Nikes Downward Swoosh

Nike's stock dropped

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What's going on?

Sportswear titan Nikes stock fell 7% on Friday, while shares of jeweler Tiffanys rose 3%. Both companies reported quarterly results that showcased weak US sales.

What does this mean?

Nikes earnings last quarter jogged past investors expectations thanks to higher sales in China and Europe. But US sales growth of 7% wasnt enough to appease investors who were perhaps worried Nikes divisive ad campaign wasnt having the desired effect.


Luxury shoppers in America werent dropping cash either: Tiffanys quarterly sales were 1% lower than a year ago, but its profit sparkled past investors forecasts. Tiffanys like LVMH-owned luxury watch company Hublot is seeing fewer Asian tourists treat themselves to US shopping sprees as Chinese consumer spending slows.

Why should I care?

The bigger picture: Tiffanys serving breakfast at home.


Tiffanys is optimistic about the rest of the year. Rather than chase dwindling tourists, it plans to attract domestic customers to its (physical or virtual) doorstep by introducing cheaper items. That seemed to sway investors who bought up its stock on Friday. But Tiffanys and other American retailers have a challenge ahead: last year, US retailers got a boost from consumers spending extra tax cut money. With no similar windfalls this year, retailers may have to work harder to part people from their cash.



For markets: Blowback from the Federal Reserve.


The Federal Reserves lowered forecast for US economic growth sent some investors away from risky stocks and into safer government bonds last week. Higher demand for 10-year bonds pushed their yields below those of 3-month bonds on Friday for the first time since before the last recession [tweet this] (long-term bond yields are usually higher than short-term ones to reflect the greater risk of default over time). That inversion spooked investors, as it’s historically been a harbinger of recession: they sold off stocks on Friday.

Originally posted as part of the Finimize daily email.

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