Sell-off Deepens | Nike Update

3 October 2019

​​Global markets ​dropped sharply overnight, with the major US markets all down over -1% and European markets under further selling pressure with the German market down nearly -3%.

The fall came  as the latest US data showed monthly private sector hiring slowed, amplifying fears around a slowdown in economic growth in the world's largest economy. As mentioned yesterday we are watching news-flow, as  disappointing manufacturing data from the US. Europe and China, suggests the US-China trade war is denting world growth. A significant slowdown in the global economy remains a key risk for markets, and US employment figures released at the end of the week will be watched very closely. 

Stock in Focus: Nike (NKE:NYSE)

​Nike shares soared to new highs after delivering an impressive first quarter result for the 2020 fiscal year, which beat the market’s high expectations.  

Revenue rose +7% to $10.7 billion, net profit after tax was $1.4 billion, up +28% from last year, and earnings per share came in at $0.86, well above management expectations of $0.70. ​
​Despite macroeconomic uncertainty Nike continue to get the job done, thanks to its smart marketing campaigns, strong product innovation and continual growth in demand for both athletic apparel and gear, and athleisure. Nike's growth was broad-based both geographically and across product lines, with the standout being China again lifting revenue by +27% from last year, and sales from digital source up +42% following improved digital services and greater international penetration of the Nike and SNKRS apps.  
We maintain our positive rating on the back of Nike’s drive to deliver new and innovative products consumers want, driving growth in China and North America – whist further expanding margins.

We currently have a BUY rating on ​Nike.
Members can login to read our full reports on Nike


Australia & New Zealand Market Movers

​The Australian market ​sold off yesterday (ASX 200 Index ​-1​.​53​%) ​with losses being broad-based. ​NAB was the worst of the four major banks, sliding after announcing it had put aside an extra $832 million after tax to refund customers of its scandal-ridden financial advice arm. Coles has ​unveiled its first-ever restaurant-supermarket hybrid in a move designed to give the ​retailer a leg up on rival Woolworths in the grocery convenience wars. ​ ​Mayne Pharma shares soared 19 per cent  after the pharmaceutical company inked an exclusive long-term deal to sell a new contraceptive drug in the United States.

The New Zealand market was lower on Wednesday (NZX 50 Index ​-​0.41%) following Wall Street lower after poor US manufacturing data highlighted the risks to the global economy. Interestingly, there was an increase in activity in the Auckland housing market over September with both new listings and sales up, according to Barfoot & Thompson.


3 Things Markets Will be Watching this Week

  1. ​​​Trade War related news-flow is likely to continue to feature in headlines.
  2. The Reserve Bank of Australia makes an interest rate decision on Tuesday.
  3. Monthly US employment figures are released at the end of the week.


Have a Great Day,


​​Global markets ​dropped sharply overnight, with the major US markets all down over -1% and European markets under further selling pressure with the German market down nearly -3%.

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