Nike Sinks After Earnings, Weak Jobs Report Sends Stocks Higher

The Rundown

The episode opens with an analysis of a surprisingly weak September jobs report that unexpectedly boosted stock markets by lowering expectations for further Federal Reserve rate hikes. The host then examines Nike's

Key takeaways

• The September jobs report added only 29,000 jobs against an expected 84,000, pushing unemployment to 4.2% and revising summer job growth down by 60,000.
• Nike reported a 4% revenue drop to $11.2 billion and now forecasts high-single-digit sales declines, marking its lowest yearly sales since 2020.

Main topics

• September jobs report & Fed rate expectations
• Nike earnings & brand strategy decline

Notable quotes

"bad news for the economy was good news for the stock market"

Conclusion

The episode provides actionable context on how shifting macroeconomic data can rapidly alter market sentiment, while

Transcript preview

Speaker 1 (0:00) Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaydad Mani, and today is Friday, October 2nd. In today's episode, we'll break down a surprisingly weak jobs report and why Wall Street is actually happy about it. We'll also tell you about Nike's earnings and why I think they might be fully cooked. Then stick around to the end of the show to find out why electric semi trucks are taking over China and why Tesla is trying to do the same here in the US. We got a great show for you today. Let's go. Speaker 1 (0:40) Stocks kicked off the fourth quarter with a small win on Thursday. The S &P 500 was up 0.2%, snapping a three-day losing streak, while the Nasdaq finished basically flat. as the bond market finally gave us a little breather. After hitting its highest level in 24 years this week, the 10-year treasury yield finally dipped to about 5.24 % on Thursday, snapping a seven-day streak of rising yields. But the big macro news this morning is the September jobs report. It just dropped this morning, and it was a big miss. The economy added just 29,000 jobs last month, way below the 84,000 jobs that economists were expecting. On top of that, the summer months got revised down by a combined 60,000. jobs, with July actually going negative. Not to mention the unemployment rate also ticked up to 4.2%. So this report. puts the Fed in a really tricky spot. Remember, the Fed hiked interest rates at the September meeting and they hinted at more rate hikes in the future. But they might have to hold off on hiking rates now because of this week's jobs report because they don't want to slow down the economy even further and make the labor market conditions even worse. The market is now pricing in an 85 % chance that the Fed does not hike at the October meeting. A week ago, those odds were just 25%. So there's been a big vibe shift over the last week or so on what the Fed will do. And that's why the stock market is loving this. Stocks are actually flying this morning at the time of this recording. And this is one of those cases where bad news for the economy was good news for the stock market. It just goes to show you how fast the vibes can change here. We'll keep tracking how this plays out. I think we're in for a pretty wild Q4. So make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with... Nike. Nike reported earnings last night, and I gotta be honest, it was another rough one. Revenues for the company fell 4 % last quarter to $11.2 billion, missing expectations. Profits did come in a bit better than expected at 48 cents a share compared to the 43 cents expected. The bigger problem for Nike though was the outlook. Nike now expects sales to fall by high single digit percentages this year, while analysts were expecting a drop of about 2%. In fact, Nike is now expecting their lowest yearly. sales since 2020, which is the year that COVID shut down the world. And when you dig into the numbers.