Markets Remains Unchanged Heading Into PCE Day 📈 | $NKE & $WBA Both Miss On Earnings, Sink as a Result 📉
The market has remained at the same pace throughout the trading week with PCE data coming out tomorrow on the horizon, a print that could make or break the market for some. Lets get right into the indexes:
The S&P500 edged up 0.1% moving towards an ATH
The Dow Jones Industrial mimicked and rose about 0.1%
The Tech Heavy Nasdaq Composite led the indices with a 0.3% gain
The Chip sector took a long awaited hit after missed its earnings forecast with the stock sliding 7% and dragging down 2% which has also revived fears of a return sell off that rattled the tech sector in last weeks trading session.
On the economic front we had a reading on intial weekly jobless claims coming in at 233k which a decrease of 6,000 from the previous week coming from the Department of Labor. This came below the streets expectations of 235,000, however recurring claims rose tho their highest level since November 2021 showing that its taking longer for unemployed people to find jobs. Real GDP increased saw an annual increase of 1.4% in Q1 of 2024 which came in higher than the prior estimate of 1.3%.
Nike and Walgreens Stocks Plummet After Disappointing Earnings Reports 📉
Two retail giants, Nike and Walgreens Boots Alliance, saw their stocks take a hit on Thursday after releasing disappointing earnings reports.
Nike’s stock fell as much as 7% in after-hours trading after the company announced fiscal fourth-quarter revenue that fell short of Wall Street’s expectations. The company reported quarterly revenue of $12.61 billion, below estimates of $12.86 billion. While Nike’s earnings per share of $0.99 exceeded expectations, its direct-to-consumer sales declined 8% from the same quarter a year ago to $5.1 billion. The company’s gross margins increased to 44.7% in the fourth quarter, but came in below analyst expectations of 45.3%. Nike’s stock has struggled this year, down over 17% in the last year, as investors grow wary of slowing growth at the retailer.
Meanwhile, Walgreens Boots Alliance’s stock plummeted 22% on Thursday, its worst trading day in at least four decades, closing at $12.19 per share. The company slashed its profit guidance for the second time this year, estimating earnings per share of between $2.80 and $2.95, down from previous guidance of $3.20 to $3.35. Walgreens is facing significant challenges, including pricing pressures from prescription drugs, which has squeezed the profit margin on many drugs. The company is also fighting a problem that other smaller pharmacies are facing, with branded drugs providing lower profits for pharmacies and generics having higher profit margins, but with decreasing supply amid ongoing shortages.
The company’s CEO, Tim Wentworth, is executing a new strategy for the company, focused on revitalizing pharmacies and pulling back on healthcare services through VillageMD. Walgreens is also fighting shrink and inflation, which is reducing customers’ discretionary spending, forcing the company to rethink its products and reduce its offerings.
Both Nike and Walgreens are facing significant challenges in their respective industries, and investors will be watching closely to see how they respond to these challenges and work to reignite growth.
