Yahoo Finance Pending Home Sales, NIKE Miss Projections
Thursday, June 27th, 2024
Market indices closed in the green today. Not by much — except for the small-cap Russell 2000, which was up +0.76% — but it’s a winning session nevertheless. The Dow gained +0.09% (following +0.04% yesterday), a mere +36 points. The S&P 500 was also up +0.09% today, while the Nasdaq gained another +53 points, or +0.30%. Bond yield rates reflect a confidence that an easing of interest rates is on the horizon: the 10-year is at +4.288% and the 2-year (still inverted) hit +4.714%.
Pending Home Sales for May improved month over month, but missed estimates. A headline of -2.1% was notably better than last month’s cold -7.7%, but still a good measure off the -0.4% analysts had been expecting. New Home Sales, released yesterday, also showed a drop from expectations, further depicting a housing market wobbling under 7% mortgage rates for an extended period of time. The Fed is not unhappy to see this, although it is much more likely to make a rate cut should these figures dive further.
NIKE NKE reported mixed results in its fiscal Q4 report this afternoon. While beating rather impressively on the bottom line — earnings of $1.01 per share versus 85 cents expected, and +53% higher that the year-ago’s 66 cents per share — revenues of $12.61 billion was well below the anticipated $12.88 billion. Based on the press release, we expect guidance for fiscal year 2025 to come down, which has hit the stock -5% in late trading. This adds to the -11% performance for NIKE year to date.
The iconic apparel brand cited challenges to its business segments. Its Lifestyle brands, including Air Force, Air Jordan, NIKE Golf, etc. came in light for the quarter. NIKE also saw weakness in its Digital business. Chinese traffic has begun to dwindle since April. Depending on whether forward guidance is brought southward in today’s conference call, we may expect to see NIKE’s Zacks Rank #3 (Hold) sink into negative territory.
Tomorrow’s Personal Consumption Expenditures (PCE) results will be closely watched. We look for slight upticks in nominal income and spending month over month, while year over year we expect figures to come down 10 or 20 basis points (bps) to +2.6% on both headline and core. Any result to the downside — not terribly likely, as its data points have largely come from elsewhere already reported — may start a buzz on the Street regarding a Fed interest rate move next month, instead of waiting until September or beyond.
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