The latest financial report fell below market expectations, causing Nike to plummet.
On Friday, June 28th local time, the three major US stock indexes collectively fell. As of the close, the Dow Jones Industrial Average fell 0.12%, the Nasdaq fell 0.71%, and the S&P 500 index fell 0.41%.
In terms of economic data. The annual rate of the core PCE price index in the United States in May was 2.6%, expected to be 2.60%, compared to the previous value of 2.80%.
Nike's stock price plummeted by nearly 20%
On Friday, June 28th local time, the three major US stock indexes collectively fell. As of the close, the Dow Jones Industrial Average fell 45.20 points, a decrease of 0.12%, to 39118.86 points; The Nasdaq fell 126.08 points, or 0.71%, to 17732.60 points; The S&P 500 index fell 22.39 points, or 0.41%, to 5460.48 points.
The S&P 500 index closed at 5460.48 points, almost flat this week. Since the release of its financial report on Wednesday, Micron Technology has experienced a cumulative weekly decline of 5.74% due to its fourth quarter performance guidance falling below analyst expectations. Nike fell 19.98%, its stock price reaching a new low since April 2020, after its annual performance guidance fell short of expectations. International precious metal futures closed slightly higher, with COMEX gold futures up 0.01% to $2336.9 per ounce, a cumulative increase of 0.24% for the week, and COMEX silver futures up 0.61% to $29.435 per ounce, a cumulative decrease of 0.6% for the week. After easily passing the Federal Reserve's annual stress test, major US banks such as Bank of America, Citigroup, and JPMorgan Chase raised their quarterly dividend payouts to investors after the US stock market closed.
Nike's stock price plummeted 19.98% to close at $75.36, marking the largest single day decline in history and evaporating its market value by approximately $28.41 billion.
The latest financial report released by Nike shows that it achieved a revenue of $12.606 billion in the fourth quarter, with analysts expecting $12.86 billion, lower than market expectations and growth stalled. At the same time, it is expected that revenue will decrease by a single digit percentage in the fiscal year 2025, while analysts predict a growth of nearly 1%. Nike Group President and CEO Tang Ruoxiu said, "We are facing challenges in the near future, but we are making progress in crucial areas for Nike's future. Through innovative services to improve sports performance, we are constantly meeting the constantly changing needs of consumers, and expanding our market layout. I believe our team is integrating Nike's competitive advantages to create greater impact on our business."
This sports shoe manufacturer has been losing out in competition with competitors such as Adidas, and its disappointing outlook has led at least seven institutions (including JPMorgan Chase, Morgan Stanley, and UBS Group) to abandon their previous bullish positions and turn to wait-and-see, lowering their ratings of Nike on Friday. Among them, UBS downgraded Nike's rating from buy to neutral, with a target price of $78; Citigroup has lowered Nike's target price from $115 to $102; Barclays has lowered Nike's target price from $109 to $80, and Morgan Stanley has previously downgraded Nike's rating to level, with a target price of $79.
UBS analyst Jay Thor wrote in a report on Friday that Nike's fundamental trend is "much worse than we realized," and he downgraded the stock's rating from buy to neutral. He said, "Its business needs to undergo significant adjustments." Last week, Sam Poser of Williams Trading also issued a warning to investors, telling them to "sell Nike stocks." If there is really a turning point, it is unlikely to occur before 2026.
Barclays analyst Ye Adelian stated that the Nike brand has significant uncertainty in the long run. She downgraded Nike's stock rating from "overweight" to "holding" and expects to remain wait-and-see until she sees more evidence that the company's strategic measures are driving sales growth.
According to Adam Krisafuli, founder of Vital Knowledge Communications, the performance of this sports shoe company is "just the latest pessimistic consumer data point in the past 36 hours.". Wolfsburg United, Levi's, and Hennes& from Europe; The latest news from Mauritz AB and L'Oreal has also issued warning signals about shopper resilience.
Apple's shipment volume in China continues to rebound in May
In terms of sectors, the 11 major sectors of the S&P 500 index rose 4 times and fell 7 times. Among them, stocks in the real estate sector led the rise.
Popular technology stocks have fluctuated in price. Qualcomm rose more than 2%, while TVB Semiconductor, TSMC, Intel, and Broadcom rose more than 1%. Texas Instruments, Tesla, and Cisco rose slightly, while NVIDIA, Lilly, Asma, and Micron Technology fell slightly. Microsoft, Netflix, Apple, and Google A fell more than 1%, Arm fell nearly 2%, Amazon and Meta fell more than 2%, and AMD fell nearly 8%.
Microsoft fell 1.30%. The EU antitrust agency will conduct an additional review of Microsoft's $13 billion investment in OpenAI. Margaret Westergh, the EU's head of competition affairs, said on Friday that the EU has ruled out the possibility of investigating the transaction under EU merger rules. On the contrary, she announced that regulatory agencies are questioning Microsoft's competitors about the exclusivity clauses between the US company and OpenAI, and whether these clauses will have a negative impact on competition. In addition, Westergh also mentioned that regulatory agencies are studying attempts by large technology companies to purchase companies through large-scale recruitment. "If these practices ultimately lead to business concentration, we will ensure that they do not evade our merger control rules," Vestag said. According to the terms of the agreement between Microsoft and OpenAI, Microsoft's Azure is the exclusive cloud provider of OpenAI, and EU regulatory agencies hope to further review this. Microsoft stated in a statement that it welcomes a comprehensive review by the European Commission and is prepared to respond to any additional questions.
Amazon fell 2.32%. Amazon announced on Friday that it will postpone the launch of its first batch of Project Kuiper network satellites to the fourth quarter of this year, compared to the previous plan of launching them as early as the first half of the year. Production operations manager Steve Metayer announced at the opening ceremony of the satellite production facility in the suburbs of Seattle that the first batch of customer testing is expected to begin in 2025 and plans to provide limited commercial services by the end of 2025. Amazon plans to provide broadband Internet services through constellations with more than 3000 satellites to compete with Musk's Starlink network. In addition, Amazon has initiated large-scale production of satellites at its factory in Kirkland, Washington, which will eventually produce up to 5 satellites per day.
Apple fell 1.63%. According to a data release on Friday, Apple's smartphone shipments to China in May are expected to increase by nearly 40% year-on-year, continuing the rebound momentum since March. According to the latest data from the China Academy of Information and Communications Technology (CAICT), the shipment volume of foreign brand mobile phones in China has increased from 3.603 million units in the same period last year to 5.028 million units, an increase of 1.425 million units or 39.6%. Although Apple is not explicitly mentioned in official data, it remains the dominant foreign smartphone manufacturer in the smartphone dominated Chinese market. During the "6.18" promotion season, the prices of iPhone 15 series products reached a historic low, with the highest drop reaching 2350 yuan.
Energy stocks generally rose. Shell rose more than 1%, while Western Petroleum, ConocoPhillips, BP, ExxonMobil, Murphy, and Chevron rose slightly. Brazilian oil closed flat, while US energy fell nearly 1%.
Popular Chinese concept stocks generally closed lower, with the Nasdaq China Golden Dragon Index falling 1.02%. NIO fell more than 5%, Xiaopeng Automobile fell more than 4%, Bilibili and Manbang fell more than 3%, Ideal Automobile fell more than 2%, JD.com fell more than 1%, Weibo, Alibaba, NetEase, and Futu Holdings fell slightly, Tencent Music and Pinduoduo rose slightly, and New Oriental and iQiyi rose more than 1%.
Multiple US banks increase quarterly dividends
Large bank stocks rose across the board. Wells Fargo and Citigroup rose more than 3%, JPMorgan Chase, Morgan Stanley, Goldman Sachs, and Bank of America rose more than 1%, while BlackRock and UBS Group rose slightly.
After easily passing the Federal Reserve's annual stress test, major US banks such as Bank of America, Citigroup, and JPMorgan Chase raised their quarterly dividend payouts to investors after the US stock market closed on Friday. In a statement released on Wednesday, the Federal Reserve stated that even during an economic recession, the capital levels of each bank participating in the test exceeded the minimum requirements. Although these banks are expected to suffer losses of nearly $685 billion during the test, resulting in a capital decline greater than last year, this result is still within the expected range of the stress test.
Dao Fu plans to increase dividends by 10%; Bank of America plans to increase its quarterly dividend from $0.24 per share to $0.26 per share; Citigroup plans to increase its quarterly dividend payout per share from $0.53 to $0.56; JPMorgan plans to increase its quarterly dividend from $1.15 per share to $1.25 per share; Morgan Stanley plans to increase its quarterly dividend from $0.85 per share to $0.925 per share; Wells Fargo Bank is expected to increase its third quarter dividend to $0.40 per share; New York Mellon Bank plans to increase its quarterly dividend from $0.42 per share to $0.47 per share; Goldman Sachs plans to increase its quarterly dividend from $2.75 per share to $3. In addition, JPMorgan Chase has authorized a new repurchase plan to repurchase stocks up to $30 billion.
Even though banks easily pass, stress testing remains a fiercely debated topic among economists and policymakers. Francisco Kovas, head of research at the Institute of Banking Policy, said that the excessive volatility of the Federal Reserve model means that scenarios and exams should be subject to stricter public supervision.
Federal Reserve Vice Chairman of Regulation Michael Barr emphasized that the purpose of stress testing is to ensure that banks can absorb losses and maintain operations in extreme situations. This year's test scenario is set as the US unemployment rate reaching a high of 10%, stock prices plummeting by 55%, and commercial real estate prices falling by 40%. In addition, some large banks also have to face additional global market shocks, including the decline in stock prices, the sharp rise in short-term treasury bond bond interest rates and the depreciation of the US dollar.