NIKE & FedEx push US market higher this week? Read & decide.

US Economic data reports helped pushed the US markets higher overall last week. Agree?

The CPI and PPI reports for November 2023, helped “convinced” the Fed to:

  • Hold interest rate (5.25% - 5.50%) status quo one more time.

  • Consider reducing the Fed funds rate by -0.75% in 2024, conditions permitting of course!

By the time US market rounded off Fri, 15 Dec 2023:

DJIA: +0.15% (+56.81 to 37,305.16).

  • During last week, Dow gained +2.7% overall. On Thu, 14 Dec 2023, it jumped > 400 points and surpassed 37,000 for the first time.

S&P 500: -0.01% (-0.36 to 4,719.19).

  • For the week, S&P 500 gained +2.6%. It is now < 1.6% away from a record close set in January 2022.

Nasdaq: +1.38% (+200.57 to 14,733.96).

  • The tech index had a weekly of+2.9%. It is roughly 9% from its all-time intraday high. Will the coming of a Santa rally help to seal the deal?

As we head into the 2nd last week of December trading, it will not be US Economic data that will be calling the shots.

Attention once again will fall squarely on quarterly earnings all over again. (see below)

The only official report that everyone will be interested in will be US’s November personal consumption expenditure (PCE) report to be released on Fri, 22 Dec 2023.

Of all the US companies reporting their September to November earnings, I have taken a shine to both $Nike(NKE)$ and $FedEx(FDX)$.

FedEx - Tue, 19 Dec 2023 (after mkt closed).

Market expectations:

  • Earnings per share (EPS): $1.49 vs $3.18 YoY.

  • Revenue: $22 Billion vs $22.8 Billion YoY.

Watchouts:

  • Shares of the transportation and delivery giant FedEx have risen +21.43% over the past 6 months, including a gain of almost +12% in 30 days.

  • Its shares surging +58.68% YTD, outperforming the +23% rise in $S&P 500(.SPX)$ index.

  • Even more impressive is amidst macroeconomic uncertainty FedEx have gained +66.66% over the past year, more than tripling the S&P 500 index during the same time span.

  • At $281.29, FedEx has added > $30 since its last earnings results.

According to Susquehanna analyst, Bascome Majors, it is not yet time to take profits for the following reasons.

  1. FedEx long-term upside opportunity from its cost rationalization exercise to keep expenses down.

  2. Valuation re-rating as greater than the near-term cyclical risk, let Bascome Majors revised FedEx target price to $315 (+11% upside for shares).

  3. Past 25 years analysis shows that when FedEx's package volume dips, investors who buy the stock often see good returns in the next year, compared to the overall market.

  4. Even though it seems like a good chance, the company still needs to perform better with its deliveries to truly convince investors.

  5. FedEx figured out how to make money even though they're shipping fewer packages.

  6. They did this by charging more and spending less.

  7. It is believed that investors would prefer FedEx ship more instead.

On Wed, 20 Dec 2023, FedEx management will need to figure a way to keep investors happy, by showing they can still be profitable and ship more packages across their different businesses.

It will be very hard-pressed to find a better performer in the Dow Jones Transportation Average.

Nike - Thu, 21 Dec 2023 (after mkt closed).

Market expectations:

  • Earnings per share (EPS): $0.78 vs $0.85 YoY.

  • Revenue: $12.43 Billion vs $13.32 Billion YoY.

Watchouts:

  • Shares of this footwear & apparels giant Nike have risen +24.5% over the past 3 months, including a gain of almost +15% in 30 days.

  • Its shares have risen a marginal +2.36% YTD, underperforming the +23% rise in S&P 500 index.

  • Whilst YTD performance has been marginal, Nike’s have gained +17.95% over the past year.

Nike still has a lot going for it, especially when assessing the company’s long-term potential with its Direct-to-Consumer (DTC) business.

Citigroup analyst, Paul Lejuez has upgraded Nike’s rating from “Neutral” to “Buy”.

He has reported the followings:

  • Optimism about Nike’s ability to protect earnings in the current and next fiscal year.

  • An “upgraded” target price of $135, compared to Nike’s 52-week trading range of $88.66 to $131.31

  • While Nike struggles with revenue, this stock is a "one-of-a-kind” brand with visible margin recovery.

  • Nike’s ability to emerge (a) leaner inventory, (b) lower promotions, and (c) more direct-to-consumer (DTC) sales.

  • As it stands, DTC currently accounts for approx. 45% of the company’s total revenue, compared to 27.5% 6 years ago.

DTC segment is not only more profitable business than the wholesale, but it also gives Nike more pricing power while allowing the company to affect the consumer buying experience.

On Thu, 21 Dec 2023, Nike management will need to deliver a top and bottom line beat, along with positive guidance in order to keep the stock running higher.

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  • Do you think you will be interested in either FedEx or Nike?

  • Do you think the 2 US stocks will be able to rise, over & above its current price?

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# 💰 Stocks to watch today?(20 Sep)

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  • JC888
    ·2023-12-18
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    Hi, tks for reading my post. Pls give a "LIKe" & "Re-post" ok. Tks! Rating is very important (to me).
    Would you consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!
    Reply
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  • phongy 45
    ·2023-12-19
    nice ... market still good to buy ?
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    • JC888
      If u are doing your monitoring, will noticed that broadly most stocks are up.. Shld have selective rally till year end, looking at current situation... But US mkt can be volatile. This is the magic of this fast paced mkt...
      2023-12-19
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  • JohnMitchell
    ·2023-12-19

    Can investors in Nike explain something to me in all seriousness. Today, a shoe "Dropped", which were the Kobe 6 Pronto Reverse Grinches. I was on my SNKRS app at 10am and placed an order immediately after 10. I got a message saying Nike was getting rid of "Bot" orders and I was in line. 3 minutes go by and the screen says my size is sold out. I learned about supply and demand in high school. If the shoes sell out in less than 1 minute, to make a bigger profit, WHY NOT MAKE MORE? What am I missing? I can understand if I waited a few hours or a few days to place the order, but selling out online in less than 1 minute seems absolutely silly.

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  • BenjiFuji
    ·2023-12-20
    Interesting. I wonder how does Nike defend itself from the other shoe competitors? Thanks
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  • Taurus Pink
    ·2023-12-19
    [正经] [正经] [正经]
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  • HiiH
    ·2023-12-20

    Great article

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    • JC888
      Hi, tks for reading. Help to repost ok. Thanks.
      2023-12-21
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  • Aqa
    ·2023-12-19
    Liked.
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  • YueShan
    ·2023-12-19
    Good⭐️⭐️⭐️
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    • JC888
      Hi tks for reading. Pls help to repost ok. Thanks
      2023-12-19
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  • WernerBilly
    ·2023-12-19

    Did NIKE do???

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  • Tom Chow
    ·2023-12-19
    good
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  • KSR
    ·2023-12-19
    👍
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