Dow Jones Forecast:
- Nike (NKE) will report earnings after the close and is expected to see $0.71 earnings per share on $10.45 billion in revenue
- NKE accounts for roughly 2.25% of the Dow Jones Industrial Average[1], slightly less than Walmart
- While trade tensions have cooled and headlines have improved, tariffs remain in place and will continue to weigh, and Nike could deliver a sobering wakeup call
Dow Jones Forecast: Nike Earnings to Deliver Trade War & Retailer Insight
The Dow Jones initially traded higher at the open before quickly retreating alongside the US Dollar[2] as US President Trump took to the stage at the UN General Assembly on Tuesday. In his speech, the President covered a variety of issues, including the US-China trade war. On the matter, President Trump said he would not accept a partial or “bad deal” from China – even as the country look to resume purchases of US agricultural products.
Regardless of the current state of trade talks, tariffs are still in place and the companies that produce the goods subjected to them will continue to feel the consequences. Therefore, Nike could deliver a material update on the impact of the economic conflict when they report earnings after the close Tuesday. Despite the stock’s headwinds, option traders appear to posses a bullish bias as evidenced by the total call to put volume.
According to Bloomberg data, NKE call purchasing surpassed puts by nearly 2 to 1 and total options volume was more than twice the average. Earnings-implied volatility hovered around 5% as the close approached, even as the broader VIX Index surgedalongside impeachment odds for President Trump. Nevertheless, NKE implied volatility was essentially even with the average after-earnings price move
