TikTok and ByteDance - TikTok's parent company ByteDance has signed binding agreements to establish a U.S. joint venture that will be majority-owned by American investors, involving partners such as Oracle, Silver Lake, and MGX [3][4] - The new joint venture will focus on U.S. data protection, algorithm security, content moderation, and software assurance, operating as an independent entity [4] Instacart - Instacart has reached a $60 million settlement with the U.S. Federal Trade Commission (FTC) over claims of deceptive consumer practices, including misleading advertising regarding free delivery services [5][6] - The settlement prohibits Instacart from making misrepresentations about delivery costs and requires clear disclosure of subscription terms, with the $60 million to be offered as refunds to consumers [7] Nike - Nike reported better-than-expected fiscal second quarter results, driven by strong wholesale and North America sales, which account for 40% of its total business [8] - Despite a profit of $0.53 per share, down 32% year-over-year but 16 cents above expectations, Nike faces challenges from tariffs and margin compression, leading to a gross margin decline of over 300 basis points to 40.6% [9][10]

Market Overview - U.S. stock futures rose on Friday following a higher close on Thursday, with major benchmark indices advancing [1] - The November CPI inflation rate decreased to 2.7% from 3% in September, with the Bureau of Labor Statistics carrying forward September levels due to a lack of October data [1] Futures Performance - Dow Jones futures increased by 0.11%, S&P 500 by 0.33%, Nasdaq 100 by 0.48%, and Russell 2000 by 0.32% [3] - The SPDR S&P 500 ETF Trust (SPY) was up 0.012% at $676.55, while Invesco QQQ Trust ETF (QQQ) advanced 0.48% to $612.03 [3] Company Highlights - Oracle Corp. shares jumped 5.65% after ByteDance signed agreements to shift control of TikTok's U.S. operations to a joint venture including Oracle [7] - Coty Inc. shares rose 1.54% as it is set to receive $750 million from the sale of its Wella business to KKR [7] - BlackBerry Ltd. shares declined 5.75% despite reporting third-quarter revenue of $141.8 million, exceeding analyst estimates [7] - Nike Inc. shares fell by 10.06% despite better-than-expected second-quarter results, citing expectations of narrower margins and lower revenue from China [13] - FedEx Corp. shares decreased by 1.04% despite positive financial results and raised guidance for FY2026 [13] Analyst Insights - Scott Wren from Wells Fargo Investment Institute projects a positive trajectory for the U.S. stock market and economy through 2026, driven by an improving economy and moderating inflation [10] - Wren notes the widening spread between 10-year and 2-year Treasury yields, the largest since January 2022, which historically correlates with stronger equity performance [10] Economic Indicators - Upcoming economic data includes speeches from New York Fed President John Williams and releases of existing home sales and consumer sentiment data [11]

Core Viewpoint - Despite weak performance in the Chinese market and the Converse brand, the world's largest footwear company achieved a slight sales increase in the latest quarter, driven by strong performance in North America [3][8]. Group 1: Financial Performance - The company reported a 1% increase in sales for the quarter ending November 30, attributed to strong performance in the North American market [3][8]. - Revenue from mainland China, Hong Kong, and Taiwan fell by 17%, leading to a 32% year-over-year decline in profits for the quarter [3][8]. - The company anticipates a low single-digit percentage decline in global revenue for the current fiscal quarter, despite expected growth in North America [9]. Group 2: Strategic Initiatives - The company is undergoing a business recovery phase due to previous strategic missteps that led to long-term sales stagnation and market share loss [9]. - The CEO, Elliott Hill, has focused on clearing inventory, accelerating product development, particularly in professional athletic shoes, and restructuring the organization [4][9]. - The company plans to adjust its operational strategy in China, increasing investments in Beijing and Shanghai and modifying product category layouts for the Chinese market [4][9]. Group 3: Market Challenges - The company faces ongoing challenges in the Chinese market, which has been a significant pain point for several quarters, requiring time and continuous investment for recovery [9]. - The company expects ongoing weakness in the Chinese market to continue impacting overall sales [9]. - Tariff policies are expected to add obstacles to the company's recovery, with an anticipated increase of $1.5 billion in tariff costs for the current fiscal year, putting pressure on gross margins [10].

Core Insights - Nike reported Q2 fiscal 2026 revenues of $12.42 billion, a 1% increase on a reported basis, but flat on a currency-neutral basis [1] - Net income fell 32% to $792 million, with diluted earnings per share (EPS) at $0.53 [1] - Gross margin narrowed by 300 basis points to 40.6%, primarily due to increased tariffs in North America [1] Revenue Breakdown - Wholesale revenues increased 8% to $7.5 billion, driven mainly by growth in North America [2] - Nike Direct revenues declined to $4.6 billion, down 8% on a reported basis and 9% on a currency-neutral basis, reflecting a 14% drop in Nike Brand Digital sales [2] - Nike Brand revenues reached $12.1 billion, up 1% on both a reported and currency-neutral basis [2] Regional Performance - Gains in North America were partially offset by weaker performance in Greater China and the APLA region [3] - Converse revenues sharply declined to $300 million, down 30% on a reported basis and 31% on a currency-neutral basis [3] Cost and Inventory Management - Selling and administrative costs edged up 1% to $4.03 billion, with demand creation expenses increasing 13% to $1.3 billion [3] - Operating overheads fell 4% to $2.8 billion, mainly due to reduced wage-related and administrative costs [4] - Inventories as of November 30, 2025, were $7.7 billion, down 3% [4] Cash Flow and Financial Position - Cash, cash equivalents, and short-term investments stood at $8.3 billion, about $1.4 billion lower than the prior-year period [5] Management Commentary - Nike's CEO stated that the company is in the "middle innings of our comeback," focusing on realigning teams, strengthening partner relationships, and rebalancing the portfolio [6]

Core Viewpoint - Nike's stock dropped over 10% in pre-market trading, closing at $59, following the release of its Q2 FY2026 earnings report, which showed mixed results despite beating some market expectations [1] Financial Performance - Net sales for the second quarter reached $12.43 billion, a 1% year-over-year increase, surpassing market expectations of $12.22 billion [1] - Net profit decreased by 32% to $792 million, with earnings per share at $0.53, exceeding the market forecast of $0.38 [1] - Gross margin declined by 3% to 40.6%, primarily due to increased tariffs in North America [1] Regional Performance - Revenue from the Greater China region fell by 17% year-over-year to $1.7 billion [1] - Earnings before interest and taxes (EBIT) in the Greater China region saw a significant decline of 49% [1]

Core Insights - U.S. stock futures are trading mixed, with several companies expected to report earnings that may attract investor attention [1] Company Summaries - **Conagra Brands Inc. (NYSE:CAG)**: Expected to report quarterly earnings of 44 cents per share on revenue of $2.99 billion. Shares gained 0.3% to $17.85 in after-hours trading [1] - **Nike Inc. (NYSE:NKE)**: Reported second-quarter revenue of $12.43 billion, exceeding analyst estimates of $12.22 billion. Earnings were 53 cents per share, beating estimates of 38 cents. However, gross margins declined for the second consecutive quarter, leading to a 10.8% drop in shares to $58.57 in after-hours trading [1] - **Paychex Inc. (NASDAQ:PAYX)**: Analysts expect quarterly earnings of $1.23 per share on revenue of $1.57 billion. Shares fell 0.5% to $113.69 in after-hours trading [1] - **FedEx Corp. (NYSE:FDX)**: Reported strong financial results for Q2 of fiscal 2026 and raised FY2026 guidance, now expecting revenue growth of 5% to 6%. The company reaffirmed plans for $1 billion in permanent cost reductions. Shares rose 0.1% to $287.50 in after-hours trading [1] - **Carnival Corp. (NYSE:CCL)**: Expected to post quarterly earnings of 25 cents per share on revenue of $6.37 billion. Shares rose 0.5% to $28.49 in after-hours trading [1]

What is going wrong for Nike. I mean, the problem here is the pace of change. And you're really seeing investors disappointed in how fast the turnaround is happening.So there are really two persistent sore points here that we saw from yesterday's results. The first being Converse. The iconic brand sales are down 30%.For a long time, the company has relied on sales of its iconic Chuck Taylor sneakers. But unfortunately, you know, consumers are just not as interested in the sneaker as they were before. The ot ...

Core Insights - The main issue for Nike is the slow pace of its turnaround, leading to investor disappointment [1] - Significant declines in sales for Converse and Greater China are key concerns [2][3] Sales Performance - Converse brand sales have decreased by 30% [2] - Sales in Greater China have dropped by 17%, attributed to difficulties in selling excess inventory and a lack of innovation to attract consumers [3] Market Strategy - Nike needs to enhance in-store traffic, reduce excess inventory, and develop products that resonate with consumers [4] - The company is focusing on tier one cities in China, such as Beijing and Shanghai, to address these challenges [5] Future Guidance - Nike has not provided full-year guidance recently, only quarterly forecasts, which affects investor confidence [6] - Longer-term guidance from the company could help reassure investors about the recovery process [6]

Core Insights - Nike's latest financial report shows robust revenue growth and significant inventory improvement, indicating enhanced operational efficiency, although profit margins are pressured by transformation investments [1][3][6] - The North American market and running category show positive recovery signals, while the Greater China region continues to face challenges, suggesting a full recovery will take time [1][4][6] Financial Performance - For the second fiscal quarter ending November 30, Nike reported net sales of $12.43 billion, a 1% year-over-year increase, outperforming Wall Street expectations [1][5] - Net profit for the quarter was $792 million, a 32% decline, with diluted earnings per share at $0.53 [5] - Inventory decreased by 3% to $7.7 billion, reflecting effective inventory management and preparation for new product launches [1][5] Profitability Challenges - The decline in profit margins is attributed to a significant drop in gross margin by 3 percentage points, influenced by rising tariffs in North America, markdowns from clearing old inventory, and an 8% decrease in direct-to-consumer (DTC) sales [1][3][5] - Marketing expenses increased by 13% year-over-year to stimulate demand, further impacting profit margins in the short term [3][5] Market Performance by Region - North America emerged as a highlight for the quarter, driven by strong performance in running products and new launches [4] - The Europe, Middle East, and Africa (EMEA) region recorded a 3% growth, while Greater China faced challenges with revenue of $1.423 billion, affected by a soft macroeconomic environment and intensified competition [4][5] Strategic Outlook - Nike's management indicated that the current transformation is at a "mid-stage," with a non-linear recovery path expected, particularly in Greater China and the Converse brand [2][6] - The company anticipates low single-digit revenue decline for the third fiscal quarter, reflecting a cautious approach amid a complex external environment [2][6]

Core Viewpoint - Nike has warned of a sales decline this quarter due to ongoing weakness in China and at its Converse brand, marking a surprising shift after two consecutive periods of growth [1] Summary by Relevant Categories Sales Performance - The world's largest sportswear company anticipates revenue to decrease in the low-single digits for the three months starting December 1 [1] Market Conditions - The decline is attributed to persistent weakness in the Chinese market and challenges faced by the Converse brand [1]