Core Insights - The Federal Reserve is expected to implement a rate cut next week, with further cuts likely in December, as inflation data shows little sign of surging [1][2][12] - The S&P 500 has reached all-time highs, driven by expectations of policy easing that will support corporate earnings [5][19] - Consumer sentiment has dropped to a five-month low, reflecting concerns over high prices and their financial impact [3] Inflation Data - The September core Consumer Price Index (CPI) rose by 0.2% from August and increased by 3% year-over-year, indicating a slower pace of underlying inflation [4][13] - The CPI report has reinforced the case for multiple rate cuts by the Fed, as inflation remains contained despite tariff impacts on certain goods [9][10] Market Reactions - Equities have shown a positive response, with the S&P 500 rising nearly 1% and the Nasdaq 100 increasing by 1% [2][19] - Money markets are pricing in a high likelihood of two rate reductions before the end of the year, reflecting trader confidence in the Fed's dovish stance [5][11] Corporate Highlights - Intel Corp. has returned to profitability and provided an optimistic revenue forecast, indicating progress in its recovery efforts [19] - Ford Motor Co. expects to recover from a significant fire affecting a key supplier, alleviating concerns about its F-150 pickup production [19] - Procter & Gamble Co. reported better-than-expected sales, as consumers continued to purchase its products despite price increases [19] - Newmont Corp. delivered stronger-than-expected quarterly earnings, benefiting from cost-cutting measures amid rising gold prices [19] - JPMorgan Chase & Co. plans to allow institutional clients to use Bitcoin and Ether as collateral for loans, marking a significant step in crypto integration on Wall Street [19]

Market Overview - US stock futures are rising significantly following the September consumer price index (CPI) report, with the S&P 500 set to open at an all-time high as prices increased by 3% year-over-year, slightly below the expected 3.1% [1][5][10] - The market is now pricing in a 99% chance of a Federal Reserve rate cut in October and a 96% chance for December, indicating strong investor sentiment [10][12] Federal Reserve Insights - The CPI report is seen as a bullish catalyst for the market, with expectations that the Federal Reserve will cut rates due to the cooler-than-expected inflation data [8][12] - Core inflation, which excludes food and energy, also showed a decrease from 3.1% to 3%, indicating progress, although it remains above the Fed's 2% target [12][14] - The lack of additional economic data due to the government shutdown creates uncertainty for future Fed decisions, particularly regarding the job market [15][18] Corporate Earnings - Intel reported better-than-expected third-quarter earnings, with revenues of $13.7 billion and adjusted earnings per share of $0.23, leading to a nearly 6% increase in pre-market shares [24][26] - The company is experiencing improved sales in its PC and AI data center businesses, although it still faces challenges in its foundry operations [24][26][28] Trade Relations - President Trump has halted trade talks with Canada, citing an anti-tariff advertisement that featured former President Ronald Reagan, which adds to the uncertainty in trade relations [2][19] - The ongoing trade discussions and their implications for tariffs remain a significant concern for the market, as they could impact business operations and investor sentiment [20][21] Company-Specific Developments - Target announced it will eliminate 8% of its corporate roles due to underperformance and market share losses, which analysts view as a necessary move [30][31] - Deckers, the maker of Hoka and Uggs, reported disappointing sales guidance, forecasting full-year sales of approximately $5.35 billion, reflecting cautious consumer behavior [31][32] - Procter & Gamble exceeded sales estimates in its latest quarter, particularly in beauty and grooming categories, although its baby and family care segment showed flat volume [32][33]

Deckers shares fell after the owner of Hoka running shoes and Ugg boots forecast 2026 revenue that falls short of analyst expectations https://t.co/1w98KWZgBc ...

Core Viewpoint - Deckers Outdoor (DECK) is identified as a potential investment opportunity due to its current trading discount and strong growth prospects despite recent stock price declines [2][3]. Financial Performance - Deckers' stock has fallen 46% from its peak earlier this year, primarily due to concerns over tariffs and slowing growth, which are now considered overblown following better-than-expected first-quarter earnings [3][12]. - The stock trades at a price-to-earnings ratio of 19, significantly lower than the S&P 500's P/E of 27, indicating an attractive valuation [5]. - Revenue for Deckers rose 16.9% to $964.5 million, surpassing estimates of $900.4 million [5]. - Hoka sales increased by 19.8% to $653.1 million, while Ugg sales rose by 18.9% to $265.1 million [6]. Market Dynamics - Domestic sales decreased by 2.8% to $501.3 million, but international sales surged by 49.7% to $463.3 million, highlighting the company's successful expansion into new markets [7]. - Growth in international markets was particularly driven by Europe and China, as Deckers expands its distribution in Europe [7]. Future Outlook - Management anticipates continued solid growth for its core brands, projecting mid-teens growth for Hoka and mid-single-digit growth for Ugg for the remainder of the year [8]. - Deckers has a strong historical performance, with stock appreciation of over 1,000% in the last decade, despite recent declines [9]. Brand Strength - Deckers has successfully developed its brands, particularly Hoka, which is gaining market share due to its popularity among runners and professionals [11]. - The company has a strong track record of acquiring and growing brands, having transformed both Ugg and Hoka into multibillion-dollar entities [10]. Cost Considerations - Deckers expects a $185 million impact on the cost of goods sold due to tariffs, but this is not seen as a justification for the significant market cap loss of approximately $15 billion [12].

Sales Performance - Deckers' financial results were boosted by strong sales gains in fuzzy Ugg boots and chunky Hoka running shoes last quarter [1]

Company Overview - Deckers Outdoor, known for Hoka running shoes and Ugg boots, has seen its stock decline by 49.5% year-to-date as of June 17 [2][5] - Despite recent struggles, Deckers has historically been one of the best-performing stocks, with returns exceeding 10,000% at one point [2] Recent Performance - In the fiscal fourth quarter ending March 31, Deckers' revenue grew by only 6.5%, a significant drop from nearly 20% growth in the first three quarters [5] - Hoka's growth slowed from nearly 30% in the first three quarters to just 10% in the fourth quarter, indicating potential market share loss to competitors like Nike [5] - Ugg, Deckers' largest brand, experienced a growth rate of just 3.6% in the fourth quarter compared to 13% for the full year [5] Guidance and Expectations - The company did not provide full-year guidance due to macroeconomic uncertainties related to tariffs, projecting first-quarter revenue between $890 million and $910 million, representing 9% growth at the midpoint [6] - Earnings per share are expected to decline from $0.75 to a range of $0.62 to $0.67 [6] - Deckers anticipates a gross margin decline of 250 basis points due to increased freight costs, promotional activities, and a shift in sales channels [7] Investment Opportunity - The significant stock sell-off may present a buying opportunity, as the challenges faced by Deckers are viewed as mostly temporary [8] - With the share price halved, Deckers trades at an attractive price-to-earnings ratio of 16, which is a substantial discount compared to the S&P 500 [9] - The company has initiated a stock buyback program, increasing its repurchase authorization to $2.5 billion, representing 16% of its market cap [9] Financial Position - Deckers has a strong financial position with no debt, $1.9 billion in cash, and a favorable assets-to-liabilities ratio of 3.5 [10] - The long-term outlook remains positive as Hoka and Ugg have established differentiated brands with a history of growth [10] Future Growth Potential - Even modest profit growth could lead to significant stock appreciation, as tariff-related challenges are expected to diminish over time [11]