Good Evening. On Friday, U.S. stocks experienced another week of steep losses, capping a month and quarter marred by violent selling that pushed all three major averages into bear market territory.
The S&P 500 fell 1.51% after failing to regain its footing earlier in the trading session, while the Dow Jones lost 1.71%. The technology-centric Nasdaq Composite fell 1.51%.
TOO MUCH INVENTORY
Nike’s (NKE) stock fell by12.81% on Friday in response to the footwear giant’s most recent earnings report. Nike’s quarter and outlook were riddled with warning lights, despite the company’s reaffirmation of its full fiscal sales forecast (excluding the impact of the strong dollar). Wall Street is not a fan of the company’s earnings call due to its more pessimistic-than-expected tone.
- Earnings Per Share: $0.93 vs. $0.92 estimate
- Net Sales: $12.69 billion vs. $12.31 billion estimate
- Inventory: $9.66 billion vs. $6.91 billion estimate
What happening to Nike? Nike is the most recent corporation to face an increasingly complex economic environment, which began with supply-chain delays and port congestion. By the time corporations were ready to deliver supplies to shop shelves, the demand had shifted as persistently high inflation undermined the purchasing power of some consumers. In the instance of Nike, shipping issues led to an increase in out-of-season items. In addition, the persistent growth of the dollar has hampered the performance of other countries.
STADIA SHUTDOWN
Google (GOOG) is discontinuing its cloud gaming service Stadia. Players will have access to the service until January 18, 2023. Google will refund all Stadia hardware purchased from the Google Store, as well as all games and downloadable material from the Stadia store. Google anticipates that these refunds will be finalized by mid-January.
Phil Harrison, vice president and general manager of Stadia, wrote in a blog post, “A few years ago, we also launched a consumer gaming service, Stadia. While Stadia’s approach to streaming games for consumers was built on a solid foundation of technology, it hasn’t gained the traction with users that we anticipated…” The Stadia team members will be reassigned to other divisions of the organization.
Will Stadia try and come back? Harrison wrote that Google sees opportunities to apply Stadia’s technology to other Google divisions, such as YouTube, Google Play, and its augmented reality efforts. The company also intends to “make it available to our industry partners, which is in line with where we see the future of gaming heading.”