More From Phalguni Soni
Why investors are preferring high-quality debt
High-quality bonds can be an investor refuge when there’s market volatility. These securities provide relatively stable cash flows. The default probability is low.
Analyzing the Prospects of Nike’s Geographic Segments
Most of Nike’s (NKE) incremental revenue was recorded in its North America market, Nike’s largest geographical segment.
Where NIKE And Under Armour Win In The Market Share Stakes
Under Armour’s share of the apparel market rose from 14% to 16%, year-over-year, in the first nine months of 2014.
What key PMI indicators mean for stocks and investors
Last week, the Institute for Supply Management (or ISM) and Markit both released their reports on the Purchasing Managers Index (or PMI). The ISM’s report gave its strongest reading since February.
Lululemon: The Outliers Affecting LULU’s Stock Price Movement
On June 11, Lululemon Athletica (LULU) filed a shelf prospectus with the US Securities and Exchange Commission (or SEC).
Must-know update: Are retail sales poised for a spring surge?
For the week ended March 15, retail same-store sales grew 0.7% and 1.5% week-on-week and year-on-year, respectively.
Why high-grade debt issuance increased more than three-fold
In the week ending August 8, weekly investment-grade bond (LQD) issuance surged by 222%, week-over-week to come in at $24.975 billion over 19 deals. Issuance was driven by refinancing older and costlier debt, acquisition related financing, share-repurchases, and other general corporate purposes.
Plosser on the use of Taylor-like rules in systematic guidance
In this part, we will discuss Dr. Plosser’s views on the use of systematic tools, for example, Taylor-like rules for setting policy rates and communicating these to markets.
Why issuers stayed away from high-yield debt markets
Issuance slowed to a trickle when market conditions were unfavorable in August. A number of transactions were either postponed, re-priced, or withdrawn from the market altogether. There was an increase in high-yield debt risk perceptions.
Must know: Stress tests and the likely timing for rate increases
On March 26, the U.S. Fed released bank stress test results indicating which banks can increase dividend payouts and share buybacks.
Must-know: How will this week’s JOLTS report impact US debt?
JOLTS (the “Job Openings and Labor Turnover” report) produces monthly estimates of job openings, hires, quits, layoffs and discharges, and other separations.
Fed’s twin targets—are negative real interest rates needed?
The Federal budget deficit (the difference between budget collections and the government’s commitments) has also been a key source of uncertainty to both businesses and households.
Home Depot Outlook Depends on the Consumer
If it’s to increase sales, in-store execution, omni-channel efforts, and better customer service will be critical for Home Depot (HD).
Is simpler and more transparent regulation better for investors?
Over the course of his speech, Plosser provided several reasons why simplicity and transparency can enable markets to price risks in a more informed manner.
Labor market predominates again in deciphering extent of recovery
In this part, we will discuss Janet Yellen’s views on labor market slack, one of the “three broad questions” posed by the Fed Chair, the answers to which are likely to shape the future monetary policy.
Must-know trends that affect pricing at T-bill auctions
The U.S. Treasury holds weekly auctions for the four-week, 13-week, and 26-week Treasury bills. But its auctions for 52-week Treasury bills (SHY) take place only once a month.
Important releases hone in on rates and consumer spending
The hottest topic for market players right now is the interest rate hike. Last week’s labor releases spurred the recovery. Many investors had thought the recovery was flagging.
Coach’s Stuart Weitzman Purchase: Why It’s Bad For KORS
Although Coach currently has a licensing deal with Jimlar for footwear, the Stuart Weitzman acquisition is likely to accomplish several objectives.
How will this week’s consumption indicators impact debt securities?
This week, markets will be looking at any clues revealing hints for the outcome of the Fed’s next Federal Open Market Committee Meeting (or FOMC) slated for March 18–19.
Lululemon’s 2Q16 Revenue Rises 15.9% Despite Forex Headwinds
Lululemon Athletica (LULU) reported sales revenue of $453 million in 2Q16, up 15.9% year-over-year. Excluding the impact of adverse foreign currency movements, sales would have increased by 21%.
Can manufacturing activity in the northeast increase the pace?
The Philadelphia Fed will release the results of its Business Outlook Survey for June, on Thursday, June 19.
Why smaller oil and gas firms are foraying into high yield debt
High yield debt markets saw $6 billion worth of new supply issued across 12 transactions in the week ending October 24.
Seeking fresh supply: Why pending home sales were flat in January
The indicator increased marginally, by 0.1% to 95 in January from an upwardly revised 94.9 in December, and came in 9% below January 2013’s reading.
Europe and China ready to jump-start their economies
Unconventional stimulus measures from central banks usually end up injecting liquidity in global financial markets. They’re especially relevant to emerging market economies.
Protect your returns by studying the key risks in bond investing
Since long-term bonds offer investors a longer and more certain income stream, the longer the maturity of the portfolio and the benchmark, the lower the income risk.
How Markets Are Pricing Under Armour Stock
Markets expect the strong growth trend to continue, and value Under Armour stock higher than the overall market and comparable firms.
Will consumer spending affect the yield curve and Fed funds rate?
The Bureau of Economic Analysis will release its personal income and outlays report for March on Thursday, May 1. The report measures individuals’ income and expenditure levels.
Why high-grade bond issuance dropped to the lowest level in 2014
With the earnings season in full swing, issuance levels have fallen over the past few weeks—a number of corporate borrowers are subject to blackout periods preceding their quarterly earnings releases.
Must-know: Market’s reception of the Fed’s July FOMC statement
Treasury yields on the long-end of the curve, were down since the conclusion of the Fed’s last FOMC meeting on June 18—30-year and ten-year Treasury yields had fallen by 12 bps and three basis points (or bps), respectively over the period June 18 to July 30.
Why corporate bonds reacted to the QE3 exit and GDP surprise
Bond yields and prices move in opposite directions. Due to the increase in yields last week, returns on investment-grade bonds were negative.
March manufacturing releases are critical in assessing a recovery
The Purchasing Managers Manufacturing Index (or PMI) is based on a monthly survey of selected companies that provide an advanced indication of what’s really happening in the private-sector economy.
Coach Returns A Mixed Bag To Shareholders
Shareholders used to benefit from Coach’s strong results through both stocks and dividend payouts. But in the past few years, returns have been eroded.
Why does Richard Fisher advocate for Delphic forward guidance?
In this article, we’ll discuss Fisher’s take on Delphic forward guidance. According to Fisher, Delphic forward guidance is more obscure and enigmatic.
What Are Lowe’s Supply Chain and Inventory Management Policies?
Lowe’s inventory turnover came in at 4.1x in fiscal 2015 compared to 4.9x for Home Depot (HD).
Must-know: Janet Yellen’s take on the Fed’s forward guidance
Central bankers usually provide markets with indications about their economic projections. They also provide information about their future monetary policy stance. The Fed wants to reduce volatility (VXX) in markets by indicating its monetary policy stance. As a result, rate changes won’t surprise the markets as much.
How Does Lowe’s E-Commerce Performance Compare to Rivals?
Lowe’s (LOW) derived about 2.5% of its sales from the e-commerce channel, or an estimated $1.4 billion, in fiscal 2015.
Why Lowe’s Is Bullish on Its Prospects in the Medium Term
Lowe’s (LOW) expects year-over-year sales growth in fiscal 2016 to come in between 4.5%-5%.
Restoration Hardware’s New Luxury Retail Mantra: Bigger Is Better
On its 1Q16 earnings call, Restoration Hardware unveiled RH Modern, a new luxury retail concept store. It will be six to eight times the size of its other stores.
Understanding Coach’s Marketing Strategies
To support its direct marketing initiatives, Coach has a database of 24 million households in North America and 10 million in Asia.
Can Under Armour’s Growth Model Cope With These Threats?
Key threats to the company include higher labor costs and greater regulation. After the Bangladesh factory tragedy, stricter regulations can be expected.
Why the Fed’s policy remains the key driver for US Treasuries
On August 15, yields on ten-year notes (IEF) and 30-year bonds (TBT) both fell by ten basis points to 2.34% and 3.13%, respectively. This was also their lowest level in over a year.
Why demand is rising for 3-year Treasury notes
The U.S. Department of the Treasury holds auctions for three-year Treasury notes (or T-notes) each month. Three-year notes are at the short-end of the yield curve.
Pricing Impact Of A Potential Staples-Office Depot Combination
Pricing pressures come from rival superstores as well as a variety of discount stores and online retailers. Therefore, a merger likely won’t result in higher prices for consumers.
A guide to Yellen’s Delphic speech and the Odyssean FOMC guidance
In this article, we’ll discuss how the Fed’s Odyssean and Delphic guidance in March has impacted financial markets.
Why Skechers Is Thriving in a Competitive Footwear Market
Skechers grabbed the number two spot in the US footwear market last year. The company’s brands were also ranked number one in walking and work footwear.
Lululemon Shows Sports Apparel Is Outpacing Retail Sector Growth
Sports apparel as a category has been outpacing growth in 12 other retail segments for several months now. This should benefit sales for Lululemon (LULU).
Will VF Corporation’s Vans Brand Spur Higher Growth in 3Q15?
VF Corporation saw sales of $2.5 billion in 2Q15, up 4.7% year-over-year. Its performance was boosted by top brands The North Face, Timberland, and Vans.
What Led to Home Depot’s Record Results in Fiscal 2016?
Home Depot (HD) reported record results in fiscal 2016. Sales reached a new high of $88.5 billion in fiscal 2016, up 6.4% year-over-year (or YoY).
Under Armour’s Upbeat Outlook and Stock Price Performance
Under Armour’s (UA) stock price hit several record highs this year. The stock has provided total returns of 54.9% over the past year.
Walmex – Walmart’s Recent Initiatives In Mexico
Walmex also looking at higher sales through the e-commerce channel. It launched e-commerce in Mexico in 2013. The growth has been moderate.
Can Walmart Beat Wall Street Expectations in 3Q16?
Walmart (WMT) is scheduled to release its earnings report for 3Q16 on November 17, 2015. Analysts project Walmart’s adjusted EPS to come in at $0.98 in 3Q16, a decline of 14.9% year-over-year.
Must-know: Why did the Indian rupee free-fall in 2013?
India’s current account deficit rose to 4.8% of GDP in 2012–2013, largely financed through hot money flows, and exceeded the government’s target level of 2.5% to 3% of GDP.
Why Walmart and Target Saw Same-Store Sales Growth in 3Q16
Same-store sales growth came in at 1.5% in 3Q16 for Walmart US compared to 0.4% in 3Q15. Target’s (TGT) same-store sales grew 1.9% in 3Q16, driven by both higher traffic and transaction size.
Coach Raises Guidance on Upbeat Results from Stuart Weitzman
Stuart Weitzman’s results were one of the brightest spots in Coach’s (COH) fiscal 2Q16 earnings release.
Skechers’ China Sales Rise: What’s the Growth Outlook?
China has been an important element in Skechers’ success in international markets. Sales from China rose to $220 million in 2015 from $86 million in 2014.
Must-know: Future impacts of financial stability measures
The Fed currently uses considerable staff resources in monitoring financial markets for risks arising from financial instability.
Overview: High-yield debt market borrowers set new 2014 records
Despite a holiday-shortened week, issuance volumes for leveraged loans surged by almost 49%, week-over-week, to $21.3 billion.
Why investors piled into junk bond funds
High market volatility usually increases risk perceptions for junk bonds (PHB). This increases spreads and yields. As a result, bond prices decrease.
Can Project Jacquard Revive Premium Denim?
Google and Levi Strauss unveiled a new collaboration. It embeds touch-enabled interactive technology in fabrics. It may revive the denim industry.
Nike Market Share Gets the High Score in Activewear
UA’s market share came in at 6%, and ADDYY’s came in at 3%. Hanes (HBI) took 3% of the market in 1Q15 .Nike (NKE) was the market leader for activewear overall.
Why Online Sales Are A Competitive Advantage For Staples
The growth in ODP and OMX’s combined sales fell—compared to Staples. They were ~143% of SPLS’s sales in 2007. This is just over $8 billion. That fell to $7.3 billion in 2013.
An investor’s guide to financial intermediation and key risks
Financial intermediation can result in concentration of risks that increase the fragility of the financial system. These risks are referred to as systemic risks.
Why Nike Is Able To Sell More Products At Higher Prices
Revenue gains for Nike (NKE) in 1H15 were broad-based. Sales rose for almost all key product categories, with the notable exception of the golf category.
When geopolitical risk takes precedence over interest rate risk
The total returns on municipal debt came in at 3.32% in the first quarter of 2014, as measured by the Barclays Municipal Bond Index.
Must-know: Analyzing the 6-month Treasury bills auction
The share of primary dealer bids rose slightly. An increase in the percentage of primary dealer bids is a sign of weaker fundamental market demand.
The Fed’s take on economic growth as the US dollar appreciates
The Fed believes persistently low inflation and an appreciating dollar will impact gross domestic product (or GDP) growth in the coming quarters. A higher US dollar makes US goods less competitive in overseas markets.
Bank of Japan announces QQE2, expanded monetary stimulus
At its monetary policy meeting held on October 31, the Bank of Japan (or BOJ) announced new stimulus measures. The measures come in addition to those it announced earlier.
The 6 Positive Things about April’s Retail Sales Report
The advance retail sales report for April 2015 was on the whole, mixed. The mixed readings in the retail sales report brought about indifferent reactions from markets.
Target and Walmart at Opposite Ends of Earnings Guidance
In its 2Q16 earnings release, Walmart revised its projections for fiscal 2016. It’s now expecting diluted EPS of $4.40–$4.70, down from its earlier guidance of $4.70–$5.05.
Under Armour’s Athletic Endorsements Paid Handsome Dividends
In terms of endorsements, the last weekend in January was eventful for Under Armour. Tom Brady won his fourth Super Bowl. He wore Under Armour cleats.
Why Lowe’s Is Trying Hard to Woo Professional Customers
A professional customer is one who’s looking for products to complete projects for other customers.
Market Moves Paint a Contradictory Picture of Nike’s Performance
The initial bullish reaction to Nike’s earnings stemmed from the upbeat futures orders reports, the higher-than-expected earnings growth, and upbeat outlook.
Must-know: An overview of the 52-week Treasury bills auction
The U.S. Treasury auctioned $102 billion worth of Treasury bills (or T-bills) last week. The 52-week, or one-year, auction was held on September 16. The auction size was set at $25 billion—unchanged from August’s auction. The auction demand was slightly lower, with the bid-to-cover ratio falling to 4.06x—compared to 4.10x in August. The ratio averaged ~4.41x in 2014.
Home Depot: Margins Up on Higher Sales, Lower Expenses
Home Depot’s margins are ahead of those reported by the number-two home improvement (XHB) (ITB) retailer, Lowe’s (LOW), over the past twelve months.
Walmart: Price Wars In The United Kingdom’s Grocery Market
The United Kingdom has been one of the most successful overseas forays for Walmart (WMT). The company operates ~576 stores in the country.
Opportunities and Challenges for Coach
Coach expects to realize $160 million in annual savings due to its restructuring initiatives from fiscal 2016 onward. It also expects to maintain its annual dividend of $1.35 per share.
Nike: 5-Year Returns Targets for Shareholders
At its 2015 Investor Day held on September 14, Nike briefed the financial community on its targets for generating value for shareholders.
Office Supplies Retail: Regulation, Competition, And Consolidation
There aren’t many large brick-and-mortar players left in the market. The industry faced stiff competition from online retailers like Amazon (AMZN).
Tapering and debt markets: Predicting the Fed’s upcoming view
Possibly the most important indicator for the debt markets going forward will be provided by Fed Chairman Janet Yellen’s semi-annual monetary policy testimony.
How Nike Made a Strong Recovery in China
Nike is bullish on prospects in China, backed by a 20% growth in futures orders, the highest among all its geographies.
Procter & Gamble Divestitures: Is 43-Brand Coty Deal the Last?
Brand divestitures, numbering ~93 out of a possible 100, according to last year’s announcement, will enable Procter & Gamble to focus on its core portfolio where it’s more market dominant.
Why policymakers favor reducing MBS and Treasuries reinvestment
The Fed also embarked on three rounds of quantitative easing (or QE). Now, the Fed is looking to decrease the size of its bloated balance sheet.
Why the FOMC believes that credit conditions are still strong
Easier borrowing conditions stimulate business investment among firms. Higher investment would generate employment and benefit firms’ revenues and profits.
Overview: High-yield bond markets since the Great Recession
High-yield, or junk-rated, bonds have higher yields than investment-grade bonds—like U.S. Treasuries and high-quality corporate debt. They’re issued by borrowers with higher credit risk—for example, with a lower ability to service the debt issued. Investors need a higher return to compensate for the higher risks involved.
Nike’s Profitability Improves But Still Trails the Competition
Despite Nike’s expanding margin and improved operating profitability, its margin and profitability still trail peers Under Armour and Lululemon Athletica.
Why low correlations between asset classes benefit investors
A diversified portfolio—one in which funds are divided among various asset classes, like stocks, bonds, or real estate—would usually have lower risk than an non-diversified portfolio.
Why you should know the key differences between job reports
Few economic releases elicit as much reaction from both the stock (IVV) and bond (BND) markets as the employment reports issued by Automatic Data Processing (ADP) and the Bureau of Labor Statistics (the BLS).
Must-know: What investment-grade corporate bonds expect in 2015
U.S. investment-grade corporate bonds (LQD) weathered higher market volatility well in 2014. They’ve been a steady source of returns for investors.
Change Is Needed In The Office Supplies Retail Segment
Although the office supplies industry is a niche retail segment, it’s highly fragmented. The industry has many players. The rivalry between the players is intense.
Analysis: Nike’s 5-Year Roadmap to Grow Sales
Nike holds the top position in athletic footwear and athletic apparel. It’s apparel and footwear sales were $8.6 billion and $18.3 billion, respectively, in fiscal 2015.
Nike’s Fastest-Growing Demographic Segments
The women and young athletes demographic segments saw the greatest sales traction in fiscal 2015 for Nike.
Why Fisher and Plosser disagreed with the FOMC policy motion
Richard Fisher believes that the Fed needs to tighten policy. This is based on the improved labor market and inflation outlook. He also believes that continued monetary accommodation is causing signs of “financial excess” in certain asset classes. He spoke earlier about signs of froth in high-yield bond (JNK) (HYG) markets.
Why are junk bond yields the lowest ever on record?
The BofA Merrill Lynch U.S. High Yield Master II Index increased by 0.34% over the week ending June 20, and is up by 5.64% so far this year (up to June 20).
Key Risks and Opportunities for Home Depot’s Multichannel Model
The Home Depot believes in educating less wired up vendors about the inherent opportunities in e-commerce. This will lead to higher sales, a win-win for both parties.
Under Armour’s Fitness App Platform Is the World’s Largest
Late last year and in early 2015, Under Armour acquired Endomondo and MyFitnessPal. Its fitness app user platform became the largest in the world.
Why Nike Is Able to Turn a Profit in E-Commerce
The Nike+ Training Club clocked ~17 million downloads by 1Q15. The app is now available in 18 languages, creating the framework for a global community.
Understanding the Fed’s yield curve can impact your bond returns
The yield curve is a graph that plots interest rates at different maturities with the same credit quality that can range from a month to 30 years or more.
US Dollar at Decade Highs Casts a Shadow over Nike’s Performance
Since Nike reports financial results in US dollars, the performance of the dollar versus foreign currencies affects the company’s performance.
Why economic data influenced high-grade bond yields
Economic data usually influences investment-grade bond yields, including Treasuries (TLT) and corporates (AGG) (LQD). Yields tend to fall on negative economic data. They rise when economic data is positive. Demand for safer investment-grade debt rises when economic growth concerns surface. This tends to raise their price and lower yields.
Nike Still Dominates Athletic Footwear in 1Q15
US dollar sales of athletic footwear rose 8% in the first quarter of 2015. Nike was the most dominant brand by far with a market share of 62%.