Nike Goldman Schwab in a Bad Run Investors Eye Turnaround

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August has proven to be a challenging month for several high-profile stocks, with investors in Nike, Goldman Sachs, and Charles Schwab potentially regretting not taking a vacation from their financial portfolios. Nike’s stock, for instance, has seen its longest losing streak on record, extending over nine days and falling 7.5% amidst indications of an economic slowdown in China, the company’s second-largest market. The trend shows no signs of abating, with further losses anticipated following Foot Locker’s failure to meet sales expectations in Q2 and a subsequent downgrading of its outlook. Foot Locker is one of Nike’s significant wholesale partners, and its performance has a direct impact on Nike’s financial health.

Charles Schwab’s shares have also been on the decline, falling for 11 consecutive days, marking its longest losing streak since July 2004. The stock has plummeted by 14.4% over this period, with a 5% drop on Tuesday alone following the company’s announcement of cost-cutting measures, including layoffs and office space reduction. Major American banks are not faring much better, with both Goldman Sachs and Citigroup stocks declining for seven consecutive days. Even Bank of America, a stalwart in the financial industry, has seen its shares fall for six out of the last seven days.

Several Stocks Experiencing a Rough August

August, traditionally a weak month for stocks, has proven particularly difficult for several companies, including Nike, Goldman Sachs, and Charles Schwab, among others. Investors would have found more peace of mind enjoying their summer vacations than checking for stock price updates.

Nike’s Record-Breaking Losing Streak

Nike has seen its stocks fall for nine consecutive days, marking its longest losing streak on record, according to Dow Jones Market Data. Over this period, the sportswear giant’s stock has dropped by 7.5%. This downturn has been largely attributed to signs of an economic slowdown in China, Nike’s second-largest market.

Nike’s streak appears set to continue following a 3.6% drop in premarket trading on Wednesday. This drop came after Foot Locker, one of Nike’s wholesale partners, missed its Q2 sales expectations and subsequently cut its outlook. Moreover, disappointing earnings by Dick’s Sporting Goods, another wholesale partner, ensured that Nike’s losing streak extended to a record-breaking ninth day.

Charles Schwab and Banks in Decline

Charles Schwab has also been hit hard, with shares falling for 11 consecutive days, marking its longest losing streak since July 2004. The company’s shares have plunged 14.4% during this period, with a 5% drop on Tuesday alone after the company announced plans to reduce operating expenses by cutting its workforce and office space.

America’s leading banks haven’t fared much better. Both Goldman Sachs and Citigroup have seen their stocks decline for seven consecutive days, with Bank of America experiencing drops for six of the last seven days.

Southwest Airlines Struggles

Southwest Airlines is another company experiencing a difficult August. The low-cost carrier’s shares have been on an eight-day losing streak, its longest since February 2020. Over this period, the airline’s shares have fallen by 6.9%.

The company’s disappointing earnings late last month, which suggested a softening of domestic demand, hasn’t helped matters. Southwest has stated that it expects revenue per available seat mile to fall in Q3, indicating a decrease in both demand and fares.

American Airlines’ recent pilot pay deal, which results in a 46% pay rise over four years according to its pilots’ union, may also be causing concern for investors, as Southwest is the only major carrier yet to agree on a deal with its pilots.

Looking for a Turnaround

Investors are now hoping for positive news, or at the very least, a lack of further bad news, to break these losing streaks and lift the gloom.

My Takeaways

Despite the current gloomy outlook, it’s important to remember that stocks can be quite volatile, and downturns are often followed by upswings. However, these recent trends should serve as a reminder for investors to diversify their portfolios and not put all their eggs in one basket. It also underscores the importance of closely monitoring global economic trends, as developments in one market can have significant impacts on companies operating in other markets.

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