Economy

Nike Executive: ‘Nike is a Brand That is of China and For China’

Published

10 months ago

July 18, 2021

Team Terrell

“Nike is a brand that is of China and for China” stated the company’s Chief executive John Donahoe. The comment was made during a call with Wall Street analysts about Nike’s latest earnings report and in response to a question about the competition of Chinese brands.

Donahoe made “a robust defense of the firm’s business in China after facing a consumer boycott there” reported the BBC. Nike has received backlash over doing business in Xinjiang, where millions of China’s Muslim minorities called Uyghurs reside.

The BBC notes “Uyghurs have been detained at camps where allegations of torture, forced labor and sexual abuse have emerged. China has denied these claims saying the camps are ‘re-education’ facilities aimed at lifting Uyghurs out of poverty.”

Donahoe said he remained confident that China would continue to be a fast-growing market for Nike as “we’ve always taken a long term view. We’ve been in China for over 40 years.” He added, “Phil [Knight] invested significant time and energy in China in the early days and today we’re the largest sports brand there.”

BBC reports of Nike being boycotted in China:

Several Western brands, including Nike and Swedish fashion retailer H&M, recently faced a backlash from Chinese shoppers after the firms expressed concerns about the alleged use of Uyghur forced labor in cotton production.

In March, a group of Western countries imposed sanctions on officials in China over rights abuses against the mostly Muslim Uyghur minority group.

The sanctions were introduced as a coordinated effort by the European Union, UK, US and Canada.

In December, the BBC published an investigation based on new research showing China was forcing hundreds of thousands of minorities including Uyghurs into manual labour in Xinjiang’s cotton fields.

Nonetheless, Nike’s fourth-quarter earnings showed revenues doubled to a better-than-expected $12.3 billion for the three months. “That helped it bounce back to a $1.5bn profit, from a $790m loss during the depths of the pandemic a year earlier” reports BBC.

“The figures also showed that revenue in China rose to more than $1.9bn, but missed Wall Street expectations of $2.2bn.” Donahue remains confident China will continue to be a fast-growing market for Nike.

Economy

National Gas Prices Could Hit $6.20 Per Gallon By August

Published

55 mins ago

May 20, 2022

Leo Terrell Staff

National gas prices could surge to well over $6 per gallon by the end of the summer, according to analysts at JPMorgan.

Natasha Kaneva, head of global oil and commodities research at JPMorgan, wrote in a research document that the United States was going to face a “cruel summer” as gas prices are expected to dwarf their already record highs.

“With expectations of strong driving demand — traditionally, the U.S. summer driving season starts on Memorial Day, which lands this year on May 30, and lasts until Labor Day in early September — U.S. retail price could surge another 37% by August to a $6.20/gallon national average,” she wrote.

“Typically, refiners produce more gasoline ahead of the summer road-trip season, building up inventories,” the analysts said. However, over the last month, “gasoline inventories have fallen counter seasonally and today sit at the lowest seasonal levels since 2019.”

The report comes the same week that the United States set a new record for gas prices with the average cost per gallon rising over $4 per gallon in all 50 states for the first time ever, according to a report from the American Automobile Association (AAA).

“The high cost of oil, the key ingredient in gasoline, is driving these high pump prices for consumers,” said AAA spokesperson Andrew Gross. “Even the annual seasonal demand dip for gasoline during the lull between spring break and Memorial Day, which would normally help lower prices, is having no effect this year.”

As explained in the report, “total domestic gasoline stocks decreased by 3.6 million bbl to 225 million bbl last week. Gasoline demand also decreased slightly from 8.86 million b/d to 8.7 million b/d. Typically, lower demand would put downward pressure on pump prices. However, crude prices remain volatile, and as they surge, pump prices follow suit. Pump prices will likely face upward pressure as oil prices stay above $105 per barrel.”

Economy

Report: April 2022 Inflation Was Worse Than Expected

Published

1 week ago

May 11, 2022

Leo Terrell Staff

The inflation crisis continued to worsen in April, according to new data released by the Bureau of Labor Statistics on Wednesday.

“The consumer price index, a broad-based measure of prices for goods and services, increased 8.3% from a year ago, higher than the Dow Jones estimate for an 8.1% gain,” CNBC reported. “That represented a slight ease from March’s peak but was still close to the highest level since the summer of 1982.”

According to the new CPI report, inflation “increased 0.3 percent in April on a seasonally adjusted basis after rising 1.2 percent in March… The all items index increased 8.3 percent for the 12 months ending April, a smaller increase than the 8.5-percent figure for the period ending in March. The all items less food and energy index rose 6.2 percent over the last 12 months. The energy index rose 30.3 percent over the last year, and the food index increased 9.4 percent, the largest 12-month increase since the period ending April 1981.”

Due to the rising inflation rate, the real wages of American workers continued to fall over the last year. According to a separate report from the Bureau of Labor Statistics, the “Real average hourly earnings decreased 2.6 percent, seasonally adjusted, from April 2021 to April 2022. The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 3.4-percent decrease in real average weekly earnings over this period.”

As noted by CNBC, “Markets had been looking for signs that March’s 8.5% CPI reading would mark the peak in pandemic-era inflation.”

However, the new April report showed that “this is another upward inflation surprise and suggests that the deceleration is going to be painstakingly slow,” said Seema Shah, chief strategist at Principal Global Investors, according to CNBC.