Markets slide as Nike shares sink after sales miss

Dow rose 33, decliners over advancers 5 & NAZ was off 4.  The MLP index slipped 1+ to the 179s & the REIT index dropped 4+ to the 458s.  Junk bond funds were mixed & Treasuries continued to be sold.  Oil was higher in the 73s & gold was off 2 to 1747 (more on both below).

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The US gov could run out of money to pays its bills by mid-Oct, according to a new analysis from a DC think tank & economists warn the unprecedented debt default could trigger a financial crisis.  The forecast from the Bipartisan Policy Center shows the "X Date" – the day when the Treasury runs out of maneuvering room to prevent the US from broaching the debt ceiling – will take place sometime between Oct 15 & Nov 4.  "New data demonstrate that Congress has only weeks to address the debt limit," Shai Akabas, director of economic policy at the Bipartisan Policy Center, said.  "If they don’t, the U.S. government risks missing or delaying critical bills that will come due in mid-October that millions of Americans rely on, from military paychecks and retirement benefits to advanced child tax credit payments."  The US has never defaulted on its debt before, although it came close in 2011 when House Reps refused to pass a debt-ceiling increase, prompting rating agency Standard & Poor's to downgrade US debt rating one notch.  If the US failed to raise or suspend the debt limit, it would eventually have to temporarily default on some of its obligations, which could have serious & negative economic implications.  Interest rates would likely spike & demand for Treasuries would drop; even the threat of default can cause borrowing costs to increase.  Once the US runs out of money, Treasury would be unable to meet about 40% of all payments due in the several weeks that follow.  The battle to raise the gov's borrowing limit carries big risks for state & local officials:  With the total debt standing at $28.5T, the go would be forced to slash federal programs unless the cap is either suspended or lifted.  But lawmakers are at a stalemate over the debt ceiling: Dems are pressuring Reps to support an effort to raise or suspend the ceiling, adamant that they won't stick it in a partisan $3.5T spending bill.  But Senate Minority Leader Mitch McConnell has rejected an appeal by Yellen to raise the ceiling, arguing that Dems have the ability to go it alone.

US could run out of cash by mid-October, triggering global financial crisis: Analysis

The COVID-19 pandemic has caught up with Nike (NKE), a Dow stock.  Revenue growth is being limited by supply-chain disruptions that have slowed the production & delivery of shoes & other goods around the world.  Revenue was $12.2B for the qtr, up 16% from a year earlier & essentially flat with the Jun qtr.  The results were below expectations of $12.5B.  Execs said consumer demand for company products remains strong & its fiscal Q1 sales would have been even higher if not for supply-chain issues.  They warned that production problems in Vietnam & Indonesia would hurt the short-term outlook.  "We’re not immune to the global supply-chain headwinds," finance chief Matthew Friend said.  He added that the company lost 10 weeks worth of production in Vietnam due to lockdowns there after a surge in COVID-19 cases & it is taking an average of 80 days to move products from Asia to North America, or twice as long as before the pandemic.  More than ½ of footwear 1/3 of its apparel manufacturing occurs in Vietnam, where local authorities recently extended a lockdown until at least Oct 1.  Execs added that they expect flat revenue growth in the current qtr, which ends in Nov, due to the impact of the factory closures & longer transit times.  Earlier this year, sales surged on pent-up demand from consumers for sneakers & athletic attire.  EPS for the Aug qtr was $1.16, exceeding projections.  Direct-to-consumer sales led the company's revenue growth.  Direct sales were $4.7B, up 28% from a year earlier.  The stock dropped 10.10 (6%).
If you would like to learn more about NKE, click on this link:
club.ino.com/trend/analysis/stock/NKE?a_aid=CD3289&a_bid=6ae5b6f7

Nike’s revenue pinched by supply-chain disruptions

Gold futures little changed for the week after settling higher today, a day after posting their sharpest daily loss in a week, as investors continued to digest the Federal Reserve' monetary policy plans, as well as China's crackdown on cryptocurrencies & developments tied to property giant Evergrande.  Today China reiterated its crackdown on cryptocurrencies, with the People's Bank of China stating that virtual currency doesn't have the same legal status as legal currency.  Dec gold rose $1 to settle at $1751 an ounce on the session.  The 1.6% drop yesterday represented the sharpest one-day $ & % decline for bullion since Sep 16.  For the week, gold futures were pennies higher than last Fri's $1751 settlement.  The Fed on Wed signaled its intent to "soon" taper its bond purchases & raise interest rates by late next year, which could dim appetite for bullion if investors shift to assets that offer yields.  The central bank's projections of interest-rate increases also pointed to rate increases as early as 2022, which could also dent demand for precious metals.

Gold prices settle higher, as Evergrande woes boost the metal’s haven appeal

Oil futures climbed for a 4th straight session, with Brent crude, the global price benchmark, marking another settlement at its highest since Oct 2018.  West Texas Intermediate (WTI) crude for Nov, the US benchmark, rose 68¢ (0.9%) to settle at $73.98 a barrel.  Prices saw the highest front-month contract finish since Jul 13 & gained 3% for the week.  Front-month Nov Brent rose 84¢ (1.1%) at $78.09 a barrel, logging another settlement at the highest in nearly 3 years.  Dec Brent, the most actively traded contract, climbed 77¢ (1%) at $77.23 a barrel.  For the week, front-month Brent prices were up 3.7%.  The Bureau of Safety & Environmental Enforcement (BSEE) estimated that 16% of US Gulf oil production (around 294K barrels a day) remained shut in after Ida made landfall on the Louisiana coast on Aug 29.  Meanwhile, refinery activity has rebounded more quickly than production.  Meanwhile, Baker Hughes reported that the number of active US rigs drilling for oil climbed by 10 to 421 this week, up a 3rd week in a row as a recovery in Gulf continues.  This week members of the Organization of the Petroleum Exporting Countries & its allies (OPEC+) have struggled to boost production after agreeing to begin further easing output curbs starting in Aug.

Oil up for 4th straight session, with Brent logging another close near 3-year high

Dow was up 214 in a choppy week.  Next week could be very volatile with the goings on in DC & China getting the most attention.  Q3 closes on Thurs & the following week will feature Sep monthly data (probably unimpressive).  Then Q3 earnings.  As shown below, Dow is about where it was 4 months ago.

Dow Jones Industrials