Jefferies Profit Slumps as Geopolitical Upheaval Hurts Deals
Jefferies Financial Group Inc. 's second-quarter earnings declined on a slump in the firm's investment-banking and capital-markets businesses, with activity muted by economic and geopolitical turmoil.
Revenue for the three months ended May 31 also dropped, slipping 1.3% to $1.63 billion, the New York-based firm said in a statement Wednesday. The biggest drops came in equity underwriting and debt capital markets, which both fell from a year earlier, when trading and deals were both climbing.
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29 minutes ago
- Yahoo
Nike Stock (NKE) Hits 6-Year Low as Market Braces for Q4 Earnings
Things aren't looking great for Nike (NKE) shareholders. Since Nike's previous fiscal Q3 earnings report, despite beating expectations across the board, the company's shares have dropped another 17%, bringing total losses to over 38% in the past twelve months. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Now trading below $70, the stock has reached its lowest level since 2018, highlighting the rate of decline the company has faced in recent years, driven by a combination of structural headwinds, cyclical challenges, and operational missteps. In contrast to the S&P 500, NKE stock has underperformed by ~16% this year. That said, the Beaverton, Oregon-based apparel giant is set to report its fiscal Q4 earnings on June 26, after the closing bell. I believe there are a few reasons that suggest a consistent shift in bearish sentiment. The good news is that with the market prepared for the worst, even small improvements and progress in the turnaround strategy could have a more positive—or less negative—impact. For now, Nike is a Hold ahead of its earnings. For starters, there's a secular shift—not just a temporary trend—where consumers are moving toward smaller, niche brands like On (ONON), Hoka (DECK), and Lululemon (LULU), rather than global giants like Nike. China, once a significant growth engine for Nike, has also become a major headwind, pressured by the rise of local competitors, geopolitical tensions, and weak consumer spending. Additionally, Nike's global shift to DTC (Direct-to-Consumer) has led to higher logistics costs, steeper customer acquisition expenses, and greater operational complexity. This has been exacerbated by a lack of meaningful product innovation, with the company still relying heavily on legacy franchises like Air Jordan and Air Force 1, rather than introducing new, tech-driven products. In the most recent quarter, Q3 2024, Nike once again posted disappointing numbers. Revenue dropped 9%, marking the fourth consecutive quarter of negative growth. Net income collapsed 32% year-over-year, while EPS fell 30%. In my view—and likely the market's—these financial results only reinforce the idea that Nike's challenges are more than just temporary; they're structural. It's essential to clarify that structural headwinds don't necessarily mean the end of the road for Nike's investment thesis; instead, they signal that changes are needed for a successful turnaround. Under the new leadership of CEO Elliot Hill, Nike has been working to rebuild wholesale partnerships (like (JD), Foot Locker (FL), Dick's Sporting Goods (DKS)), investing in new tech-driven product launches slated for 2025 (including collaborations with influencers like Kim Kardashian), and announcing plans to cut $2 billion in costs over the next three years. On the short-term cyclical side, Nike has also focused on addressing its inventory issues, moving away from excess stock that had led to heavy discounting over the past two years. In the last quarter, inventory levels fell by 2% year-over-year, although they remain elevated across all regions. Since these strategies don't produce immediate results, Nike's management has guided that Q4 revenues will likely still decline in the mid-teens. At the same time, gross margins are expected to contract by 400 to 500 basis points—to a range of 39% to 40%—which is well below the five-year average of 44%. The silver lining is that management attributes this margin compression mainly to inventory liquidations and restructuring charges, which are expected to be temporary. With that in mind, I expect the primary focus on earnings day—beyond beating the $0.12 EPS and $10.7 billion revenue estimates—to be on any early signs of progress in turnaround efforts, such as cost-cutting and less severe negative growth, along with continued reduction in inventories at a healthy pace. What's interesting is that despite the current depressed share price, Nike still trades at a free cash flow yield of 5.7%—well above the U.S. 10-year Treasury yield (~4.4%) and roughly in line with its cost of capital (~8% to 9%). That's pretty normal for a brand-heavy company. However, at 15x cash flows, Nike is trading below traditional peers like Adidas (ADDYY), which trades at a rate of 17x, and well below newer competitors stealing market share, such as On Holdings, which trades at 36x cash flows. In my view, Nike's bearish sentiment is so high that even if the stock disappoints the market, it might struggle in the short term but probably won't collapse—since the worst could already be priced in. For those familiar with options and a trading mindset, a good strategy to consider here is a diagonal put spread, which basically involves buying a longer-dated put and selling a shorter-dated put at a higher strike price. Basically, traders who buy a long-term bearish position (or protection) expiring in October—say, the October $56 strike put—and sell a short-term bearish position expiring right after earnings (like the June 27th $58 strike put) can take advantage of the high implied volatility around earnings by collecting premium on the more expensive short-term option. Things are shaping up to be volatile. According to Nike's option chains, the 'expected earnings move,' calculated via the at-the-money straddle on options closest to expiration, implies a potential move of approximately 8.3% up or down after the earnings release. The main risks of this strategy include Nike dropping below $58 before June 27, or if the stock moves sharply up or down after (or even before) the earnings announcement, causing both puts to lose value. Such volatility could reduce the value of both put options. That said, any losses would be limited to the premium initially paid. On Wall Street, NKE stock carries a Moderate Buy consensus rating based on 13 Buy, 12 Hold, and zero Sell ratings over the past three months. NKE's average stock price target of $71.41 implies approximately 16% upside potential over the next twelve months. All signs point to Nike's Q4 earnings being relatively transactional, without any major surprises—just steady, incremental steps toward a turnaround. Given the company's lackluster performance over the past few years (and recent months), the market's patience is running thin. Even the depressed valuations haven't convinced many to go long yet. That said, while I expect this quarter might still disappoint in terms of progress, I don't see it signaling a more profound decline, so a full-on stock price collapse seems unlikely. For now, I would say Nike is best avoided for new longs, with a solid Hold call for long-term investors. Traders, though, might find good opportunities with bearish strategies that also capitalize on short-term spikes in implied volatility. Disclaimer & DisclosureReport an Issue
Yahoo
33 minutes ago
- Yahoo
What is credit history?
Your credit history is a record of how you have managed past debt and how you are handling ongoing debt. Your credit history is outlined in detail in your credit report, which also includes any liens, credit inquiries or bankruptcies. Credit history also helps to determine your credit score, a numerical value that indicates your creditworthiness to potential lenders. You can improve your credit history by practicing healthy credit habits, like paying your bills on time, which can also impact your employment and rental options, credit card terms and offers as well as other lending opportunities. Your credit history is a look at how you have managed your credit in the past. If you are in the market for a new loan (such as a home mortgage loan, a car loan or a credit card), looking for a rental or even searching for a job, your credit history can have a significant impact. Find out more about what a credit history is, why credit history matters and ways you can improve it. Think of your credit history as a financial record of your credit activity. Among other financial information, it typically includes the following: whether you pay your bills on time, how many credit cards and other loans you have, what types of credit you use and how much debt you carry. Any late payments are typically reported after 30 days delinquent, so you could have late payments that trigger fees with your card issuer, for instance, but are not reported. Your credit history is recorded in a document called a credit report, which provides information about how you use your credit accounts, including your payment history and account balances. The report also provides your identifying information, details on any collections and bankruptcies on your record and information about credit inquiries. Even child support or alimony payments are part of your credit history and can have a negative impact if you miss a deadline. Credit history versus credit score Your credit score and credit history are related but are not the same. Your credit score is based on and calculated using an algorithm that includes your credit history that is documented on your credit report. Three major credit bureaus — Equifax, Experian and TransUnion — generate credit reports, but they do not always record the same information in the same format. Each bureau uses one or more scoring models — typically FICO or VantageScore — to interpret the data it has collected and create your credit score. FICO and VantageScore have multiple versions; FICO 8 is the most commonly used credit scoring model. The information on your credit report (your credit history) goes into a mathematical model that generates your credit score, which is typically a number between 300 and 850 that indicates how likely you are to pay off your debt. Because each credit scoring model has its own methods and criteria, your credit score with each one may vary. But each model is attempting to do the same thing: predict your likelihood of repaying your debts, specifically for the financial product you are applying for. So responsible financial behavior is likely to translate to a good score regardless of the model. Using a report card analogy, your credit report would be the report card that documents your credit history, or how you did on all of your assignments for a semester. Your credit score would be an overall letter grade, such as an A+ or a D. However, note that you won't find your credit score on your credit report. To see your actual credit score, rather than the data that goes into it, you can check to see if the credit bureau offers a free credit score and credit report. You might have to provide some personal information, such as your Social Security number. You can also purchase a more detailed report and score directly from one of the major credit bureaus or a third-party service, or you may be able to get a free credit score from a credit card issuer such as American Express or Capital One (sometimes even if you aren't an account holder with that bank). Checking your own credit score shouldn't impact it since it's considered a soft check. Lenders use your credit history to help determine whether to approve you for a loan or a credit card, as well as the size of your credit limit. Your credit history also influences the interest rate or cost of the loan you would be eligible for. Say you have a limited or no credit history because you've never used credit or you're a young adult who is just starting out on your own. If you apply for a top-tier rewards credit card to help, you will likely be turned down due to insufficient credit history. On the other hand, a long credit history full of on-time payments and responsible credit use can help you qualify for the best credit cards or secure a mortgage at a favorable interest rate. You can get a full picture of your credit history by ordering your credit reports from the three major bureaus. You are entitled to a copy of your credit report for free from each of the three credit bureaus once a week. However, remember that these reports don't provide your score for free, only the data used to calculate your score. For your credit score, you'll need to purchase it from them or get it for free from credit card issuers and other services that provide it as a customer benefit. Reviewing your credit report can help you better understand your financial challenges and areas that need improvement. It's also good to ensure the information is correct. Sometimes credit reports contain outdated or incorrect information which can wrongly prevent you from receiving access to credit, loans and good interest rates. Here are some best practices to build your credit score and establish a strong credit history: Pay all of your bills on time, every time. Your payment history, which reflects whether you pay your bills by their due date, accounts for 35 percent of your FICO credit score. Late payments, usually reported when at least 30 days delinquent, will drag your score down. If you do have a late payment recorded on your credit report as part of your credit history but otherwise have a history of paying on time, you can reach out to your creditor and ask to remove it. This may or may not be successful, but it's worth a try. Keep your credit card balances low. The amount you owe compared to the total credit available to you accounts for 30 percent of your credit score. The less debt you carry, the better your score is likely to be. Generally speaking, it's good to use no more than 30 percent of your available credit. Strive to pay your accounts off in full before the end of every billing cycle, if possible. Since your credit utilization is typically calculated once a month, making an extra payment mid-month can help bring it down. Keep your oldest credit card account open. The length of your credit history — or, how long you've been using credit — makes up 15 percent of your credit score. A longer history is better for your score. That's why, although it may seem wise to close inactive accounts, it's a good idea to keep them open because they contribute to your length of credit history and bring down your credit utilization. Closed accounts that are in good standing can stay on your credit reports for up to 10 years. For instance, it's OK to close an inactive credit card account if it's racking up unnecessary fees, but otherwise consider keeping it open and using it once in a while. Don't apply for many credit cards within a short frame of time. New credit accounts for 10 percent of your credit score. This factor considers the number of new credit accounts you've recently opened, as well as the number of recent credit applications you've made. It's best to keep these to a minimum. However, when you're shopping for a big loan such as a mortgage loan or car loan, you do have a 'rate-shopping window,' which is a period of time within which multiple credit inquiries will be factored into your credit score just once. Maintain a diverse portfolio of credit. Your credit mix makes up 10 percent of your credit score and accounts for the different types of credit accounts you have, including revolving debt (like credit cards) and installment debt (like student loans and mortgages). Consider becoming an authorized user on a parent's/guardian's or spouse's/partner's credit card. When you're an authorized user, the primary cardholder's activity often gets added to your credit report. You don't have to use the card or even get a physical card to be added to the account, but this is a great way to build credit if you're starting from scratch … assuming the primary cardholder handles their card responsibly. Use a third-party tool. You could also turn to alternative credit-building tools such as Experian Boost and eCredable Lift, suggests Ted Rossman, senior Bankrate analyst. These types of services can give you credit for things that haven't historically counted toward your credit score, including rent payments, streaming service subscriptions and utilities. Your credit history is an important factor that tells lenders your creditworthiness, or likelihood that you will repay your debt in a timely manner. It's a record of how well you have managed credit, containing information on your credit accounts (such as payments) and any negative marks against your creditworthiness (such as delinquencies and bankruptcies). Check your credit report occasionally to make sure that your information is accurate since it informs your credit score. If your credit score isn't as high as you'd like, engaging in good credit habits can help you to build your credit score. Who can check your credit history? The credit bureaus can share your credit history as documented in your credit report to creditors, government authorities, landlords, employers, insurance companies, among other services that may need your credit history as outlined by the Consumer Financial Protection Bureau. For some requests, such as for rentals and employment, many states now require consent. What is good credit history? Good credit history is a positive credit report narrative indicating responsible use of your available credit, such as paying your bills on time. Negative input, such as late payments, can stick around on your credit report for up to seven years and cast a cloud on your credit history. One exception is chapter seven bankruptcy, which can linger for as long as 10 years. You can get fraudulent or erroneous information removed from your credit report, but everything else generally stays for a set period of time. Sign in to access your portfolio
Yahoo
33 minutes ago
- Yahoo
CEO Jensen Huang Just Sold Nvidia Stock. Should You?
Nvidia (NVDA) is in focus this morning following news that Jensen Huang, its chief executive, has sold more than $14 million worth of the company's shares in recent sessions. According to Huang's recent filing, he's trimmed his stake in NVDA from 75.8 million shares to 75.7 million shares. The chief executive also owns more than 783 million NVDA shares through trusts, partnerships, and LLCs. Seeking Passive Income? This Dividend Stock Yields 9.6%. TSLA Stock Warning: Tesla Could Lose $1.9 Billion in Free Cash Flow This Year Cathie Wood Is Dumping Circle Stock. Should You? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Huang's move comes on the heels of a massive surge in Nvidia stock, which is now trading more than 70% above its year-to-date low set in the first week of April. Note that Jensen Huang could sell another roughly $850 million worth of Nvidia stock by the end of 2025. However, his share sales (including the one revealed today) will be executed under a Rule 10b5-1 prearranged trading plan – adopted and publicly disclosed in March – designed to avoid the perception of insider trading. Such plans are common among executives to diversify personal wealth without signalling a lack of confidence. Huang still holds more than 900 million NVDA shares, underscoring his long-term commitment to the artificial intelligence behemoth. The sale represents less than 1.0% of his holdings and aligns with prudent financial planning – not pessimism. In short, given the company's leadership in AI and Huang's strategic vision, his filing shouldn't be interpreted as a bearish signal for Nvidia stock. While NVDA has already been lucrative for its investors in recent months, Kevin Simpson – the founder and chief executive of Capital Wealth Planning – recommends sticking to it for the longer term. Simpson said Nvidia stock will likely print a new all-time high in the coming weeks as he appeared on CNBC last week. According to him, Nvidia shares remain worth owning as 'they're not [just] chips anymore.' In fact, the multinational is stretching its wings in software (CUDA) and networking as well. Wall Street analysts agree with Simpson's bullish view on Nvidia stock as well. The consensus rating on NVDA currently sits at 'Strong Buy' with the mean target of about $175 indicating potential upside of more than 20% from current levels. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
