The reasoning for such an assertion can be based on the premise of what type of company Nike is. Selling sport shoes and other clothing products at an above market price may not be complacent with consumers with the upcoming economic downturn. As inflation worries have propelled the Federal Reserve to increase interest rates, a negative effect will occur for companies such as a decrease in purchases. Consequently, companies will have to compensate for the lack of sales by firing employees. This results in lower domestic income for Americans, creating even more negative effects for the economy. Because consumers will not spend at their previous rate, profits will fall for companies that sell products at high prices (like Nike) and will transcend the bad news to shareholders of their stock. As Nike perfectly fits this description, expect some announcements in the future, especially if there is a hard landing, of a lowering of guidance.

Historically speaking, when the recession of 2001 through 2003 took place, shares of Nike dropped dramatically to near 33% which is a big downfall for a large capitalization corporation. When the economy got back to a more prosperous state, shares of Nike rose because of increases in margins and earnings, placing Nike almost 100% ahead relative to the end of 2003. Will Nike follow a similar pattern when the next recession occurs? The topic is debatable, but Nike does seem to follow a relatively cyclical pattern determined by the economy a

The reasoning for such an assertion can be based on the premise of what type of company Nike is. Selling sport shoes and other clothing products at an above market price may not be complacent with consumers with the upcoming economic downturn. As inflation worries have propelled the Federal Reserve to increase interest rates, a negative effect will occur for companies such as a decrease in purchases. Consequently, companies will have to compensate for the lack of sales by firing employees. This results in lower domestic income for Americans, creating even more negative effects for the economy. Because consumers will not spend at their previous rate, profits will fall for companies that sell products at high prices (like Nike) and will transcend the bad news to shareholders of their stock. As Nike perfectly fits this description, expect some announcements in the future, especially if there is a hard landing, of a lowering of guidance.

Historically speaking, when the recession of 2001 through 2003 took place, shares of Nike dropped dramatically to near 33% which is a big downfall for a large capitalization corporation. When the economy got back to a more prosperous state, shares of Nike rose because of increases in margins and earnings, placing Nike almost 100% ahead relative to the end of 2003. Will Nike follow a similar pattern when the next recession occurs? The topic is debatable, but Nike does seem to follow a relatively cyclical pattern determined by the economy a

Historically speaking, when the recession of 2001 through 2003 took place, shares of Nike dropped dramatically to near 33% which is a big downfall for a large capitalization corporation. When the economy got back to a more prosperous state, shares of Nike rose because of increases in margins and earnings, placing Nike almost 100% ahead relative to the end of 2003. Will Nike follow a similar pattern when the next recession occurs? The topic is debatable, but Nike does seem to follow a relatively cyclical pattern determined by the economy a

It is true that Nike has an excellent PE ratio of nearly 17 and a good dividend payout of 1.24 cents per share, but with the negativity of the economy conspicuously hurting the fundamentals of Nike, and a technical pattern similar to that of a cyclical stock, I would be very wary of buying any shares of Nike at the current time. If you were lucky and have shares of Nike that you purchased earlier, I would advise selling these shares, collecting your capital gains, and buying shares of Nike back when the economy goes through this recession.