CONSUMER CYCLICALS: Adidas; tariff impact
(A3/A-; Stable) (Equities -10%)
For Adidas supply chain exposure (by volume) to (Vietnam, Indonesia, China) is (27%, 19%, 16%) respectively (this is at group level including footwear and apparel). The three are facing (46%, 32%, 54%) tariffs respectively.
This is a industry wide issue; Nike Footwear (65% of group sales) has higher (50%, 27%, 18%) exposure and its Apparel arm (27% of group) has (28%, 16%, 15%) exposure. It is also stuck with higher NA exposure; 42% vs. Adidas at 22%.
On ~1/5th exposure to US, double digit sales growth last year, guidance for HSD sales growth this year and n/g 1.5x/2.5x levered balance sheet credit may be able to remain low vol (only +5-6 today). We'd note weaker margins (gross 50%, EBIT mid-5% - vs. Nike 12%) and levels (10y at MS+80) offsets some of that.
Lululemon: -13% (pre-market)
Under Armour: -10% (pre-market)
Nike: -10% (pre-market)
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
OUTLOOK: Price Signal Summary - Gilts Remain Above Support
- In the FI space, Bund futures on Monday pulled back from their recent highs and the contract remains below last week’s peak. The move down undermines a recent bullish theme. A continuation lower would expose the next key support at 131.26, the Feb 19 low. Clearance of this level would be viewed as an important short-term technical break. Two important resistance points remain intact for now; 133.46, the Feb 28 high, and 133.71, the Feb 5 high.
- A bull cycle in Gilt futures remains intact - for now. The contract has recently traded higher and this highlighted scope for a test of resistance at 93.39, the Feb 13 high. It has been pierced, a clear break of it would open 93.83, the high on Feb 6 and a bull trigger. On the downside, key short-term support has been defined at 91.79, Feb 20 low. Clearance of this level would highlight a bear threat. First support lies at 92.57, the Mar 3 low.
FED FUNDS FUTURES: BLOCK: May'25 FF Sale
- -10,000 FFK5 95.775, sell through 95.78 post time bid at 0708:57ET. The May contract trades 95.785 last (+0.030)
SONIA: SONIA FIX - 04/03/25
SONIA FIX - Source: BBG/ICE
- 1M 4.45420 -0.0032
- 3M 4.40750 -0.0079
- 6M 4.30990 -0.0166
- 12M 4.17340 -0.0261
