The ongoing cost-of-living crisis alongside inflation continues to persist, resulting in the spending on soft goods such as clothes and shoes taking a backseat.
Consumers will be interested to note that some of the biggest sportswear companies such as Under Armour, Nike, and Adidas have fallen in value on the AvaTrade platform over the last week, while certain commodities have risen in value.
This comes during a period in which UK universities are decreasing the number of days where students need to be on campus to allow them to find a part time job to pay for food and accommodation fees, leaving little room for soft goods and luxuries amid the cost-of-living crisis.
According to Kate Leaman, chief market analyst at AvaTrade, the stock price of sportswear companies is currently falling and the price of certain commodities are rising as a result of the following:
“Looking at our most falling table* this week, three of the top five instruments that have seen their stock prices drop are among the world’s biggest sportswear companies. Under Armour, Nike and Adidas have been facing fierce competition from new and emerging brands, leading to the fall in prices.
“As China is a significant growth market for Nike, it is no surprise that the country’s recently slowing economy has played a contributing factor in the drop of Nike’s prices. Nike has fallen for 10 straight days, making these last sessions its longest losing streak since its market debut in 1980.
“As the cost-of-living crisis and inflation continue to persist, it is accompanied with the looming resumption of student loan payments in October within the US. This has resulted in the rise of consumer caution on their spending on soft goods, leading to softening demands as they choose to spend their money elsewhere.
“What’s more, as Under Armour does not possess the e-commerce strength compared to Nike and is more vulnerable to weakness in the wholesale channel, it’s share price has plummeted considerably compared to Nike and Adidas. In fact, Under Armour reported its revenue dropped by 2% year over year (YOY) in the fiscal first quarter ending in June, with its wholesale revenue down 6%.
“In this week’s most rising table*, two of the top five instruments that have seen a rise in value are commodities. Firstly, as OPEC countries such as Russia and Saudi Arabia have massively cut oil exports during a period in which demand remains high, the price of heating oil has risen.
“Secondly, amidst fluctuations in the US dollar and Treasury yields, silver’s prices has witnessed an increase. In a current volatile environment, characterised by a weakening US dollar, silver can be seen as a protective asset as these shifts can make silver more affordable and accessible for foreign currency holders.”