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Though NKE matched analysts’ revenue expectations and beat third-party consensus on earnings per share, the stock fell nearly 4% in post-market trading. The news media immediately focused on what some analysts called disappointing North American sales growth. Sales in the region did climb 7%, but just missed the Street’s estimates.
There were high expectations going into NKE earnings, especially after Foot Locker Inc. (FL) crushed Wall Street estimates for Q3, citing in part success with Nike products. One thing to keep in mind as NKE trades today is the other side of the world, namely China, where NKE saw its fastest quarterly growth of any region. Consider thinking about how those results might fit into the China picture, where we’ve seen some U.S. companies run into trouble recently while others continue to perform well.
Commodity markets may conjure a freewheeling world of high rollers living hard and taking outsized risks, and there’s some historical truth in that image. But in a sense, all investors—whether big, small, or in between—participate in the commodity markets. If today, for example, you ate breakfast, made a cup of coffee, adjusted your thermostat, or filled your gas tank, guess what? You’re already a commodities “player.”
Commodities affect our lives every day, in other words. So, just what is a “commodity,” and how does commodities trading work? How do I “invest” in commodities? The following offers a brief introduction to commodities and a few pointers for investors.
Simply defined, commodities are raw or unprocessed materials that can be bought or sold and are used to make something else that eventually is consumed. For trading purposes, a given commodity typically is interchangeable—one bushel of corn is considered pretty much the same as any other. Many commodities are pulled from deep underground or plucked from right on top of the ground.
Of these commodities, crude oil is the world’s most actively traded. On average, over 4.2 million futures and options contracts traded each day in 2017, according to Futures Industry Association data.
There are two broad types of commodity market participants:
Both play a major part in the commodities markets. are standardized agreements between buyers and sellers where both parties agree to buy or sell a specific amount of a particular commodity at a predetermined price, at a specific date in the future. For example, one crude oil futures contract specifies 1,000 barrels of West Texas Intermediate crude, the U.S. benchmark.
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