Must read: Tesco, Nike, US jobs report

TESCO

Richard Hunter, Head of Markets, interactive investor says: Tesco (LSE:TSCO) prepares to deliver half-year results on Thursday 2 October.

Expectations will be high as ever for the supermarket, although at the first-quarter numbers in June there were no signs that the company was losing its grip on dominating the British aisles.

Indeed, the juggernaut powered on, maintaining the light between the group and its nearest rivals.

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The prospect that supermarkets may be about to embark on a trade war of their own is not one which Tesco is taking lightly, and is mindful of a renewed attack from Asda let alone the notoriously competitive pricing which the sector attracts. The group maintained its conservative guidance of adjusted operating profit in a range of between £2.7 billion and £3 billion, slightly shy of the previous £3.13 billion. Any upgrades to the forecast would be warmly received.

Especially in the recent past, and try as they may, other supermarkets have tended to take market share from each other rather than from Tesco. The group’s sheer scale feeds its appetite for lowering prices for customers through the likes of Aldi Price Match, Low Everyday Prices and Clubcard Prices, while a strong focus on significant cost reduction creates something of a virtuous circle. As such, any upcoming battle is for Tesco to lose rather than Asda to win.

The shares have risen by 16% this year alone and remain below the longer-term historic valuation, which suggests room for further appreciation. In the meantime, the group is likely to consolidate its position as the preferred play in the sector.

NIKE

Victoria Scholar, Head of Investment, interactive investor says: Nike Inc Class B (NYSE:NKE) will announce its first-quarter 2026 results on Tuesday 30 September. According to Refinitiv, it is expected to report earnings per share of 27 cents versus 70 cents year-on-year while revenue is seen hitting $11 billion down 5% year-on-year.

The spotlight is on the sportswear giant which has suffered a 10% slide in its share over the last month and a slump of around 18% over the past year.

Nike hasn’t been performing anywhere near its peak. There has been an onslaught of newer, trendier, more exciting sportswear brands entering the market covering apparel and footwear that have created a major headache for the world’s largest sportswear brand. Nike became a bit complacent at the top and is now having to do some soul searching to try to reignite its spark with a renewed focus on sports, cost cuts, and innovations. As part of this shift, Nike announced a tie-up with Kim Kardashian’s Skims, harnessing her immense social media power to try to improve engagement with female shoppers, although its launch has been mired by production issues.

On top of stiff competition, Nike has also been dealing with pressures from Trump’s tariffs which have resulted in increased costs of $1 billion in the current fiscal 2026. Nike is having to make major changes to its supply chain to significantly reduce its reliance on China.

Last quarter, the company said results were ‘not up to the Nike standard’. It reported a sharp drop in quarterly net income to $211 million versus $1.5 billion year-on-year while sales slumped 12% to $11.1 billion. However, shares soared by over 15% on that day thanks to investor optimism towards its turnaround plan. Nike’s CFO Matthew Friend said he expected ‘headwinds to moderate from here’. Therefore, a lot is riding on these upcoming results as a make-or-break moment for the share price as investors assess whether there are green shoots of recovery and early signs of improvements.

Just this week, JD Sports Fashion (LSE:JD.) provided a vote of confidence in Nike’s recovery by saying it is ‘doing all the right things’ to improve sales. And Nike has enjoyed some broker upgrades from Morgan Stanley, RBC, Cowen and Citigroup in September.

There are currently 20 buy recommendations towards the stock, 17 holds and 2 sells with an average price target up 13% from the current share price.

US JOBS REPORT

Victoria says: The first Friday of October brings the latest US jobs report which is expected to provide further confirmation of a deteriorating labour market.

The headline non-farm payrolls (NFP) figure for September is anticipated to come in at around 70k while the unemployment rate is likely to remain at 4.3% having risen from 4.2% last month to reach the highest level since October 2021. Average hourly earnings are seen holding steady at 3.7% year-on-year but slowing to 0.2% month-on-month. Investors will also be watching out for potential revisions to last month’s data.

Last month, the US economy added fewer jobs than expected, with the headline NFP reading coming in at just 22k for August, the weakest reading since the pandemic, paving the way for last week’s quarter point rate cut from the Federal Reserve. When making its policy decisions, the central bank is weighing up competing pressures from elevated inflation and a weak jobs market.

Comments from Fed Chair Jay Powell this week highlighting the risk of cutting rates ‘too aggressively’ suggest the market might be pricing in too many interest rate cuts this year.

Plus, there are unknowns about how Trump’s tariffs might impact inflation. And there have been some positive data releases, including an upward revision to US Q2 GDP and weekly jobless claims which saw fewer Americans file for unemployment support last week. All of these factors suggest that although two more rate cuts are expected before year-end, they are by no means guaranteed.