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Does Nike's stock price fall indicate that TPP is dead?
Howard Richman, 12/24/2015

Why did Nike stock price just fall by 9.5%? According to zero hedge, Nike just released an earning report that was quite positive.

The explanation could come from this Market Realist article from back in March. Here's a selection:

Nike (NKE) is the world’s number one athletic footwear brand. It clocked $16.2 billion in global footwear sales. Nike’s footwear is manufactured abroad. This includes factories located in Vietnam and Malaysia—members of the TPP. It’s important to note that ~68% of Nike’s footwear is manufactured in these countries. Nike has 67 factories in Vietnam, including 26 footwear factories.

Other companies in footwear and sportswear include Skechers (SKX), Under Armour (UA), and Timberland (VFC). They also have factories in Vietnam. They would be affected by the TPP.

The stocks of all the other companies that produce shoes in Vietnam are also down:

  • Sketchers. On October 22 it was 46.19. On October 23 it was 31.64.
  • Under Armour. October 12 it was 103.35. On December 24 was  81.21
  • Timberland. On October 22 it was 73.21. On October 23 it was 62.26.

The Trans Pacific Partnership (TPP) will reduce U.S. tariffs on Vietnamese products while permitting Vietnam to continue to manipulate exchange rates. It will result in the reduction of sales of American factories, such as the ones producing New Balance shoes, and the movement of U.S. factories to Vietnam, where Nike already has a huge factory. 

The Nike stock price collapse could be unrelated to TPP, but let's not forget that the prices of pharma stocks fell 10% in stock value just before Chapter 18 of TPP was leaked to Wikileaks. That's when we first learned that Obama had unilaterally reduced patent protection on U.S. pharmaceuticals from 11 years to 5. 

TPP will be voted on (up or down votes) in the House and Senate sometime in 2016. Perhaps insiders have figured out that TPP will lose these votes.

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