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By Jeremy Glaser | 12-20-2015 06:00 AM

Week Ahead: Will Nike's Hot Streak Continue?

Product innovation has been resonating with consumers, but shares of the firm--which is set to report earnings Tuesday--look overvalued.

Securities mentioned in this video
NKE Nike Inc

For Morningstar, I'm Jeremy Glaser. Welcome to The Week Ahead, our quick take on what investors should have on their radar screens for the week starting Dec. 21.

In this holiday shortened week, there are only a handful of earnings reports.

Wide-moat Nike will give its quarterly update on Tuesday. The firm has been on a hot streak recently as its product innovation has been resonating with consumers, and management has been able to boost profitability. There are no signs of this momentum slowing down, but investors should keep in mind that Nike's bright future is already priced into the shares, which do look somewhat overvalued.

Income and spending data is due Wednesday. Last month consumption data disappointed, but that was mostly driven by the warm weather depressing utility usage. On a year-over-year, 3-month average basis, spending is likely to remain in the 3% range, with incomes growing a bit faster than that.

This report also provides the Fed's preferred inflation measure. Chair Yellen has made it clear that the bank is closely watching inflation numbers to determine when to raise rates again.

Other data due this week include the third estimate of third-quarter GDP and existing and new home sales.

Stay tuned to Morningstar for our take on all of these stories throughout the week.



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