The U.S. stock market is trading lower following the selling that took place around the world.
Asian markets all closed lower as China’s exports fell 6.8 percent year-over-year. The major European indices were all trading broadly lower with Germany’s DAX leading the way, declining by 1.4 percent. The Eurozone third quarter GDP increased by 0.3 percent, but it had been forecast to rise by 1.7 percent.
The S&P 500 dropped by 18 points to 2,058, the Dow Jones Industrial Average fell by 195 points to 17,535 and the Nasdaq declined by 54 points to 5,047. One of the reasons that the stock market is selling off so badly is the plunging price of crude oil.
Crude oil crashed through the $37 level this morning for the first time since 2009. Many investors had hoped that OPEC’s meeting last week would result in production caps, but that didn’t happen. Goldman Sachs has said that oil could fall as low as $20 a barrel if production leads to a glut and a lack of storage space occurs. China looks as if it is willing to buy much of this oil for strategic reserves.
Nike has signed what is being called as a “lifetime” deal with LeBron James. While the terms of the deal aren’t specifically known, the scuttlebutt is that the contract will last until James’ death. He will receive payments on a yearly basis and would like become a brand ambassador in his later years. It would be similar to the way Michael Jordan sneakers have been sold long after Jordan has quit playing.
While no one is sure of the amount, former Michael Jordan agent David Falk estimated it could be in the range of $400 million to $500 million. The size of such a deal has investors worried that Nike has gone too far. Nike stock is up 36 percent for the year, but dropped 41 cents Monday on the news and is dropping again in early trading on Tuesday by another 72 cents to $130.88.