On Monday, March 9, the U.S. markets saw their biggest sell-off since the 2008 crisis.There were two distinct trends driving the sell-off. Firstly, the increasing number of Coronavirus cases outside China is causing mounting concerns of a global economic slowdown. Further, on Wednesday, March 11, WHO declared coronavirus a pandemic outbreak creating further panic in the markets.
Secondly, crude oil prices plummeted by more than 20% after Saudi Arabia increased production. Nike (NYSE: NKE) stock has declined 16% since Monday and is down by a total of 23% since early February, considering the impact that the viral outbreak and a broader economic slowdown could have on the apparel industry
.Moreover, more than 15% of the company`s total revenues are derived from China, which has been the worst impacted by the outbreak.In addition to that, China is the most profitable and fastest-growing area for Nike. Further, Nike sources approximately 23% of its products from China which is likely to impact the company’s supplies over the coming months. However, going by the trends seen during the 2008 economic slowdown, it's possible that Nike stock could bounce back and potentially outperform the market as the crisis winds down.In this analysis, we take a look at how the company’s stock reacted to the economic crisis of 2008 and also compare its performance with the S&P 500.