Nike shares (NKE) surged nearly 5.75% to $80.90 after Jefferies upgraded its rating on the stock to “buy” from “hold” and significantly raised its price target by 42% to $115.

According to the brokerage, NKE’s renewed focus on innovation will balance inventories, boost wholesale distribution, and lead to higher sales and profits, especially since market expectations are currently low.

Analyst Randal Konik owed the upgrade to the shoemaker’s resilience and strong brand presence despite past missteps.

Nike appointed former senior executive Elliott Hill as CEO in October 2024, signaling a return to its core strengths.

With more than 50% of potential buyers still choosing Nike for athletic footwear, Konik believes new leadership will strengthen product direction and restore balance between direct-to-consumer and wholesale strategies.

The company has undergone significant strategic shifts following a disappointing 2024, during which its stock fell nearly 30%.

However, recent developments suggest that Nike is repositioning itself for a comeback.

Bill Ackman’s Pershing Square increases Nike stake

Apart from the upgrade, Nike has recently received another boost in the form of Billionaire investor Bill Ackman’s hedge fund, Pershing Square steadily increasing its stake in the company, making it the firm’s fifth-largest holding at just over 11% of its portfolio.

Ackman’s continued buying suggests strong conviction in Nike’s long-term prospects despite its recent struggles.

Nike’s decline from its 2021 peak has been dramatic, with the stock losing over 50% of its value.

However, Ackman appears to see this as an opportunity. His fund previously profited from a Nike investment in 2017-2018, making roughly $100 million.

While Ackman has remained relatively quiet about Nike since opening his position in mid-2024, his firm’s latest filings indicate growing confidence in the company’s turnaround strategy.

Nike SKIMS collaboration expected to bring fresh momentum

Nike is not just relying on leadership changes to reignite growth—it is also making significant moves in marketing and partnerships.

In a bid to reclaim its brand dominance, the company aired its first Super Bowl commercial in 27 years in February, signaling an aggressive return to major advertising.

Additionally, Nike recently announced a high-profile collaboration with SKIMS, the shapewear brand co-founded by Kim Kardashian.

The joint venture, set to launch in the spring, is expected to bring fresh momentum to Nike’s apparel business.

SKIMS has grown rapidly since its founding in 2019, generating around $1 billion in annual sales and expanding into physical retail locations.

The brand’s success in offering inclusive sizing and trendy designs could give Nike an edge in the competitive athleisure market, where rivals like Lululemon have gained ground.

Nike’s financial strength supports comeback potential

Despite recent sales declines, Nike remains a financial powerhouse.

The company holds $9.7 billion in cash, exceeding its total debt of $9 billion. This financial flexibility allows Nike to invest in product innovation, marketing, and strategic partnerships without excessive risk.

From a valuation perspective, Nike’s stock trades at a price-to-sales (P/S) ratio of 2.3, its lowest in over a decade.

Historically, the stock has averaged a P/S ratio of 3.6, suggesting significant upside potential if the company successfully executes its turnaround strategy.

Nike’s deep brand equity, extensive sponsorship deals with major sports leagues, and a resilient global supply chain position it well for a potential recovery.

According to data compiled by LSEG, the average rating of 39 analysts for NKE is “buy”, with a median price target of $90.

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Anthropic has introduced Claude 3.7 Sonnet, a frontier AI model designed to provide users with both immediate and more considered responses.

The company touts it as the industry’s first “hybrid AI reasoning model,” allowing users to choose how long the AI “thinks” before generating an answer.

The rollout, announced on Monday, is part of Anthropic’s broader strategy to simplify AI interactions.

Unlike traditional AI models, which require users to select from multiple versions based on cost and capability, Claude 3.7 Sonnet integrates both rapid response and deeper reasoning into a single model.

Claude 3.7 Sonnet’s premium plans only available to subscribers

Anthropic will make Claude 3.7 Sonnet available to all users and developers, though only subscribers to its premium plans will have access to the model’s reasoning capabilities.

Free-tier users will receive a non-reasoning version, which the company claims still outperforms its predecessor, Claude 3.5 Sonnet.

The model’s pricing reflects its advanced capabilities.

Claude 3.7 Sonnet is set at $3 per million input tokens and $15 per million output tokens—higher than OpenAI’s o3-mini and DeepSeek’s R1, both of which are dedicated reasoning models but lack Claude 3.7 Sonnet’s hybrid functionality.

AI reasoning gains traction in the industry

Claude 3.7 Sonnet represents a shift toward reasoning-based AI, a method many labs are adopting as traditional improvements in AI performance slow.

Competitor models, such as OpenAI’s o3-mini, Google’s Gemini 2.0 Flash Thinking, and xAI’s Grok 3 (Think), also focus on breaking problems into smaller steps to improve accuracy.

Anthropic envisions an AI that can autonomously determine how much time to spend on reasoning, eliminating the need for users to manually adjust settings.

The company’s product and research lead, Diane Penn, emphasized that reasoning should be seamlessly integrated rather than treated as a separate function.

“Just as humans use a single brain for both quick responses and deep reflection, we believe reasoning should be an integrated capability of frontier models rather than a separate model entirely. This unified approach also creates a more seamless experience for users.” Anthropic wrote in a blog post.

Competitive edge in the AI race

Claude 3.7 Sonnet’s launch comes as Anthropic seeks to strengthen its position in the competitive AI landscape, challenging OpenAI’s ChatGPT and Google’s Gemini.

The startup is reportedly in talks to raise up to $2 billion from investors including Lightspeed and Google, valuing the company at approximately $60 billion.

Amazon has already invested $8 billion in the firm.

Anthropic’s product chief, Mike Krieger, a co-founder of Instagram, sees the hybrid model as a way to streamline AI chatbot interactions.

“Models all have personalities; they’re all a bit different,” Krieger told CNBC.

“It’s a lot to ask consumers to choose the model or decide how long they want it to reason. We want people to focus on what they need, not on technical details.”

To further improve user experience, Krieger said Anthropic will introduce a feature allowing users to set a time “budget” for reasoning, ensuring efficient responses tailored to different tasks.

Additionally, the company plans to roll out a coding tool that leverages AI agents.

Industry peers follow suit

Anthropic has a track record of pioneering product innovations ahead of competitors.

The company was the first to introduce a widely available AI “agent” feature last year, a move OpenAI soon mirrored.

OpenAI CEO Sam Altman has hinted at a similar approach to simplifying AI interactions.

In a February post on X, Altman stated that OpenAI aims to eliminate the need for users to choose between models, seeking to return to a “magic unified intelligence.”

With AI labs racing to refine chatbot functionality, Claude 3.7 Sonnet’s hybrid approach positions Anthropic as a key player in shaping the future of AI reasoning and user experience.

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US President Donald Trump and French President Emmanuel Macron put on a display of diplomatic warmth on Monday, but stark differences emerged over their approaches to resolving the war in Ukraine.

As Trump pushed for a swift ceasefire deal with Russia, Macron underscored the need for a structured peace process, revealing deep divisions between the United States and Europe on how to end the conflict.

The meeting, which marked three years since Russia’s 2022 invasion of Ukraine, highlighted the contrasting strategies pursued by Washington and Paris.

While Trump expressed his eagerness to broker an immediate truce, Macron emphasized that any peace agreement must be carefully assessed, verified, and include security guarantees.

Their divergence underscored the broader debate over whether a quick ceasefire would lead to lasting stability or simply serve as a temporary pause before further aggression from Moscow.

Trump avoids calling Putin a dictator

One of the key moments in their discussions came when Trump declined to label Russian President Vladimir Putin a dictator, despite having controversially called Ukrainian President Volodymyr Zelensky a dictator just days earlier.

Macron, in contrast, was unequivocal in condemning Russia’s actions, stating, “President Putin violated the peace.”

His comments reinforced Europe’s firm stance that Russia remains the clear aggressor in the ongoing war.

Trump reiterated his belief that a ceasefire should be reached “as soon as possible” and suggested that he could travel to Moscow to meet with Putin once an agreement is in place.

His remarks fueled speculation about the extent of his willingness to engage with the Russian leader and the potential impact on US-European relations.

Macron insists on a structured peace process

While Trump advocated for a swift resolution, Macron cautioned against rushing into a deal that could leave Ukraine vulnerable.

He stressed that any agreement must be “assessed, checked, and verified” to ensure that it provides real security guarantees rather than merely freezing the conflict.

“We want peace, he wants peace. We want peace swiftly, but we don’t want an agreement that is weak,” Macron told reporters, signaling his concerns that a premature settlement could embolden Russia rather than deter future aggression.

Agreement on European peacekeeping forces

Despite their differences, Trump and Macron found common ground on the potential deployment of European peacekeeping forces once a formal peace deal is reached.

Macron clarified that these forces would not be engaged in active combat but would serve to monitor and uphold the terms of the agreement.

“They would not be along the front lines. They would not be part of any conflict. They would be there to ensure that the peace is respected,” Macron stated.

Trump signaled his support for the proposal, asserting that Putin was also open to the idea.

“Yeah, he will accept that,” Trump said, adding that he had specifically raised the issue with the Russian president.

The meeting between Trump and Macron underscored the ongoing rift in Western diplomacy over how to handle the Ukraine crisis.

While the US president appeared eager to strike a deal and move toward de-escalation, the French leader insisted that any resolution must be rooted in long-term security.

As the war in Ukraine continues to shape global geopolitics, the divide between Washington and Europe remains a crucial factor in determining the next steps toward peace.

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Shares of Japan’s top trading houses soared on Tuesday after Warren Buffett’s Berkshire Hathaway Inc. signaled plans to moderately raise its holdings in the sector.

The announcement was widely seen as a vote of confidence in companies like Mitsubishi Corp. and Marubeni Corp., which have gained global prominence for their diversified business models.

Mitsubishi surged 9.2% in Tokyo trading, heading for its biggest single-day gain in a year.

Marubeni jumped 8%, while Mitsui & Co., Itochu Corp., and Sumitomo Corp. also saw their strongest rallies since August.

The broader Topix index, however, slipped 0.2%.

Buffett’s long-term bet on Japan’s trading giants

Berkshire Hathaway initially invested in Japan’s five major trading houses in 2020, pledging at the time to keep its stake below 10%.

In his annual investor letter dated February 22, Buffett revealed that the firms had agreed to slightly relax that cap, allowing Berkshire to increase its ownership.

Analysts view Buffett’s move as a calculated bet on Japan’s trading houses, which engage in a vast range of businesses, from energy and commodities to retail and finance.

The sector’s diversification is seen as a safeguard against market volatility, particularly in a time of global economic uncertainty.

“Trading houses are trading well below their peak, so Buffett probably sees this as a chance to buy more,” said Norikazu Shimizu, an analyst at IwaiCosmo Securities Co.

“With Trump’s presidency and changes in tariff policies, the market outlook is uncertain, but these companies have a broad enough footprint to remain stable.”

Trading firms welcome Berkshire’s deepening involvement

Marubeni responded positively to Buffett’s interest, stating that his investment reaffirmed the strong valuation of Japan’s trading companies.

Buffett’s interest “is proof that the trading company sector, including our company, is highly valued,” Marubeni said in an emailed statement to Bloomberg.

Itochu, meanwhile, disclosed ongoing discussions with Berkshire about potential collaborations involving its subsidiaries, such as Duracell and Fruit of the Loom.

Buffett has previously praised Japan’s trading houses for their shareholder-friendly policies, including responsible dividend increases and stock buybacks.

He also noted their conservative approach to executive compensation compared to US firms.

“Over time, you will likely see Berkshire’s ownership of all five increase somewhat,” the veteran investor said.

“Our holdings of the five are for the very long term, and we are committed to supporting their boards of directors.”

A key metric of trading houses on the Topix index currently trades at about 10 times estimated earnings, compared to 14.5 times for the broader Topix.

Buffett’s continued investment suggests he sees long-term value in the sector despite these lower valuations.

Speculation mounts over Berkshire Hathaway’s next moves

Buffett’s deepening interest in Japan’s trading firms has fueled speculation over his next financial maneuver.

In October, Berkshire issued its largest-ever yen-denominated bond since it began borrowing in Japanese currency in 2019.

With yen notes maturing in April, investors are closely watching how the company will deploy its capital in the region.

Mitsubishi and Mitsui both confirmed they are in discussions with Berkshire over potential joint investments.

Analysts suggest Buffett’s involvement will provide a sense of security for investors and could serve as a catalyst for further growth in Japan’s trading sector.

“This is a tailwind for trading company stocks as a whole, and it seems likely to lead to a certain sense of security for investors,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management.

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Starting in April, energy bills for millions of UK residents will see a significant increase of 6.4%. 

This price hike, announced by the regulatory body Ofgem, is a direct result of escalating wholesale energy prices, Reuters reported on Tuesday. 

The Ofgem price cap, which sets a limit on what energy suppliers can charge domestic customers, is being adjusted upwards to reflect these rising costs. 

This change will affect a substantial portion of the British population, potentially impacting household budgets and raising concerns about the affordability of energy.

The third straight quarterly rise

The recent increase in energy prices marks the third consecutive quarterly rise, dealing a blow to the government’s goal of reducing energy bills for consumers. 

This unwelcome news comes on the heels of higher-than-expected inflation figures for January in the UK, further exacerbating concerns about the rising cost of living.

The government now faces mounting pressure to address the issue of escalating energy costs, as households across the country are feeling the pinch of higher bills. 

This situation could potentially lead to widespread discontent and a decline in public support for the government’s economic policies.

The Office of Gas and Electricity Markets (Ofgem), the UK’s energy regulator, has announced a new price cap on energy bills. 

The new cap will increase the average annual cost of electricity and gas for a typical household by 111 pounds, or 6.4%, from 1,738 pounds to 1,849 pounds ($2,334.18). 

This increase is due to rising wholesale energy costs and other factors affecting the energy market.

Rising gas prices

British gas prices surged to a two-year high in early February due to a confluence of factors. 

The primary drivers were the cold temperatures that swept across Britain and Europe. 

These frigid conditions led to a significant increase in gas consumption as households and businesses cranked up their heating systems to stay warm. 

Consequently, there was a substantial drawdown from gas storage facilities in both Britain and Europe to meet the heightened demand.

Exacerbating the situation was the expiration of a crucial gas supply deal between Russia and Ukraine at the end of the previous year. 

This agreement facilitated the flow of Russian gas through Ukrainian pipelines to European markets. 

However, with the deal’s termination, uncertainty loomed over the future of Russian gas supplies to Europe, further contributing to the price spike. Ukraine had refused to renew the deal with Russia as both countries are currently at war. 

The combination of these factors – soaring demand due to cold weather, dwindling gas reserves, and geopolitical tensions surrounding Russian gas exports – created a perfect storm that drove British gas prices to their highest level in two years.

Ofgem formula 

Wholesale gas and power prices are a major component in the formula that Ofgem, the Office of Gas and Electricity Markets, utilizes to determine the energy price cap. 

This price cap is a regulatory measure in the United Kingdom that sets a maximum price that energy suppliers can charge consumers for their default energy tariffs.

Ofgem’s price cap formula takes into account these wholesale energy costs, along with other factors such as network costs, operating costs, and a reasonable profit margin for energy suppliers. 

However, the effectiveness of the price cap in shielding consumers from high energy bills has been questioned, especially during periods of extreme price volatility in the wholesale energy market. 

When wholesale prices surge significantly, energy suppliers may find it challenging to operate within the confines of the price cap, potentially leading to financial difficulties or even market exits.

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