Morning Squawk: Quad Witching, Nike Slides, Weed Rules, and More

Here’s a revised version of the article, aiming for a CNBC-style tone with added depth and a focus on business and technology analysis:

## Wall Street Braces for “Quadruple Witching” Amidst Shifting Economic Tides

Market participants are bracing for heightened volatility as today marks “Quadruple Witching,” a quadrennial event where options and futures contracts across four major security types expire simultaneously: index options, single stock options, index futures, and index futures options. This confluence, particularly significant in December, is poised to generate record-breaking trading volumes, with Goldman Sachs projecting over $7.1 trillion in notional options exposure set to expire, including a staggering $5 trillion tied to the S&P 500.

The heightened activity comes on the heels of a recent market rebound, as the S&P 500 and Dow Jones Industrial Average broke a four-day losing streak following a softer-than-expected inflation report. However, analysts caution that the data, while encouraging, comes with caveats. This week, the S&P 500 and Dow have seen modest declines of approximately 0.8% and 1%, respectively, while the Nasdaq has also dipped by 0.8% week-to-date. The “Quadruple Witching” event could exacerbate these movements, presenting both opportunities and risks for investors navigating the end-of-year trading landscape.

In related news, TikTok CEO Shou Zi Chew has informed employees that the company’s U.S. operations will be consolidated under a new joint venture. This strategic restructuring could have significant implications for the platform’s long-term trajectory and its relationship with regulatory bodies in the United States.

## Nike Faces Headwinds as China Challenges Persist

Shares of Nike experienced a sharp decline in premarket trading following a cautionary outlook from the sportswear giant, which anticipates a sales dip in the current quarter. Executives cited ongoing challenges in the critical Chinese market as a primary driver of the subdued forecast. Nike projects fiscal third-quarter revenue to contract by a low single-digit percentage, with modest growth anticipated in North America. Furthermore, the company expects gross margins to shrink by 1.75 to 2.25 percentage points, a figure that includes a significant 3.15 percentage point impact from tariffs.

Despite the somber revenue projection, the company’s performance was not entirely negative. Robust sales in North America provided a crucial buffer against the downturn in China, and overall results managed to surpass Wall Street’s expectations. CEO Elliott Hill characterized the current period as the “middle inning of our comeback,” suggesting an optimistic, albeit measured, outlook for the brand’s recovery. The ongoing trade tensions and evolving consumer preferences in key international markets continue to present a complex operating environment for global apparel giants.

## Presidential Reclassification Signals Shift in U.S. Cannabis Policy

In a move that could reshape the U.S. cannabis landscape, President Donald Trump has signed an executive order directing federal agencies to reclassify marijuana. This action represents the most significant shift in federal drug policy concerning cannabis in over fifty years, potentially loosening long-standing restrictions on the substance.

Upon finalization by the Drug Enforcement Administration (DEA), cannabis is slated to be moved from Schedule I of the Controlled Substances Act—its current classification alongside substances like heroin and LSD, indicating a high potential for abuse and no accepted medical use—to Schedule III. This new classification would recognize cannabis as a substance with accepted medical uses and a lower potential for abuse, similar to medications like ketamine and codeine-containing Tylenol.

The reclassification is expected to have profound implications for the burgeoning cannabis industry, potentially impacting research, investment, and market access. While the move could signal a more favorable regulatory environment, shares of cannabis companies saw a dip following the announcement, likely driven by concerns over increased competition and the potential for new market entrants under a less restrictive regime.

In a separate development, U.S. Department of Homeland Security Secretary Kristi Noem announced the suspension of the diversity visa program. This decision follows an incident where an individual suspected of a fatal shooting at Brown University was reportedly granted a visa through this program. The suspension raises questions about immigration policy and national security protocols.

## Texas Longhorns Claim Top Spot in College Sports Valuation

The University of Texas at Austin has ascended to the pinnacle of collegiate athletics, with its athletic program now valued at an impressive $1.48 billion. This represents a substantial 16% increase from the previous year, positioning the Longhorns as the most valuable college sports program according to recent rankings.

In fiscal year 2024, the university’s athletic program generated an aggregate revenue of $332 million, a figure that outpaces all other institutions and marks a 23% surge compared to the prior year. These figures, sourced from the Knight-Newhouse College Athletics Database at Syracuse University, reflect a remarkable 53% growth since 2023.

Last year’s leading program, Ohio State University, has now fallen to the No. 2 position, with its valuation at $1.35 billion, a modest 2% increase year-over-year. The continued rise in the valuation of top-tier college athletic programs underscores the significant commercialization of collegiate sports, driven by media rights deals, lucrative sponsorships, and increasing fan engagement. This trend raises ongoing discussions about the allocation of resources, athlete compensation, and the overall business model of intercollegiate athletics.

## This Weekend’s Recommended Reading

Here are a few additional stories that offer deeper insights into the evolving business and technology landscape:

* **The Tech Sector’s AI Arms Race:** Explore the latest developments in artificial intelligence and how major tech players are positioning themselves to dominate the future of the industry.
* **Renewable Energy’s Next Frontier:** Delve into the innovative technologies and investment strategies driving the transition to sustainable energy sources.
* **Navigating the Global Supply Chain:** Understand the complexities and resilience challenges facing global supply chains in an increasingly interconnected world.