This is the last edition of Balance Sheet for the year. We will be returning on Tuesday, 3 January 2023. Hopefully reading this newsletter is the final thing on your to-do list and your December problems can now become January problems. Thanks for reading.

The lowdown

• 🏦 Sam Bankman-Fried returns to the US and is granted bail on a $250 million bond.

• 🎅🏼 Wall Street tumbles, making a Santa rally increasingly unlikely.

• 🚗 Elon Musk says that he will not sell Tesla stock for two years.

Featured Stories

Nike and Adidas face obstacles

Nike and Adidas both faced headwinds in 2022, which may act as a drag on profits into 2023.

Nike’s main challenge is its swollen inventory. The famous old shoemaker reported better-than-expected quarterly results on Tuesday but noted that there was pressure on margins, due to discounting. The discounting was required to reduce the nearly $10 billion of inventory it had built up by the September quarter. The figure now stands at $9.3 billion. Over the past five years, average inventory has been roughly $5 billion ($) so there is still a way to go.

Adidas’ main challenge is how to plug the gap left by its former partner Ye (formerly known as Kanye West). Adidas was forced to terminate its partnership($) with the rapper after he made a series of antisemitic remarks. The end of the Yeezy collaboration is one reason the company’s share price has declined 50% this year.

The content we're consuming today

• Economist: How to make the most of LinkedIn ($).

• Odd Lots podcast: What a bakery can tell us about the economy right now.

• FT on YouTube: Fractured markets: the big threats to the financial system.

Off-balance sheet items

• You won’t have this newsletter to read each morning for the next week so will need something else to occupy your time. Here is a list of the best video games of 2022 ($).

The bottom line