Nike is not starting its Christmas very well after dropping 5% early going. Though the company came out ahead of its earnings estimates yesterday, the company warned of margin pressure for the for the next several quarters.

Nike CFO Donald Blair said he expects to see margin pressure for up to 18 months because of increases in transportation and labor costs as well as commodities like cotton which is a new problem many retailers are facing including Lucky Brand, Aeropostale and Jones New York.

Nike's future order growth was a disappointment coming up 11% rise from a year ago while analysts were hoping for an increase closer to the mid-teens.

This is obviously one of the major threats facing the market: It's well known that input costs are rising, without an attendant jump in end consumer prices.

Meanwhile, S&P profit margins are at historical highs. Nike is suggesting they can't be maintained.

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