Fewer subscribers in Asia
Disney squeezes the Dow Jones
05/11/2023, 10:48 p.m
Walt Disney earns less, so the Dow Jones index is going down just as much as the entertainment group’s stock. Because Disney is an important economic indicator. Beyond Meat and Sonos lose even more.
The US stock exchanges have shown themselves to be divided. While interest-sensitive technology stocks were supported by falling market interest rates, economic concerns weighed on standard stocks. The Dow Jones Index lost 0.7 percent. The share of Walt Disney.
The figures of the entertainment group were received with disappointment. After Walt Disney increased sales in the second fiscal quarter, but at the same time recorded a drop in profit, the share went down by 8.7 percent. Although the entertainment company exceeded expectations, it was disappointing that the Disney+ streaming service lost a lot of subscribers, especially in Asia. “Disney is a key economic indicator,” commented David Trainer, CEO of New Constructs. The group’s figures “speak volumes about the situation of the consumer”, which does not give a uniform picture.
The S&P 500 fell by 0.2 percent. The Nasdaq Composite closed 0.2 percent higher.
Following Wednesday’s consumer prices, producer prices are now also pointing to falling inflation. The upward trend in prices slowed down over the year and was also a tad weaker than expected over the month. Producer prices are no longer exerting any major inflationary pressure, it said, with a view to the annual rate of just over 2 percent, which means that inflation here was just slightly above the Fed’s inflation target of 2 percent.
However, the weekly labor market data were slightly weaker than predicted. Both data thus underpinned hopes of an interest rate pause by the US Federal Reserve, but also the economic downturn. The optimism on the market was limited. An interest rate pause is definitely possible, but there is little reason for speculation about interest rate cuts in the current year, it said in trading with a view to the medium-term monetary policy of the US Federal Reserve.
Debt ceiling sword of Damocles
The impending default in the USA continued to act as a stumbling block on the market should Republicans and Democrats not agree on raising the debt ceiling in the coming weeks. Republicans only want to approve an increase or suspension in exchange for billions in government spending cuts. Negotiations are scheduled to continue on Friday.
“While easing inflation is good news for US equities, there is far too much background noise, including risks surrounding the debt ceiling and ongoing worries about US regional banks, for investors to really get into (buy) sentiment “, the SPI asset managers summarized the concerns of the market. According to Societe Generale, hedge funds are preparing for a significant market correction. Both stock and bond investors shared the same recession concerns, analysts warned.
The dollar trended stronger, with the dollar index gaining 0.6 percent. Investors could be inclined to rely on a compromise in the debt dispute and corresponding spending cuts, it said in the trade.
At the bond market Stocks rose on the back of low inflation and weak jobs data, pushing yields deeper into the red. Traders did not want to rule out that some players, at least on the bond market, were banking on recession and thus on the first interest rate cuts at the end of the year.
With the recession and demand concerns, oil prices fell. Additional pressure came from the solid dollar that oil more expensive for buyers from other currency areas. Dollar strength also weighed on gold prices, preventing the precious metal from benefiting from falling market interest rates.
The business figures of the financial service provider and online broker Robinhood Markets (+6.4%), on the other hand, were well received. Against it broke PacWest by 22.7 percent. The regional bank announced that customers had withdrawn more deposits at the beginning of May.
A takeover bid by the financial company Mr Cooper (+4.3%) for mortgage company Home Point pushed its stock up nearly 19 percent. Beyond Meat (-18.3x%) suffered from a planned capital increase by the meat substitute manufacturer. The share of the consumer electronics manufacturer experienced a course debacle sonos (-23.7%). Although the quarterly figures were in line with expectations, Sonos lowered the outlook for the financial year.
Applovin promised unexpectedly high sales and thus drove the price up by 23.5 percent. unit software (+12.9%) posted a surprisingly low deficit in the first period. Groupon 16.1 percent fell. The operator of websites with discount offers was again in the red in the past quarter and recorded a further decline in sales, which also failed to meet market expectations.