📈 Disney's $200B Succession Race

Activist push for Cheesecake Factory breakup, FTC bans fake reviews, Daze messaging app blows up, Lucid CEO calls out Wall Street, Disney Chairman starts search for new CEO

Author

Evelio Silvera
October 22, 2024

Good morning.

⚡ The Fast Five → Activist push for Cheesecake Factory breakup, FTC bans fake reviews, Daze messaging app blows up, Lucid CEO calls out Wall Street, Disney Chairman starts search for new CEO

And now…

⏱️ Your 5-minute briefing for Tuesday, October 22, 2024:

MARKET BRIEF
Before the Open

As of market close 10/21/2024.

Pre-Market

  • Boeing was the top gainer on the Dow and among the best on the S&P 500, up 3.1%.

  • Microchip Technology shares fell 2.8%, among the steepest decliners on the Nasdaq.

Fear & Greed

*DOWN 1 pt

Trends

Market Rally Takes a Breather, but Tech's Still Got the Juice

Why it matters: Major indexes are pulling back from record highs just as earnings season kicks into high gear, but tech's resilience hints at a potential pivot in market leadership.

The big picture: The Dow and S&P 500 took a modest step back Monday (down 0.8% and 0.2% respectively), while the tech-heavy Nasdaq bucked the trend with a 0.3% gain. This divergence comes as Wall Street braces for a tsunami of earnings reports from market heavyweights.

The market's getting a double shot of drama this week:

  • Tech titans and blue chips face the music: Heavy hitters like Tesla ($TSLA), Boeing ($BA), and IBM ($IBM) are on deck to report

  • Bond yields are spicing things up: The 10-year Treasury yield jumped to 4.19%, adding some spice to the stock market's recipe

Go deeper:

  • Fed's new vibe: Dallas Fed's Logan is talking about "gradual" rate cuts – music to growth investors' ears

  • Energy wild card: Oil bounced 1.6% after last week's nosedive, suggesting Middle East fears are cooling

  • M&A's still alive: Starboard Value's stake in Kenvue ($KVUE) sent shares up 5.5%, showing smart money's still hunting for deals

What they're saying: "Although the economy is strong and stable, the macro outlook continues to face 'meaningful' uncertainties," says Dallas Fed President Lorie Logan, giving markets a glimpse of potential policy shifts ahead.

WHAT WE’RE WATCHING
Events

  • Thurs. Oct. 24: Dept. of Labor - Unemployment Claims, 8:30AM

  • Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.

Earnings Reports

  • Today: GE Aerospace, Verizon, Phillip Morris, Texas Instruments, Lockheed Martin, Fiserv, RTX, 3M, Spotify, GM

  • Tomorrow: Tesla, Tmobile, NextEra, Coca Cola, ServiceNow, At&t, Boeing, General Dynamics

MARKET BRIEF
Leading News

Disney's Next Magic Kingdom Ruler: The $200B Succession Race Heats Up

Why it matters: The House of Mouse's next CEO will shape not just entertainment, but the future of streaming, theme parks, and sports media. With $60 billion in park expansions planned and streaming wars intensifying, Disney's (DIS) leadership choice could make or break millennial portfolios.

The big picture: Disney's board just pushed their CEO succession timeline to early 2026, giving Bob Iger's potential successors more runway to prove themselves. Four internal candidates are leading the race, each bringing unique strengths to the $200B entertainment empire.

Go deeper:

  • Parks & Experience powerhouse: Josh D'Amaro leads Disney's most profitable division and 180,000 employees. His theme park innovation and consumer products expertise mirror the path of past CEOs.

  • Content is queen: Dana Walden's entertainment successes (Only Murders, Handmaid's Tale) and streaming savvy make her a frontrunner. She'd be Disney's first female CEO.

  • Sports betting wild card: Jimmy Pitaro's ESPN leadership and upcoming streaming platform could be game-changing as sports media enters the Web3 era.

What they're saying: "A critical priority before us is to appoint a new CEO," says new board chair James Gorman. "This timing... will allow ample time for a successful transition."

The bottom line: Disney's transition presents a buying opportunity. The stock typically outperforms during leadership clarity periods, and its cross-platform dominance in streaming, parks, and sports positions it well for the digital future.

Headlines

  • FTC's rule banning fake online reviews goes into effect (link)

  • Activist Urges Cheesecake Factory to Consider Breakup (link)

  • Daze, a creative, AI-powered messaging app for Gen Z, is blowing up prelaunch (link)

  • Amazon’s satellite constellation doesn’t offer its stock much upside (link)

  • Lucid CEO says Wall Street misinterpreted $1.75 billion capital raise (link)

  • Chick-fil-A launching family entertainment app with animated shows, podcasts, games (link)

  • Trump tax plans could exempt 93 million Americans from income taxes (link)

CRYPTO
Fear & Greed

*DOWN 2 pts

Headlines

  • BTC down Monday after climbing past $69K. What’s next? (link)

  • Chainlink Partners With Major Financial Players to Improve Corporate Actions Data Reporting Using AI and Blockchain (link)

  • CFTC Chair Behnam presses Congress to act on crypto and election betting legislation (link)

DAILY SHARE
On the Socials

*Hat-tip to RampCapitalLLC