📈 Disney's Profitable Stream

Good morning.

⚡ The Fast Five → Palantir moves to Nasdaq, Meta to face antitrust lawsuit, Amazon launches Temu copycat, Biogen stock rises, Disney tuns the tide

🔎 Market Trends → Wall St. ends lower after Powell dims hopes for rate cut; US Futures Decline as Market Heads for a Losing Week

And now…

⏱️ Your 5-minute briefing for Friday, November 15, 2024:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

Fed Caution Pressures Stocks as Disney and Tapestry Shine

The S&P 500 and Nasdaq Composite each dipped 0.6%, closing at 5,949.2 and 19,107.7, respectively. The Dow Jones Industrial Average slipped 0.5% to 43,750.9. Energy and tech eked out gains, but industrials led the decline.

The Big Picture:

Federal Reserve Chair Jerome Powell emphasized a measured approach to monetary policy, citing an economy strong enough to avoid hasty action. His remarks tempered market expectations of further rate cuts, with the CME FedWatch Tool lowering the odds of a December cut to 59% from 83% just a day earlier.

Inflation is nearing the Fed’s 2% target, but Powell flagged "stubborn" housing inflation as a concern. Fed Governor Adriana Kugler echoed these sentiments, noting slower disinflation. The market remains wary, balancing strong economic indicators with persistent inflationary pressures.

On commodities, WTI crude rose 0.3% to $68.65 a barrel as global demand expectations brightened. Meanwhile, gold slid 0.6% to $2,570.60 per ounce, reflecting shifting investor sentiment.

Market Movers:

• Super Micro Computer (SMCI): Dropped 11.4%, the steepest fall on the Nasdaq, after delaying its quarterly report, signaling operational challenges. Late filings often erode investor confidence, especially for tech firms in competitive markets.

• Tesla (TSLA): Fell 5.8%, extending recent losses as EV market competition intensifies. Investors are weighing slowing growth against Tesla’s lofty valuation.

• Walt Disney (DIS): Jumped 6.2%, leading the Dow, after streaming growth fueled stronger-than-expected earnings. Disney's focus on streaming profitability could be a long-term catalyst.

• Tapestry (TPR): Soared nearly 13% after terminating its acquisition of Capri (CPRI), boosting confidence in its standalone strategy. Investors welcomed reduced regulatory uncertainty and potential cost savings.

What They’re Saying:

"The economy’s resilience gives us room to proceed cautiously," said Powell. "But inflation hasn’t fully normalized yet."

WHAT WE’RE WATCHING
Events

• Today: Census Bureau - Core Retail Sales - 8:30am

• Why You Should Care: It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Earnings Reports

• Today: Alibaba, Spectrum Brands, Buckle, Soho House

• Monday: Trip.com, Symbotic, AECOM

MARKET BRIEF
Leading News

Disney's Streaming Magic: $321M Profit Turnaround

Why it matters:

Disney (DIS) has flipped the script on its streaming services, turning a $4B loss into a $321M profit in just two years. This seismic shift signals the company's ability to compete head-on with streaming giants like Netflix.

Zoom Out:

Disney’s latest earnings report shines a spotlight on its streaming trifecta: Disney+, Hulu, and ESPN+, which collectively added 4.4M new subscribers last quarter. The magic behind this rebound lies in a potent mix of killer content and smart strategy.

CEO Bob Iger restructured the company to mimic Netflix’s playbook, streamlining content creation and platform management. Disney also doubled down on an ad-supported subscription tier, capturing cost-conscious viewers while expanding its advertiser base.

Award-winning content like "The Bear" and "Shogun", alongside nostalgic family favorites and live sports, has kept audiences hooked.

Deep Dive:

• Ad-supported growth: Disney’s budget-friendly plans attracted more users than they lost from its premium tiers, proving the power of pricing diversity.

• Password crackdown pays off: Like Netflix (NFLX), Disney is pushing freeloaders toward paying subscriptions, further boosting revenues.

• Future proofing: Analysts predict only half of today’s streaming platforms will survive the next decade, but Disney’s diversified content slate and global footprint keep it in the winners' circle.

Market Pulse:

"Disney’s profitability marks a turning point for streaming, setting a new benchmark for content-driven growth." — Brandon Katz, Parrot Analytics

Bull’s Take:

Disney’s streaming rebound highlights the resilience of great content paired with sharp strategy. With ESPN+ capturing sports fans and Disney+ delivering award-winning hits, the House of Mouse is proving it can thrive in an evolving streaming market. Investors should keep an eye on subscriber growth and advertising revenue trends as DIS solidifies its standing as a streaming powerhouse.

Headlines

• Biogen’s stock rises after E.U. regulator reverses negative view of Alzheimer’s drug (link)

• Advance Auto Parts closing hundreds of locations following sluggish performance (link)

• Palantir’s stock is moving to the Nasdaq (link)

• Maker of Coach handbags calls off merger with company that produces Michael Kors accessories (link)

• Amazon launches Amazon Haul storefront to compete with Shein, Temu (link)

• US judge rules that Meta needs to face FTC antitrust lawsuit (link)

CRYPTO
Fear & Greed

Headlines

• XRP Jumps 17% Outperforms Rest of the Market as Rally Cools (link)

• Bitcoin could see 'repeated all-time highs' over the next two quarters, says VanEck crypto research lead (link)

• ETH as money? Exploring ether’s unique role (link)

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