By Peter Bergman (MoneyAmped.com)
It appears that Wall Street is poised to finish the week on a high note, bouncing back from Monday’s significant decline. Disney plans to increase its investment in the Entertainment division as new energy sales dominate the Chinese auto market for the first time.
1. Futures rise as investors regain confidence
U.S. stock futures inched up on Friday as the previous session’s encouraging weekly jobless claims data brought a sense of composure back to Wall Street.
At 04:15 ET (08:15 GMT), the Dow futures contract showed a modest increase of 55 points, or 0.1%. Similarly, S&P 500 futures saw a climb of 11 points, or 0.2%, while Nasdaq 100 futures experienced a rise of 65 points, or 0.4%.
The Wall Street indices ended the day on a positive note, as the Dow Jones Industrial Average surged nearly 700 points, or 1.8%. The S&P 500 had an impressive session, climbing 2.3%, marking its most robust performance since November 2022. The Nasdaq Composite, known for its focus on technology stocks, also saw gains of 2.9%.
The data on unemployment claims provided some relief to investors who were worried about the condition of the job market and the overall state of the U.S. economy. As a result, Wall Street rebounded after experiencing a significant decline on Monday.
However, the primary benchmarks have experienced a decline throughout the week, with the S&P 500 down by 0.5% and both the Nasdaq and the Dow showing a decrease of approximately 0.7%. Both the S&P 500 and the Nasdaq are set to experience their fourth consecutive week of losses.
Paramount Global (NASDAQ:PARA) stock surged in premarket trading following the entertainment company’s impressive performance, surpassing profit forecasts set by Wall Street. Additionally, its streaming business achieved a remarkable milestone by reporting its first quarterly profit in three years. However, in an effort to reduce expenses, the company revealed plans to reduce its U.S. workforce by 15%.
Expedia (NASDAQ:EXPE) stock soared in premarket trading following the online travel company’s impressive quarterly performance, despite its earlier caution about a decline in travel demand in July.
In contrast, premarket trading saw a decline in ELF Beauty (NYSE:ELF) stock following the release of cautious guidance by the cosmetics company. Despite surpassing first-quarter estimates and raising annual sales and profit forecasts, the stock slipped.
2. Disney relies heavily on its Entertainment division
Walt Disney (NYSE:DIS) recently released a report that combines positive and negative news. They expressed concerns about the performance of their parks business, but on the bright side, their streaming services, including Disney+, Hulu, and ESPN+, achieved a profitable outcome for the first time.
It appears that Disney is significantly increasing its investment in the Entertainment division. It has revealed intentions to allocate a minimum of $1 billion annually for the next five years in the U.K., Europe, the Middle East, and Africa for the creation of original movies and TV shows.
The company plans to allocate the funds across various films, Disney+, National Geographic, and other TV productions, according to a statement from a Disney spokesperson to Reuters.
Disney’s future endeavors may capitalize on the recent triumphs of movies such as “Inside Out 2” and the company’s television ventures.
CEO Bob Inger is diligently working towards revitalizing Disney following significant financial setbacks from streaming ventures, the decline of conventional television, and a challenging period for its renowned film studio.
3. The majority of electric vehicle sales occur in China
In July, the Chinese auto market achieved a significant feat, with slightly more than half of all vehicles sold being either brand-new pure electric vehicles or plug-in hybrids, according to industry data.
Last month, data from the China Passenger Car Association revealed that sales of new energy vehicles reached an all-time high, making up 50.7% of total car sales. This marks a significant increase from the previous year’s penetration rate of approximately 36%.
Three years ago, electric vehicle (EV) sales made up a mere 7% of overall vehicle sales in China. However, due to substantial investments in EV supply chains, the domestic EV industry has experienced significant growth.
In contrast, the U.S. Energy Information Administration, a research firm, reported that electric and hybrid vehicle sales accounted for 18% of total sales in the United States during the first quarter of this year.
4. The Chinese Consumer Price Index (CPI) experienced growth during July
The Chinese consumer price index inflation in July exceeded expectations, indicating a potential improvement in weak domestic demand. This comes after the People’s Bank made a series of unforeseen interest rate cuts.
The Consumer Price Index (CPI) experienced a 0.5% increase on a year-on-year basis, as reported by the National Bureau of Statistics on Friday. This growth surpassed the anticipated 0.3% increase and was higher than the 0.2% growth observed in the previous month.
Rising inflation is a result of various steps Beijing has taken to enhance local liquidity conditions, primarily through the PBOC’s interest rate reductions.
Nevertheless, PPI inflation continued to decrease for the 22nd month in a row, although the rate of decline remained at its lowest level since January 2023.
The PPI inflation contracted by 0.8% on a yearly basis, which was slightly more favorable than anticipated, as it remained unchanged from the 0.8% decline observed in June.
5. Crude set to achieve weekly gains
Crude prices experienced a slight decline on Friday. Still, they were set to achieve significant weekly gains due to the positive outlook on the U.S. economy and ongoing geopolitical tensions that have driven prices up.
At 04:15 ET, the U.S. crude futures (WTI) experienced a slight decline of 0.3% to $76.00 per barrel, while the Brent contract also saw a 0.3% drop to $78.92 per barrel.
Both crude benchmarks were poised to register a weekly increase of over 3%, marking the first week of positive performance in the past five weeks.
Surpassing expectations: The release of U.S. jobless claims data on Thursday had a positive impact on market sentiment, exceeding expectations. The latest Chinese inflation data released on Friday revealed positive developments in the largest importer of oil globally.
Traders also observed an increased risk premium being applied to oil prices following Ukraine’s significant offensive against Russia, marking one of the largest attacks since the conflict started in early 2022. Continued tensions in the Middle East, with concerns of possible reprisals from Iran and Hamas towards Israel, also contributed to the presence of certain risk factors in the oil market.
