Marketbites: Disney Disappoints
MARKET PERFORMANCE:
Portfolio Manager Commentary:
The Dow Jones average and S&P 500 fell Thursday as Disney shares were under pressure and concerns around regional banks persisted. Disney shares fell more than 8% the day after the media giant released its fiscal second-quarter results. While higher prices helped Disney's streaming division narrow its losses, it dealt a harsh blow to subscriber growth. The company also announced it would take on impairment charges of $1.5 billion to $1.8 billion as it removes more content from its streaming platforms.
Investor worry over regional banks once again flared up. PacWest Bancorp, the latest troubled bank in focus, said Thursday in a regulatory filing that deposits fell 9.5% last week. PacWest shares dropped 22% Thursday, and the bank said it had access to $15 billion in immediate liquidity, if needed.
“Investor focus is now on both the economic backdrop and liquidity and what’s going on versus rates and inflation,” said Dylan Kremer, co-chief investment officer of Certuity. “The PacWest [news] kind of falls into the fragile sentiment from either the regional banking crisis and then the debt ceiling overhang. It’s a combination of the two.”
Chart of the Day:
Newer cybersecurity companies are grappling with uncertain economic conditions as they find it harder to raise capital, continue to trim their workforces, and refocus on profits after long periods of chasing growth. Fed by a glut of venture-capital investment, many private cybersecurity providers hired widely and expanded their operations significantly in recent years. Some have had to change direction quickly this year, as global economies soured and interest rates rose sharply. Staff numbers have often been the first casualty.
Venture-capital funds also are more selective now in where they deploy their capital, said John Masserini, a senior research analyst at consulting company TAG Cyber. VC funding for cybersecurity companies was $2.9 billion in the first quarter of 2023, compared with $5.3 billion during the same period last year, according to cyber recruiting company Pinpoint Search Group.
Source: WSJ
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