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Research Market strategy
by Swissquote Analysts
Morning News

Walt Disney Revenue Boosted by Summer Movies

Topic of the day

Walt Disney Co.'s hit movies, led by "The Lion King" and "Toy Story 4," once again helped drive strong quarterly results. But the company is largely looking beyond the theater for its future, focusing instead on reasons for folks to stay home. Disney Chief Executive Robert Iger has spent billions of dollars buying franchises, from the Avengers to Star Wars - brands that will soon be put to the test when Disney launches Disney+, its putative streaming rival to Netflix Inc. "We're making a huge statement about the future of media and entertainment," Mr. Iger said on a conference call with Wall Street analysts. Highlighting the company's dueling priorities, Disney's theatrical-movie division posted a 52% rise in revenue and 79% jump in operating income in the three months ended Sept. 28. Despite the company's box-office riches, a streaming-first mentality now pervades the company, if Mr. Iger's remarks were any indication. Disney's film and television divisions are producing hundreds of hours of programming not only for Disney+ but also a 19-month-old ESPN streaming service and Hulu, a third service that Disney now controls after its $71.3 billion acquisition of the 21st Century Fox entertainment assets.

Swiss stocks

The SMI rose only 0.1 percent to 10,327 points Thursday despite news from the Chinese Commerce Ministry that Peking and Washington have agreed to gradually reduce the existing punitive tariffs if talks achieve a Phase 1 agreement. The SMI had hit a new record high of 10,356 points in trading. “Safe havens” like gold and bond prices, declined on the news, and the Swiss franc fell against the US dollar. Defensive sectors pulled down the index. Novartis fell 0.6 percent, Lonza 0.9 percent and Nestle 0.6 percent. Luxury goods stocks Swatch rose 0.7 percent and Richemont 0.4 percent, both heavily reliant on China trade. Zurich Insurance climbed 1.4 percent on nine-month financials, with gross premiums in its core business, property and casualty, up markedly. Zurich now hopes to exceed all 2017-2019 targets. AMS rose 2.1 percent, after releasing its second takeover bid for Osram, which foresees more concessions to management and employees, but left the bid at EUR 41 per Osram share.

International markets

Europe

The STOXX Europe 600 Index was up 1.49 points, or 0.37%, to 406.56. London stocks closed higher as global markets rose amid signs of progress in trade talks between Washington and Beijing. The FTSE 100 rose 0.1% to 7406.41. Insurer RSA Insurance and house builder Persimmon topped the list of FTSE 100 gainers, up 4% and 3.8%, as investors cheered the pair's third-quarter updates. Insurer Hiscox was the biggest blue-chip faller, down 9.7%. The French CAC was up 24.25 points, or 0.41%, to 5890.99 while the German DAX was up 109.57 points, or 0.83%, to 13289.46. Shares of Centogene B.V. (CNTG) fell 4% in their trading debut Thursday after its initial public offering of 4 million shares was priced at $14 apiece, the low end of the expected range. Centogene shares were changing hands at $13.40, down about 4.3%, after opening at $14.10. Lufthansa's third-quarter results beat market consensus, with adjusted EBIT 6% ahead of expectations, Berenberg says. Investors should be reassured today thanks to the market beat and guidance's confirmation, the brokerage says. Italy’s largest lender, UniCredit SpA, has shed its entire stake in investment bank Mediobanca SpA, a move that ends a 70-year-plus relationship and has the potential to shake up the country’s corporate landscape. The stake sale was announced late Wednesday. On Thursday, UniCredit reported sharply higher third-quarter net profit, its shares rising 6.2% in early trade. Mediobanca shares were down 0.4%.

United States

U.S. stocks climbed intraday as signs of progress in trade talks with China fueled investors' appetite for risky assets. The Dow Jones Industrial Average gained 242 points, or 0.9%, in early-afternoon trading. The S&P 500 advanced 0.5%, while the tech-heavy Nasdaq Composite was up 0.7%. All three indexes are trading at records, lifted by a resilient U.S. jobs market, a series of interest-rate cuts by the Federal Reserve, hopes that the trade spat with Beijing is easing and a strong corporate earnings season. Walt Disney Co. reported a 34% jump in revenue in the latest quarter, boosted by the box-office performance of "The Lion King," "Toy Story 4" and "Aladdin." Shares of Disney rose 4.5% to $139 in after-hours trading Thursday as the company's earnings fell but still beat analysts expectations. Online travel-agency stocks plunged Thursday after Expedia's latest earnings report revealed a struggle to contend with changing search-engine dynamics as well as trouble with some of its brands.

Asia

Asian markets were mixed and U.S. futures dipped, as the risk-on mood that has driven global markets this week showed signs of cooling. Chinese exports last month fell 0.9% from a year earlier, following September's 3.2% decline. A Wall Street Journal poll of economists had expected a 3.1% decline.

Bonds

The yield on 10-year Treasurys intraday rose to 1.950% from 1.814% Wednesday, reaching levels last seen over the summer, as investors sold U.S. government debt, seen as a haven asset. Bond yields move in the opposite direction to prices.

Analysis

IR rises BBVA to Buy (Hold) – Target 5,80 (5,20) EUR
IR rises the Hannover rück target to 180 (145) EUR – Hold
IR rises the Dt. Telekom to 18,50 (17,50) EUR – Buy


Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.

 
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