CPI report and The Streaming War

14/8/22 ~ Sunday Summary

CPI report

On Wednesday, the consumer price index for July rose 8.5% year over year, with economists surveyed by Dow Jones expecting a 8.7% increase. Core inflation (which ignores volatile food and energy prices) also saw a lower than expected increase.

As a result of this, stocks were trading higher during Wednesday trading, with major tech stocks outperforming the wider market, as seen with $META rising almost 6% and Netflix gaining over 6%. The comeback rally saw the S&P500 surge to levels not seen since early May, and is up almost 15% since it's mid-June plummet.

The future

Although the easing of inflation was reacted well by investors, many remain grounded as some believe the central bank will remain aggressive in it's hiking of interest rates. Chief economist at KPMG Swonk has stated that he believes the Federal Reserve is on for 75 basis points.

Disney's comeback? - the streaming war continues.

This week Disney released it's Q3 report, and what it revealed has raised questions among investors.

Some statistics from the report:

-26% increase in revenue

-EPS was $1.09 vs $0.97 expected

-Disney now has 221m subscribers vs Netflix's 220m!

-Disney parks and cruise division saw revenue increase by 72%

-introduced a 38% price hike of it's streaming services

-ad-supported option for streaming services (similar to Netflix)

What separates Disney from Netflix?

The diversification and range of income sources are a key reason as to why many investors are fond of Disney, as in recent years Disney has grown into a household name in family entertainment and is now a leading media conglomerate across the globe.

Disney's growth has been a product of several acquisitions over the last 30 years, for example Studio Entertainment (the foundation of the company) has been used to acquire more and more franchises , such as the Star Wars franchise and Marvel Entertainment. Alongside this, Disney has acquired ABC, ESPN and 21st Century Fox, which it uses to distribute content through.

Thank you all for reading:)

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