UPDATED with Tuesday morning turnaround: Markets and media shares rallied Tuesday after a scary dip the day before on Omicron jitters. The Dow is up 300 points and other indexes are trending higher as well in morning trade with media stocks looking strong.
Disney, ViacomCBS, Discovery, Fox and Lionsgate were all solidly in the green. Exhibitors and movie theater advertising platform National CineMedia were up as well, reaping the benefits a day late of the spectacular box office debut of Spider-Man: No Way Home. Imax is up 3.3%, AMC Entertainment by 2%, Cinemark by 3.7%, Marcus by 4.5% and NCMI 5.3%.
The focus on Monday was on the fast spread of the Omicron variant and the spate of new shutdowns and travel restrictions slapped on globally to try to contain it. Today, investors are digesting President Biden’s steps to fight the new Covid surge including making 500 million at-home tests available to Americans for free. Studies confirming that booster shots appear to be effective at stemming Covid symptoms are positive news. However, the situation, and the markets, are likely to be volatile. Biden is set to address the nation at 2:30 p.m. ET on the variant and government measures.
PREVIOUSLY, Monday AM: Stocks were flattened Monday by a wave of angst over the fast-spreading Omicron variant, exacerbated by pending interest rate hikes and economic tightening the Fed signaled last week, and after Sen. Joe Manchin scuttled President Biden’s key social policy legislation.
All major indexes fell on the first day of a shortened trading week ahead of the holidays. With Christmas falling on a Saturday, financial markets will be closed Friday.
Not even record-setting ticket sales for Spider-Man: No Way Home could keep exhibitors in the green with AMC Entertainment and Imax down, respectively, by 6.6% and 3.4%.
The Nasdaq has lost 1.8% and the S&P 500 and Dow 1.7% and 1.8% each — meaning a nearly 650-points drop for the DJIA. The broader Russell 2000 has fallen by a hefty 2.54%. Today’s declines follow steep losses last week as the variant began to take hold along with investor jitters over its possible economic fallout.
Many big media names were down even more than the broader market. Disney is lower by 2.35%, ViacomCBS by 3.69%, Discovery by 3.22% and Fox by 2.63%. Comcast is off 1.49%.
Countries from Israel to Germany to Ireland have imposed curfews and travel restrictions. The Netherlands announced a nationwide lockdown of non-essential stores, bars and restaurants. Denmark closed schools. New York and LA are heavily hit and increasingly concerned. Colleges have started to announce they are moving back to remote. Companies are delaying back to work mandates. Omicron has pushed CNN to close its offices, Starz and Lionsgate just did the same. It has canceled movie premieres and sporting events and complicated the outlook for production. Media insiders — like everyone else — are wondering if it’s possible to balance on the precipice and come out on the other side without reverting to 2020’s drastic measures.
The annual January gathering of world leaders, billionaires and executives in Davos, Switzerland was just postponed. The World Economic Forum, which puts it on, said Monday it “will defer its Annual Meeting in Davos, Switzerland, in the light of continued uncertainty over the Omicron outbreak.” It’s now planned for early summer.
The in-person event from Jan. 17-21 was set to address “economic, environmental, political and social fault-lines exacerbated by the pandemic.”
Among nearly 50 media and tech stocks tracked by Deadline, only a handful were trading higher, and barely so, including Netflix (the ultimate stay-at-home stock), Endeavor, Cinemark, AT&T (which had fallen so low it may have started to look attractive) and Chicken Soup for the Soul (which earlier today expanded a stock buyback program).
The Omicron variant has been reported in about 89 countries, with cases doubling every 1.5-3 days.
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