This Wednesday saw big losses on the U.S. stock markets for the major communications companies, most notably with Disney “dinged” by a 9% drop. Following Disney’s disappointing earnings figures, big falls in rival cable companies ensued – Time Warner lost 9% also. Discovery Communications saw a 13% drop, as the strong dollar and lower advertising sales meant below forecast profits. Disney’s issues stem from large numbers of ESPN subscribers choosing much simpler services, eg. stand-alone streaming, over standard company packages. The knock-on effect continued as Twenty-First Century Fox (7%), CBS (5%) and Viacom (7%) all felt the impact. As Barton Crockett, an analyst with FBR Capital Markets commented, “If Disney can get dinged, maybe nobody’s safe.”
Following today’s publication of non-farm payroll data by the Department of Labor, which may well be the seal on a September interest rate hike, all the U.S. stock markets are reporting losses of some description. The payroll data showed a July increase of 215,000 workers into the economy, as unemployment held, leading to many investors perceiving an end to the Fed’s low interest rate policy. Furthermore, today’s stock market losses exactly mirror an increase in the Forex Gold Index, with the Silver Index showing double that gain.
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