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Key Market Updates for Investors: Stocks, Inflation, ESPN Partnerships, Purdue Pharma, and Maui Wildfires
Stock Market Performance
Investors should be aware of the current stock market trends as they begin their trading day. The S&P 500 and the Nasdaq Composite are both on track for a down week, with losses of 0.2% and 1.23% respectively. If this trend continues, it will mark the second consecutive week of declines for both indexes. The last time the Nasdaq experienced back-to-back weekly losses was in December. The Dow Jones Industrial Average, however, has bucked this trend and is up by 0.3% for the week.
Inflation saw a period of deceleration last month, with the consumer price index rising 3.2% year-on-year, according to the Bureau of Labor Statistics. This report was slightly better than Wall Street's expectations, though the annual rate was marginally higher than the previous month, marking the first month-over-month rate increase in approximately a year. Core inflation, which excludes volatile food and energy prices, increased by just 0.2% for the month, mirroring June's increase. More inflation data will be released on Friday in the form of the producer price index.
Disney's ESPN Partnerships
Disney has been actively seeking new partners for ESPN, but top sports leagues remain unconvinced. Both the NBA and MLB have questioned the benefits of a partnership that could see lucrative broadcasting fees exchanged for equity in ESPN. Such a deal would provide immediate cash savings for Disney, but could potentially leave the leagues underfunded. While talks are still in the early stages and few details have been disclosed, Disney's exclusive window to renew rights with the NBA ends in April 2024, adding a sense of urgency to the discussions.
Purdue Pharma Settlement
The Supreme Court has halted a $6 billion bankruptcy settlement for Purdue Pharma and its owners, the Sackler family. The settlement would have transferred ownership of the company away from the family and shielded the Sacklers from civil lawsuits related to the opioid OxyContin, produced by Purdue. The court has agreed to review the settlement, which was reached in May with numerous U.S. states and thousands of local governments.
Wildfires in Maui
Wildfires in Maui have resulted in at least 55 fatalities, making it the deadliest natural disaster in Hawaii since the 1960 tsunami. The death toll is expected to rise, according to officials. President Joe Biden has promised aid for those who have lost loved ones or homes and has directed FEMA Administrator Deanne Criswell to expedite requests for federal assistance. Major airlines have also added flights to facilitate evacuation from the island.
Conclusion: Implications for New Businesses
Market Trends and New Businesses
The current stock market trends, with the S&P 500 and the Nasdaq Composite headed for a down week, could create a challenging environment for new businesses looking to raise capital or invest. However, the performance of the Dow Jones Industrial Average suggests that opportunities still exist in certain sectors.
Inflation and Business Costs
The deceleration of inflation last month could provide some relief for new businesses grappling with rising costs. However, the slight month-over-month increase in the annual rate signals that businesses should remain vigilant and plan for potential cost increases.
Media Partnerships and Revenue Streams
Disney's ongoing discussions with top sports leagues about potential ESPN partnerships highlight the importance of exploring diverse revenue streams. New businesses, particularly in the media and sports sectors, should monitor these developments closely as they could reshape industry norms and revenue models.
Legal Developments and Corporate Responsibility
The Supreme Court's decision to review the Purdue Pharma settlement underscores the importance of corporate responsibility and the potential legal repercussions of business practices. This serves as a reminder for new businesses to prioritize ethical practices and risk management.
Natural Disasters and Business Continuity
The devastating wildfires in Maui demonstrate the importance of disaster preparedness and business continuity planning. New businesses, especially those in disaster-prone areas, should have robust plans in place to ensure their survival and recovery in the face of such events.
Article First Published at: https://www.cnbc.com/2023/08/11/5-things-to-know-before-the-stock-market-opens-friday-august-11.html
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