Investors want to see a clear path to a turnaround from boomerang Disney (DIS) CEO Bob Iger before nibbling at a stock plumbing fresh lows.

“What investors really want is they want to see a company that can execute its way to success,” said Goldman Sachs managing director Brett Feldman at the Goldman Sachs Communacopia and Tech Conference in San Francisco.

Feldman provides coverage on Disney and other legacy media companies for clients.

“If you are still debating what they are supposed to do, that can be an overhang on the stock,” Feldman added. “So the main thing [of importance] is setting a strategy and then setting a strategy that the market thinks will work if you execute on it.”

Judging by Disney’s stock price, investors are worried about the path forward for Disney under Iger.

Shares of the media giant hit a fresh 52-week low on Tuesday. The stock has tanked over 6% year to date, badly lagging the S&P 500’s 17% return.

There remain several issues hanging over Disney’s stock price, pros such as Feldman contend.

First — and a new one — are the increasingly contentious contract negotiations with Charter (CHTR).

Disney channels such as ABC and ESPN have been blacked out since last Thursday for the cable customers of Charter-owned Spectrum. The blackout came after the two failed to reach a new carriage agreement.

Mickey Mouse, the mascot of The Walt Disney Company, waves before ringing the opening bell at the New York Stock Exchange (NYSE), Nov. 27, 2017, in New York City. (Drew Angerer/Getty Images)

Disney urged Spectrum subscribers to opt for Hulu + Live TV to circumvent blackouts on Tuesday, Yahoo Finance’s Alexandra Canal reported.

The final outcome of the contract battle could have negative ramifications for Disney’s future earnings power if the higher rates it’s trying to push through to Charter aren’t landed.

Meanwhile, following sweeping layoffs at Disney enacted by Iger this year, investors remain on pins and needles on the next restructuring move.

Iger said in July he would take an “expansive” look at Disney’s traditional TV assets, a signal to the Street that a sale of linear TV channels is in the cards amid growing cord-cutting by consumers.

Story continues

No update from Disney has been provided since. Iger has said that he doesn’t want to unload the ESPN brand.

The lack of information appears to be unnerving investors.

“To hear a leader in the industry like Bob Iger acknowledge that you have to put everything on the table right now, I think shows how seriously they’re taking this,” Feldman said. “It’s a real signal to the Street that they’re going to do what they need to do so that Disney can have another hundred years of success.”

Read more coverage of the 2023 Goldman Sachs Communacopia + Tech conference:

–

Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

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By Jamie Chisholm

Critical information for the U.S. trading days

Wall Street is undecided about trying for another rally on Friday, according to early trading in futures. That’s in keeping with the struggle it has been of late, with the S&P 500 SPX down six of the last eight sessions amid August’s bearish tendencies.

Some technical factors are causing concern. The Nasdaq 100 NDX is in danger of decisively falling back below its 50-day moving average support trend. Apple (AAPL) did so a week ago, and now its relative strength index, a gauge of momentum, has swiftly dropped to 30, signaling the stock may soon enter short-term oversold territory.

Over the same short period, the yield on the 10-year Treasury BX:TMUBMUSD10Y has twitched within a range of roughly 4% to 4.2% as investors try to get a handle on varying inflation and economic growth readings.

So, what’s an investor to do amid such uncertainty? Well, buy the companies that help traders to trade it, reckons VGI Partners, the Australia-based fund manager. In it’s semi-annual investor letter, covering performance to the end of June, VGI highlighted the top ten long investments in its Global Investments fund , three of which provide, to varying degrees, what may be termed the plumbing of the financial markets.

With a weighting of 7% is the London Stock Exchange , which VGI is keen to point out has transformed from a traditional exchange into a data and analytics group. After its purchase of data group Refinitiv in 2021, the LSE now generates only 3% of revenues from its legacy cash equities exchange.

Deutsche Börse represents about 8% of the portfolio and is deemed atractive says VGI because it provides trading, clearing, pre/post-trading and data and analytic services in four key operating segments: Trading & Clearing, Fund Services, Security Services and Data & Analytics.

DB is a “well-diversified exchange group whose activities touch on most aspects of European capital markets, offering a blend of transactional and non-transactional revenue exposure,” VGI adds.

But top holding is CME Group (CME), with a 9% weighting. CME operates futures and derivatives exchanges, including the Chicago Mercantile Exchange, the New York Mercantile Exchange, the Chicago Board of Trade, and the Dow Jones Index Services.

VGI particularly likes CME’s “effective monopoly” of trading in interest rate derivatives. “Demand for interest rate derivatives is driven by volatility in interest rate markets, whose effect is compounded by the number of bonds held by those looking to manage interest rate risk and, by extension, market liquidity,” the fund manger notes. And the chart below illustrates this strong relationship.

VGI expects the growth in the size of the U.S. Treasury market, particularly in relation to privately held US treasuries as the Fed undergoes a balance sheet unwind, to provide important support to a CME’s interest rate derivatives business. CME should also benefit — as are other exchanges — from a boost to net interest income from the collateral balances it holds.

“We believe that CME’s assets are critical pieces of market infrastructure and will be recognized as such in the future,” VGI concludes.

Markets

U.S. stock-index futures , , are little changed as benchmark Treasury yields BX:TMUBMUSD10Y dip. The dollar DXY is lower, while oil prices slip and gold gains.

Try your hand at the Barron’s crossword puzzle and sudoku games, now running daily along with a weekly digital jigsaw based on the week’s cover story. To see all puzzles, click here.

The buzz

Economic data on Friday, include the July producer price index report, due at 8:30 a.m., and the August consumer sentiment reading at 10 a.m.. Both times Eastern.

UBS Group (UBS) has terminated a 9 billion Swiss franc ($10.27 billion) loss-protection agreement and a CHF100 billion public-liquidity backstop guaranteed by the Swiss government that were put in place at the time of its takeover of troubled rival Credit Suisse.

The pound rose back above $1.27 after data showed the U.K. economy grew 0.5% in June, more than twice the 0.2% expected.

Country Garden shares fell nearly 6% to below HK$1 for the first time as China’s biggest homebuilder warned of a loss and suffered another ratings downgrade of its debt.

Shares of Cano Health Inc. (CANO) are down more than 50% in Friday’s premarket after the primary-care provider and health-management platform said there was “substantial doubt” about its ability to keep operating.

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The chart

Just a reminder from Christopher Wood, global head of equity strategy at Jefferies, of why some investors are getting twitchy about the recent rally in oil pries because of how it may clobber the happy narrative that major central banks can soon stop raising interest rates.

“The correlation between the Brent crude oil price and the five-year forward inflation expectation rate has been 0.88 since 2011,” says Wood. “This is potentially an awkward development in the context of the prevailing narrative that both the Federal Reserve and the ECB are all but done in this tightening cycle even if the official mantra in both cases remains ‘data dependent’.”

Top tickers

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.

Ticker Security name
TSLA Tesla
MULN Mullen Automotive
AMC AMC Entertainment
NIO Nio
WE WeWork
NVDA Nvidia
GME GameStop
TTOO T2 Biosystems
AAPL Apple
NKLA Nikola

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The SEC is considering a proposal, partly a response to the meme stock craze, to reduce the amount of time it takes to clear trades, the agency said in a release this morning.

Driving the news: In his remarks today, SEC chair Gary Gensler specifically pointed to last January’s meme stock trading mania as a reason for the change. Back then, some traders weren’t able to buy stocks at critical times because of issues with clearing trades, he said.

• Today, the Commission is proposing several amendments to the securities clearing and settling process — what one might call the ‘market plumbing,’ ” Gensler said.
• “I share the frustration of investors who were locked out from making certain trades,” he added.

Between the lines: Right now it takes two days for a trade to clear, known as T+2. Meaning, if you sell a stock or convert a currency on Monday, you get the cash on Wednesday.

• This move would get the markets to T+1: Sell today — get paid tomorrow.
• If accepted, the proposal would take effect by March 31, 2024, the SEC said in a release today.
• In the future, we could see T+.5, the SEC said it is seeking comments on a same-day settlement cycle.

Why it matters: The less time it takes to clear trades, the less risk there is in the system. In a release today, the SEC cites two recent moments of volatility from the past couple of years, as examples:

• The Gamestop trading mania, which caused headaches for Robinhood largely because of T+2, as Felix Salmon explained here.
• The March 2020 COVID-related crash.

The big picture: This would be “the Wall Street regulator’s most direct response yet to last year’s wild trading in GameStop Corp. and other meme stocks,” Bloomberg reported last week.

Go deeper: Wall street speeds up, slowly

Editor’s note: This article has been updated with new details from Gensler’s remarks.

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From Sonja Trauss

SB 9 was signed by Governor Gavin Newsom and is now state law. Will the impact in San Francisco be as bad as opponents predict? Hopefully the answer is yes.

The opponents of SB 9 promise that exclusive, expensive single-family quarters will suddenly be overrun by cheap apartments and the neighborhood will be opened up to every Tom, Dick, Harry, Lisa, Angela, Pamela, Renee, Fatima, Muhammad or Kofi. This wonderful result could become a reality with the support of the San Franciscans on the ground.

The first thing new and exciting about SB 9 is that it is specifically for Single Family Zones (also often referred to as “RH-1 Zones”). Most land use laws, which allow denser, cheaper housing, expressly exclude single-family zones. This is because our land use and zoning laws are primarily concerned with creating and maintaining economic segregation. The requirement that each residential unit be equipped with a large piece of land makes living more expensive.

SB 9, on the other hand, specifically targets single-family homes and says cities must allow maisonettes that are the same size as the largest single-family home in the neighborhood, or at least 1,600 square feet (800 square feet per apartment), whichever is larger.

SB 9 would enable maisonettes in many of the purple lots that are currently designated for single family homes. (Image courtesy Robert Fructman)

Another exciting aspect of this journey to housing production is that maisonettes are being built all over the city, and not just neighborhoods like SoMa, Mission and Bayview. In the past 10 years, a shocking 80% of new homes have been built in just two regulatory districts: Districts 6 and 10, represented by Matt Haney and Shamann Walton, respectively. This means that only 20% of the new residential construction production is spread across the other nine districts. This is clearly unfair and absolutely nothing can justify this injustice.

The passage from SB 9 offers the possibility of a massive increase in residential construction distributed throughout the city, but its implementation can still be sabotaged. SB 9 grants exemptions for individual family areas that are historic districts (and fire zones, but that doesn’t affect San Francisco). Local housing opponents, both inside and outside the local government, will seek to use this exemption and existing procedures to tackle, delay and discourage the big houses in their leafy, exclusive neighborhoods from becoming maisonettes.

You can help with housing construction by joining a local YIMBY group like SFYIMBY or just being careful of what is happening in your neighborhood. When the opportunity arises, speak to you about an apartment. Post in the comments on Nextdoor that, no, you don’t think a new planned maisonette is going to ruin the neighborhood. Click on everyone on your neighborhood list and say that you think San Francisco needs more housing of all kinds and that no, we shouldn’t be organizing to stop a local housing offer. Write your supervisor an e-mail and let him know that you like SB 9, that you want it to be implemented quickly and that you are looking forward to more apartments in your neighborhood.

These messages are really important. Most of the voices in the housing debate support a reason why housing should not be built. We need voices that say YES.

Sonja Trauss is the managing director and co-founder of Yes In My Back Yard.

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The shares of PG&E Corp. PCG, + 0.77%, rose 0.9% in pre-trading on Monday after the California-based utility announced an agreement to sell its San Francisco headquarters to Hines Atlas US LP for $ 800 million. The utility announced that it would distribute the proceeds of $ 390 million to $ 420 million in sales to its customers, subject to approval by the California Public Utilities Commission (CPUC). The company remains on track to move into its new Oakland, California headquarters in the first half of 2022. “This sale and relocation will generate cost savings that will directly help reduce customer bills,” said Chief Executive Patti Poppe. “At the same time, it will give us an efficient and effective place to work in the Bay Area as we focus on serving all of the communities in which we operate.” Separately, the company announced that it would consolidate two more California properties in San Ramon and one in Concord into the new headquarters in Oakland. The stock is down 17.5% year-to-date to Friday, while the Dow Jones Utility Average DJU, + 0.07%, 5.1% and the Dow Jones Industrial Average DJIA, + 0.44%, down 10.6% % has increased.

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