Friday morning gave Wall Street a good start as earnings season kicked off favorably. Positive news from the financial sector helped lift spirits about the market as a whole, and investors are looking forward to seeing how companies manage to spur growth now that tax cuts are more than a year old and will no longer have huge impacts on year-over-year results. Just after 11:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 197 points to 26,340. The S&P 500 (SNPINDEX:^GSPC) climbed 13 points to 2,901, and the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 19 points to 7,966.
JPMorgan Chase (NYSE:JPM) got things started off on the right foot among major banks reporting their latest financials, with first-quarter results that encouraged not only its own shareholders but also market participants more broadly. Meanwhile, Walt Disney (NYSE:DIS) announced its long-awaited streaming service, and many believe that the media and entertainment giant will be able to use its new offering to reverse the tide of cable-cutting customers and potentially bring in even more overall revenue.
A Dimon in the rough
JPMorgan shares rose 4% after the Wall Street banking giant made a strong start to earnings season. The bank said that net income reached a record $9.2 billion in the first quarter of 2019, working out to $2.65 per share.
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Nearly all of JPMorgan’s core areas performed well. Core loans and deposits were up modestly, while investment assets and credit card sales volumes rose by double-digit percentages. JPMorgan boasted keeping the top ranking among global investment banks in terms of market share, and although total revenue for its markets segment was down, gross investment banking revenue soared 44% from year-earlier levels. Average loan balances also showed strong growth.
CEO Jamie Dimon sees plenty of opportunity for further gains. New efforts will help provide workers with new skills at work and help to bridge the racial wealth divide. Ongoing support for consumers, small business, and large corporations should help foster broad economic growth, and Dimon is optimistic that even amid geopolitical uncertainty, a more constructive economic environment and favorable conditions across much of its market should keep confidence strong and produce even better results in the future.
Disney+ gets rave reviews
Shares of Disney soared almost 10%, making it the best-performing stock in the Dow after the entertainment giant revealed details about its Disney+ streaming-video service. The House of Mouse expects to release Disney+ in the U.S. market on Nov. 12, and investors are especially happy about the proposed price and the likelihood that it will compete effectively against Netflix and other streaming content distributors.
Disney said that it expects to set a $6.99 monthly subscription price on the service, undercutting Netflix’s double-digit monthly pricing. With an extensive library that includes content from Pixar, Marvel Studios, Star Wars, National Geographic, and newly acquired titles from 20th Century Fox along with its own namesake production studios, Disney will offer an attractive value proposition for viewers. Disney also discussed its more comprehensive strategy for delivering content directly to consumers, including ESPN+, Hulu, and Hotstar.
From an investment standpoint, Disney is managing expectations quite well. CFO Christine McCarthy was clear that Disney+ will take years before it can become consistently profitable, and spending to flesh out the content library will likely amount to roughly $2 billion annually between now and 2024. Yet the company does expect the service to gain traction, setting a 60 million to 90 million subscriber target. With the prospect for huge demand both domestically and in the global market, Disney’s making a move that’s worthy of the most disruptive companies in the media industry.