Here are the key events taking place on Monday that could impact trading.
NOT-SO-MAGIC KINGDOM: A majority of “self-described Disney World enthusiasts” say the Florida theme park has “lost its magic” due to skyrocketing costs, according to a recent study.
A study from gambling website Time2play surveyed 1,927 “Disney World enthusiasts,” and of those, 68.3% reported that the price hikes make them feel like the theme park has “lost its magic.” A whopping 92.6% reported that they believe the high costs for the park has made a vacation for the average family “out of reach.”
A ticket for Disney World’s Magic Kingdom in 1971 was a total of $3.50, according to the study. When adjusting for inflation, that would mean tickets would be about $25.60 today. Instead, tickets for one Disney World park range from $109 to $159 per day, according to the study.
Nearly 50% of respondents reported postponing a trip due to the price hikes.
All in, Disney World veterans can expect to pay 35.7% more for their next trip compared to their last one, Time2play found.
A chart posted to social media last year by a researcher at SJ Data Visualizations, a U.K.-based firm, shows that prices for Disney World have risen by at least 3,871% since 1971, with prices rising at a more drastic rate in the early 1980s compared to its first decade.
Families spoke out about the prices earlier this year as traveling picked back up following coronavirus lockdowns, and they expressed shock at the price hikes. One dad of two estimated he would be on the hook for a $4,000 to $5,000 bill, even with one of his kids qualifying for free admission.
“I understand inflation and all of those things. I understand cost increases,” Kentucky father Matt Day told the Washington Post earlier this year on the high prices. “I always had the impression that Disney was a family vacation destination, and that impression is why I was surprised to see how expensive it truly was — and how out of reach it is for most American families.”
“It’s really unprecedented,” said Len Testa, president of theme-park trip-planning site Touring Plans told the Washington Post earlier this year. “We haven’t seen this sort of anger about price hikes in — we can’t remember the last time something like this caused this much anger from Disney fans.”
‘ANTI-RACIST,’ ‘ANTI-OPPRESSION’ LAYOFFS: Twilio CEO Jeff Lawson announced in a message to all employees that 11% of its workforce would be laid off, stating that they made the layoffs through an “Anti-Racist” and “Anti-Oppression” lens.
The San Francisco-based corporate communications company CEO said in the message to employees that the layoffs are “wise and necessary.”
“I’m not going to sugarcoat things. A layoff is the last thing we want to do, but I believe it’s wise and necessary. Twilio has grown at an astonishing rate over the past couple years. It was too fast, and without enough focus on our most important company priorities. I take responsibility for those decisions, as well as the difficult decision to do this layoff,” Lawson said.
In determining which roles would be impacted in the layoffs, Lawson said that company officials examined which roles were most aligned with its four priorities, but said that the layoffs were carried out through an anti-racism lens.
“As you all know, we are committed to becoming an Anti-Racist/Anti-Oppression company,” Lawson wrote. “Layoffs like this can have a more pronounced impact on marginalized communities, so we were particularly focused on ensuring our layoffs – while a business necessity today – were carried out through an Anti-Racist/Anti-Oppression lens.”
Those who were laid-off will get “at least” 12 weeks of pay, and an additional week per year of service at the company. They will also receive the full value of Twilio’s next stock vest.
DIRE ECONOMIC OUTLOOK: U.S. stocks closed lower Friday as investors came to grips with corporate warnings that paint an increasingly dire outlook for the health of the U.S. economy.
In the past week, big corporations including Goldman Sachs Group Inc. prepared to cut jobs, exacerbating fears of an impending recession.
FedEx cautioned late Thursday that it is closing offices to offset declining demand, and General Electric said supply-chain problems were weighing on profits. The news pushed down stocks, with the Dow Jones Industrial Average falling 139.40 points, or 0.5%, to 30822.42. The S&P 500 dropped 28.02 points, or 0.7%, to 3873.33.
For the week, the Dow lost 4.1%, while the S&P retreated 4.8%.
The Nasdaq Composite declined 103.95 points, or 0.9%, to 11448.40. It fell and 5.5% for the week, its worst since June. All three indexes are down four of the past five weeks.
|I:DJI||DOW JONES AVERAGES||30822.42||-139.40||-0.45%|
|I:COMP||NASDAQ COMPOSITE INDEX||11448.403659||-103.95||-0.90%|
The big moves are surprising given how U.S. stocks appeared on the upswing earlier this summer, climbing from their mid-June lows on the back of earnings that weren’t as bad as feared and some strong hiring data.
However, investors who had hoped that the midsummer bounce back was the beginning of a new bull market rally got a rude awakening when data on Tuesday confirmed that inflation remains stubbornly high.
Investors now anticipate that the Fed will have to keep raising rates aggressively, which could eventually tip the economy into recession.
FED RATE HIKE IMMINENT?: Futures bets show that traders see a 76% probability that the Fed will raise interest rates by another 0.75 percentage point at its meeting next week, according to CME Group.
Investors are also pricing in another rate rise of the same amount in November.
The two-year Treasury yield is especially sensitive to investors’ expectations for near-term Fed rate increases. It settled Friday at 3.859%, its second-highest level of the year. On Thursday, it settled at its highest level since 2007.
The yield on the benchmark 10-year Treasury note also fell slightly, to 3.447%. Yields and prices move inversely.
Before Tuesday’s inflation data, some money managers had hoped central banks would be in a position to start toning down their rate increases.
“It’s clear that they’re not going to pivot. That ship has sailed,” said Hani Redha, a portfolio manager at PineBridge Investments.
Traders are also nervous the Fed may continue tightening even if the economy slows.
IPO: Corebridge Financial Inc., the life insurance and asset-management unit of American International Group, priced its initial public offering, the first attempt at a large, traditional IPO in the U.S. in months.
|CRBG||COREBRIDGE FINANCIAL INC COM USD0.01||20.72||-0.01||-0.05%|
The offering priced at the low end of expectations and fell in its stock-market debut, disappointing advisers who had hoped the deal might inject life into a floundering IPO market.