Iger returns to Disney, China COVID woes, FTX aftershocks – what moves markets


By Jeffrey Smith

Investing.com — Walt disney shares are selling like Taylor Swift tickets on the news that Bob Iger will return to the CEO seat at the entertainment giant as Bob Chapek’s streaming vision unravels. Global markets have gloomier things on their minds, however, after China confirmed its first deaths from COVID-19 in months, casting doubt on its ability to reopen its economy this winter. European and Asian equities are lower, along with oil prices, and US equities will follow. Zoom Video reports earnings after the bell. And Bitcoin falls as more gruesome details about FTX’s bankruptcy continue to trickle out.

1. The Return of the King

Walt Disney (NYSE:) stock rose 9% in premarket on the news that Bob Iger, who quintupled the company’s value in his 15 years as CEO, is back.

Iger has been awarded a two-year contract with “a mandate from the board of directors to set the strategic direction for renewed growth”.

The Mouse House has given up on Iger’s successor, Bob Chapek, after seeing the company’s stock lose nearly half of its value over the past 12 months due to the rising costs of battling Netflix (NASDAQ:) for supremacy in the streaming market.

Chapek has had quite a bit of bad luck during his three-year stint as the pandemic wreaked havoc on the theme parks and cruise companies, as well as film production and distribution. He is also embroiled in a culture war between Governor Ron DeSantis and the artistic community over Florida’s so-called “don’t say gay” law.

2. Crypto continues to wobble as the FTX fiasco plays out

Cryptocurrencies continued to be under pressure as more investors headed for the exit, appalled by the news flood surrounding the collapse of crypto exchange FTX.

briefly fell below the $16,000 level, but remained above the two-year low it set two weeks ago as FTX crumbled. At 06:50 ET (11:50 GMT) it was down 2.7% to $16,064.

Reports over the weekend suggested that FTX owes its 50 largest unsecured creditors more than $3 billion. Several social media accounts that track blockchain data noted on Monday that the “hacker” (suspected by many to be a company insider) who took digital currency off the exchange after it filed for bankruptcy protection is still moving those assets around – a constant reminder of the company’s inability (or unwillingness) to protect clients’ assets.

The focus of the market has begun to shift in recent days from FTX itself to Digital Currency Group, whose Grayscale Bitcoin Trust (BTC) (OTC:) has come under pressure after Genesis Trading, another of its affiliates , has suspended customer withdrawals.

3. Stocks open lower on China news; Zoom revenue in the eye

US stocks will open lower later, pressured by weekend news out of China and still weighed down by the Federal Reserve’s unwillingness to send a signal that could be taken as a pivot to softer monetary policy.

A series of Fed officials went to great lengths last week to emphasize that while a 50 basis point increase at the next meeting would be a smaller step than the one at the last four meetings, it is still a raise and that there may be a a few more before the central bank is ready.

At 06:30 ET, we were down 83 points or 0.2%, while we were down 0.5% and down 0.8%.

Aside from Disney, the spotlight will fall on later Zoom video communication (NASDAQ:), reporting third quarter results after the closing bell. Taiwan Semiconductor Manufacturing (NYSE:) will also be in the spotlight following reports of a cryptic meeting between the CEO and Chinese President Xi Jinping in Thailand over the weekend.

4. China reports COVID deaths in Beijing as outbreaks spread

China reported its first deaths from COVID-19 in several months, including three in Beijing, as the number of cases across the country surpassed its April peak, casting doubt on authorities’ ability to implement the Zero-COVID strategy of the country to be meaningfully relaxed.

Outbreaks are underway in both Beijing and Shanghai, with local lockdowns once again in effect.

Bloomberg reported that Shijiazhuang — a city of about 11 million people about 300 kilometers from Beijing — has suspended schools and universities and asked residents to stay at home for five days. The significance of that is that Shijiazhuang was considered a test case for the removal of all virus restrictions.

The health news overshadowed the central bank’s decision to leave it unchanged.

5. Oil Drops on China News; The protests in Iran are gaining momentum

Crude oil prices fell below $80 a barrel amid the combined weight of Chinese news and expectations of a fall in demand amid reports that both Europe and China have recently bought more oil than they need .

China’s domestic demand is likely to fall sharply as the current spate of COVID outbreaks forces a return to more restrictive mobility measures, while European buyers are reported to have stockpiled ahead of December 5, when an import ban on Russian oil and products of becomes force.

futures fell 0.2% to $79.98 a barrel, while futures fell 0.3% to $87.38 a barrel.

As oil prices fall, protests against Iran’s ruling authorities continue to gain momentum. The protesters received surprising encouragement from the captain of the national football team earlier on Monday, just hours before the opening World Cup match against England. Ehsan Hajsafi opened a press conference by saying, without prompting, that the protesters “should know that we support them”.

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