The daily business briefing: November 14, 2019

Image
Harold Maass
Disney stock
Drew Angerer/Getty Images
The daily business briefing newsletter
Your free email newsletter subscription is confirmed. Thank you for subscribing!

1.

Disney shares jump after Disney+ signs up 10 million subscribers on 1st day

Walt Disney Co. shares surged to a record high on Wednesday, jumping 7.3 percent after the entertainment giant's new streaming service Disney+ signed up 10 million subscribers within a day of its launch. The figure was "eye popping," far exceeding Wall Street's expectations and suggesting that Disney+ could instantly be considered a legitimate competitor for streaming powerhouse Netflix, Dan Ives at Wedbush said in a note. Disney had aimed to line up 60 million to 90 million subscribers for the service in five years, but the first-day success suggested it could reach its goals faster, Ives said. Disney was the top stock in the Dow Jones Industrial Average, which gained 0.3 percent to close at the latest in a string of record highs. [MarketWatch]

2.

October deficit jumped 34 percent over same month last year

The federal deficit rose to $134 billion in October, a 34 percent increase over last October, according to Treasury Department data released Wednesday. The Treasury Department estimated that the full 2020 fiscal year deficit would be greater than $1 trillion for the first time since 2002. President Trump promised during his 2016 campaign that he would eliminate the deficit while in office, but the shortfall has jumped due to the GOP tax cuts and several bipartisan spending deals that have increased defense and domestic spending. A bigger deficit and rising overall federal debt can push up interest rates and limit actions leaders can take to avoid a recession. [The Hill]

3.

WeWork losses double as expansion drives up costs

WeWork parent The We Company said Wednesday its quarterly losses more than doubled to $1.25 billion as it opened 97 new shared-office sites, bringing its total to 625. The company also expanded into 16 new cities to give it a presence in a total of 127 cities in 33 countries. It also reported a record increase in the number of desks it has for customers, jumping by 115,000 to reach a total of 719,000 desks. It had just 354,000 a year earlier. WeWork had $2 billion in cash on hand, plus $3.4 billion in commitments from Japan's SoftBank Group Corp., which bailed out WeWork in October in exchange for control over the company. [Reuters]

4.

Stock futures lower but nearly flat after Wednesday's records

U.S. stock index futures edged lower early Thursday following Wednesday's fresh records for the Dow Jones Industrial Average and the S&P 500. Futures for the Dow, the S&P 500, and the Nasdaq were all down by less than 0.1 percent ahead of the start of trading. Wall Street continued to focus on developments in negotiations to end the trade war between the U.S. and China. Earlier this week President Trump said the two sides were "close" to sealing the limited first phase of a trade deal. On Wednesday, The Wall Street Journal reported that Beijing was balking at White House demands that China stop requiring technology transfers from American companies seeking access to Chinese markets, as well as the White House's push for a commitment to buy specific U.S. farm goods. [CNBC, The Wall Street Journal]

5.

Powell says Fed likely to hold interest rates steady

Federal Reserve Chairman Jerome Powell said Wednesday that the U.S. central bank probably would not make any further interest rate reductions in the next few months, provided the economy doesn't take a turn for the worse. "Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely," Powell told Congress' Joint Economic Committee. Last month, the Fed cut its target short-term interest rate by a quarter point for the third time this year. Powell's remarks came a day after President Trump said in a closely watched speech that the Fed should have made bigger reductions in interest rates. [The Associated Press]