Cineworld, LON:CINE, Share price Killik & Co's Market Update: 16th Jul
Last week we talked about markets having a little bit of a wobble because of concerns about inflation data, but this week markets have moved on to achieve yet new record highs. The s p 500 index over in the us has achieved its ‘th record closing high for 2021, so far, here’s the chart over the last five years and as you can see, the index just keeps on moving higher and higher and higher. The rise. This week was due to positive results from earnings season. Companies at the moment are in the process of reporting their results for the most recent quarter, and a lot of these results are coming in ahead of expectations. This week in particular, we had results out from the big u.s banks, jpmorgan and goldman sachs, both published results that were quite far ahead of expectations, and if big banks are doing well, that implies the economy is doing well too. We’Ve got lots more companies reporting over the next couple of weeks, so let’s just hope that these strong results continue. This week disney published the box office takings for the opening weekend of black widow, which is his latest marvel film. The film took 218 million dollars in its opening weekend, so the figures were good, but what was really interesting was the amount of this revenue that came from disney plus, which is disney’s online streaming platform disney released the film on disney plus, on the same day that It was released in cinemas, so viewers could choose to pay 30 to watch it on disney plus.
So let’s have a look at how these opening weekend box office figures broke down. 80 million worth of revenue came from the domestic box office in the us, 78 million came from the international box office and 60 million came from disney plus so that’s a really big proportion of the overall total. This is good news for disney, because the cost of showing on disney plus would have been relatively low, but it’s bad news for theaters, because they would have lost out on a lot of that potential revenue. To put that widow into the context of other marvel films. Take a look at this bar chart which shows how much other marvel films made in their opening weekend. So, as you can see, avengers end game was a record breaker taking over 1.2 billion in its opening weekend, but other really popular ones such as black panther and iron. Man 3 were around the 370 million dollar mark, so black widow at 218 million is not too far behind those, especially if you consider that a lot of theaters around the world still aren’t open. A lot of the ones that are open are still employing social distancing and, furthermore, a lot of consumers are still not comfortable going to the cinema. Disney shares lost a lot of value during the first lockdown, because there was concern that disney would lose a lot of revenue from theaters, so it’s really showing to see that disney has been able to replace a lot of this revenue through disney plus.
And, as you can see by this chart, the share price has really picked up. Accordingly, more inflation data has been published this week with numbers in the uk and the us coming in ahead of expectations. The data for both countries showed an increase in the prices of second hand, cars which has been a factor in the recent rises in inflation, and this ryzen price has been caused by the global semiconductor shortage that we’re experiencing. At the moment. The shortage has caused a delay in the production of new vehicles, and that has forced people to look instead. At the second hand, car market pushing up prices. This global semiconductor shortage has been caused by a variety of factors, one being the pandemic, which has caused some supply bottlenecks, one being the tariffs that the us is imposed on china and one more specific to the auto industry. Is the auto manufacturers cancelled a lot of orders for semiconductors last year when they were slowing down production now, they’re ramping up again, they’ve all replaced their orders at the same time, and the semiconductor industry is struggling to keep up across the world we’re becoming more dependent On electronic devices, and that means we’re becoming more dependent on semiconductors. The global shortage that’s happening at the moment has led to talk of what’s being called semiconductor nationalism. Countries do not want to depend on other countries for their semiconductors and therefore some countries, such as the us, are looking at setting up new factories, so they can become self sufficient in semiconductors.
One company that could benefit from this is asml, which makes photolithography machines. These are required to make the smallest and most complex semiconductors and at the moment, asml has a natural monopoly, because no other company can do what it does. If semiconductor nationalism does become a thing, and if countries do start to build more factories, then you would expect an increase in demand for the machines that asml is making. If this has been reflected by a spike in the price of asmr shares over the last year.