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Weekly Recap: $AMC, $IBM and The Global Economy

The Good:

AMC + Movie Theaters

As one of the most heavily impacted business models by the pandemic, movie theaters have seen a long slew of bad news. But today, a major milestone for one of the nation’s biggest markets prompted optimism among theater owners, including the CEO of AMC. With Governor Cuomo’s announcement that New York may reopen movie theaters, excepting the city itself, analysts felt optimistic that movies slated to release at the end of the year would be able to do so. Every major studio has seen a reshuffling of its schedule, with some studios pushing back tentpoles and potential blockbusters all the way to 2022. This is a needed win for AMC, who announced it could run out of cash by year’s end without financial intervention.


The Bad:

IBM

Following its third consecutive quarter of revenue declines, IBM stocks fell today. Revenue declined 2.5% continuing a trend that has afflicted IBM both before and during the pandemic. In response to this, the new CEO of IBM announced a major institutional change, stating that the managed infrastructure services portion of IBM’s Global Technology Services would become its own, stand-alone company. Following the quarterly report, Krishna held a conference call with analysts, stating that IBM expects to achieve “sustainable mid-single digit revenue growth over the medium term.” IBM’s Global Technology Services segment, IBM’s biggest, contributed $6.46 billion in revenue, down 4% year over year but higher than some analysts had predicted.


The Ugly:

The Global Economy

For those that hoped the coronavirus would wane with time, a new surge of infections, globally and in the US, is dashing hopes. The number of cases has now hit 40 million around the world and cases have risen again in the US to over 8 million. Many have argued about the possibility of a so-called second wave, but Europe began to see a rebound of cases in August, following the relaxation of shutdown laws. Proportionally, Europe is now reporting more new cases, and faster, than the US. Globally, the economy is lapsing, though the one bright spot—China—is helping slow the contraction. China’s GDP is showing signs of a strong recovery, with its third quarter showing 4.9% growth compared to last year.

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