Sharks, tornadoes, and cheese (8/1/14)
Friday morning saw the markets extend the downward momentum from Thursday’s 300-plus point loss, and the Dow fell as much as 126 points. However, a positive jobs report and some positive earnings news helped stem some of those losses.
The Dow fell 69 points, with 20 of its 30 components declining; the S&P 500 Index dropped 5; and the Nasdaq was lower by 17. Decliners led advancers by nearly nine to five on the NYSE and by two to one on the Nasdaq. The prices of Treasuries strengthened. Gold futures added $12.00 to close at $1,294.80 an ounce, and the price of crude oil slipped $0.29 to settle at $98.17 a barrel.
For the week, the Dow, the S&P 500 Index, and the Nasdaq each lost 2%.
In Earnings News:
- Procter & Gamble, maker of Tide detergent and Crest toothpaste, posted better-than-expected earnings of 95 cents a share for the fourth quarter and $4.22 for the fiscal year. Fourth-quarter sales fell 1%. The company’s CEO, A.G. Lafley, said P&G will improve performance by focusing on the 70-80 brands that generate 90% of sales and 95% of profits and divest up to 100 minor brands over the next 12-24 months. P&G’s shares (PG) rose 3%.
- Electric car manufacturer Tesla earned 11 cents per share in the second quarter, better than the 4 cents expected by analysts. Revenue rose by 90%. The company produced 8,763 cars last quarter, more than initially forecast. In addition, Tesla is expanding internationally by entering the Chinese market and producing a right-hand drive version of the Tesla S for the United Kingdom. Tesla (TSLA) rose 4%.
- LinkedIn was the latest social media company to beat estimates this quarter. Last quarter’s adjusted earnings came in at 51 cents a share, up from 38 cents a share a year ago. The company credited the increase to growth in premium subscriptions and its recruiting business. LinkedIn’s shares (LNKD) gained 11%.
In Other Business News:
- The economy added 209,000 jobs in July, according to the Labor Department, shy of the 238,000 expected by economists. The unemployment rate increased to 6.2% from 6.1% due to an increase in the number of individuals entering the workforce. While the number wasn’t as strong as some would have liked, it was the sixth-straight month of increases over 200,000, something the economy hasn’t seen since 1997. For more insight into the data, read Dr. Brian Jacobsen’s analysis.
- Low interest rates and a strengthening economy contributed to increased car sales in July, and analysts expect that growth to continue throughout the rest of the year. Many of the car companies reported their best July numbers in years. GM’s sales rose 9.4%, Ford gained 9.6%, Chrysler increased 20%, and Nissan grew 11%. Trucks and SUVs accounted for 78% of the sales.
- The Institute for Supply Management’s purchasing managers index rose to 57.1% in July, up from 55.3% in June and its highest level in three years. A reading above 50 indicates growth in manufacturing activity.
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I had the pleasure of watching Sharknado 2: The Second One on Wednesday night. We were so enamored by its brilliance that my husband and I watched it with commercials, a feat that hasn’t happened in our house since June 18, 2007 (i.e., the day the DVR changed our lives forever).
When I say “brilliance”, I actually mean it was brilliantly bad. I mean, how could you not love a movie where a weatherperson seriously says, “We are talking about shark-falling rates of two inches-per-hour.” Or where Al Roker explains what will happen when two E2 sharknados combine without cracking a smile. Or (spoiler alert!) where the heroine replaces her recently amputated hand with a buzz saw to fight off sharks.
When Sharknado premiered last summer, 1.4 million people tuned in. Not a huge audience, but it did generate huge social media buzz, with 5,000 tweets per minute. And what many people thought would be typical under-the-radar SyFy movie along the lines of Sharktopus, Piranhaconda, and Mongolian Death Worm turned into a cultural phenomenon with 14 million people eventually watching the movie.
For SyFy, turning Sharknado into a franchise was a no-brainer. The sequel was shot in just 18 days with a budget of only $2 million. The exposure the cable channel received was priceless: Sharknado 2’s audience nearly tripled, and tweets increased by 83%. And the actors involved? While producers initially hid the premise of the move from the actors the first time around, for the sequel, they had people lining up for cameos, and the stars had new life breathed into their careers. And I’m guessing chainsaw sales are through the roof.
What’s the draw of bad movies (or movies so bad they’re good)? No one’s quite sure. One idea is that it’s the actors that own the awfulness of the dialogue and make it their own. Another is that these bad movies are eminently quotable. (“This is a twisterwith teeth.”) Maybe it’s just that the sheer ridiculousness of a movie brings people together. Whatever it is, I think I’m kind of looking forward to next summer’s installment. At the same time, living in a city next to a big body of water that’s not exactly immune to tornados …I’m also a little bit nervous.Sharknado 3: The Cheesy One?
