Diamonds and Dogs

12/21/15

The force may not be with Disney (DIS). Star Wars opened this weekend to record sales coming in at $238 million domestically and over $500 million globally. Only Jurassic World did better globally in their first weekend, but that included China. Star Wars won't open in China for a couple more weeks. Analysts are raising their domestic box office estimates for Star Wars to $800mn from $700mn with price targets of $130 or better which represents 19% upside from current levels. Disney's stock opened higher, but now is lower by nearly 2%. Looks like a good battle in Disney's stock today.

No rebound for oil. Oil fracking company, Whiting Petroleum (WLL) is down 8% to a new 11 year low. Ironically, the price of crude oil this morning dropped 2% to $34 a barrel which also an 11 year low. Very few oil companies are making money with crude at these levels. U.S. Energy Information Administration said the oil market glut would continue through 2016 while some organizations don't expect oil to rebound to $60 to $80 a barrel for years. With the high yield bond market flooded with oil company bonds, we should see more downgrades and credit defaults in 2016.