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By Alex
Eule | Wednesday, April 21 The
Hybrid Economy. So much for the
pullback. After two days of declines, investors are buying the dip. The Dow
Jones Industrial Average gained 316 points, or 0.9%. The S&P
500 was
also up 0.9%, while the Nasdaq
Composite rose 1.2%. All the
concerns earlier this week about vaccines and accelerating Covid-19 cases
seemed to be out the window. Some of the best performing stocks today were
reopening-sensitive travel names like Norwegian
Cruise Line (+10.3%), Carnival (+6.3%), MGM
Resorts (+4.2%), and Expedia
Group (+3.4%). Chipotle
Mexican Grill CEO Brian
Niccol sounded an optimistic note about the
reopening tonight during his company's first-quarter earnings
call: What we're
definitely seeing is people want to be back in our dining rooms. I've
had the luxury of traveling recently ... and I have been at numerous
restaurants, and it's great to see the lines again in our dining
rooms. And we're seeing a nice rebound, obviously, in those dining room
sales because there weren't any a year ago. Chipotle's
revenue was up 23% from a year ago, the first-quarter affected by Covid-19. Teresa
Rivas has
more on Chipotle's earnings here. Speaking of
earnings, it continues to be a banner earnings season. Nearly every
major earnings report today blew by Wall Street forecasts, including the
numbers from Chipotle, as well as Verizon, Whirlpool, Discover, and Lam
Research. According to the
earnings calendar I monitor on Briefing.com, 31 of 37
companies exceeded forecasts today. That's in line with the 85% average beat
rate so far this quarter. And yet the
most important earnings numbers in the last 24 hours were actually a
disappointment -- those reported last night by Netflix. Shares of
the streaming pioneer fell 7.4% today -- and some folks saw a major turning
point in the stay-at-home success that drove businesses for much of the last
year. Netflix added just four million new subscribers in the first
quarter, well below its forecast of six million. And the company is now
expecting just a million new sign-ups in the current quarter. But are we
really ready to call an end to our favorite quarantine activities, from
streaming and video calls to at-home-fitness and food takeout? Eric
Savitz explains why Netflix's slowdown may be a temporary blip. Chipotle had
some interesting clues, too, about reopening routines. The company's digital
sales were up a staggering 134% in the first quarter as diners stuck with new
ordering habits picked up during the quarantine. "We had record sales
for our digital business despite the fact that our dining rooms are
opening," CEO Niccol told investors tonight. "So I think it just
demonstrates the power of both access modes, meaning the in-restaurant dining
access mode and the digital access mode." The
reopening is here, but a year of new routines aren't going away anytime
soon. Call it the hybrid economy. |
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