The start of December is testing this Teflon stock market. Wall Street’s open is looking rough for Tuesday after U.S. President Donald Trump said a China trade deal might have to wait until after the 2020 election. That came after the worst day for stocks in eight weeks.
We best just move on, to the call of the day, from Ross Gerber, president and chief executive of Gerber Kawasaki. Gerber told this column in March that Disney DIS, -0.63% would dominate over Netflix NFLX, -1.48% with its new streaming app. Up 37% for the year to date, the entertainment giant has been one of the best S&P 500 performers this year, making his call a smart one.
And for 2020, he’s sticking to that. “I think Disney upside could be another 20% to 25% from here. That’s still our biggest bet by far,” he told MarketWatch.
“I don’t think people fully realize the monopoly Disney created in Hollywood by not just content, but ability to monetize in so many different ways,” said Gerber, whose firm has $1 billion under management.
“So kids watch Frozen 1 on Disney Plus, then see Frozen 2 in the theaters, then buy Frozen dolls, etc., then watch Disney Plus again when Frozen 2 comes to the app,” he said. “So this cycle of movies to theme parks to merchandise to app is amazing.”
Netflix’s problem is that it makes movies for the app and there’s no monetization outside of keeping subscribers happy, he said. Gerber, who owns and likes Netflix stocks, though he’s sold a lot, said the streaming company needs a deal, maybe for movie theaters, so that it can start showing its films outside of the app.
He also likes investment company Blackstone Group BX, -2.43%, for its share distributions and potential upside if the economy is still strong. Another pick is multinational logistics real-estate investment trust Prologis PLD, -1.68%, a global play if the world’s economy continues to improve. Its customers include e-commerce giant Amazon AMZN, -1.07%, parcel delivery company FedEx FDX, -1.26% and retailer Walmart WMT, +0.16%.
Gerber remains an unapologetic Tesla TSLA, +1.49% fan — the electric car maker’s shares are up 39% in the current quarter. From producing 100,000 Model 3s per quarter to expected success from its Chinese factory and ‘that’ Cybertruck, he sees shares doubling from here.
Elon Musk, Tesla’s chief executive, is “just not scared to try to do something innovative and there’s so few companies that want to do that anymore,” said Gerber.
The market
Dow YM00, -0.65%, S&P ES00, -0.54% and Nasdaq NQ00, -0.72% futures dived on Trump’s trade zinger. European stocks SXXP, -0.16% are down and Asia ADOW, +0.20% had a tough day.
The quote
“The latest tariff threats from the U.S. are not what one would expect from an ally.” — That was France’s finance minister Bruno Le Maire responding to the Trump administration’s tariff threat on French imports. His comments came as Trump criticized French President Emmanuel Macron ahead of the NATO meeting in London.
The buzz
Spanish fossil-fuel giant Repsol REP, -0.32% REP, -0.60% says it will take a multibillion-euro charge to cut emissions to net zero by 2050.
Shares in mining company Cleveland-Cliffs CLF, +5.26% are tumbling in premarket trading after the company announced a $1.1 billion deal for AK Steel AKS, +4.71%, whose shares are up.
Activist investors are setting their sights on corporate environmental offenders.
The stat
$11 million — That’s how much was spent a minute during peak shopping hour in a record Cyber Monday, with $9.2 billion total online sales thus far, according to Adobe Analytics.
The tweet
Check out the answers to this tweet:
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