The Dow Jones and S&P 500 continues to make record highs, an indication that the stock market is not too bothered about the Delta variant spreading.
However, American corporates are warning investors and companies whose tone was bullish are more cautious about the spread of the virus.
Disney, Airbnb, and Southwest have warned about the impact on the economy as a result of the Delta variant.
Disney’s recent quarterly earnings were outstanding, especially the Disney+ streaming service 116 million subscriber count. Disney’s shares soared by 5% last week after their earnings report was released, which pushed Dow Jones to record highs.
But Disney is concerned cancellations to parks are on the increase.
According to Disney CEO Bob Chapek, they have a bullish view and are still seeing a demand for parks to remain open. The primary cancellations are for groups or conventions. Their parks reservation levels are above quarter three numbers.
Airbnb also reported excellent quarter two results due to more people engaged in travelling; more people have got the vaccine. Their operating loss of $59 million from last year was decline by $217 million, in quarter two. Furthermore, their sales picked up by 299% to $1.3 billion.
However, the CEO Of Airbnb, David Stephenson, has cautioned that the spread of the Delta variant is starting to take its toll. Their bookings for the fall have decreased, not a huge drop yet, but they are concerned. They already forecasted quarter three bookings to decline and estimated that it would be down vs previous years.
Southwest is experiencing high cancellations-Delta.
Southwest Airlines recently investors about the significant impact the Delta variant could have. They see a drop in close-in bookings and an increase in close-in trip cancellations. Southwest believe it’s a result of the surge in Covid-19 infections. Their estimated quarter three revenue to drop by 3 to 4 points vs their outlook three weeks ago. And they expect revenue to decline by 15 to 20% in the third quarter. Therefore, they expect the recovery in airline spending to moderate into the fall.