October: a time for the fall
But media stocks outperforming despite recession fearsWall Street seems to be pricing stocks for a worldwide recession and, unfortunately, it happens to be playing out in October, traditionally the worst month for stocks.
The good news: Media stocks are actually outperforming this month.
After Thursday's 7.3% swoon on the Dow, that index is down 21% just this month, and we're only seven trading days into it.
The Nasdaq and S&P 500 both are off 20% this month. But The Hollywood Reporter Showbiz 50 is down only 18%, unusual because it has lagged the broader averages most of the year.
On Thursday, some of the worst performers were anything having to do with radio: Cumulus Media tumbled 43%, Entercom Communications was down 18%, and Sirius XM Radio was off 13%.
Only two stocks from the Showbiz 50 rose Thursday: Netflix and Regal Entertainment, and both just fractionally.
October's carnage has been historic, but at least most media conglomerates are in better shape than General Motors. That stock is at a 50-year low.
This month, Viacom has fared best among the conglomerates, losing 17%. After that are Disney and Time Warner, each off 23%, then Sony and News Corp, each down 24%. CBS is off 31%.
Credit fears, of course, have been weighing heavily on the market and are likely to result in a recession, meaning that businesses won't buy advertising -- a realization that has led to the hammering of media stocks.
The best media performances in October have been put in by movie exhibition companies. Cinemark Cinemas is down 14%, and Regal is off 18%.
As for radio, it not only had a bad day Thursday, but the sector has led to the downside all month. Cumulus is off 59% in October, Entercom is down 55%, and Westwood One is off 42%.
And Sirius XM Radio has fallen 30% this month to just 40 cents a share, the lowest close in its 14-year history as a publicly traded company.