GM (GM) Gets Killed, Disney (DIS) Is Fine: The Beer And Hamburger Economy

With the market down 300 point in a day and off more than 10% from its recent highs, Wall St. is looking at some of the most active stocks and scratching its head.

GM (GM) is off 7% today, very near its 52-week low, and trading at $29.50. The theory here is simple. Housing is losing its value. The market is down. People won’t spend $25,000 on a new car. Fair enough. The domestic market could lose several hundred thousand sales compared to industry estimate between now and year–end. Toyota (TM) shareholders know it, too. The stock is down over 7% in the last five trading days.

But, over at Disney (DIS), things are fine. The stock is up almost 1% to nearly $32. But, Disney sells a lot of things almost everyone can afford. TV programming. Movies. Even trips to theme parks. All cost much less than a car. Some are free. Shares in Viacom (VIA) are flat today. Probably for the same reason.

McDonald’s (MCD) is only off a little over 1%. Even when people feel poor they can buy fast food. Anheuser-Busch (BUD) is only over a little over 1% as well. Why not have a beer when the market is bad.

Procter & Gamble (PG) is up today. Soap is cheap.

Douglas A. McIntyre