It’s a definite sign you’re in one of the “at-risk” groups for coronavirus when you write “Around the Watercooler” and the spell checker tries to separate the words “water” from “cooler”. The device is likely something that will be disappearing from offices everywhere as the near-panic state over coronavirus gains steam.
As I’m writing, I’ve gotten the notice that the Nashville Visitors Bureau says they have already had 50,000 hotel rooms cancelled due to disease concerns. That’s decidedly not good news for a city that counts on tourism for a significant part of its tax revenues. Taxing you to visit is how those of us who live here avoid pesky things like state income taxes.
Now is a good time to take a break from the fear of a virus and talk about how that’s impacting business. Business, news reports to the contrary, is still being conducted worldwide, although everyone from fishing lure companies to bicycle manufacturers are wondering if inventories will last until China gets back to shipping parts and pieces.
Can’t answer that one, so I’m not going to make a supposition.
As far as U.S. companies, Wall Street is doing a very good job of completely flagellating all companies including many that would otherwise be doing fine.
As the markets continue to gyrate, stock prices are changing so fast that it’s virtually impossible for CFOs to actually measure how they’re doing.
Their business fundamentals are there, but stock price impacts their ability to borrow- and a company’s worth can change as quickly as the DJIA.
On Monday, for example, the Dow Jones Industrial Average dropped over 2,000 points. It dropped 1400 points at the opening, setting off a series of triggers that halted trading while everyone caught their breaths. By the end of the day, the DJIA finished over 2,000 points lower. The S&P 500 and Nasdaq Composite lost 7.9 and 7.2 percent, respectively.
Whew. That’s a lot of activity.
All triggered by two events: an oil price war between Saudi Arabia and Russia that knocked down the value of a barrel of West Texas Intermediate Crude (the U.S. benchmark) down more than a third to $27.34 a barrel. That whacked the stock prices of Exxon, Chevron, BP, Halliburton, and Schlumberger. The other factor? You guessed it, speculation over the Coronavirus.
The airlines, despite flying with some very empty planes in many passenger cabin these days, benefitted from the oil drop. American, United, and Delta all saw their stock prices rise.
In the meantime, Carnival Cruise Lines was torpedoed, dropping 19.93 percent to close at $21.74/share. It doesn’t help your business when the government comes right out and says stay off cruise ships. If that’s not negativity enough, there are the images of quarantined cruise liners anchored offshore.
One outdoor company that is doing well is Dick’s Sporting Goods (NYSE: DKS). The company that infuriated hunters and shooters when it announced several moves in support of more gun control legislation beat fourth quarter revenue estimates, with overall increases of 3.5 percent in same-store sales over last year. In another move that will re-infuriate outdoors enthusiasts, CEO Edward Stack announced the company plans to remove hunting gear from another 440 of the company’s 726 stores in 2020.
At the same time, Dick’s says it’s enthusiasm for the overall business is being tempered by the “rapidly evolving coronavirus situation” - including caution related to “supply chain disruption potentially impacting second quarter results.”
One result from this weekend that absolutely no one expected came from the USA Shooting Trials in Tucson, Arizona.
Kim Rhode, virtually a permanent member of the USA Shooting team since 1996, failed to qualify for the Tokyo Games. That ends her streak of consecutive Olympic Games at six.
Instead of the six-time medalist, USA Shooting will be represented by Amber English and Austen Smith.
Both are Olympic rookies.
As Smith said on the USA Shooting website, “I’m just in shock, really.” Kim Rhode, she said, has “been my idol since the start. She’s who I aspire to be, really.”
Last weekend, her idol, the now-40 year-old mom we’ve watched since her first Olympic win as a teenager in Atlanta in 1996, finished fourth.
Despite missing Tokyo, Rhode says she doesn’t see the end of her career anywhere in sight.
Knowing how determined she is at anything she undertakes, I’d not rule out the likelihood of seeing her competing - successfully- in Paris in 2024 or Los Angeles in 2028.
She’s not without other interests. A new shooting facility, NRA Board of Director commitments and motherhood are all time consuming. But, as she told reporters last week, she’s going to spend a lot of her newfound free time…shooting.
We sometime forget that shooting isn’t Kim’s vocation, it’s one of her passions.
We’ll keep you posted.
—Jim Shepherd
