Some music companies’ stock prices took a hit Monday (Feb. 24) as markets around the world fell sharply on fears the coronavirus is not contained and will leave a large impact on economies around the world.
Concert promoter and ticketing company Live Nation fell 8% and Ryman Hospitality was down 5.8%. Ryman makes roughly 90% of its revenue from hotels and resorts, but it owns a portfolio of music-related properties including the Grand Ole Opry and Nashville’s Ryman Auditorium.
The Madison Square Garden Company fell only 2.4%. The company gets roughly half its revenue from entertainment properties such as Madison Square Garden and Radio City Music Hall in New York and The Forum in Los Angeles. MSG is planning to spin off its entertainment segment from its sports division sometime in the first quarter.
Travel and outdoor entertainment stocks were hit especially hard on Monday. American Airlines Group dropped 10.1%, Delta Air Lines fell 7.7% and SkyWest sank 5.4%. Cruise line companies also fell sharply. Carnival Corporation, operator of the Diamond Princess ship that has accounted for 53 coronavirus cases, dropped 9.4%, bringing its year-to-date loss to 26.4%. Cruise line operator Royal Caribbean fell 7.9%.
The Dow Jones Industrial Average and S&P 500 fell more than 3.6% on Monday, their worst days in two years. Apple’s 4.8% drop also weighed on the S&P 500 a week after the company announced the virus was responsible for delays in iPhone manufacturing and closure of some retail stores in China.
Concerns mounted over the weekend after reports the coronavirus had reached Iran, Italy and South Korea. On Monday afternoon, CNN, citing Italy’s National Civil Protection Service, reported the country had 229 confirmed cases in Italy. South Korea, which since Sunday has been on its highest alert status, has confirmed 833 cases. Six deaths have been reported in Iran. As of Monday, the World Health Organization counted more than 2,600 deaths, all but 23 of them in China.
Reactions have ranged from neutral to terrified. Investor and television personality Jim Cramer believes the virus problem could get worse and “the dip is not yet a buy,” meaning sell, take profits now, and wait for stocks to become cheaper.
Citing possible snags in supply chains, Goldman Sachs lowered its gross domestic product forecast — again — from an annualized rate of 1.4% to 1.2%, well below the 2.1% growth rate achieved in the third and fourth quarters of 2019, according to the U.S. Bureau of Economic Analysis. “An increasing number of companies are curtailing production for lack of Chinese-made finished goods and parts,” Chris Low, chief economist at FHN Financial, told MarketWatch, a dour signal for a country that exported $558 billion of goods to America in 2018, per the Office of the U.S. Trade Representative.