The market should not earn much praise despite some sectors erasing all losses and are up on the year-to-date. The Nasdaq ended up 5.76% while the S&P 500 is down ~10%. So, why should investors expect these two big names – Walt Disney (NYSE:DIS) and Wells Fargo (NYSE:WFC) – to recover? They are down 53% and 25%, respectively.
Wells Fargo closed is carefully managing the loans it gives out. It will stop accepting applications for new home equity lines of credit. The bank is anticipating defaults and home foreclosures in the coming months.
This is a good move that benefits shareholders and ultimately protects the economy from more problems.
Last month, Wells Fargo declared a 51-cent a share quarterly dividend, an 8% dividend yield.
In the entertainment space, ViacomCBS (NASDAQ:VIAC) set a positive tone with a decent earnings report. Disney followed by reporting revenue growing 20.7% Y/Y in the second quarter. Disney has two potential catalysts. The re-opening of theme parks will reverse the revenue losses during the coronavirus lockdown. And Disney Plus subscription growth should continue.
While the lockdown persists and the virus is out there, Disney cannot earn income from studios, sports (ESPN), and its parks. A full recovery is more likely in 2022 than in 2021. That suggests investing in DIS stock will require a two-to-three-year time horizon.
