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Media Shares Rise after Fed Rate Cut

News, 08 January 2001

Media shares defied the current stock market downturn by rising over the course of last week.

The Bloomberg Media Index, which charts the fortunes of 43 leading media groups, saw a rise from 106 on Tuesday to 120.10 on Friday.

The increases follow the Federal Reserve’s decision last Wednesday to cut interest rates, a move which should benefit media owners by encouraging adspend. “If interest rates come down, then people can afford high-ticket items and advertisers pump up their spending,” explained Universal McCann’s forecasting director Robert Coen.

A similarly upbeat note was sounded by Michael J Wolf, senior partner for media and entertainment at management and technology consultancy Booz, Allen & Hamilton. “Advertisers won't cut back as much as people say,” he predicted. “They may slow down, but they are concerned that in a slower economy they have to create demand.”

News source: New York Times