What’s going on here?

Disney’s fourth-quarter results put the magic back in the kingdom.

What does this mean?

Disney was stuck on pause last year, after a costly push for new customers fell flat while existing subscribers ditched their paid cable memberships. But if real life is an old-school fairytale, stuffed full of subliminal heteronormative messaging, Bob Iger is the buff knight in shining armor. Disney’s former CEO returned to the helm and swiftly started checking boxes on the to-do list. By the end of last quarter, costs were cut, streaming business was better, theme parks were full, and sports channel ESPN was back on the map – all of which translated to better-than-expected profit. With any luck, that could make investors believe in the company’s newly bolstered foundations and give the struggling stock a sprinkling of pixie dust.

Why should I care?

Zooming out: Someone chanted “Bibbidi-Bobbidi-Boo”.

The Magic Kingdom is a big place. Disney’s roster of parks, entertainment channels, and trademarks can leave investors’ heads spinning – and the same goes for any companies with complicated storylines. The main number to watch, though, is free cash flow: the amount that’s left after a firm’s paid for projects and expenses. In Disney’s case, the company believes its lower costs, a streaming business that’s verging on breakeven, and heftier cable profit could pull it to an $8 billion bounty this year. That would be 60% higher than last year, and not that far off its record $9.8 billion.

The bigger picture: ESPN’s a good sport.

ESPN’s results are usually lumped into Disney’s numbers, but the sports network won space for itself for the first time this earnings season. No wonder: ESPN pulled in nearly $1 billion in profit, 16% more than the same time last year and around one-third of Disney’s overall total. Investors’ doubts about the network’s potential have been weighing on Disney’s stock, so this strategic show and tell could release some of that tension.

What’s going on here?

China’s prices slipped in October, fueling fears that deflation could sink its claws into the economy.

What does this mean?

China must’ve heard that the world’s bored of inflation stories, so it’s shaking up the narrative. The country’s consumer prices were 0.2% lower this October than last, while the amount paid to producers of goods fell for the thirteenth month in a row. That puts China on track for deflation, a much more menacing enemy than inflation. After all, if shoppers catch wind that prices are on the slide, they’ll hold off on loading their carts and wait for even better deals. And because stores want to shift their stock, they’ll pull prices lower to do that. Repeat that cycle a few times, and the economy will be left in a spin.

Why should I care?

For markets: Deflation’s a maze.

Deflation has already proved itself as a serious threat. Japan spent some 20 years desperately trying to energize slumping prices during its so-called “Lost Decades”. But China’s danced with the devil before too, and has somehow managed to hoist its economy out of the mud every time. This time around, the government’s been relying on baby steps to get the economy moving, like a series of small interest rate cuts. But if nothing changes in the next few months, the country will need to take off the kid gloves – and the stock market will be eager to watch the fight.

The bigger picture: China and the US can finally agree on something.

China’s currency has been keeping prices company on the descent, sliding to an all-time low against the dollar. Thing is, the cheaper China’s currency, the more affordable the country’s exports, which would lure in more foreign buyers. That’s a boon for China, and if the US makes the most of those cheap prices as a buyer, the bargains could help calm down stateside inflation.