Strong Consumer Demand For Live Concerts Undergirds Pure-Play Music ETF (MUSQ)

Live Nation Entertainment Inc LYV has been in the news recently thanks to the disclosure of its second-quarter earnings report. On paper, the results were mixed, with earnings per share of $1.03 missing the consensus view of $1.06. However, the top line offered a more encouraging framework, which saw Live Nation generating $6.023 billion versus the estimate of $6.018 billion.

While slipping against bottom-line targets is never ideal, context is everything. In particular, despite a relatively stable labor market, U.S. households are still struggling with the lingering challenges of the COVID-19 crisis. One year ago, a research paper cited by Bloomberg noted that most Americans had depleted their pandemic savings, thus raising the specter of an economic downturn.

However, Live Nation stated that total revenues gained 7% year over year. In addition, operating income swung up 21% to $466 million. Most notably, company president and CEO Michael Rapino stated that a wealth of entertainment events have attracted "both casual and diehard fans who are buying tickets at all price points."

Moreover, Rapino pointed out that Live Nation's "strategic investments in hospitality and infrastructure are driving strong returns as more attendees maximize their onsite experiences." Such observations reinforce the optimism toward the global live events sector. According to Research and Markets, this ecosystem could soar from last year's valuation of $58.91 billion last year to just over $754 billion in 2030, implying a compound annual growth rate of 53.78%.

The ETF: While Live Nation represents a key player in the in-person entertainment industry, it's not the only name in town. To enjoy the convenience and profitability potential of the top leaders in music, investors may consider the pure-play thematic exchange-traded fund MUSQ Global Music Industry ETF MUSQ.

With MUSQ, investors enjoy a basket of securities rather than exposure to a single opportunity. For instance, while LYV stock represents one of the mainline holdings of the MUSQ fund, the ETF also carries LiveOne Inc LVO, a digital media company which focuses on the monetization of live music, among other audio-entertainment specialties.

What's more, MUSQ offers exposure to foreign enterprises, such as South Korea's YG Entertainment. This company operates as a record label, talent agency and event management firm, offering U.S. investors unprecedented breadth in the wider music and audio entertainment ecosystem.

The MUSQ Chart: After some turbulent weather passed in late 2023, the MUSQ fund has been attempting to find a baseline of support. The average historical closing price of the ETF currently stands at $24.42, with the present price representing a 1.8% discount.

At $23.98 following the closing bell on Tuesday, MUSQ is within 1.5% of its 200-day moving average (at $24.32). Bulls may consider this level their immediate upside target.
The fund's 50 DMA stands at $24.50, about 2.2% away from Tuesday's closing price. This is another target that optimistic investors will be aiming for.
An upside resistance line exists at the psychologically important $25 level. If the bulls manage to lift MUSQ's price above its 50 DMA, this resistance line will likely be in the crosshairs next.