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Netflix Posts Smashing Earnings; Stock Futures Trade Higher

Netflix Posts Smashing Earnings; Stock Futures Trade Higher

US stock futures are trading higher today on the back of strong earnings reports, lower valuations, and policy reversals in the UK, all of which are contributing to a bullish risk attitude. Despite all of the positive news, it is essential for traders to bear in mind the risks associated with inflationary trends, hawkish language from the Fed, and a slower rate of profit growth in 2023. These dangers are quite real, and they can potentially alter the mood of investors and the price of stocks.

Over in Asia, traders also evaluated a strong beginning to the corporate earnings season that helped prolong a rally in US markets. The stock markets in Japan and South Korea went up, while the stock market in Hong Kong went down. After previously having given up virtually all of their gain, stocks in the US staged a strong recovery on Tuesday, which resulted in the S&P 500 posting consecutive gains to start the week.

The Japanese government continues to engage in jawboning of the yen, with the Finance Minister Shunichi Suzuki announcing that he would increase the frequency with which he monitors foreign-exchange markets. The exchange rate for one dollar in the currency was around 149. It’s possible that the Japanese authorities won’t accomplish much with their involvement in the currency market.

Earnings

The market leader in streaming, Netflix, attracted 2.41 million subscribers during the third quarter, which was far more than both the company’s own projections and those of Wall Street. Netflix had growth in every area of the globe, and the company said in a letter to shareholders on Tuesday that it anticipates adding another 4.5 million subscribers worldwide during this time.

Immediately after the publication of the company’s quarterly results, the stock of Netflix had a spike of up to 16%, reaching a high of $278.94. Despite this surge in stock price, Netflix stock has lost sixty per cent of its value thus far. The boost in Netflix stock price also helped other streaming services, such as Roku Inc. and Walt Disney Co; their share prices also advanced in after market hours. Netflix’s r revenue for the quarter climbed 5.9% to $7.93 billion, exceeding analysts’ estimates. Profit of $3.10 a share also came ahead of projections. The most important number which made investors much happier was the number of paying customers, which climbed to 223.1 million.

The surging dollar is taking a chunk out of sales and profitability. Netflix has said that it is able to modify content investment and pricing appropriately, but the company’s prediction for sales and profit for the fourth quarter fell short of what Wall Street was expecting. The business projects revenues of $7.78 billion for the current quarter, which is lower than the $7.98 billion that analysts anticipate. It is anticipated that earnings will come in at 36 cents a share, which is a much smaller amount than the $1.20 that was projected on Wall Street.

The third quarter saw millions of additional viewers join the channel due to the robust slate of new programming offered. New episodes of Stranger Things, one of the most watched television programs in the whole globe, were released at the beginning of the period. Netflix also released the Korean blockbuster hit Extraordinary Attorney Woo, the movies The Gray Man and Purple Hearts, and the real crime drama Monster: The Jeffrey Dahmer Story, its second-most-popular English-language original series.

OIL

The price of oil rebounded from a two-week low as investors became concerned that the most recent round of sanctions imposed by the European Union on Russian petroleum might worsen the market tightness that the United States is attempting to relieve with further sales of its own. The actions taken by the EU regarding Russian petroleum might cause shockwaves to travel across the global tanker market as well. In fact, several Indian refineries have already halted spot purchases in preparation for the current restrictions to go into effect in early December.

After falling by a total of 7% over the course of the previous three trading sessions due to efforts by the United States government to bring prices down, West Texas Intermediate traded up by as much as 1.6% today. Oil traders will also be on the watch for an announcement made by the administration of Vice President Joe Biden on Wednesday on a proposal to release 15 million barrels from emergency oil reserves in the United States in an attempt to reduce the high price of gasoline.