Netflix in free fall
Wall Street rally loses momentum
04/20/2022, 10:55 p.m
After the previous day’s optimism, the euphoria about the start of the accounting season on the US stock exchanges is fading somewhat. The Dow Jones closes in positive territory, technology stocks are less in demand. After devastating subscriber loss numbers, Netflix stock continues to plummet.
Wall Street was mixed midweek after US stock markets posted sharp gains the previous day. However, little has changed in the overall unsettled market environment. In addition to the Ukraine war, high inflation and high market interest rates are the determining factors. Of the Dow Jones Index closed 0.7 percent higher at 35,161 points, the S&P 500 noted 0.1 percent lighter. The tech-heavy Nasdaq Composite fell 1.2 percent. Investors focused on the reporting season, which is in full swing. Here the question arises as to whether the companies were able to pass on their increased costs to the end users.
“We are living in a year of higher inflation and that will create problems for some companies,” said Luc Filip, Head of Investments at SYZ Private Banking. “What we’re trying to assess is a company’s pricing power, some will find their profitability under pressure if they don’t have it,” Filip said.
Already have the night before Netflix and IBM presented their quarterly figures. The Netflix streaming service posted a global decline in the number of users in the first quarter and expects further declines. The company suffered from stiffer competition. With the dwindling number of customers, the company also clearly missed its own growth forecast. The stock fell 35 percent.
At the IT specialist IBM (+7.1%) the business figures were better than estimated. Revenue rose to $14.2 billion (previous year: $13.19 billion). The revenue growth was driven not least by the 14 percent growth in sales of the hybrid cloud platform.
Procter & Gamble Co. (+2.7%) recorded the strongest organic sales increase in at least twenty years with 10 percent in the last quarter. Consumers spent more on household goods like Pampers diapers and Gillette razors despite inflation and a looming recession.
For the shares of Lululemon Athletica was down 4.8 percent after the yoga apparel supplier set itself an ambitious goal: by 2026, the company wants to double its sales to $12.5 billion.
Abbott Laboratories benefited from its corona tests in the first quarter. The diagnostics company increased profits and sales significantly. It also raised its guidance for full-year coronavirus testing sales but lowered its earnings outlook. The stock rose 2.2 percent.
The US stock exchange operator Nasdaq (-4.6%) earned less in the first quarter despite revenue growth. The dividend should still increase, and the group also announced a stock split. Business figures from Tesla, Alcoa and United Airlines are only expected after the close of trading.
Bond yields come back – dollar falls
At the bond market Yields fell more significantly after they had recently risen sharply on the expectation of rising key interest rates. The 10-year yield fell 7.4 basis points to 2.84 percent.
On the foreign exchange market, the dollar weakened as market interest rates fell. Of the dollar index lost 0.5 percent.
after the oil prices Having fallen sharply the day before on concerns about global oil demand, they are now trending little changed. Crude oil inventories in the US decreased significantly and unexpectedly in the week ended April 15th. The data from the private American Petroleum Institute (API) had already recorded a decline in the past week. On the other hand, there was concern about demand. According to a BBC report, Germany wants to stop Russian imports by the end of the year.