Technology

5 Keys to Wall Street By Investing.com


©Reuters.

By Geoffrey Smith

Investing.com – Netflix (NASDAQ:) shares have lost a quarter of their value after the company reported a shocking decline in subscribers in the first quarter and warned that the current quarter will be much worse. The news forms an “interesting” backdrop for Tesla (NASDAQ:) results to be released after the bell. Venture capital firms seem to have cooled off on the idea of ​​supporting Elon Musk’s bid for Twitter (NYSE:).

Inflation prevents the Chinese central bank from cutting its key interest rates, and German producer prices rose at a breakneck pace in March, putting an ECB rate hike back on the table in July. Oil prices rise after a surprising decline in US stocks.

Here are the top five things to watch out for this Wednesday, April 20, in the financial markets.

1. The shock of Netflix results, season 2

Shares of Netflix are set to tumble again at the open, after the streaming giant announced it expects to lose 2 million net subscribers this quarter, following a stunning drop of 200,000 in the past three months.

It is the second quarter in a row that the longtime market favorite has posted a more than 20% drop in its share price in its shares, and this reflects growing saturation and competition in the global streaming market, as well as mounting pressure on consumers. household budgets due to inflation. Shares of Netflix fell 26% before the market open, on track for their lowest level since September 2019.

Chief Executive Officer Reed Hastings says he is considering launching a version of the service at least partially financed by advertising, marking a major departure from the company’s business model to date.

2. Tesla Expected to Announce Quarterly Earnings and Revenue Decline; BPA cools after Musk’s offer to buy Twitter

Netflix’s crash raises the stakes for big profits ahead of Tesla’s imminent earnings report, which, like its streaming partner, has for most of its existence enjoyed an exorbitant valuation underpinned by expectations of unlimited growth and ultra-cheap capital.

Analysts believe that Tesla’s profit will have fallen to $2.36 a share from $2.54 the previous quarter, though that would still be more than double from 93 cents a year ago. Everything indicates that revenues will have fallen in the quarter as a whole to 17,630 million dollars.

More important will be what CEO Elon Musk has to say about the impact of the Covid-19 lockdown in Shanghai, which has seen its plant shut down for the last three weeks. The factory resumed its activity on Tuesday.

In parallel, several news stories suggest that private equity giants, including Blackstone (NYSE:), have balked at the idea of ​​co-financing Musk’s bid for Twitter, as Musk hinted at a new takeover bid for the company.

3. The bags point to a mixed opening pending more results; mortgage and home sales data

US stock markets point to a mixed open on Wednesday, as Netflix’s earnings have once again shaken confidence in the growth narrative underpinning most of the tech sector. That impact was only partially mitigated by surprisingly strong revenue growth from IBM (NYSE:), a report that was completely overshadowed by Netflix’s results on Tuesday.

At 12:15 AM ET, the {{8873|Jones futures}} is up 64 points, or 0.2%, while down less than 0.1% and down less than 0. ,one%. All three cash indices had posted solid gains on Tuesday, especially tech, which rose 2.2%.

Early earnings reports include consumer giant , and , while CSX, Equifax and Kinder Morgan (NYSE:) will publish their results after the bell.

On the other hand, the weekly data for and mortgages will be published at 1:00 p.m. (CET) while those for March will be published at 4:00 p.m. (CET). The president of the Chicago Federal Reserve will appear at the same time, while the president of the San Francisco Fed will do so at 4:30 p.m. (CET).

4. China refuses to cut; supporters of an aggressive ECB rate hike raise their voices as inflation continues to soar

China’s central bank has disappointed local financial markets, keeping its benchmarks unchanged at its regular monetary policy meeting instead of cutting them as many had hoped.

There had already been signs that the actual degree of support for the PBoC’s monetary policy might not match the barrage of rhetoric that the authorities have displayed over the past two weeks. On Friday, the PBoC cut its reserve ratio, a key quantitative tool for managing the money supply, by only 25 basis points instead of the expected 50. Looking on the bright side, the end of Shanghai’s lockdown is in sight as more districts are reported free of new cases.

Meanwhile, in Europe, the (uninfluential) Governor of the National Bank of Latvia, Martins Kazaks, has once again put on the table the possibility of the ECB raising interest rates in July, just a few days after President Christine Lagarde downplayed this possibility, citing risks to the economy stemming from the war in Ukraine. Producer prices in Germany continue to rise strongly, specifically 4.9% in March alone, and 30.9% for the year as a whole.

5. Oil rises thanks to the decline in reserves indicated by the API pending official data

Oil prices climb further above $100 a barrel after the weekly stockpile report from the American Petroleum Institute indicated that US crude stockpiles fell by almost 4.5 million barrels last week, reversing most of the increase recorded the previous week.

Those from the United States will be announced at 4:30 p.m. (CET), as usual.

By 12:30 AM ET (12:30 PM ET), US crude futures were up 0.9% at $102.96 a barrel, while futures were up 0.8% at $108.11 a barrel. .

Commodity-wise, there have been more reminders of the potential for local cost-of-living crises to impact global supply, as around 20% of Peruvian production has been disrupted by miner protests. .

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