Market Movers: Netflix Earnings, China’s GDP, and Gold’s Record High
Friday’s tame US stock futures came from investors evaluating a barrage of corporate reports and new economic statistics from China. The streaming behemoth Netflix (NASDAQ:NFLX) exceeded earnings forecasts for the quarter, underscoring its determination to put money before new customers. In other news, robust demand for safe havens drives up Bitcoin and gold to an all-time high.
1. Futures subdued.
Friday’s US stock futures fluctuated at the zero line after Wall Street’s mixed day earlier in the day.
The Dow futures contract had decreased by 30 points, or 0.1%, S&P 500 futures had increased by 4 points, or 0.1%, and Nasdaq 100 futures had increased by 33 points, or 0.2%, by 03:31 ET (07:31 GMT).
Among the worst-performing stocks on Thursday were those in the healthcare industry, with Elevance Health falling the most after the company that was formerly known as Anthem lowered its forecast for full-year profits. Centene (NYSE:CNC) Corp. and Molina Healthcare (NYSE:MOH) both declined.
As this was going on, semiconductor companies like Broadcom (NASDAQ:AVGO) and Micron Technology (NASDAQ:MU) saw a slight increase thanks to positive reports from rival Taiwan Semiconductor Manufacturing Co. However, the gains were offset by declines in the athleisure brand Lululemon Athletica (NASDAQ:LULU) and freight transportation company CSX (NASDAQ:CSX).
By the end of the trading day, the tech-heavy Nasdaq Composite had slightly increased, and the 30-stock Dow Jones Industrial Average had gained 161 points, or 0.4%, but the benchmark S&P 500 had slightly decreased, wiping off earlier gains.
2. Netflix reports its highest quarterly profit ever.
Netflix revealed higher-than-expected quarterly revenue, indicating the company’s decision to prioritize profits over explosive user growth.
In contrast to 8.76 million net new members in the same time last year, the business added 5.07 million users in its third quarter. This indicates that the effects of a crackdown on password sharing between customers, which began in 2023, are beginning to fade. Even so, the number exceeded Wall Street forecasts, which contributed to a spike in share price during after-hours trading.
In areas where Netflix offers its ad-supported tier, more over half of new members choose to sign up for it, indicating some resiliency in this important business area. The pattern served to counterbalance a fresh release slate that Netflix described as “patchier than normal.”
The quarter’s sales of $9.83 billion and earnings per share of $5.40 exceeded expectations.
Although Netflix intends to implement pricing hikes in Italy and Spain in order to boost revenue, net income is predicted to decline in the current quarter. It recently increased costs in other global regions as well.
3. The third-quarter GDP growth rate in China is 4.6%.
Official data released on Friday revealed that China’s economy grew more slowly in the third quarter, underscoring the difficulty Beijing faces in reviving the nation’s flagging economy.
The gross domestic product of China increased 4.6% year over year from July to September, matching forecasts but slowing from 4.7% in the previous quarter. It was below the government’s full-year objective of 5% and the lowest figure in eighteen months.
Over the last three weeks, Beijing has unveiled a number of stimulus plans, which represent the country’s most concerted attempts to support slowing economic growth to date. The three main burdens on the second-largest economy in the world have been a protracted property market crisis, a sluggish private sector, and a persistent deflationary tendency.
After the data was released on Friday, Chinese stocks fell, but later in the day, the People’s Bank of China introduced fresh lending initiatives aimed at increasing share buybacks and other equity purchases, wiping out the losses.
4. Gold hits an all-time high.
In Asian trade on Friday, gold prices reached a record high, continuing a multi-year upward trend supported by strong demand for safe haven assets.
The yellow metal has gained favor due to a highly fought US presidential race, increased economic instability, and geopolitical concerns.
While gold futures expiring in December increased by 0.5% to $2,720.15 an ounce, spot gold increased by 0.4% to $2,706 per troy ounce.
Also rising on Friday was the price of Bitcoin, which some investors view as a gold-like protection against risk.
5. Oil prices increase.
Despite a little increase on Friday, worries about demand kept oil prices on course for their largest weekly decline in almost a month.
While U.S. crude futures (WTI) traded 0.3% higher at $70.89 per barrel by 03:32 ET, the Brent contract increased 0.3% to $74.66 per barrel.
After data revealed that official US inventories fell last week but are still expected to fall roughly 6% this week, marking their largest weekly decline since September 2, both benchmarks settled higher on Thursday for the first time in five sessions.
Due in large part to concerns over the economic instability of China, the world’s largest oil importer, both OPEC and the International Energy Agency lowered their projections for the demand for oil globally earlier this week.
