Netflix shares rise amid new subscribers
2023.01.20 09:47
Netflix shares rise amid new subscribers
By Ray Johnson
Budrigannews.com – Netflix, the world’s largest streaming service provider (NASDAQ:) in an otherwise gloomy corporate earnings season, generated a rare bright spark.
While co-founder Reed Hastings stepped down as chief executive and handed the reins over to long-time partner Ted Sarandos and chief operating officer Greg Peters, Netflix shares rose 7% in after-hours trading as the company announced that it had gained more subscribers than anticipated at the end of the previous year, totaling approximately 7.7 million.
Netflix, one of the stock market’s darlings during the pandemic lockdowns, then fell nearly 70% between the end of 2021 and the beginning of the following year as a result of falling subscribers, increased competition, and rising inflation and interest rates that have squeezed household budgets.
However, it has recovered more than 60% from its lows in June, and the change in leadership may not affect the path ahead.
Netflix’s announcement was welcome considering that fourth-quarter aggregate earnings were expected to decrease by about 3% year-over-year. NYSE: State Street likewise Schlumberger are among the companies that will report later on Friday.
In cryptoland, corporate news was less positive.
Along with lenders BlockFi and FTX, Genesis’ lending unit filed for bankruptcy protection in the United States on Thursday after the market collapsed. In its bankruptcy filing with the United States Bankruptcy Court for the Southern District of New York, the lending unit of Genesis stated that it estimated that it had over 100,000 creditors and that its assets and liabilities ranged from $1 billion to $10 billion.
A gloomy Thursday reflected some of the early-year optimism regarding peaking central bank interest rates in wider markets.
Policy rates will rise above 5% this year from the current range of 4.25-4.50% and will not fall until 2024, according to Federal Reserve officials, who have been resolute throughout the week.
Futures markets only pushed their implied “terminal rate” up to 4.9% overnight while still pricing cuts of almost half a percentage point in the second half of the year. Markets still doubt them.
With real wage growth now turning positive once more after approximately 18 months in the red, the most recent U.S. weekly jobless claims demonstrate that the labor market is still far too tight for many Fed policymakers to consider taking their foot off the brake.
This week, European central bankers have reinforced their hawkish policy message even more. Officials at the European Central Bank refuted reports that the bank was planning to slow the pace of its rate hikes next month.
Only the Bank of Japan, which has maintained its super-easy stance and formal cap on government borrowing rates at least for the time being, has provided some relief on that front this week.
The impending conflict over the debt ceiling in the United States raised even more concerns. In the midst of a disagreement over raising the ceiling between the Republican-led House of Representatives and President Joe Biden’s Democrats, the U.S. government reached its borrowing limit of $31.4 trillion on Thursday, which could result in a fiscal crisis in a few months.
The starkest reflection of the concern this week has been the largest inversion in the 3-month-to-10-year yield curve in 40 years, with many investors likely to avoid short-term debt instruments and related cash-management vehicles until the issue is resolved.
On Friday, world stock markets were steady to up. After the nation declared that the worst was over in its fight against COVID-19, strong foreign inflows boosted sentiment, causing Chinese stocks to rise ahead of the Lunar New Year holidays next week.
