Netflix Adds 10.1 Million Subscribers But Mr. Market Is Not Pleased
Netflix has recently provided its second-quarter report, missing analyst estimates on earnings and beating them on revenue.
The company reported revenue of $6.15 billion and earnings of $1.59 per share which was not sufficient enough to please the market. Netflix added 10.1 million net global subscribers but traders hoped for a truly blowout quarter.
In addition, Neftlix guided for just 2.5 million net global subscripers to be added in the third quarter.
Netflix shares were up 63% before the earnings release so it was hard to match elevated expectations.
Not suprisingly, Netflix shares found themselves under presure after the release of its earnings report and are losing about 8% in premarket trading.
Netflix report highlights a potential problem for other high-flying tech stocks – expectations are so high that it could be nearly impossible to match them.
European Leaders Try To Negotiate A Recovery Fund
European leaders are meeting to discuss a giant 750 billion euro recovery fund needed to take EU out of recession.
These negotiations will have a material impact on the world markets since failure to come up with a deal will put pressure on commodities and earnings forecasts for multinationals.
At this point, more frugal northern countries do not want to subsidize the already indebted sourthern EU members.
For example, Dutch Prime Minister Mark Rutte has stated that there was a less than 50% chance that a recovery fund deal would be reached during the current summit.
Housing Starts Grow By 17.3% In June
Building Permits increased by 2.1% and stay materially lower than pre-pandemic levels. This is not surprising since the economy will need more time to get back to normal while the continued surge in the number of new coronavirus cases threatens the current recovery.
Meanwhile, Housing Starts increased by 17.3% in June. This is a direct result of Building Permits’ growth of 14.1% back in May.
In short, the economic data for June tells a story of robust recovery. The key question is whether the recent problems on the coronavirus front are hurting the recovery in July.
S&P 500 futures are gaining some ground after the release of economic reports.
For a look at all of today’s economic events, check out our economic calendar.