Taxing times for Netflix weigh on Wall St as Tesla looms

Netflix is leading stocks on Wall Street lower as the streaming giant’s revenue came up short of expectations and a tax dispute with Brazil squeezed the firm’s margins, while Tesla’s quarterly result after the bell will set the scene for the rest of the Magnificent 7.

Plant-based meat producer Beyond Meat is the latest company to join the next generation of meme stocks, extending this week’s surge so far to more than 540% and among the Sharesies’ top 10 US trades on the day.

Across the Atlantic, the UK’s FTSE 100 bucked the trend of souring share markets as accelerating inflation didn’t speed to quite the pace investors feared, firming up the prospects for the Bank of England to cut its benchmark interest rate.

And Catalist’s latest angel market update found the early-stage investors stepped up their activity in the September quarter, with healthcare companies attracting a third of the almost $4.2 million invested by the angel groups.

Moving pictures

Netflix’s quarterly result cast a pall over Wall Street as the streaming giant led the S&P 500 lower as it dropped 9.9% after its revenue grew at a slower pace than analysts' predicted and its margins were squeezed by a dispute with Brazilian tax authorities.

Corporate earnings season is picking up pace in the US, and have been beating expectations, although Tesla’s result after the close of trading will set the scene for the rest of the Magnificent 7 companies driving most of the growth on Wall Street, with the electric vehicle maker down 2.1% in late trading.

The S&P 500 was down 0.9% in late trading, while the tech-heavy Nasdaq Composite shed 1.6%, with the CBOE’s volatility index spiking higher amid the increased nervousness among investors.

That didn’t spur on a revival in the gold price, which turned sharply earlier this week, with gold futures down 0.7% at US$4,082 an ounce at 7am in Auckland.

“Spot gold slipped below US$4,020 per ounce and has fallen more than 8% from the record high earlier in the week,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “The sharp move appears to be driven by the unwinding of extended positioning after an almost one-way advance through this year.”

Meanwhile, Beyond Meat continued its latest foray as a meme stock with the plant-based meat maker up 12% in late trading, taking its surge so far this week to more than 540%. Beyond Meats was the third most traded US stock by Sharesies users today.

Not so fast

Across the Atlantic, the UK’s FTSE 100 rose 0.9%, with investors buoyed by data showing inflation accelerated at a slower pace than they’d feared and opening the door for the Bank of England to cut its key rate when it meets next month. The kiwi dollar traded at 42.95 British pence at 7am in Auckland from 42.98 pence yesterday.

Stock markets were generally weaker on the continent, with Germany’s DAX 30 down 0.7% and France’s CAC 40 falling 0.6% with soft earnings from L’Oreal and Hermes weighing on luxury companies’ share prices.

That souring tone is set to carry through to the antipodes, with Australian futures pointing to a 0.6% decline when the S&P/ASX 200 index opens across the Tasman, while the kiwi dollar traded at 57.38 US cents at 7am from 57.47 cents yesterday.

No major local data are scheduled for today, while Auckland International Airport and Skellerup Holdings will hold their annual meetings today. The Treasury’s NZ Debt Management unit will also hold its weekly bond tender today.

And junior exchange operator Catalist today released its latest quarterly update on angel investing, showing an almost 20% increase in the value of investment to almost $4.2 million in the September quarter from a year earlier, with an almost 50% lift in the number of deals to 44. A third of that was invested in healthcare companies.

Reporting by Paul McBeth. Image from Thibault Penin on Unsplash.