Stocks moved mostly lower Friday morning as Big Tech stocks continued a sell-off that sent the S&P 500 back under the 5,000 mark.
The S&P 500 (^GSPC) fell about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) slid more than 1%. The Dow Jones Industrial Average (^DJI) rose 0.4%.
The S&P 500 on Thursday notched five losing days in a row as investors absorbed disappointing earnings from Netflix (NFLX). That weighed on hopes that quarterly earnings will meet high expectations to help revive the equity rally. Shares of the streaming giant, the first of the megacap techs to report, slid 7% to during the morning session.
Other tech stocks followed on the path down. Market darling Nvidia (NVDA) lost more than 3%, while Apple (AAPL) and Amazon (AMZN) saw drops of more than 1%.
The market had come back from a deeper sell-off after Israel’s retaliatory strike on Iran spooked traders market overnight and spurred a rush to safe havens such as gold. But investors are still on high alert, though Iran has confirmed the drone attack and said it failed.
Stocks were already under pressure before the shock amid persistent uncertainty about Federal Reserve interest-rate cuts.
Friday brought results from Procter & Gamble (PG), which raised its full-year profit forecast despite missing quarterly sales estimates. Also on the docket, American Express (AXP) posted a profit beat as wealthy customers kept spending.
Meanwhile, US government bonds pulled back almost fully from their biggest rally of the year. The yield on the safe-haven 10-year Treasury (^TNX) fell to trade around 4.6%, after a fall of 14 basis points.
In commodities, Brent crude futures (BZ=F) — the global oil benchmark — traded around 0.4% higher to around $87 a barrel. West Texas Intermediate crude futures (CL=F) were up 0.5% to roughly $83 a barrel. Gold (GC=F) increases cooled a bit after earlier earlier gains, trading up 0.3%.
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Here’s the most important point on Netflix
Netflix (NFLX) shares are getting hit premarket after another big quarter on almost every line item.
It makes sense; the stock was priced for perfection ahead of the report.
But cutting through the noise, this point by Pivotal Research’s Jeff Wlodarczak is the most important thing to take away on Netflix at this juncture:
“Netflix reported another high quality result with an across the board 1Q subscriber beat driven by core US and Euro markets and stronger than expected average revenue per user (successful 4Q price hikes in U.S./U.K./France) implying the ability to generate strong subscriber growth AND take price/expand margins, a powerful combo.”
With nothing in the report suggesting Netflix’s fundamentals are struggling, you have to wonder if the pullback in the stock will be bought at the open today. One could make the argument that the stock isn’t even that expensive compared to historical trading norms.
Check out the current valuations on Netflix compared to those seen from 2016 to 2021, when the company was in no way as fundamentally strong as it is today. All data is presented to you, of course, by the Yahoo Finance platform.
You can analyze more of this data on Netflix by heading to the statistics section on the Netflix ticker page.
Netflix shares may not be as expensive as they look on the surface. (Yahoo Finance)
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