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Netflix subscribers, oil prices, Bitcoin volatility – what’s moving markets

0 — Wall Street looks set to open lower after the reported Israeli strikes of Iran his risk appetite, and prompted volatile trading in both the crude and cryptocurrency markets. Netflix will be in the spotlight after the streaming giant announced it would e stopping the reporting of quarterly membership numbers. 

1. Netflix slumps despite blockbuster subscriber growth 

Netflix (NASDAQ:NFLX) delivered impressive new subscriber numbers in the first quarter after the close Thursday, soaring past expectations, but its stock still slumped amid concerns about future growth.

The streaming giant added 9.33 million users, markedly beating analyst expectations of about 4.8 million net adds, but also cautioned that paid net additions would slow sequentially in the current quarter.

The company also said it would stop reporting quarterly membership numbers and average revenue per membership starting next year with its Q1 2025 earnings, saying that revenue and operating margin are its key performance measures.

This news was very unexpected, and investors have taken it to mean that the years of strong customer gains may be coming to an end, as it’s unclear what would drive new sign-ups once the crackdown on password sharing had netted as many users as possible.

Adding to the concerns, the company projected revenue of $9.49 billion for the current quarter, shy of analyst expectations of $9.537 billion.

Netflix stock fell nearly 4% in after hours trading following the report, having jumped almost 90% over the last year. 

2. Futures fall on raised Middle East tensions

U.S. stock futures fell Friday, with risk appetite hit by the reignition of the conflict between Israel and Iran, risking a broader conflict in this volatile region.

By 04:15 ET (08:15 GMT), the Dow futures contract was 120 points, or 0.3%, lower, S&P 500 futures dropped 21 points, or 0.4%, and Nasdaq 100 futures fell 108 points, or 0.6%.

The main indices closed Thursday in a mixed fashion, with the blue chip Dow Jones Industrial Average posting small gains, while the S&P 500 and the Nasdaq Composite closed lower, for the fifth consecutive session.

The broad-based S&P 500 is on course for weekly losses of 2.2%, heading for its third straight negative week, and its worst since the end of October last year.

The raised Middle East tensions have not helped sentiment, but the main negative driver has been falling expectations of an interest rate cut by the Federal Reserve any time soon as U.S. economic data have proved resilient, suggesting inflation may take time to fall to target.

The economic data calendar is largely empty Friday, and the focus is likely to be on the corporate sector, with quarterly results expected from the likes of consumer products giant Procter & Gamble (NYSE:PG), oilfield services company Schlumberger (NYSE:SLB) and financial services colossus American Express (NYSE:AXP).

3. Bitcoin in focus ahead of halving event

Bitcoin, the world’s largest cryptocurrency by market capitalization, has seen volatile trade Friday, ahead of its widely-anticipated halving event on April 20.

By 04:15 ET, Bitcoin traded 6% higher at $64.950.0, having slumped as low as $59,693 earlier Friday, when reports of the missiles striking I’an emerged, weighing heavily on risk appetite. 

This cryptocurrency briefly fell below the $60,000 level, which is considered a key support level, and trades significantly below the all-time high of $73,750, hit in March.

The trading volume of Bitcoin is up over 2% in the past 24 hours, while the market capitalization of the leading digital asset stands at $1.23 trillion. 

The focus was now on the upcoming ‘halving’ event, which is expected to take place with the generation of block no. 840,000 on the Bitcoin blockchain over the weekend.

The halving will effectively cut the reward for mining Bitcoin by half, and is expected to reduce the rate at which new Bitcoin is generated. The event ties into the notion that declining supply will push up its price.

Previous halvings occurred in 2012, 2016 and 2020, and were followed by significant price rallies.

4. Goldman under pressure to separate CEO, chair roles

The pressure is growing on Goldman Sachs (NYSE:GS) to separate the key CEO and board chair roles, currently both held by David Solomon.

Norway’s $1.6 trillion sovereign wealth fund, one of the world’s largest investors, said on Friday it would again vote in favor of a resolution calling for a split of the two roles.

Proxy advisors Institutional Shareholder Services and Glass Lewis have already recommended that investors back the shareholder resolution at Goldman’s annual meeting on April 24.

Norges Bank Investment Management, which operates the Norwegian fund, is the 12th biggest investor in Goldman Sachs according to LSEG data, with a 0.84% stake in the Wall Street bank at the end of 2023, valued at the time at $1.09 billion.

The Goldman board disagrees with this position, and Solomon can point to the bank’s recent results to back up his governance.

Goldman’s profit rose 28% to $4.13 billion in the first quarter, data showed on Monday, fueled by a recovery in underwriting, deals and bond trading that lifted its earnings per share to the highest since late 2021.

5. Crude volatile; blasts in Iran raise supply concerns

Crude prices have handed back a large position of Friday’s gains that followed reports of Israeli missiles striking Iran, in volatile trading.

By 04:15 ET, the U.S. crude futures traded 0.3% higher at $82.97 a barrel, while the Brent contract climbed 0.2% to $87.26 per barrel.

The crude benchmarks had posted gains of around 3% earlier Friday after Iran’s Fars news agency said that explosions were heard at an airport in the Iranian city of Isafahan, while U.S. news outlet ABC News cited a U.S. official as saying that Israeli missiles had hit a site in Iran.

Israel’s potential retaliation for Iran’s missile and drone strike, which was in turn retaliation for an alleged Israeli strike on an embassy in Damascus, marked an escalation in the Middle East conflict, and saw traders racing to reintroduce a risk premium back into oil prices.

However, the strikes have since been seen as relatively limited, and gains have been quickly sold into.

Both benchmarks are set to close the week around 3% lower as U.S. economic resilience led financial markets to expect the Federal Reserve could delay cutting interest rates, potentially hitting future activity in the world’s largest consumer.

Additionally, economic data from China, the world’s biggest importer of crude, suggested domestic demand remains frail even as its economy grew faster than expected in the first quarter.

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