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Nasdaq loses steam amid mixed results from Netflix and Tesla

Netflix

Wall Street continued to climb with the earnings season rolling on. Dow rose for the eighth consecutive session, buoyed by banking stocks. Goldman Sachs’ shares rose about 1% as the bank beat revenue expectations, despite a miss on profit estimates. However, the tech-heavy index, Nasdaq, lost steam in the extended hours as Netflix and Tesla’s earnings results did not offer further strength to the stock market. Netflix’s shares fell 6% in after-hours trading due to a miss on the revenue estimates. Tesla was flat following the earnings reports, as its profit margin declined further on price cuts. Tech stocks’ upside momentum moderated in July due to position rebalancing and caution ahead of company earnings.  

The US bond yields rose slightly, and the US dollar index regained ground, rising above 100, while the British Pound fell following lighter-than-expected UK CPI.

Asian markets are set to open mixed, with the ASX 200 futures up 0.03%, Hang Seng Index futures up 0.33%, and Nikkei 225 futures down 0.36%.

Price movers:

  • 8 out of 11 sectors finished higher in the S&P 500, with Utilities and Real Estate leading gains, up 1.02% and 1.12%, respectively. Industrial, Materials, and Technology were the laggards, all ended in the red.
  • Tesla’s profit margin fell to 18.3%, the lowest since the fourth quarter of 2021. Its earnings per share were at $0.91, topping an estimated $0.82. The revenue was at $24.93 billion, higher than an expected $24.47 billion. The company maintained its car delivery target at 1.8 million for 2023. However, Tesla’s price cuts impacted its net income. Investors are also eyeing details about its Cybertruck production.  
  • Netflix’s shares slipped 6% on missed second-quarter revenue, despite a beat on subscribers and EPS. The streamer added 5.9 million new subscribers amid the password crackdown policy in the US and will roll out the policy broadly. It reported earnings per share at $3.29, beating an estimated $2.86. The revenue was at $8.19 billion, short of $8.3 billion as expected. The company did not provide a breakdown of revenue from the ad-supported tire, nor the accounts from the new password policy.  
  • Apple’s stocks popped on a report that the company was developing its own ChatGPT-like large language model. Apple’s shares rose to a new high amid the news. 
  • GBP/USD fell 0.7% following the lighter-than-expected CPI data for June. The country’s headline inflation printed at 7.9% year on year, lower than the consensus of 8.2%. The core CPI was at 6.9%, also lower than an estimated 7.1%.

ASX and NZX announcements/news:

  • Genesis Energy (ASX/NZX: GNE) updates FY23 Q4 performance with strong hydro conditions, with 3,779 customers gaining in the quarter. The electricity netback was at NZ$146/MWH, up 12.7% on pcp.
  • Michael Hill (ASX/NZX: MHJ)’s FY23 sales revenue rose 6% year on year, and the company anticipates FY23 Group comparable EBIT of between NZ$56 million to NZ$59 million vs. NZ$62.9 million in FY22.
  • SkyCity (ASX/NZX: SKC) appoints Donna Cooper as a non-executive director.

Today’s agenda:

  • Australian employment change for June
  • US unemployment claim

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