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Author: Geoffrey Smith
Investing.com – Netflix’s (NASDAQ:) earnings warning still poses the clearest challenge for growth stock valuations, and Peloton (NASDAQ 🙂 and Siemens Energy wind turbines are also falling sharply due to disappointing news. Russia and the United States have recent talks in Ukraine to avoid war, but there is little hope of avoiding conflict. Intel (NASDAQ 🙂 plans to build another $ 20 billion chip factory, this time in Ohio. And oil prices are falling from a seven-year high due to concerns about a soft patch on the Covid-driven economy. Here’s what you need to know about the financial markets on Friday, January 21st.
1. Netflix is struggling to grow; The platoon hits the brakes
Netflix shares lost nearly a fifth of their value in the current quarter after subscriber growth. It will open at its lowest share price in April 2020, after effectively dismantling almost all of its published profits since the start of the pandemic.
Netflix is hardly the first technology stock to fall out of bed in recent months. However, it is by far the largest and most famous company in the world. Despite the fact that investors have ruled out other echo-related issues as a company-specific issue, Netflix’s inability to sustain the narrative of endless growth that has driven stock market gains over the past decade is likely to have implications for its members.
Netflix wasn’t the only big bet for future trends to turn south from one day to the next. Shares of the platoon – another initial winner of the pandemic – fell after reports of a drop in demand, and Siemens Energy (DE :), which owns one of the world’s largest wind turbine businesses, fell 13% after warning customers.
2. Blinken, by Lavrov motions
US Secretary of State Anthony Blinken is in talks in Geneva, Switzerland with his Russian counterpart Sergey Lavrov to prevent war in Ukraine.
The talks will only last 90 minutes and a press conference is scheduled for 07:00 (1200 GMT), which gives both sides little time to achieve anything remarkable.
Ukraine is a sovereign state and a member of the United Nations. Russia, which had already invaded it in 2014, annexed part of its territory and established republics in its east, has repeatedly said that the mere possibility of joining NATO in the future is a justification for a previous military invasion. NATO has not offered Ukraine a chance to become a member.
French President Emmanuel Macron and German Chancellor Olaf Scholz are also talking about Ukraine today. The vulnerability of the two countries to the economic pressure on Russia’s energy supply has effectively hampered any joint Western response, as it did in 2014.
3. The shares will reopen below; Nasdaq correction territory
U.S. stock valuations will reopen, with Netflix’s earnings warning and Peloton’s evolution giving a new blow to the market so that the market can still hold on to a historically high valuation.
At 06:20 hours ET (1120 GMT) fell 0.1% to 0.4% and 0.8% respectively. The Dow has fallen more than 3% this week and is now firmly in the correction territory, falling more than 10% from its November peak.
Later profit-sharing stocks include oil services giant Schlumberger (NYSE :), Kansas City Southern (NYSE 🙂 and rail operator IHS Markit (NYSE :). Estee Lauder (NYSE 🙂 will also be the focus on Thursday after its quarterly earnings go back and forth without further negative shaking.
4. Intel to build new chip plant in Ohio
The semiconductor cycle continues to rotate. With signs indicating that demand is outstripping supply for longer than expected, Intel is committed to building a new one, according to Time magazine and others.
This is a multi-billion capacity expansion announced by the world’s leading chip makers. Samsung (KS 🙂 and Taiwan Semiconductor Manufacturing (NYSE :), like Intel, are also committed to making large-scale investments in the coming years.
Intel shares fell less than 0.4% in pre-market trading due to lower weakness on sales driven by valuations over the past two years.
5. Oil spills as gasoline inventories continue to rise
Crude oil prices fell due to concerns that the recent waves of Covid-19 will keep up with world demand in the short term, allowing some of the world’s depleted inventories to recover.
The U.S. rose more than $ 5 million a barrel last week for the third week in a row, albeit the smallest rise in those three weeks. These figures are in line with data showing that unemployment claims have risen to a three-month high as a result of the sudden change in customer behavior in the hospitality and travel sectors.
At 6:40 a.m. ET, futures were down 1.8% at $ 83.98 a barrel, while futures were down 1.7% at $ 86.87 a barrel. Baker Hughes ’and‘ location data ’ends later this week.
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