💡 If you want these updates delivered to your inbox every Friday, sign up here
But first, the macro wrap-up:
Despite a rocky week for stocks after US consumer prices came in hotter than expected for a third month straight, the S&P 500 is up 0.4% this week. Consumer prices, inflation and interest rates remain one of the biggest macro movers for the stock market.
Netflix drops 5% 🍿
Showstopper: Netflix added a staggering 9.3m subscribers, beating expectations of 4.8m. Revenue and net income also grew, yet shares dipped 5%. So, what happened?
Spooked investors? Netflix said it will stop reporting quarterly subscriber gains in 2025, a key metric investors use to compare performance of streaming giants. It seems Netflix would rather be assessed on its income.
Buffering: It’s likely because Netflix expects subscriber count to slow down now password crackdowns have come into full effect. Its guidance for Q2 was also $20m shy of what analysts are predicting, likely contributing to the drop in share price.
Apple loses top spot, again 📲
A bumpy quarter: A couple of months ago, Microsoft overtook Apple as the world’s most valuable company. Now, Samsung has dethroned the fruity giant as the world’s biggest smartphone seller.
Losing market share: Global iPhone market share dropped 9.6% year-on-year in Q1 this year, as Huawei and Xiaomi continued to eat away at Apple in China. Samsung has also promised to release AI features such as live translate, Circle to Search and generative image editing.
All eyes on May 2nd: Apple releases Q2 earnings on May 2nd, and given it’s one of the few major stocks in the red year-to-date, it’ll be under scrutiny from investors. In particular, investors will want to hear about Apple’s latest AI plans.
Big banks, big problems 🏦
It’s all about interest: JPMorgan Chase, Citigroup and Bank of America topped Q1 expectations, but each stock ended up in the red this week. Why? Because they’re falling short on net interest income (what it earns from interest on loans and deposits, minus what it pays out for saving accounts).
A double-edged sword: Initially, high interest rates suited big banks (think mortgages, credit cards etc). But now, the value of the banks’ older bonds are dropping in price; significantly. Essentially, what first seemed beneficial is turning out to be problematic.
Balancing act: Banks have a balancing act on their hands – they’ve been raising yields on their savings accounts to compete for customers, but now, it’s starting to eat into profits. A lot depends on what the Fed does with interest rates throughout this year.
What have we learnt this week? 🤓
Netflix subscribers may stagnate: Netflix now has 270m subscribers, but it seems it wants to prioritise monetisation over subscriber count.
Apple’s behind on AI: Apple is currently exploring a partnership with Alphabet to keep up with rivals in the AI smartphone race. It recently cut its car division to re-shift its focus onto AI.
U.S. interest rates are a macro-mover: What the Fed does with interest rates typically affects the stock market. Big banks are often the most affected.
Stock announcements 👀
Here are the key earnings dates to look out for next week:
Monday 22nd April: Verizon
Tuesday 23rd April: PepsiCo, Spotify, Tesla, Visa
Wednesday 24th April: Boeing, Ford, Meta
Thursday 25th April: Alphabet, Microsoft, Pinterest, Snap
Friday 26th April: AbbVie, Exxon Mobil
Thanks for tucking in! Want to receive these updates every Friday? Sign up here or share via WhatsApp with your friends.
*Figures and ratings correct as of 22nd April 2024.
Past performance does not guarantee future results. Capital at risk when investing. This content is for educational purposes only. Shares does not provide investment advice. If you are unsure about anything, please seek advice from an authorised financial advisor.
