Coffee With Greta: Strangest Thing of the Year Is This NFLX Rally
DJIA Futures: -94, (-0.3%)
SPX Futures: -11 (-0.3%)
NASDAQ Futures: -22 (-0.2%)
Good morning friends!
Futures are lower as the market braces for more Q2 earnings.
Let’s get right to it!
Netflix Rallies On Smaller-Than-Expected Subscriber Loss
Netflix (NFLX) shares are up 4.4% ahead of the open after reporting mixed Q2 results and a smaller subscriber loss than expected.
The streaming giant reported earnings of $3.20 per share on $7.97 billion in revenue.
That topped analysts’ expectations for EPS of $2.94 but missed revenue estimates for $8.035 billion.
Netflix lost just 970,000 subscribers in the quarter, far below the company’s own guidance for a loss of 2 million.
The “Stranger Things” producer said it expects a net addition of 1 million subscribers in Q3 vs expectations for 1.8 million.
Netflix said it is aiming to unveil its new lower-cost, ad-supported tier in early 2023.
Mortgage Demand Tumbles to a 22-Year Low
Mortgage demand is dropping rapidly as buyers pull back due to higher mortgage rates.
The Mortgage Bankers Association reported total application volume fell 6.3% last week, hitting the lowest level since 2000.
Purchase applications fell 7% weekly and were 19% lower compared to the same week in 2021.
Refinance applications dropped 4% weekly and plunged 80% year-over-year.
The average 30-year contract rate rose to 5.82% from 5.74% the previous week.
Treasury Yields Dip
Treasury yields are pulling back this morning as markets attempt to gauge what the Fed will do at next week’s meeting.
The 2-year yield is down 7 basis points to 3.18% while the 10-year yield is down 7 basis points to 2.95%.
The yield curve is still inverted, signaling a recession is likely imminent.
CME Group’s FedWatch Tool shows 66.8% of traders still expect a 0.75% hike while 33.2% expect a 1% move.
Oil Prices Slip Ahead of U.S. Inventory Report
Oil prices slip as the market awaits key inventory data from the U.S.
West Texas Intermediate crude futures are down 1.8% at $102 bbl while Brent crude futures are down 1.9% at $105 bbl.
The Energy Information Administration releases official inventory data later today.
The American Petroleum Institute reported Tuesday that U.S. crude inventories rose by 1.9 million barrels last week and gasoline stockpiles rose by 1.3 million barrels.
Gas Prices Continue To Tumble
U.S. gas prices fell for the 35th day in a row today.
AAA shows the national average for regular gas fell nearly 3 cents overnight to $4.467/gal.
That’s down more than 51 cents from a month ago but still $1.30 higher than a year ago.
The national average for diesel also fell nearly 2 cents overnight to $5.497/gal.
Diesel prices have fallen by 32 cents in the past month but are up $2.22 compared to one year ago.
Existing Home Sales Expected to Fall
The National Association of Realtors reports existing home sales for June at 10:00 a.m. ET.
That report is expected to show sales fell to a seasonally adjusted annual rate of 5.36 million units last month from an SAAR of 5.41 million units in May.
Homebuyers have pulled back as mortgage rates rise.
Freddie Mac shows the average 30-year fixed rate was 5.52% in June, up from 2.98% in June 2021.
Tesla Earnings On Deck
Tesla (TSLA) shares are up 0.6% in premarket trade as the electric automaker gears up to report Q2 earnings.
Those results will be released after the close today.
Consensus expectations are for Tesla to report earnings of $1.85 per share.
The company previously reported it delivered 254,695 vehicles in the quarter.
That was down 18% from Q1 as Covid restrictions in China dented production.
That drop in deliveries is expected to result in lower revenue for the quarter.
In Case You Missed It
- Twitter (TWTR) won its request for a speedy trial to force Elon Musk to go through with his $44 billion acquisition of the company. The Delaware Court of Chancery Chancellor ruled Tuesday that the five-day trial will take place in October. Twitter’s lawyer claimed a quick trial is imperative to stop the harm caused by uncertainty over the deal. But Musk’s team argued the expedited timeline will not give them ample time for discovery.