Wall Street set for muted open
U.S. stock futures were little changed early Wednesday following a weak earnings report from Netflix (NASDAQ: NFLX) and increased signs that Federal Reserve policymakers will hike interest rates aggressively to tame surging consumer prices.
As of 6 a.m. ET, futures tied to the blue-chip Dow rose 7 points, or 0.02% to 34,848. The tech-heavy Nasdaq 100 futures dropped 15.25 points, or 0.11% to 14,202 while S&P 500 futures were unchanged.
On Tuesday, the International Monetary Fund (IMF) slashed its global growth forecast for this year to 3.6%, down 0.8% points since its January forecast, saying that the ongoing Russian invasion of Ukraine will hurt economic progress and push inflation higher.
Netflix shares crater after losing 200,000 subscribers in Q1
Shares of Netflix nosedived in the premarket trading session on Wednesday after the streaming giant lost subscribers for the first time in a decade and predicted even more tough times ahead.
Netflix said late Tuesday that it lost 200,000 subscribers in the first three months of the year, missing its own forecast of adding 2.5 million subscribers. Analysts had expected an increase of 2.6 million subscribers.
To make matters worse, the company expects to lose another 2 million subscribers in the current quarter ending in June, to about 219.6 million. The company blamed the slowdown in part on increased competition and saturation in its largest markets.
Netflix posted Q1 earnings of $3.53 per share, beating analysts’ estimates of $2.89 per share. Revenue came in at $7.87 billion, up about 10% but slightly below analysts’ expectations of $7.93 billion.
Netflix plans to kick start growth by charging some of its 100 million subscribers that share passwords and by improving the quality of its content.
Shares of Netflix were indicated $95.01, or 27.25% lower to $253.60 apiece in premarket hours.
Tesla earnings on tap
Meanwhile, Wall Street is eagerly awaiting Tesla (NASDAQ: TSLA)’s first-quarter earnings report later today after the company recently reported record deliveries and rising operating costs.
Analysts expect the EV maker to report quarterly earnings of $2.26 per share on revenue of $17.76 billion.
Abbott Laboratories (NYSE: ABT, Procter & Gamble (NYSE: PG), United Airlines (NASDAQ: UAL), CSX (NASDAQ: CSX), and Carvana (NYSE: CVNA) are also scheduled to report today.
