The wave of sell off continues to besiege Wall Streeet, and in particular the Nasdaq, which slips further into the correction phase, weighted by the thud of Netflix. After 16 Italian time, the Dow Jones lost 100.76 points (-0.29%), to 34,619 points, the S&P 500 fell by 0.88% to 4,442, while the Nasdaq dropped by 1.50% to 13,948. points approx.
The sells that besieged the hi-tech market were mainly caused by the jump in 10-year Treasury rates, which this week also flew over 1.90%, to a record since December 2019. 30-year rates have risen beyond the 2.20% threshold, while one-year yields have returned to the 1% threshold for the first time in two years, since the period before the Covid-19 pandemic. Today, US Treasury yields make a significant turnaround: 10-year yields are down 7 basis points to 1.75%; those at 30 fall back up to 2.074%.
Both the Dow Jones and the S&P 500 are preparing to conclude their third consecutive week of losses; the Nasdaq, with a weekly decline of 0.5%, is about to close the worst week since October 2020.
The Russell 2000 index is also bad, starting to close the worst week since June 2020.
Crucial will be next week when the FOMC, the Fed’s monetary policy arm, meets on January 25 and 26 to announce the next monetary policy moves.
In the last few days, the fed funds market has come to discount a first rate hike in the March meeting, from the current range between zero and 0.25%.
The risk off has triggered sharp falls in Bitcoin in the last few hours as well: the number one cryptocurrency in the world has capitulated by over 10% to around $ 38,233.
The protagonist of the titles is the collapse of Netflix, a title that has benefited significantly from the lockdowns from Covid-19 and which now suffers from the reopening of the economy.
From the quarterly published yesterday after the end of trading on Wall Street, it emerged that, in the fourth quarter of 2021, the number of Netflix subscribers grew on a net basis by 8.28 million units, better than the growth of 8.19 million. estimated by analysts. However, the number falls short of Netflix’s growth of 8.5 million subscribers exactly the previous year, in the fourth quarter of 2020.
Not only that: in the whole of 2021 the growth was 18.2 million new subscribers, less than half of the new subscribers that Netflix had managed to attract in the first six months of 2020.
The outlook is disheartening: for the first quarter of 2022, the group expects an increase in new subscribers, on a net basis, of just 2.5 million units, significantly below the 3.98 million new subscribers of the first quarter of 2021, and even worse than the +6.93 million expected by analysts, according to StreetAccount estimates. The analysts interviewed by FactSet had expected an even higher number, equal to +7.25 million subscribers.
The stock of the streaming giant thus collapsed in afterhours trading on Wall Street by 20%: a decline that means that a capitalization of almost $ 45 billion went up in smoke, on a total market value that, at the end of the trading day of yesterday, it was over $ 225 billion.
Also very bad yesterday Peloton, sunk by 24%, in the wake of a report by Cnbc according to which the group is temporarily interrupting the production of its fitness equipment. However, the prices rebounded by more than + 4%, after the CEO denied the rumors.
The company also announced in the last few hours of its decision to charge its customers for the shipping and configuration costs of its Bike and Tread products, in part due to the flare-up of inflation.
The price of his Bike will thus rise to $ 1745 from $ 1495, while the least expensive treadmill will rise to $ 2,845 from $ 2,495 an hour.
The sells prevail over the shares after the entry of the Nasdaq in the correction phase: with the drop on the eve of the eve, the hi-tech list travels at a value 11.85% lower than the record close last November.
Scott Redler, analyst of T3 Live, explains the bearish trend of Wall Street with the breaking of important key levels, as in the case of the S&P 500, which closed yesterday below the threshold of 4,500 points for the first time since last October 18th. . From a technical point of view, according to Redler, the break of the support indicates a subsequent drop to 4.320, a level that would represent a 10% decline for the S&P index (and therefore would also make this list enter in the correction phase).
The US quarterly earnings season continues and will see Apple and Tesla’s financial results as protagonists next week.