Good morning! Here’s what you need to know in markets on Tuesday.
1. Netflix’s stock got hammered after the bell after reporting that it added far fewer subscribers in the second quarter than Wall Street was expecting – and warned of another subscriber shortfall to come in the third quarter. In after-hours trading on Monday, Netflix’s shares were down $US56.44, or 14.1%, to $US344.04.
2. Tesla sank about 3.5% in trading Monday after CEO Elon Musk’s weekend Twitter spat. Musk called a British diver from the Thai cave rescue a “pedo guy” in a now-deleted tweet.
3. Asian stocks sagged on Tuesday, weighed by a sharp decline in crude oil prices as Libyan ports reopened, while the dollar was on the defensive ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony. Japan’s Nikkei stock index closed up 0.49%, the Hong Kong Hang Seng is down 1.16%, and China’s Shanghai Composite is down 0.95%.
4. UK earnings data is coming. Pay data and unemployment data for May will be released by the Bank of England at 9.30 a.m. BST (4.30 a.m. ET). Wage growth is forecast to slow slightly to 2.7%, while unemployment should hold steady at 4.2%. Bank of England Governor Mark Carney is also giving a speech at the Farnborough Airshow at 9.00 a.m. BST (4.00 a.m. ET).
5. Goldman Sachs is about to name its next CEO – here are the execs who will be in and out, according to a dozen insiders. When Goldman Sachs CEO Lloyd Blankfein hands off to his heir apparent, David Solomon, in the coming months, it will be the investment bank’s first change in leadership since 2006.
6. Amazon crashed for over an hour on its biggest shopping day of the year, likely losing millions in sales. The website was experiencing issues like links that appeared to go nowhere, leaving customers unable to access the special deals.
7. A reporter for British broadcaster Channel 4 went undercover as a Facebook moderator at CPL Resources, a Dublin-based content moderation contractor. They found that Facebook is failing to delete shocking examples of graphic violence, child abuse, and racism, including a little boy being beaten by a grown man.
8. The European Union this week is expected to slap Google with a massive fine for abusing its dominance of smartphone operating systems via its Android software. Gary Reback, a legendary antitrust lawyer who helped spur the case, thinks it will have little practical effect on Google or the tech industry.
9. Uber CEO Dara Khosrowshahi confessed that during his first year he was mostly focused on Uber fixing its reputation “externally,” addressing issues with cities, drivers, and the public. He said he dropped the ball on making sure Uber’s internal culture was cleaned up. Last week, Uber’s chief HR person, Liane Hornsey resigned followed an investigation into how she handled racial-discrimination concerns.
10. Qatar Airways Group CEO Akbar Al Baker said his airline’s US business has improved since the Trump Administration took office mainly because of services cuts by his rivals. Al Baker doesn’t believe the Trump Administration’s stricter immigration policies will affect the travel habits of his customer base.
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