Here is what you need to know.
Netflix is getting smoked after earnings. The home entertainment provider announced earnings of $US0.07 per share, which missed the $US0.12 that Wall Street was forecasting. Revenue surged 23.3% to $US1.74, but that was just shy of the $US1.75 billion that was anticipated. Netflix announced user growth of 880,000, missing the 1.25 million that analysts were expecting. “Our over-forecast in the US for Q3 was due to slightly higher-than-expected involuntary churn (inability to collect), which we believe was driven in part by the ongoing transition to chip-based credit and debit cards,” the company said in its earnings release. Shares of Netflix are down 3.3% in pre-market trade after falling as much as 14% following the release.
Valeant is being investigated for the way it prices drugs. Valeant Pharmaceutical International has received a US subpoena over the pricing and distribution of its drugs. According to Reuters, prosecutors are also looking into information the company has given to Medicare and Medicaid. “We remain committed to assisting eligible patients who need our products, and we will be working with the appropriate groups to submit the requested documents and plan to cooperate with the inquiries,” Valeant chairman and CEO Mike Pearson said.
Square has filed for an IPO. The mobile payment company’s S-1 filing showed $US850 million in net revenue and a $US154 million net loss for fiscal year 2014. The company is headed by co-founder Jack Dorsey, who is also the CEO of Twitter. According to the filing, “This may at times adversely affect his ability to devote time, attention, and effort to Square.” The stock will trade on the New York Stock Exchange under the ticker “SQ.”
Albertsons is delaying its IPO. US grocer Albertsons is postponing its initial public offering indefinitely, until market conditions become more favourable, a person close to the matter told Reuters. The company was supposed to price its IPO on Thursday.
Burberry had a disappointing quarter. Luxury goods retailer Burberry saw sales grow at its slowest pace in three years, according to Bloomberg. The company announced first-half revenue of 1.11 billion pounds, which was shy of the 1.16 billion pound Bloomberg estimate. Burberry sees adjusted pretax profit of 445 million pounds ($US689 million), which is in-line with analyst forecasts. Weakness in China was a drag. “The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets,” Christopher Bailey, Chief Creative and Chief Executive Officer, noted. The stock is down by more than 12% in London trade.
The Bank of Korea kept policy on hold. In an expected move, the Bank of Korea kept its benchmark interest rate unchanged at 1.50% for a fourth straight meeting. The central bank said while the US economic recovery has been sustainable, China and other emerging markets are seeing a notable slowdown. At home, the BOK noted, “The trend of declining exports has persisted,” and that the won has “appreciated against both the US dollar and the Japanese yen.” The Korean won finished stronger by 1.5% at 1130.30 per dollar.
Chinese loans bounced back. New loans in China totaled 1.05 trillion yuan ($US165.47 billion) for September, which was well ahead of the 885.5 billion yuan Reuters consensus, and a vast improvement from the August reading of 809.6 billion yuan. Additionally, China’s M2 money supply grew at a 13.1% clip versus a year ago, according to a statement released on the People’s Bank of China website.
Stock markets around the globe are higher. Germany’s DAX (+1.4%) leads the gains in Europe after China’s Shanghai Composite (+2.3%) paced the advance in Asia. S&P 500 futures are up 14.00 points at 1998.00.
US economic data is heavy. Initial and continuing claims, CPI and Empire Manufacturing are all due out at 8:30 a.m. ET before the Philadelphia Fed crosses the wires at 10 a.m. ET and the Treasury budget is released at 11 a.m. ET. Natural gas and crude oil inventories are scheduled for 10:30 a.m. ET and 11 a.m. ET, respectively. The US 10-year yield is higher by 2 basis points at 1.99%.
The earnings calender is full. Citigroup, Goldman Sachs, Taiwan Semiconductor and UnitedHealth highlight the names reporting ahead of the opening bell while Mattel, Schlumberger and Wynn Resorts are among those releasing their quarterly results after the close.