US stock futures were lower but digging themselves out of a deeper sell-off on Friday, after Israel’s retaliatory strike on Iran spooked the market and spurred a rush to safe havens such as gold.
Dow Jones Industrial Average (^DJI) futures were down roughly 0.3%, coming back from a 1.4% drop in after-hours trading. S&P 500 (^GSPC) futures dropped 0.4%, while contracts on the tech-heavy Nasdaq 100 (^NDX) slid 0.6%, also after sharper falls.
The market initially reacted with alarm to signs Israel had attacked an Iranian city home to nuclear facilities, despite urging from allies to restrain from setting off a tit-for-tat cycle of military violence. With few details about the strike available, prices for oil and gold jumped as stocks and Treasury yields sank, while the CBOE Volatility index — Wall Street’s “fear gauge” — hit an over 5-month high.
Those moves have weakened as some composure returns, amid signs the scope of the Israeli strike was limited. But investors are still on high alert, though Iran has confirmed the drone attack and said it had failed.
Stocks were already under pressure before the shock, as persistent uncertainty about Federal Reserve interest-rate cuts wears away at spirits.
The S&P 500 on Thursday notched five losing days in a row as investors absorbed disappointing earnings from Netflix (NFLX). That weighed on hopes that quarterly earnings will meet high expectations to help revive the equity rally. Shares of the streaming giant, the first of the megacap techs to report, slid 6% in pre-market.
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Here’s the most important point on Netflix
Netflix (NFLX) shares are getting hit in the pre-market after another big quarter on almost every line item.
Makes sense, the stock was priced for perfection ahead of the report.
But cutting through the noise, this point by Pivotal Research’s Jeff Wlodarczak is the most important thing to take away on Netflix at this juncture:
“Netflix reported another high quality result with an across the board 1Q subscriber beat driven by core US and Euro markets and stronger than expected average revenue per user (successful 4Q price hikes in U.S./U.K./France) implying the ability to generate strong subscriber growth AND take price/expand margins, a powerful combo.”
With nothing in the report suggesting Netflix’s fundamentals are struggling, you have to wonder if the pullback in the stock will be bought at the open today. One could make the argument the stock isn’t even that expensive when compared to historical trading norms.
Check out the current valuations on Netflix compared to those seen from 2016 to 2021, when the company was in no way as fundamentally strong as it is today. All data presented to you of course, by the Yahoo Finance platform.
You can analyze more of this data on Netflix by heading to the statistics section on the Netflix ticker page.
Netflix shares may not be as expensive as they look on the surface. (Yahoo Finance)
