“The FTSE 100 opened lower amid fluctuating tensions in the Middle East as markets tried to gauge the likelihood of further escalation,” says AJ Bell investment director Russ Mould.
“Oil prices were briefly above $90 per barrel before easing while gold moved within touching distance of all-time highs. A combination of chip stocks tanking on yesterday’s weak guidance from semiconductor manufacturer TSMC and the threat of conflict saw Japanese stocks chalk up big losses.
“Against that backdrop, the decline in the FTSE 100 feels modest with the travel and retail sectors showing the most weakness. UK retail sales came in materially below expectations to show zero growth. Defensive sectors such as tobacco and consumer staples gained ground in London.”
Netflix
“Netflix doesn’t seem to have had any problems recruiting more subscribers, but whether it can sustain this momentum or keep existing viewers loyal is another matter.
“Guidance for net subscriber additions to be lower in the second quarter has spooked the market and the shares fell 4.9% in pre-market trading. It also didn’t help that Netflix said it would soon stop reporting quarterly membership figures.
“Investors like transparency and the market has judged Netflix on its subscriber success ever since it has been on the stock market. To many, it is a valuable metric and hiding it comes at a time when many people are wondering if Netflix has reached maturity in many regions, so a lot more effort is going into earning more money from existing customers and third parties via advertising.
“It’s fair to say that recent subscriber growth has been fuelled by Netflix’s efforts to clamp down on password sharing. Its zero-tolerance approach has worked wonders, yet one has to consider that the easy wins might have now been achieved.
“Netflix always seems to have new revenue-generating ideas up its sleeve. From milking its intellectual property through merchandising, bulking out its sports content to reach a wider audience, and scooping up advertising dollars from carrying third party promotions, there is plenty going on to keep the wheels turning.
“That’s lucky because content does not come cheap and Netflix needs big bucks to keep filling the pipeline with movies and TV shows that make people want to come back over and over again.
“Fortunately, the release slate for the second half of the year looks solid and there are plenty of big-name shows and films which could lure in new or returning subscribers, and keep existing ones happy, including new instalments of Cobra Kai, Squid Game and Beverly Hills Cop.
“These should be classic ‘water cooler’ moments, content that colleagues will talk about at work and friends and family will discuss in the pub or at home. That’s the sort of buzz Netflix wants and needs to keep its platform front of mind in a highly competitive marketplace.”
888
“When expectations are set low enough, sometimes it doesn’t take a lot to beat them and that’s proved to be the case at William Hill’s owner, 888. Investors will be relieved to see revenue come in ahead of forecasts in the first quarter and should lap up the promise of a return to growth in the current quarter.
“888 still faces significant challenges around regulation, onerous debts and delivery of a plan to achieve cost savings and a sale of its US business. However, it is taking baby steps in the right direction.”
These articles are for information purposes only and are not a personal recommendation or advice.