A busy week for US earnings sees Netflix (NASDAQ:NFLX) in the spotlight, while in the UK investors are facing jobs, inflation and retail sales data.
US
There’s not a whole lot of data for the US markets to sink their teeth into this week.
The existing home sales figures are joined by the usual jobless claims – which just fell to their lowest level since the pandemic struck the States – on Thursday before the flash manufacturing and services PMIs arrive on Friday.
It’s unclear whether that lack of action will impede the Dow Jones’s ability to hit new heights, or whether the relative quiet will allow a serious expedition above 34,000.
Much of the direction of the US markets is going to be dictated by the state of the ongoing earnings season. Coca-Cola (NYSE:KO) reports on Monday, followed Procter & Gamble and, after their disappointing vaccine update, Johnson & Johnson on Tuesday. Verizon (NYSE:VZ) is then on Wednesday, while Intel (NASDAQ:INTC), AT&T and Pfizer (NYSE:PFE) report on Thursday.
The undoubted highlight of the earnings calendar, however, is Netflix’s Q1 results on Tuesday.
Netflix’s fourth quarter update in January reflected the fact the streaming service is now the default entertainment provider for many households around the globe. Revenue rose 21.5% $6.64 billion, compared to estimates of $6.626 billion, while the company added 8.5 million net paid subscribers, more than 2 million above what was expected. That increase saw the firm finish 2020 with more than 200 million subscribers for the first time in its history, after hitting the 100 million mark in 2017.
Yet it didn’t knock every metric out of the part. At $1.19 per share, earnings fell significantly short of the $1.39 pencilled in by analysts.
With room for improvement, expectations are high for Q1. Luckily, Netflix has said it is heading for a record quarter in terms of revenue, up 23.6% year-on-year to $7.1 billion.
On a year-on-year basis the company’s own forecasts for net subscriber additions aren’t looking as strong. Netflix is aiming to add 6 million subscribers in Q1, compared to the staggering, covid-aided 15.8 million the same time the year previous.
And, after stating it was chasing an operating margin of 20% in FY 2021, up 2 percentage points from 2020, an update on profitability will be crucial on Tuesday.
Briefly spiking towards an all-time peak of $590 in the afterglow of its Q4 update in January, Netflix’s stock price has taken some hits since, at one point dropping under $500 in mid-March. It’s now moving between $540 and $560 and could be put back on the path to its record highs if all goes according to plan this week.
UK
The UK really takes the data-spotlight this week, which may or may not be good news for a FTSE looking to cross 7,000 and stay there.
Following a fairly disastrous claimant count change reading – of 86.6k against the 9.0k forecast – last month, that figure is going to be the focus of Tuesday’s jobs report.
Wednesday then brings the ominous question of rising inflation to UK shores, though with the monthly figure hovering around the half a percent mark, there isn’t necessarily anything to worry about just yet.
Friday, finally, brings the retail sales data for March, alongside the flash manufacturing and services PMIs for April.
As for the corporate side of things, Primark-owner AB Foods (LON:ABF) is up on Tuesday, with a mining hat-trick of Antofagasta (LON:ANTO), BHP Group and Rio Tinto (LON:RIO) on Wednesday followed by Anglo American (LON:AAL), Rentokil Initial (LON:RTO) and Taylor Wimpey (LON:TW) on Thursday.
Eurozone
The focus in the Eurozone this week will be Thursday’s ECB rate vote and subsequent press conference.
Before that, there is the region-wide current account number on Monday, German PPI on Tuesday, consumer confidence on Thursday and then, in the ECB aftermath, flash PMIs on Friday.
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