Netflix will pace an extended tech stock slump Friday as the Nasdaq navigates its worst start to the year since 2008.
U.S. equity futures extended declines Friday, following on from a tech-lead selloff late Thursday that extended the Nasdaq’s worst week in two years, as investors worry the the Fed’s inflation fight will intensify just as consumer-lead growth is beginning to wane.
A gloomy demand outlook from streaming service Netflix (NFLX) – Get Netflix, Inc. Report and a collapse in shares of Peloton (PTON) – Get Peloton Interactive, Inc. Class A Report amid what it called a ‘significant’ slump in interest in its connected fitness equipment added to concerns of slumping consumer demand, while a series of rate hikes in China raised the prospect of slowing growth from the world’s largest exporter as it pursues its ‘zero-Covid’ policies.
Set against bets of at least three rates hikes from the Fed this year — and possibly as many as five — the tech sector weakness bled into broader Wall Street stocks on Thursday and looks to hold sentiment in check for the Friday session as traders navigate options expiries at the close of the day and a surge in equity volatility, with the benchmark VIX (undefined) index rising 50.5% over the past five days to 26.61 points.
Netflix, Peloton, Intel, Microsoft And Slumping Tech Stocks – Five Things You Must Know
Oil prices were also in retreat, although crude remains within comfortable touching distance of its recent seven-year highs, with reduced demand bets taking WTI crude futures for March delivery $1.34 lower to $84.21 per barrel.
Bitcoin, too, is taking another beating, falling 9.6% — and firmly below the $40,000 mark — following Thursday’s rejection of a Bitcion ETF from Skybridge by the Securities and Exchange Commission and plans by the Russian government to ban the use and mining of all cryptocurrencies.
On Wall Street, futures tied to the Dow are indicating a 90 point opening bell decline while those linked to the S&P 500 are priced for a 28 point retreat that would extend the benchmark’s January decline past 6%.
Nasdaq Composite futures are indicating a 140 point opening bell slump, setting up the worst January performance since 2008, even as benchmark 10-year Treasury note yields ease to 1.792% in overnight trading.
In terms of individual stocks, Netflix shares plunged lower, potentially erasing $45 billion from its market value, following a weaker-than-expected outlook for subscriber growth and the first suggestion that increased competition is affecting its ability to attract new users to its streaming platform.
Peloton shares, meanwhile, moved modestly higher as the fitness equipment maker hit back at reports it’s prepared to suspend production of its bikes and treadmills.
Intel (INTC) – Get Intel Corporation Report was also in focus after it unveiled plans Friday to invest $20 billion into two chipmaking plants in Ohio that it hopes have have up-and-running within three years as it expands domestic production ahead of a meeting with White House officials.
In overseas markets, Europe’s Stoxx 600 was marked 1.66% lower by mid-day in Frankfurt as traders played catch-up to yesterday’s late-session decline on Wall Street while Japan’s Nikkei 225 closed 0.9% lower on the session at 27,522.26 points.
