Futures flat on worries over supply chain disruptions; Netflix falls

Netflix’s global sensation Squid Game helped lure more customers than expected. — Reuters pic
Netflix’s global sensation Squid Game helped lure more customers than expected. — Reuters pic

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NEW YORK, Oct 20 — US stock index futures struggled for direction today as investors weighed the impact of supply chain constraints and inflation on corporate earnings, while Netflix shares remained sluggish after its quarterly report.

Netflix’s global sensation Squid Game helped lure more customers than expected, the world’s largest streaming service said as it predicted a packed lineup would further boost signups through the end of the year.

Its shares, however, fell 2 per cent after hitting a record high earlier this month and gaining 18.2 per cent so far this year.

Analysts expect S&P 500 earnings to rise 33 per cent from a year earlier, according to Refinitiv data, while keeping a close eye on growth outlook from companies that are faced with rising costs, labor shortages and supply chain disruptions.

“Investor response to the latest set of earnings reports has been a touch hit and miss with supply chain issues dogging both Procter and Gamble and Philip Morris,” Danni Hewson, financial analyst at AJ Bell, said in a client note.

Other mega cap technology and communication names were mixed in premarket trading. Facebook, up 0.7 per cent, is planning to rebrand itself with new name that focuses on metaverse, according to the Verge.

Tesla Inc edged 0.3 per cent lower in the run up to its quarterly results after markets close, with investors awaiting details on its performance in China.

“People are waiting to see what the large tech companies are going to report. That is probably the real reason we’re seeing individual stocks responding more than the broader market,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

In quarterly reports, Verizon Communications Inc gained 1.2 per cent as it added more postpaid phone subscribers than expected in the third quarter, while oilfield firm Baker Hughes Co slipped 3.2 per cent on downbeat profit.

Abbott Laboratories rose 3.2 per cent after raising its full-year profit forecast on a rebound in Covid-19 test sales.

Anthem Inc rose 1.6 per cent and Biogen Inc gained 1.3 per cent after both healthcare companies raised their full-year profit forecasts.

United Airlines Holdings gained 1.6 per cent after the carrier reported a smaller quarterly loss than a year ago on travel rebound.

The benchmark S&P 500 index is just 0.4 per cent below its early September record close, while the Dow Jones Industrials average is 0.5 per cent below its all-time high reached in mid-August.

US stock indexes closed higher on Tuesday with the biggest boosts from the technology and healthcare sectors amid optimism about solid third-quarter earnings season.

At 08:52 a.m. ET, Dow e-minis were down 19 points, or 0.05 per cent, S&P 500 e-minis remained unchanged and Nasdaq 100 e-minis were up 15 points, or 0.1 per cent.

Ford Motor gained 0.5 per cent after Credit Suisse upgraded the US automaker’s stock to ‘outperform’ on EV transition.

Oil majors Exxon Mobil and Chevron Corp slipped 0.6 per cent and 0.3 per cent, respectively, tracking crude prices. — Reuters

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