Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
S&P 500, Nasdaq 100 Soar Ahead of Netflix Earnings. What Should Traders Expect?

S&P 500, Nasdaq 100 Soar Ahead of Netflix Earnings. What Should Traders Expect?

Diego Colman, Strategist

S&P 500 AND NETFLIX OUTLOOK:

  • The S&P 500 and Nasdaq 100 rally at the start of the week following’s Friday big sell-off
  • Positive quarterly reports from various banks boosts sentiment on Wall Street
  • Netflix’s earnings on Tuesday could be a key catalyst for the tech sector. What should traders expect?

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

Most Read: S&P 500, Nasdaq and Dow Jones Price Action Setups and Technical Outlook

After a brutal sell-off last Friday, U.S. stocks staged a remarkable rebound at the start of the new week, as solid earnings from several key financial institutions helped offset extreme pessimism about the challenging economic landscape. At the same time, news that the UK government will reverse deficit-financed fiscal stimulus that would have created a huge hole in the budget and sent markets into turmoil also appeared to reinforce risk appetite.

When it was all said and done, the S&P 500 surged 2.65% to 3,678, with consumer discretionary leading gains on Wall Street, followed by the real state and communications sectors. Meanwhile, the Nasdaq 100 soared 3.46% to 11,062, bolstered by a strong rally in shares of Microsoft, Alphabet, Amazon, Tesla and Meta Platforms.

Looking ahead, stocks maintain a bearish bias amid growing recession headwinds and tightening financial conditions, despite Monday’s face-ripping advance, but thin liquidity and light positioning are likely to continue to amplify volatility in the equity space. In the current environment, any market-related headlines could spark outsize directional moves that would seem erratic in normal times.

Turning to near-term catalysts, the economic calendar lacks major data releases on Tuesday, but there is one event that the retail crowd should keep an eye on: Netflix’s earnings announcement after the closing bell.

Although Netflix (NFLX) is no longer among the 10 largest U.S. companies by market capitalization, it still has a large weighting in both the S&P 500 and the Nasdaq 100, suggesting that its trading performance may influence both indices, but perhaps more importantly set the tone for technology firms.

In terms of expectations, analysts forecast third-quarter EPS of $2.11 on revenue of $7.84 billion and a net addition of 1 million users, but more attention should be paid to guidance; after all investors are forward-looking. That said, traders should focus on the subscriber outlook, as well as commentary on the Paid sharing initiative and the launch of the lower-priced service tier with ads.

The embrace of advertisement could a boon for Netflix’s revenues, offsetting slower user growth in the increasingly competitive streaming business, so any bullish projections by management could boost sentiment, sparking a strong rally in NFLX’s shares.

Equities Forecast
Equities Forecast
Recommended by Diego Colman
Get Your Free Equities Forecast
Get My Guide

image1.png

Source: EarningsWhispter

Focusing on Netflix’s key technical levels on the daily chart, initial resistance appears around the $250.00 psychological mark. If bulls manage to push prices above this barrier successfully, the focus shifts to $290, the 23.2% Fibonacci retracement of the November 2021/May 2022 sell-off. On the other hand, if earnings spark a bearish reaction, the first key support to consider rests near $215.00. If this floor is breached, we could see a move towards $190.00.

NETFLIX (NFLX) TECHNICAL CHART

Chart  Description automatically generated

Netflix Chart Prepared Using TradingView

US 500 Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% 0% 1%
Weekly -4% 1% -1%
What does it mean for price action?
Get My Guide

EDUCATION TOOLS FOR TRADERS

  • Are you just getting started? Download the beginners’ guide for FX traders
  • Would you like to know more about your trading personality? Take the DailyFX quiz and find out
  • IG's client positioning data provides valuable information on market sentiment. Get your free guide on how to use this powerful trading indicator here.

---Written by Diego Colman, Market Strategist for DailyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES