Netflix, Eurozone inflation & UK jobs data in focus
Netflix => The stock trades around its 2022 low
EUR/USD => The pair holds above 1.01
FTSE => The index falls below 7200
Netflix Q2 earnings preview
Netflix is due to report Q2 earnings after the close, which come as the streaming giant trades down 70% year to date amid a broader selloff in tech stocks and pandemic plays. Netflix lost 200k subscribers in Q1 and warned that they expect to lose 2 million subscribers in Q2 amid increased competition, password sharing, and owing to the cost of living crisis, which is stretching household budgets. That said, a price hike means that revenue is expected to rise 9.6% to just over $8 billion in the April to June quarter, and EPS is expected to fall to $2.93, down 1.3%. However, much attention will be on the outlook for subscriber numbers, particularly in light of the new ad-supported service that is due to be launched later this year with Microsoft.
Where next for Netflix share price?
After falling from an all-time high of $700, Netflix ran into support at $162 in May and had been consolidating at this lower level since caped by $162 on the lower side and $210 on the upper side. Last week the price attempted to push above the 50 sma, which, combined with the move over 50 on the RSI, is keeping buyers optimistic. A move over 210 could open the door to $247, the April high, and expose the 100 sma at 257. Beyond here, $330 comes into play. On the downside, a break below $162 could open the door to $132, the July 2015 high.
EUR/USD looks to inflation data
EUR/USD rose 0.5% in the previous session in risk-on trade. Equities across Europe pushed higher, extending gains from Friday. Meanwhile, the USD fell on easing aggressive Federal Reserve bets after several hawks supported a 75 basis point rate hike over 100 basis points. Today the pair is holding steady as attention turns to Eurozone inflation data, which is expected to confirm the record-high preliminary print for June. Hotter than forecast inflation could boost the euro. Surging inflation will pile pressure on the ECB to adopt a more hawkish tone at the meeting this week, where the central bank is expected to raise rates by 25 basis points.
| EZ inflation YoY June | Expectation: 8.6% (0.5%) | Previous: 8.1% |
FTSE falls ahead of jobs data
The FTSE, along with its European peers, closed higher in the previous session, boosted by heavyweight resource stocks, which tracked commodity prices higher. Today the index is falling after losses on Wall Street overnight and as attention turns to UK jobs data. The unemployment rate is expected to hold steady at around a 60-year low, and the tight labour market is set to lift wages excluding bonuses to 4.3% in the 3-months to May, up from 4.2% in April. This would still be a wage cut in real terms as inflation sits at 9.1%, fueling the cost-of-living crisis.
| UK unemployment May | Expected: 3.8% (1.3%) | Previous: 3.8% |
Support can be found at 7090 (July 11 low) and 7000 (psychological level).
Resistance for the pair can be seen at 7272 (yesterday’s high) and 7319 (50 sma).
