Netflix and Amex sink following disappointing Q4 results

By Ed Moya, Senior Market Analyst at OANDA

Netflix shares fell after delivering disappointing guidance.  The first of the FAANG stocks to report had a small miss on revenue but the news what not all negative as they continue to see a strong trend in delivering global net paid adds.  The initial weakness was helped by lower than expected Q1 guidance for both EPS and revenue.  Before today’s earnings report shares had rebounded over 30% following the Christmas Eve selloff.  The recent rally was supported by the news that they will be raising their subscription prices.

American Express shares plummeted following mixed results.  The top-line saw revenue post the sixth consecutive quarter of growth with a $10.47 billion reading, analysts were expecting $10.57 billion.  The bottom delivered a strong beat with an EPS of $2.32, a strong beat of the $1.80 estimate.  For 2019, the company expects earnings to come in between $7.85 to $8.35, analysts’ forecast was $8.17.  Expenses did show sharp rises in both Marketing & Business Development and Card Member Services.  Total expenses increased 9% in the fourth quarter and 8% for the year.

The US indexes all saw modest bullish moves following the close.  The Nasdaq continues to advance above the 50-day SMA, but is finding resistance from the 50% Fibonacci retracement of the October high to December low move.  If price is unable to extend above the 6,750 level, initial support may be found from the 6,530 level.  To the upside, 7,000 remains critical resistance.

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