Netflix crushes expectations across the board, adds 2.41 million subscribers (2 min read)
Shares of Netflix went up by more than 14% after reporting solid Q3 results that are better than expected and an additional 2.41 million net global subscribers. The number of new subscribers doubled what analysts had estimated with the majority of them in the Asia Pacific Region. Netflix said they do not expect the company’s new ad tier to see much results in Q4 but believes it will grow over time. Netflix also forecast an additional 4.5 million of new subscribers by Q1 next year but expects lower revenues due to currency pressures overseas.
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Activist investor Starboard reveals stake in Salesforce, sees significant opportunity (1 min read)
The CEO of Starboard Value and activist investor, Jeff Smith, revealed to have taken a significant stake in Salesforce. Salesforce’s stocks jumped 4% after the news. Shares of Salesforce dropped about 40% this year and recently in August gave a disappointing forecast for 2023 that raised concerns for some investors. Although Salesforce did not generate any new leverage relative to peers in recent years, John said their CRM system has been integrated in the way many businesses operate and he would like to be a long-term investor in this company.
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Homebuilder sentiment drops to half of what it was six months ago (2 min read)
Rising mortgage rates have pushed homebuilder sentiment in the single-family home market lower. It is currently at about half of what it was just six months ago. The housing market index which was designed to gauge market condition also dropped again in October and at the lowest level since 2012. Higher mortgage rates have severely impacted demand, especially for the first time home buyers. As interest rates are expected to continue to rise and stay elevated, single-family building is forecast to see additional declines in 2023.
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Understanding the ‘Night Effect’ (2 min read)
Research has suggested that after-market trading may produce a better return than the daytime. NigthShares is an ETF provider that focuses on this niche segment. They launched two ETFs this summer that tracks the after-market performance of the S&P 500 and Russell 2000 using futures contracts. Both ETFs have underperformed their benchmarks so far. The firm said the “Night Effect” is like a type of factor investing and requires a longer time to see results. They also emphasize that the strategy was meant to help investors diversify from the daytime volatility and was not intended to replace any traditional investments.
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State Street 3Q ETF Outflows Soar to $14B (2 min read)
State Street reported $14 billion outflows and 8% declined in fee revenues in the third quarter. However, their drop in earnings was still better than what analysts had expected. The largest outflows were in equity-focused and alternative investment funds. Fixed income was the only asset class the firm saw a positive inflow. Many ETF providers have reported a mixed of results in Q3. Charles Schwab reported a loss in ETF sales and assets while BlackRock’s iShares saw inflows lower than last year but still managed to stay in the positives.
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Young, wealthy investors are flocking to alternative investments, study shows. What to know before adding to your portfolio (2 min read)
A recent study shows a majority of high-net-worth investors between the ages of 21 and 42 are turning to alternative investments for above average returns. Alternative investments typically refers to hedge funds, private equity funds, real estates, and structured products. With the markets selling off this year, financial advisors have also turned to alternative investments to reduce portfolio volatility or diversify away from the public markets. As the interest in alternative investments grows, experts warned that it is important to know the product and its risk before making an allocation.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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