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Netflix and Alphabet push US indices up

Markets

Nikkei 225

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Dow Jones

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DAX 30

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FTSE 100

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JSE Top 40

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Last Week’s Highlights

Netflix CEO gone and shares rose

Netflix co-founder Reed Hastings resigned from his position as CEO of the company. The series and movie streaming company has been under a lot of pressure due to the large number of customers lost in the first half of 2022. Netflix announced that in the fourth quarter of last year, it gained 7.66 million subscribers, a figure that exceeded Wall Street forecasts of 4.57 million, thanks to new content to attract viewers such as “Wednesday” and “Harry & Meghan.” Despite this good news, Hastings stepped down and the position will now be shared by co-CEO Ted Sarandos and COO Greg Peters. Netflix shares rose 6.1% to $335.05 in post-closing trading.

Alphabet lays off 12,000 employees

Alphabet cuts 12,000 jobs and puts its focus on artificial intelligence (AI). The company claims it faces “a different economic reality” so it laid off staff supporting experimental projects. Faced with this situation, the head of Alphabet since 2019, Sundar Pichai, took “full responsibility” for the decisions that directly influenced the layoffs. The company is also facing digital advertising revenue problems because several companies are cutting their budgets. Against this backdrop, Pichai said Alphabet must currently “sharpen our focus, redesign our cost base and direct our talent and capital to our highest priorities.” With all this news, the company’s shares rose 4% on Friday.

Coming Up This Week

Cryptocurrency stocks recover

The cryptocurrency market has been somewhat unstable and uncertainty has reigned. However, crypto stocks are rebounding as digital currencies attempt a resurgence. Coinbase, Silvergate Capital, and Microstrategy all rose in Friday’s trading. The cryptocurrency market largely dismissed the whole notion of contagion from Sam Bankman-Fried and FTX. Despite that, there are still risks, because it would appear that the Department of Justice will have more direct involvement and put some additional restrictions on cryptocurrency mining, which may have effects over the market. However, several specialists rate Coinbase and Silvergate with a “Hold” rating and Microstrategy with a “Moderate Buy”, due to its upside potential of 99.05%. 

Amazon to rise subscription prices

Amazon announced Thursday that it will raise the price of some music subscription plans starting next month. According to the company, Amazon Music’s ‘Unlimited Single Plan’ will go up $1 to $10.99 per month and its ‘Unlimited Student Single Plan’ will go from $4.99 per month to $5.99. The company said that subscribers will be able to notice the change in prices from February 21. The company has raised the price of its services before. In February last year, the price of annual Amazon Prime subscriptions in the United States was increased by 17%, to compensate for higher shipping costs and wages.

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Market News

Major US indices closed Friday’s session higher thanks to Netflix and Alphabet. Netflix shares rose 8.46% as the platform had more subscribers than expected in the fourth quarter, while Alphabet announced 12,000 job cuts, sending shares up 5.34%.

Following the good performance of both companies, the S&P 500 and Dow Jones indices broke a three-session losing streak, while the Nasdaq rose more than 2%. In total, the Dow Jones increased 330.93 points, or 1%, to 33,375.49, the S&P 500 rose 73.76 points, or 1.89%, to 3,972.61 and the Nasdaq Composite gained 288.17 points, or 2.66%, to 11,140.43.

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