Investors are watching Netflix (NFLX) today, bracing for its quarterly earnings report. Options traders priced in volatility of around 8%.
Netflix fell into a downtrend after Paramount Skydance (PSKY) paid a $2.8 billion breakup fee. Previously, Netflix was set to buy Warner Bros. (WBD). The firm is reportedly testing a free-trial model. It wants to test out the viability of growing paid subscribers through seven-, 14-, and 30-day free trials.
Netflix is trading at lows because investors are worried about two things. First, AI-created content could break Netflix’s moat in acquiring content cheaply, then profiting from subscriptions.
Secondly, Netflix might have a retention problem. It would make well-received shows for season one. However, season two or three would come out many years later. By then, the audience would forget about the first season.
Energy Stock Rebound
The rebound in energy stocks lost momentum as WTI crude held the $80/bbl range. Even though oil stockpiles running lower are a major catalyst, traders are not convinced that is a catalyst. The U.S. might flip its aggressive stance and signal a willingness to negotiate with Iran. That would put pressure on energy stocks like Chevron (CVX), Phillips 66 (PSX), or Valero (VLO).
Investors should consider maintaining an exposure in the energy sector. Expect energy prices to stay higher for longer this summer.
Related Stories
