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| | Top News  Shutterstock With Q3 earnings season kicking into gear, the three major U.S. stock averages stayed near record highs in the past week with some fluctuations in between. The Nasdaq rose 1.3% over the past five sessions, the S&P 500 gained 1.6% and the Dow Jones advanced 1.1%. But inflation may be damping investor sentiment. Fund managers turned bearish on growth prospects for the first time since the depths of the pandemic, according to a Bank of America Securities Survey. On Thursday, Snap's earnings showed that supply chain disruptions and labor shortages are starting to hurt companies' advertising spending. And on Friday, even Fed Chair Jerome Powell, who has been calling inflation "transitory," said high inflation is likely to last "well into next year.' Still, he says the central bank is on track to start tapering asset purchases with the aim to wrap up the process in mid-2022. The 10-year Treasury yield ends the week at ~1.65%, after breaching 1.7% on Thursday and starting out the week at ~1.58%. | | Trending After an initial post-market rise following its earnings report, Netflix ( NFLX) turned 2% lower on Tuesday as investors began digesting some of the streamer's numbers. While the company added a net 4.38M global subscribers - better than its own guidance for 1.54M, as well as analyst expectations for 3.5M - forecasts for the coming quarter (8.5M subs) stayed in line with last year's holiday period despite a slew of new shows and programming. Quote: We're in uncharted territory," co-CEO Reed Hastings said on a post-earnings call. "We have so much content coming in Q4 like we've never had, so we'll have to feel our way through and it rolls into a great next year also." Netflix is also tweaking its controversial approach to measuring shows' success, which had looked at the number of accounts that had viewed a title for at least two minutes in its first 28 days on the service. It will now focus on total hours viewed per title. That will make a slight difference in its rankings, but "we think engagement as measured by hours viewed is a slightly better indicator of the overall success of our titles and member satisfaction," adding it also gives proper credit to rewatching a show, traditionally a big draw for the service. Squid Game: "A mind-boggling 142M member households globally have chosen to watch the title in its first four weeks." Squid Game, the latest megahit from Netflix, could also be worth nearly $900M for the streaming giant, according to an internal document from the company. By comparison, under Netflix's now-former measurement system, Bridgerton's Season 1 was the most-viewed program (82M accounts) and Extraction the top movie (99M accounts). ( 20 comments) | | Sponsored By VantagePoint  If you want to trade smarter (not harder) and be prepared for Monday's stock market open, then you're not going to want to miss out on this. We'll show you today - LIVE - how to know what stocks may be about to explode the beginning of next week. How? Artificial intelligence. If you want to be on your A-game come Monday morning, you're going to want to see what we have to show you next. Bring your own ticker symbols as we'll look at some of your choices - LIVE. Saturday, October 23rd at 11:00 AM ET / 8:00 AM PT There are no replays. Save your seat by clicking here! | | Cryptocurrency The crypto industry celebrating a long-awaited milestone this week as the first exchange-traded fund linked to Bitcoin ( BTC-USD) launched on the New York Stock Exchange. The ProShares Bitcoin Strategy ETF ( BITO) does not invest directly in Bitcoin, but rather holds futures contracts of the digital currency - meaning it will have a very high correlation with Bitcoin, but won't mirror the token's exact value. It will also cost more to own the fund, but some may be willing to pay up for institutional level custody, execution and security.
Bigger picture: The new approval could bring more investors into the crypto market as it comes with a more regulated structure. That means 401( k)s and IRAs could now have an allocation of the sector, while the ETFs will also be available through brokerage accounts. Until now, Bitcoin has been a favorite among tech-savvy or younger traders, who are more comfortable with its technology, as well as the risks or price swings involved with their investments. While the SEC has recently taken a tougher stance on crypto, the ETF green light highlights what structure the agency is currently able to tolerate. Bitcoin futures trade on the Chicago Mercantile Exchange and are regulated by the Commodity Futures Trading Commission, while Bitcoin-related ETFs have already launched in other countries like Canada. There are also concerns about purchasing Bitcoin through digital currency exchanges, given worries about hackers or losing so-called private keys. Go deeper: The ProShares Bitcoin Strategy ETF might be the first to list in the U.S., but it sure won't be the last. Grayscale Investments is jumping on the train with plans to convert the Grayscale Bitcoin Trust ( OTC:GBTC) - which has $38.7B assets under management - into a spot ETF. Other issuers like Valkyrie, Galaxy Digital and VanEck are also excited about the recent approval as crypto-related shared soared and Bitcoin hit fresh records. ( 126 comments) | | Earnings The EV maker posted record revenue and profit in Q3 as it scaled up despite some problems along the supply chain. "A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed," Tesla (NASDAQ: TSLA) declared, as shares slipped 1.3% AH on Wednesday. However, the firm still reiterated prior guidance of "achieving 50% average annual growth in vehicle deliveries" over a multi-year horizon. By the numbers: The company racked up $1.6B in GAAP net income ($2.1B in non-GAAP net income), while producing 237,823 vehicles in Q3 (+64% Y/Y) and delivering 241,391 (+73%). Operating margin was 14.6% of sales to easily top the guidance range and analyst expectations, while automotive gross margin came in at 30.5% vs. 28.4% consensus (and 28.8% with credits backed out). The improvement was struck even with the average selling price of a vehicle down 6% due to a shift in the model mix. On the operations side, Tesla said its buildout for the Berlin-Brandenburg Gigafactory remains on schedule with testing of equipment well underway. It expects to receive final permit approval by the end of this year and continues to target the first Model Y production there and in Austin before 2021 comes to a close. Tesla also notched $806M in revenue from its energy business (solar deployments of 83MW were up 46%), though costs of revenue rose to $803M, the highest number in the last five quarters. Recharging: The automaker revealed some changes to its battery cell chemistry, using lithium-iron-phosphate ( LFP) for its standard range vehicles rather than nickel-cobalt-aluminum which it will continue to use in its longer-range EVs. "LFP is significantly cheaper and stable, which makes it safer," said Sam Abuelsamid, principal analyst at Guidehouse Insights. However, the cells are less energy-dense, meaning they offer lower range for the same weight as other cells, while cold weather affects them more. ( 459 comments) | | Media Some predicted the move since he left office, but former President Donald Trump is finally launching his own media network. The new business, called Trump Media & Technology Group ( TMTG), will include a social media platform called "TRUTH Social," as well as a subscription video-on-demand service (TMTG+) that features "non-woke" entertainment programming, news and podcasts. The company will go public via a SPAC merger with Miami-based Digital World Acquisition (NASDAQ: DWAC), which surged more than 350% premarket to $45.50/share on Thursday .
Quote: "I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech," Trump wrote in a press release. "We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable. Trump Media & Technology Group's mission is to create a rival to the liberal media consortium and fight back against the 'Big Tech' companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America." Earlier this year, Trump was restricted, and then banned, by major social media giants like Facebook (NASDAQ: FB), Twitter (NYSE: TWTR), Snapchat (NYSE: SNAP) and YouTube ( GOOG, GOOGL) after the Jan. 6 storming of the U.S. Capitol. Following the incident, Parler - a free speech social network popular with conservatives - was also removed from the Apple and Google app stores, while Amazon (NASDAQ: AMZN) ended its web hosting agreement. As a result, TMTG appears to be targeting multiple fronts, saying on its website that it eventually hopes to compete against AWS and Google Cloud, as well as Disney (NYSE: DIS) and Netflix (NASDAQ: NFLX). Along ideological lines? While "TRUTH Social" intends to be America's "big tent" social media company that encourages "free speech," we could be witnessing a further polarization of the corporate landscape. Once upon a time, politics was not married to the business world as it is today, and competing services may continue to sprout up as the country appears more divided. According to a survey from The Hill, 30% of respondents said they'd use a "Trump-backed social media platform," though 54% said they wouldn't and 16% would consider it. TRUTH Social is set for a beta launch next month and a full rollout in the first quarter of 2022. ( 743 comments) | | Tech Going in the opposite direction, Snap shares ( SNAP) tumbled around 20% AH on Thursday following results that some are referring to as "ad-mageddon." The long-feared internet advertising meltdown was responsible for a revenue miss in Q3, with sales coming in at $1.07B vs. expectations for $1.1B. The company also detailed a worse forecast for the coming holiday quarter, which is typically one of the busiest, saying it anticipated a revenue growth rate of 19%-20%, down from third quarter growth of 57%. What happened? "Our advertising business was disrupted by changes to iOS ad tracking that were broadly rolled out by Apple ( AAPL) in June and July," CEO Evan Spiegel said on a conference call. "While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS." Over the past few quarters, direct-response advertising has grown to more than 50% of Snap's business, but given the recent changes, "coupled with Snapchat's existence as a mobile-only platform, our strength in DR has become a more significant headwind in the current environment." Ad-dependent peers like Twitter ( TWTR), Facebook ( FB), Pinterest ( PINS) and Google ( GOOG, GOOGL) were also hit by the headlines and traded lower on the news Outlook: Apple's privacy change is not the only contributor of the advertising slowdown. Ad partners facing supply chain issues and labor shortages "reduced short-term appetite" to generate demand for their products, according to Spiegel, and the trends could get worse if the bottlenecks don't clear up. It's also an interesting instance of tech stocks getting hammered due to sale struggles in the physical world, where companies do not spend on online marketing for goods they cannot get to users (not to mention another setback to the economic recovery). ( 35 comments) | | U.S. Indices
Dow +1.1% to 35,677. S&P 500 +1.6% to 4,545. Nasdaq +1.3% to 15,090. Russell 2000 +1.% to 2,289. CBOE Volatility Index -5.3% to 15.43.
S&P 500 Sectors
Consumer Staples +0.8%. Utilities +2.4%. Financials +2.8%. Telecom -0.6%. Healthcare +2.9%. Industrials +1.8%. Information Technology +1.6%. Materials +0.9%. Energy +1.2%. Consumer Discretionary +1.5%.
World Indices
London -0.4% to 7,205. France +0.1% to 6,734. Germany -0.3% to 15,543. Japan -0.9% to 28,805. China +0.3% to 3,583. Hong Kong +3.1% to 26,127. India -0.8% to 60,822.
Commodities and Bonds
Crude Oil WTI +2.1% to $83.98/bbl. Gold +1.4% to $1,793.4/oz. Natural Gas -1.9% to 5.306. Ten-Year Treasury Yield -0.4% to 130.48.
Forex and Cryptos
EUR/USD +0.36%. USD/JPY -0.64%. GBP/USD +0.04%. Bitcoin +0.5%. Litecoin +4.2%. Ethereum +5.3%. Ripple -3.7%.
Top Stock Gainers
Phunware Inc (NASDAQ:PHUN) +749%. Remark Holdings Inc (NASDAQ:MARK) +147%. Huadi International Group Co. Ltd (NASDAQ:HUDI) +87%. Valneva Se ADR (NASDAQ:VALN) +60%. Meiragtx Holdings Plc (NASDAQ:MGTX) +51%.
Top Stock Losers
Atea Pharmaceuticals Inc (NASDAQ:AVIR) -68%. Commun Systems Inc (NASDAQ:JCS) -55%. Nutriband Inc (OTCQB:NTRB) -38%. Ocular Therapeut (NASDAQ:OCUL) -38%. Vinco Ventures Inc (NASDAQ:BBIG) -37%.
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