The stock market of the United States (US), Wall Street ‘fired’ on trading Friday (21/1), the impact was pressured by the fall in Netflix stock price by 21.8 percent.
Poor growth in subscribers to streaming service Netflix caused the US company’s shares to fall 21.8 percent. That further rattled stock markets already rattled by concerns the US central bank, the Federal Reserve, will tighten monetary policy too aggressively to fight inflation.
Investors were also made to wait and see alias waiting for the details of the Fed meeting next week. While the data does not seem to show the pace of consumer price increases has slowed for several months. That makes the job of Fed Chairman Jerome Powell more difficult as he tries to calm markets.
“We know the Fed is turning around and the problem is that the inflation numbers aren’t going to start dropping until the end of this spring,” said Andrew Slimmon, managing director at Morgan Stanley Investment Management.
Despite Netflix’s negative earnings, he said it was too early to know whether the company’s fundamentals would not continue to be strong.
In Friday’s trading on Wall Street, the Dow Jones Industrial Average was down 1.30%, the S&P 500 was down 1.89%, and the Nasdaq Composite was down 2.72%. Both the S&P 500 and Nasdaq posted their biggest weekly losses since the market crashed in March 2020.
With the Fed proposing four rate hikes this year, fears of a hard landing (economic sluggishness) have mounted among investors.
But a slowing economy in the months ahead, according to Steven Ricchiuto, chief US economist at Mizuho Securities USA LLC may give the Fed a second thought.
“The growth rate will slow much faster than the Fed anticipated,” he said.