Are things going to get a little tougher for Netflix? In premarket trade on Monday, the stocks of Netflix Inc. (NFLX, -0.04%) declined by 1.7 percent to trade at $421.97. This came after the investment banking advisory firm Evercore ISI downgraded Netflix from a hold to a sell. According to Ken Sena, an analyst at Evercore, the streaming video service will need to increase their investments despite uncertain returns in order to keep up with the growing competition. Sena, who has maintained his rating of Netflix as hold for the last 5 months, cut the target of the Netflix stock price from $450 to $380. This is below the closing price on Friday of $438.40; 13 percent below. Sena stated that “with content providers becoming better equipped to leverage these newer channels through [over-the-top] offerings of their own, we view shares as unattractive." Over the last year, the shares of Netflix have advanced 28 percent while there has been a decline of 0.3 percent in the S&P 500 index (SPX).
Monday saw a great start for U.S. stocks with the benchmark Dow Jones advancing more than 200 points. This came as investors have now turned their attention to the policy statement and meeting of the Federal Open Market Committee which will take place on Wednesday as it will hopefully provide more information regarding the timeline of interest rate hikes. In response to the rally in U.S. stocks, stocks in Asia and Europe also pushed higher which were boosted by a promise of fiscal stimulus in China as well as abundant liquidity from central banks. Also, for the first time on Monday, the German DAX 30 index (DAX) advanced above 12,000, up 2%. As a result, the Dow Jones Industrial Average (DJIA) advanced 228.11 points, or 1.29%, to 17,977.42 with 28 of its thirty components trading higher. Also on the upside was the S&P 500 index (SPX) which gained 27.79 points or 1.35%, to 2,081.19. Nine of the index’s 10 main sectors traded in positive territory with health-care and utilities leading the gains. Also on the upside was the Nasdaq Composite index (COMP) which gained 57.75 points, or 1.19 percent to 4,929.51. According to analysts, this bounce in the market is typical after a bout of selling which was evident last week.
Weak economic data out of the U.S. is never positive for the U.S. dollar (USD) and on Monday, the greenback traded lower. This came as a result of investors locking in profits from the USD’s recent rally while disappointing data prompted negative sentiment regarding the strength of the U.S. economy. Data showed that industrial production in February only climbed 0.1 percent which missed expectations for a 0.2 percent gain. Also, manufacturing output declined by 0.1 percent as a result of declining automobile production. This is a clear indication that the growth in the economy could be slower in the first quarter this year. Meanwhile, in a separate report, data showed that manufacturing activity growth and new orders in the New York State declined in March for a 2nd straight month. In forex trading, the EUR/USD traded at 1.0575, up 0.76%, while the USD/JPY held steady at 121.31. Against the British pound and the Swiss franc the greenback traded lower with USD/CHF down 0.09% to 1.0064 while GBP/USD was up 0.30% to 1.4792.
Monday saw crude oil prices decline to a six-year low. This came in response to a cut in demand forecasts by OPEC who also stated that U.S. production levels are unlikely to level off until the end of 2015. In their report, OPEC forecast that crude oil demand will decrease to 29.19 million barrels per day with only a modest increase in global oil demands at 92.37, up 1.17 million barrels per day. In commodity trading, WTI crude oil for delivery in April declined to $43.84 a barrel, down 2.23% on the NYMEX while Brent crude oil for April delivery traded at $53.38 a barrel, down 2.36%, on the ICE (Intercontinental Exchange). In early trading, WTI crude futures declined to a six-year low of $42.85 a barrel.