CEO Sightings

Mixed Earnings Reactions: AT&T Falls, Johnson & Johnson Holds Ground, Proctor & Gamble Sees a Pricing Boost and Texas Instruments Faces AI Challenges

By:JJ Kinahan

Netflix broke its subscription record and Inked a $5 billion WEE deal, propelling stock up 9% in premarket trading

  • Netflix signs up record number of subscribers and makes a strategic WWE deal, driving a robust 9% premarket surge.
  • Mixed earnings reactions: AT&T falters, Johnson & Johnson remains steady and Proctor & Gamble boosts sales.
  • Tesla comes into focus with an anticipated a 10% stock move, and China’s economy stabilizes amid challenges.

The S&P 500 reached yet another record high yesterday, advancing by 0.3%, while the Nasdaq Composite saw a 0.4% increase. The S&P 500 has gained 2% for the month, and the Nasdaq is up by 2.8% after rebounding from a negative start for the month.

With earnings season in full swing, the market is poised to determine whether corporate earnings will act as a catalyst for continued growth or a reason for caution.

Netflix (NFLX), a major player in the streaming industry, reported earnings after yesterday’s market close that exceeded expectations. The company witnessed its strongest fourth quarter ever for net additions, with over 13 million new subscribers, marking a significant increase from the 7.7 million added during the same period in 2022. Total subscribers grew by 13% year-over-year, and the introduction of Netflix's new ad-supported tier contributed to 40% of all sign-ups where available. The company's announcement of a 10-year, $5 billion deal with World Wrestling Entertainment (WWE) also indicates a strategic move into live streaming, a sector that has yet to be fully explored. In premarket trading, Netflix shares rose by 9%.

Earnings season highlights

Several other companies reported their earnings after hours and in premarket trading. AT&T (T) fell short of expectations and revised its forward-looking guidance downward, resulting in a nearly 4% decline in premarket trading.

Johnson & Johnson (JNJ) exceeded earnings and sales forecasts, maintaining its outlook, while also announcing a $700 million settlement related to talcum baby powder and its alleged connection to ovarian cancer.

Proctor & Gamble (PG) missed sales estimates but surpassed earnings, citing pricing as the primary driver of sales growth.

Texas Instruments (TXN), reporting lukewarm earnings and outlook, stands out for its lack of participation in the artificial intelligence (AI) business, a sector that has often boosted stock prices in recent times. The chip manufacturer's stock dropped by 3.5% in premarket trading.

Later in the day, IBM (IBM) and Tesla (TSLA) are scheduled to report earnings, with Tesla expected to attract significant attention. Options market data for Tesla suggests an anticipated 10% stock movement for the remainder of the week.

In other news, eBay (EBAY) announced a workforce reduction of 1,000 employees, equating to around 9% of its workforce.

China seeks economic stability

China, grappling with economic challenges, implemented measures to enhance stability, including a reduction in reserve requirements for banks. The country's economic struggles, particularly youth unemployment, raise questions about the outflow of intellectual capital and civil unrest among younger people.

The recent launch of spot exchange-traded Funds (ETFs )has brought changes to the cryptocurrency market, particularly at Bitcoin, which has experienced selling pressure. The anticipation surrounding ETFs led to a "buy the rumor, sell the news" scenario, with retail investors capitalizing on the pre-launch hype. Observers are now keen to see how Bitcoin responds in the aftermath and whether the new ETFs will contribute to decreased volatility for cryptocurrency.

As drama continues to unfold in the markets, traders are keeping a watchful eye on whether the recent gains will be sustained. Historical patterns suggest markets often rally in the days following options expiration, only to reverse course midweek.

Additionally, I'd note that many companies reporting earnings this quarter have seen a decline in stock prices the day after announcements. Hence, attention is directed towardsNetflix to see if it can maintain its premarket gains and whether this reflects broader market stability.

JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan 

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.  Options, futures, and futures options are not suitable for all investors.  Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on

tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.

tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.

tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved.  Applicable portions of the Terms of Use on apply.  Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.