Nasdaq 100 Futures Fall on Interest-Rate Concern, Netflix Plunge
Nasdaq 100 Futures Extend Loss on Rate Concerns, Netflix Plunge
(Bloomberg) -- Futures tracking the Nasdaq 100 Index declined after the underlying technology-heavy gauge entered a correction Thursday and shares of Netflix Inc. plunged 20% in premarket trading.
March contracts pared their decline to 0.8% at 6:20 a.m. in New York after sliding as much 1.6%. Investors remain nervous over the prospect of tighter Federal Reserve policy, and a report Thursday showing an increase in U.S. jobless claims to a three-month high did little to quell those concerns.
“Markets eventually deemed that the underperformance in jobless claims is insufficient to drive any significant change in the pace of Fed policy tightening,” said Jun Rong Yeap, a strategist at IG Asia in Singapore.
Losses in Nasdaq 100 futures accelerated in late U.S. trading as Netflix announced that it expects to add just 2.5 million subscribers this quarter, a number that falls short of Wall Street’s estimates and would mark the slowest start to a new year for the company in at least a decade. S&P 500 futures dropped as much as 1%, before paring their loss to 0.4%.
“The lackluster outlook from Netflix this morning also adds on to the bearish sentiments, as investors pare back on risks in light of Fed policy tightening and challenges to firms’ growth outlooks ahead,” IG’s Yeap said.
The Nasdaq could enter a bear market as the macroeconomic environment isn’t supportive of rate-sensitive technology stocks, Ipek Ozkardeskaya, a senior analyst at Swissquote, said in written comments.
If Big Tech companies don’t live up to expectations of strong earnings growth, “the Nasdaq could fall like a castle of cards,” she said.
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