STRONG GROWTH
Netflix has released its third-quarter earnings report, leading to a surge in its stock price as it exceeded expectations. The company reported earnings per share of $5.40, surpassing the predicted $5.12, and revenues of $9.83 billion, higher than the estimated $9.77 billion. Notably, Netflix experienced significant growth in its ad-supported membership tier, with a 35% increase in the quarter. It is worth noting that although ads are not expected to be a primary growth driver until 2026, the ad-supported tier accounted for over half of sign-ups in eligible countries in the third quarter. Furthermore, Netflix provided a positive outlook for the December quarter, forecasting a 14.7% revenue increase to $10,128. Analysts reacted favorably to the fourth-quarter projections and highlighted Netflix’s strategic investment in content, positioning the company ahead of competitors in the media industry.
INCREASED DEMAND
Gold prices have soared to a new all-time high above $2,700 per ounce, and this was driven by expectations of more monetary policy easing and increased demand for safe-haven assets due to uncertainty about the U.S. presidential elections and conflicts in the Middle East. As of 8:00 AM CST, spot gold hit a peak above $2,730 per ounce, showing a 2% increase for the week. Moreover, it is worth noting that as the tensions in the Middle East caused concerns and uncertainty, many investors turned to safe assets, and as a result of this, gold prices have increased by more than 31% this year. In addition, prices of silver, platinum, and palladium also rose along with gold due to global uncertainties. Nevertheless, despite the positive performance in the precious metal market, it is important to remark that some analysts have stated that the price of gold may face some difficulty increasing beyond the $2,750 level as it has been consistently rising since late July.
INSTITUTIONAL VS RETAIL
Despite institutional demand propelling Bitcoin closer to its all-time high, retail investors appear cautious and reluctant to enter the market, showing a lack of FOMO or fear of missing out. This hesitancy is evident as Bitcoin is currently only 9% shy of its record peak, indicating a potential disconnect between the behavior of individual and institutional investors. In addition, while institutional market conditions show signs of improvement, the retail sector seems to be lagging behind. Moreover, it is worth noting that the recent surge in the cryptocurrency market is underpinned by optimism surrounding the regulatory landscape post the U.S. presidential election in November, and as Bitcoin climbs approximately 14% in just over a week, investors have poured around $1.4 billion into US spot-Bitcoin ETFs, while CME Group’s Bitcoin futures market has seen record levels of open interest. Overall, the market is witnessing dynamic shifts and fervent activity, driven by a mix of institutional interest and regulatory optimism.
RISKY BUSINESS
The decentralized lending market has seen a spike in “high-risk” loans, reaching levels not seen in over two years, prompting concerns about potential liquidation cascades and market instability. These loans, positioned within 5% of their liquidation prices, have collectively amounted to $55 million as of Wednesday, as reported by analytics firm IntoTheBlock. In decentralized lending, traders use digital assets as collateral to secure loans, but if the value of the collateral drops too much, the loan can be liquidated. A loan within 5% of its liquidation price means that a slight decrease in the collateral’s value could trigger this liquidation. The increasing number of high-risk loans could lead to a cascade effect wherein rapid liquidations cause further price drops and market turbulence. This chain reaction could jeopardize the value of collateral, putting more loans at risk of liquidation, and ultimately contributing to a downward trend in prices and impacting market liquidity by discouraging lenders from adding further funds to prevent losses.
INTERNATIONAL NEWS
China’s central bank recently took steps to support the country’s markets following the release of data showing a slowdown in economic growth, the slowest in six quarters. This move by the People’s Bank of China is seen as part of the government’s ongoing efforts to stimulate the economy and combat the effects of the slowdown. PBOC Governor Pan Gongsheng emphasized the challenges posed by the real estate and stock markets, signaling a need for targeted policy support in these areas. Despite the slower growth rate, there are optimistic signs that the economy may have reached a turning point, with data for September exceeding expectations. Analysts are hopeful that China will meet its growth target of approximately 5% by 2024, with a modest rebound in the fourth quarter likely to help achieve this goal. The market responded positively to the central bank’s actions, with the CSI 300 Index of onshore stocks experiencing a 3.6% increase, boosted by new policies and support for technology companies, such as the chipmaker Semiconductor Manufacturing International Corp.
