Video streaming pioneer Netflix (NASDAQ:NFLX) was the top performing S&P 500 stock in 2015, but 2016 has got off to a terrible start.
The shares shed more than 5% in the morning session of the first trading day of 2016 after Baird Equity Research downgraded the stock to 'neutral' from 'outperform', as it thinks the firm will struggle to keep its growth rate at a level that justifies its frothy valuation.
The company has not yet revealed subscriber numbers for the fourth quarter of 2015 but Baird, having conducted a survey of subscribers, reckons the new additions will be lower than the market had been expecting.
Overseas is where it's at for Netflix in terms of growth, but a lot of this has already been priced into the stock, Baird argues.
Shares trade at more than 20 times projected 2016 earnings, which almost suggests Earth needs to colonize a new planet to open up enough new markets to justify such a rating.
Mining tiddler Golden Global (OTCMKTS:GLDG) is up 200% today – OK, this is not even a penny stock but a fraction of a penny stock – so I logged on to the bulletin boards to see what all the fuss was about.
One bulletin board has had more than 250 posts today; unfortunately, most of them seem to be spam, leaving me unsure whether the bulletin board activity – worthless though it is – sparked the share price rise or vice-versa.
Maritime shipping companies have been holed below the Plimsoll line – that's the line on the ship indicating the maximum safe draught – today by the Chinese Caixin manufacturing Purchasing Managers' Index (PMI), which clocked in at 48.2.
The number 50 acts as a kind of Plimsoll line for the PMI, with a sub-50 reading indicating contraction, so you can see why a slow-down in the economic activity in one of the world's exporting economies would be a worry; on top of that, add in rising tension in the Middle East, where Saudi Arabia and Iran have got the hump with each other, and it is not looking so good for world trade.
Worries about China will continue to weigh on emerging markets (EM) in 2016, reckons Per Hammarlund, chief emerging markets strategist at Nordic bank SEB.
“The Syrian conflict and Shia-Sunni relations are unlikely to improve. Unless the spat between Saudi Arabia and Iran develops into a direct military confrontation (which is unlikely), the impact on oil and the major economies will be muted. However, low and potentially falling oil prices and escalating violence will dampen economic activity in the Middle East. Speculative pressure on the SAR will increase, leading to a withdrawal of Saudi foreign investment in both EM and Developing Markets (DM). The main beneficiary will likely be Russia, which may now bargain (tacitly) for an easing of European sanctions in exchange for cooperating with Western powers in Syria,” Hammarlund reckons.