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Today's big stories

Netflix reported worse-than-expected quarterly earnings, and the streaming giant’s share price plummeted
Our analyst has dug into a way to trade the global economic recovery that's already risen 120% this year – Read Now
Procter & Gamble’s quarterly earnings came in ahead of expectations, as pandemic cleaning habits die hard

Dishonorable Mention

What’s Going On Here?

Netflix’s first-quarter subscriber growth came in worse than expected late on Tuesday, and the streaming service wouldn’t like to thank its parents, its agent, or – sniff – its investors.

What Does This Mean?

Here’s the trouble with pocketing a record number of subscribers last year like Netflix did: it sets a high bar for every subsequent earnings announcement. Too high, this time around, with the streaming service only adding four million new subscribers last quarter – two million less than it promised. And too high this quarter as well, by the sounds of things: Netflix admitted it’s expecting to add just a million subscribers versus a predicted 4 million. That matters because new subscribers are a proxy for future income, so while the lower costs of delayed production did push profit over expectations, unimpressed investors initially sent Netflix’s stock down 10%.

Why Should I Care?

For markets: Accountants are sneaky.
Thing is, Netflix’s profit doesn't even account for the full cost of making content, which is spread over a few years even though the company generally pays for everything up front. Investors, then, prefer a figure Netflix can’t obscure with accounting quirks, like how much cash it brings in each year. Or rather, how much it doesn’t bring in: the streaming giant hasn’t made enough cash to cover costs in almost any year since 2012. That’s a tradition it’s promised to end this year, but it might be easier said than done when production fully ramps up again…

The bigger picture: These endless US streaming wars.
Still, a recent survey by Morgan Stanley found that 39% of Americans think Netflix has the best original content of all the streaming services – well ahead of Amazon Prime (12%) and Disney+ (7%) (tweet this). And this update aside, investors seem to agree that the world needs more Emily In Paris: Netflix’s shares have risen about 80% since Disney+ launched, dwarfing the average 15% gains of its competitors.

You might also like: Everything you need to know before investing in Netflix.

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2. Analyst Take

The Biggest Trade Of The Recovery?

What’s Going On Here?

There’s a lot of talk around how to invest in the global economic recovery these days, with investors putting particular emphasis on energy and industrial stocks.

And it’s true that those sectors could do especially well. But it’s also true that investors have already pushed their stock prices to dizzying highs.

What you actually want is a trade that still has plenty of upside if the recovery holds up.

And there is a trade like that: an ETF that’s already risen 120% this year, but that’s still 80% off its all-time highs.

It’s not what you’d call glamorous, sure, but it stands to keep benefiting from the recovery – not to mention from big infrastructure spending plans around the world.

So that’s today’s Insight: the ETF that’s more than doubled this year, and why it might still be a great way to profit from the economic recovery.

Read or listen to the Insight here

Look beyond the stock market

With stocks near record-highs, profits are only getting harder to come by these days.

In other words, you’d be smart to look at investments that typically don’t move in line with the stock market.

Yieldstreet offers a way to do just that: it’s an alternative investment platform where you can invest in real estate, art, aviation, legal finance, and more.

You get to choose from their unique suite of products across a range of asset classes, all with different yields, durations, and minimum investments.

And since only a fraction of the billions of dollars’ worth of deals Yieldstreet analyzes make it onto its platform, you won’t have to spend all day looking for opportunities that meet your needs.

You can invest with just $1,000: get started today.

Get Started

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