A Trust Test
By Wed, Apr 22, 2020
Hey Scoopers,
The same forces that drove the market down on Monday lingered for one more day. — More on that in the “Overall Market” section.
Beyond the overall market, investors were surprised to see a streaming company added more than 15 million new subscribers while deciding to sell off their big data stocks. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, someone is using the COVID-19 to run a trust test. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: For the second day in a row, all three indices ended the day in the red zone. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price continued to hover under the $7,000 mark.
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The Three Forces Lingered For One More Day.
As expected, all three indices finished Tuesday in the red. All sectors followed the indices’ direction with the Technology sector leading the pack and losing more than 4% of its value. We discussed the three forces that drove the market down in detail on Monday’s edition of the Daily Scoop (Read More). In the absence of any significant development in the market, the sell-off seems to be the continuation of the same three forces.
Who Would Have Thought?
So, what happened?
Shares of Netflix (Ticker: NFLX) finished Tuesday in the green, but only slightly. The company announced its latest quarterly earnings report after hours, and the stock was initially up by nearly 10% in reaction to more than 15 million net new paid subscribers globally. However, as the earnings call progressed, and investors learned about conservative earnings forecasts for the year, the stock price settled almost the same place it had started the day. Similar to all production companies, Netflix has to deal with the halt of its original content production and has higher costs in response to the COVID-19 global disruption. Despite all that, who would have thought, Netflix can still add 15 million more subscribers in one quarter? If you had asked us a year ago, we would have rolled out eyes.
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Who Has Money For Big Data?
So, what happened?
Shares of Alteryx (Ticker: AYX) were down by more than 10% on Tuesday. The company is one of the high-flyer stocks in the data analytics industry and is expected to announce its quarterly earnings in two weeks. It seems that investors are adjusting their holdings before the earrings date. Generally, investors believe big data analytics software is among the IT spendings that will shrink in response to the COVID-19 priorities. That’s why many big data and analytics software players, such as AYX, are experiencing a surge in negative sentiment about their future.
A Trust Test
So what happened here?
Facebook (Ticker: FB) announced its own version of COVID-19 symptom tracking in partnership with Carnegie Mellon University’s Delphi epidemiological research center. The company is asking users to self-report their COVID-19 symptoms and is planning to release the feature to its global user population.
What’s very interesting about this survey is a way for Facebook to test how much its users trust the platform, despite all the challenges the company has had in recent years with regards to user data and privacy.
Have you responded to Facebook’s COVID-19 symptom survey? Let us know about what went through your mind before trusting the platform with your data? Our email is members@tradestocks.com.
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
