Market Morning: Netflix Hits Wall, Instagram Hides Likes, Iran Smolders Over Trump

Market Morning: Netflix Hits Wall, Instagram Hides Likes, Iran Smolders Over Trump

Netflix Hits Growth Wall

Apparently, there aren’t an infinite number of people in the world who want to subscribe to Netflix (NASDAQ:NFLX). The streaming giant passed the 150 million subscriber mark, but missed forecasts for new memberships, adding only 2.7 million new subscribers last quarter. It was only about half of what analysts were expecting. Netflix says it expects 7 million more new subscribers next quarter. Netflix is blaming it on content rather than competition. “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions. Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated.” Analysts are still worried about future competition, including from Disney (NYSE:DIS) Apple (NASDAQ:AAPL), and AT&T (NYSE:T) that are all moving more towards streaming. Disney’s price point is about half of Netflix. Netflix shares are down 12% in the premarket.

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In Biggest News This Century, Instagram Hides Likes

In a development that could only possibly be rivaled by first contact with extra terrestrial intelligent life and being reported everywhere, Instagram, owned by Facebook (NASDAQ:FB) *might* be one step closer to concealing likes on the selfies and such that you share on the social media platform. It is hiding likes in Italy, Japan, Brazil, Australia, and New Zealand. The division of labor in said countries has since broken down and they have descended into chaos, resorting to barter to survive on a meager subsistence level, as they can no longer see likes. Likes on Instagram are hearts, rather than the Facbookian thumbs up gesture.  In a concession to life as we have come to know it, Instagram is still allowing content creators to see how many likes, or hearts, they have on whatever they are sharing. It’s just not being posted for the public to see. So people will probably start appending them to their pictures to show everyone how much people like their stuff. Perhaps this will halt the zombie apocalypse in its tracks.

Iran Worried About Second Trump Term

“There is a better than 50 percent chance that he might still be in office, so we will need to deal with him for another six years,” said Iranian foreign minister Javad Zarif on Bloomberg. Following yet another now infamous Trump tweet in which he urges the “four horsewomen of the Apocalypse” to return to the countries from which they came, referring to the four socialist Congresswomen who really do not like him, the impeachment push against Trump has been abandoned and support for him has risen among Republicans. Now that Iran believes that it may have to deal with Trump for another six years, they may feel more pressured into doing something drastic regarding oil, given that they are prohibited from selling it, which is causing extreme economic hardship in the country and could lead to desperation.  Referring to Trump’s negotiation tactics, Zarif said, “So he always believes, it seems, that ‘What’s mine is mine and what’s yours is negotiable.”’ That sounds about right. Regarding the apocalypse though, Trump can rest easy. Instagram will still allow him to see his own likes. He can tweet about how many he gets for various presidential selfies.

Memo to Barnier: EU Will Have to Face Consequences of No Deal As Well

In what could only be described as hubris on a colossal scale, chief Brexit negotiator from the European Union, Michel Barnier, has warned probable upcoming United Kingdom Prime Minister Boris Johnson et al. that “The UK will have to face the consequences” of a no-deal Brexit. “I think that the UK side, which is well informed and competent and knows the way we work on the EU side, knew from the very beginning that we’ve never been impressed by such a threat. It’s not useful to use it,” said Barnier.

Which means, the EU is trying to call the UK’s bluff and will be completely unprepared for an actual no-deal Brexit. Given that interest rates are negative in much of the EU and the debt situation there is just completely beyond the pale and insane beyond measure, it is very likely that the EU is the one that will suffer more from a no-deal Brexit, as the various debt-drowned sovereigns will have to be bailed out as their economies collapse from less trade with Britain and their debt to GDP levels rise to new heights and bond prices crater again. Good luck with that, Barnier. The UK, in the meantime, has reasonable debt levels, at least by today’s standards, though they are still high at 85%. In any case, Barnier has even bigger things to worry about. In short order, he may not be able to see how many hearts Christine Lagarde gets for her Instagram selfies.

US Kicks Turkey Out of F35 Program For Buying Russian Missile System

This could shake up NATO. The United States has removed Turkey from the F35 program for buying a Russian missile system. The F35 is being developed by Lockheed Martin (NYSE:LMT). Ellen Lord, undersecretary of defense, tsk-tsked Turkey as a father would a four-year-old, and said, “Turkey will certainly and regrettably lose jobs and future economic opportunities from this decision. It will no longer receive more than $9 billion in projected work share related to the F-35 over the life of the program.” Defending its decision, the White House said, “The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.”