Netflix Tanks As Stocks See Their Worst Week Since March 2020

US stocks saw their worst week since the start of the pandemic at the end of January, following two years of the best inflation-adjusted returns since 1928 – the eve of the Great Depression. The S&P fell more than 5.7 per cent in the closing stages of the month, mirroring the decline seen during the first week of March 2020.

The Dow Jones also saw its value fall to as low as 34,265, capping three weeks of consecutive losses.

Tech Sector Hit Hardest

The tech sector has been hit the hardest. Investors are fleeing stocks in this area in favour of value, looking for more reasonable P/E ratios. Previously celebrated stock pickers, such as Cathie Wood, are now being excoriated in the press for their bullishness on firms like Nvidia.

The NASDAQ is now down more than 14 per cent since hitting a high in November 2021.

Netflix Among Biggest Losers

Netflix stock is among the biggest losers this quarter, partly due to the general slowdown of interest in owning tech stocks, and partly thanks to subscriber losses.

The digital streaming platform’s stock price fell more than 21 per cent on Friday following bad news about subscriber growth numbers. Rival Disney also saw its share price fall by over 6.9 per cent during the same session.

Yields Falling

Following rate rise announcements and worries about the falling price of stocks, treasury yields are also slowly eroding as investors look for safe havens.

The ten-year yield on US treasury bills is now 1.76 per cent, down from 1.83 per cent on Thursday, well under inflation.

Inflation Fears

The broader market gains seen in 2021 are also being undermined by inflation fears.

Traders believe that consumer-focused tech companies are likely to see their revenues plunge as households reorientate their budgets towards the skyrocketing costs of energy and utilities.

Furthermore, these less risky firms are also the ones most able to raise prices first during the current inflationary round, with others coming in afterwards.

Rising costs of living may prevent consumers from splashing out on new electronics, vehicles and other discretionary spending over the coming months.