Tuesday, 17 October: Netflix shares reached a record high, closing at $202.68 on the NASDAQ last night after experiencing a higher than expected surge in subscribers during Q3. The number of new subscribers surpassed predictions and totalled 5.3 million in Q3, and the group expect the global customer base to reach 115.6 million by the end of the year. Internet television has massively exceeded what people’s expectations would have been when Netflix first entered the market. The surprise increase comes at a reassuring time for Netflix, as the market has been expressing their concerns over the increasing competition they face by the likes of Amazon and their streaming service, as well as Walt Disney’s decision earlier this year to stop streaming their movies online using Netflix and launch their own online platform, which is expected to come into effect in 2019.
Today’s big slump in the blue chip index was Merlin Entertainments. The entertainments company, which operates 123 attractions in 24 countries, including the likes of Alton Towers and Thorpe Park, was trading around 20% lower in the morning after reporting fairly flat revenue growth, and after correcting EBITDA for the full year, which is expected to be between £470-£480m for the full year. The poor performance was due to unfavourable weather conditions combined with the London Terror Attacks. Based on this, and the trading update, the outlook for the full year appeared slightly pessimistic, which consequently took a punch to the share price.
After spending the majority of the morning in red, the FTSE 100 picked itself back up after the anticipated UK inflation data was released. Inflation rose to a five-year high which also confirmed the likelihood of the BoE raising interest rates next month. Annual CPI inflation rose to 3.0%, in line with expectations, but core inflation was slightly below expectations, up 2.7%. By the end of the day, the FTSE was up 0.14% at 7516 and GBP/USD was down 0.51% at 1.3185.