Must read: Fresnillo, UK inflation, Netflix

GLOBAL MARKETS

The FTSE 100 has opened higher with Fresnillo (LSE:FRES) leading the charge up 5% thanks to a strong set of third-quarter results driven by a stellar period for precious metals. Barclays (LSE:BARC) is another top gainer thanks to the announcement of a share buyback and improved guidance.

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Stocks in Japan hit fresh highs overnight following a report that incoming prime minister Sanae Takaichi is preparing an economy boosting stimulus package.

US futures are pointing flat after declines for the Nasdaq last night following Netflix Inc (NASDAQ:NFLX)’s earnings disappointment.

UK INFLATION

UK inflation hit 3.8% in September, below expectations for a reading of 4% while core inflation (excluding energy, food, alcohol and tobacco) hit 3.5% also below forecasts for 3.7%.

There was a mix of push and pull factors impacted inflation last month, leaving the headline reading unchanged for the third straight month. The food and non-alcoholic drinks annual inflation rate fell for the first time since May last year and there were lower prices for live events. However, petrol prices and airfare price falls eased versus last year.

For Chancellor Rachel Reeves, today’s data is a welcome surprise that suggests the inflationary headwinds proved to be slightly less burdensome than expected last month. Although inflation remains higher than France, Germany and the EU highlighting how the UK economy is still struggling with price pressures.

Today’s below-expectations data could also prove pivotal for the Bank of England in so far as it could give the central bank the confidence to carry out one more rate cut most likely in December, which would be another win for the government. This could help contribute towards increased mortgage affordability, supporting the housing market and expand consumer and business borrowing to drive greater spending and investment to stimulate the economy.

NETFLIX

Netflix shares fell after third-quarter earnings missed expectations because of an unexpected cost associated with a tax dispute in Brazil. However, it said this is not expected to have a material impact on future results.

The company said absent this expense, we would have exceeded our Q325 operating income and operating margin forecast. Q3 earnings per share hit $5.87, below analysts’ expectations while revenue grew by 17% to $11.51 billion, meeting consensus forecasts.

Investors have been spooked today by this unexpected blow stemming from Netflix’s tax issue in Brazil that has knocked its share price off course in Frankfurt this morning. This cost aside, Netflix delivered a strong quarter with its best ad sales to date and a rosy sales forecast for the full-year.

It has enjoyed a lot of success from KPop Demon Hunters and it looks like there’s a strong slate again this quarter with Stranger Things, Nobody Wants This and others popular shows. Netflix tried to shrug off the threat around AI, a key concern for investors, saying generative AI presents a ‘significant opportunity’ for the streaming platform. The jury is out on whether AI will work in Netflix’s favour or cannibalize its content.

Netflix has suffered some price target cuts from JPMorgan and Piper Sandler this morning. Despite the slide in its shares, Netflix’s stock has had an impressive run so far this year, outperforming the market, rallying close to 40% before this update.