Must read: tariff tensions, UK jobs, Netflix
ii’s head of investment rounds up the morning’s big news.
20th January 2026 09:05
by Victoria Scholar from interactive investor
GLOBAL MARKETS
European markets are down again today with French drinks giants suffering after President Trump threatened a 200% tariff on French wine and champagne. Remy Cointreau (EURONEXT:RCO) and Lvmh Moet Hennessy Louis Vuitton SE (EURONEXT:MC) are in the red as trade tensions with the US escalate over Greenland. Only a handful of stocks on the FTSE 100 including Informa (LSE:INF) and Endeavour Mining (LSE:EDV) are in the green today while most stocks have been caught up in the trade war driven risk-off mood.
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US futures are sharply lower as the cash market prepares to play catch up, with steep losses likely after yesterday’s holiday. Investors continue to pile into haven assets, with gold and silver up around 3% and 7% respectively.
UK UNEMPLOYMENT
According to the Office for National Statistics, the UK unemployment rate hit 5.1% in the three months to November, meeting expectations to remain at the highest level in five years. Real wage growth in the three months to November reached 4.5% excluding bonuses, down from 4.6% in the previous period. Payrolled workers in November decreased by 33,000 from October, with provisional expectations for a further decrease of 43,000 in December. Vacancies however were largely unchanged, increasing modestly by 10,000 to 734,000 in the three months to December.
There are continued signs of slack in the labour market, with unemployment at a five year high, wage growth cooling and a fall in the number of payrolled workers. Tax increases and higher employment costs have put pressure on businesses, increasing their reluctance to take on extra long-term fixed staff costs, while a subdued consumer demand backdrop also reduces the need for additional workers.
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For the Bank of England, today’s report supports the view that inflation is likely to ease towards the 2% target this year, as price pressures from the labour market (and elsewhere) subside. However, it fails to move the dial on the market’s near-term rate expectations, with the central bank likely to hold off next month from further cuts having reduced interest rates six times already this cycle.
NETFLIX PREVIEW
There are high hopes going into Netflix Inc (NASDAQ:NFLX)’s Q4 results on Tuesday which means there is a high bar if the shares are to rally following the announcement, even if numbers are strong. The festive quarter is typically a good time for Netflix with more eyeballs bingeing series and watching movies during the holidays.
According to Refinitiv, Netflix is expected to report operating income of $2.9 billion vs $3.2 billion last quarter on revenues of $11.97 billion vs $11.51 billion in Q3. KPop Demon Hunters, Stranger Things 5 and Squid Game 3 were among the biggest hits on its platform in Q4 helping to retain audience attention. Remember that Netflix no longer releases subscriber numbers, so investors will be focusing more on revenue growth, operating margin, free cash flow, and ad sales as well as growth in newer areas like sports and gaming.
Last quarter, Netflix delivered a mixed set of results – it achieved strong revenue growth of 17% and a record quarter for ad sales. However, shares suffered after a Brazilian tax issue resulted in a quarterly earnings disappointment.
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Overshadowing earnings, meanwhile, there have been media reports that Netflix is preparing an all-cash bid for Warner Bros. Discovery Inc Ordinary Shares - Class A (NASDAQ:WBD)’s studios and streaming assets, an improvement from its previous cash-and-stocks deal. Netflix’s sweetened offer represents its attempt to kill off a rival bid from Paramount Skydance Corp Ordinary Shares - Class B (NASDAQ:PSKY). Netflix and WBD agreed to a deal worth $82.7 billion in December, but Paramount subsequently made a hostile takeover bid which has been rejected.
Shares have struggled since deal talks emerged. However, analysts still have a consensus buy recommendation on the stock with a target price of $126.05, representing more than 40% upside from the current share price.
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