Skip to main content

Netflix, Chipotle, Apple, Manchester United - 5 Things You Must Know

Stock futures fluctuate following a two-day drop for the S&P 500; Netflix slides after subscriber growth falls short; Verizon and Chipotle report earnings.

Here are five things you must know for Wednesday, April 21:

1. -- Stock Futures Fluctuate Amid Virus Concerns

Stock futures were mixed Wednesday following a two-day drop for the S&P 500 as investors moved cautiously during earnings season and assessed risks posed by worsening coronavirus outbreaks.

Netflix  (NFLX) - Get Netflix Inc. Report tumbled after subscriber growth fell short of expectations and the streaming giant predicted the current quarter would be challenging. 

Contracts linked to the Dow Jones Industrial Average rose 22 points, S&P 500 futures were up 2 points and Nasdaq futures declined 18 points.

Stocks fell for a second day Tuesday as Wall Street looked to earnings for indications on the strength of the post-pandemic recovery but a spike in virus cases overshadowed mostly solid corporate results.

The S&P 500 retreated further from its all-time high set Friday as equities have been pressured by rising coronavirus cases across the globe, particularly in Asia and South America. The spike in the virus has renewed concerns about fresh lockdowns and what impact they may have on the economic recovery.

Stocks in Tokyo declined more than 2% on Wednesday as a resurgence of coronavirus cases led to restrictions on travel and dining.

Jim Cramer: We're Back to the Market That Baffles

2.-- Netflix Slumps as Subscriber Growth Stalls

Netflix dropped more than 8% in premarket trading Wednesday after the streaming giant added fewer subscribers in the first quarter than Wall Street expected.

Netflix said it added 3.98 million subscribers in the first quarter, below forecasts of 6.34 million and internal company estimates of 6 million. The first quarter a year ago was the strongest in company history when Netflix added 15.8 million new customers.

For the second quarter, Netflix said it expects 1 million new customers, far below the 4.2 million projected by analysts.

"We believe paid membership growth slowed due to the big COVID-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to COVID-19 production delays," the company said in letter to shareholders.

Netflix finished the first quarter with 208 million paid memberships, up 14% from a year earlier but below its own guidance of 210 million paid memberships. 

The company said it anticipates that paid membership growth will reaccelerate in the second half of 2021, noting it expects a "very strong back half slate" with the return of some of its biggest shows and large-scale movies.

Earnings in the first quarter were $1.71 billion, or $3.75 a share, well above analysts' estimates of $2.98.

The stock fell 8.56% to $502.55 in premarket trading Wednesday.

Scroll to Continue

TheStreet Recommends

3. -- Wednesday's Calendar: Verizon and Chipotle Earnings

Verizon Communications  (VZ) - Get Verizon Communications Inc. Report posted first-quarter adjusted earnings of $1.31 a share, 2 cents above analysts' estimates.

Earnings reports are also expected Wednesday from Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill Inc. Report, Spirit Airlines  (SAVE) - Get Spirit Airlines Inc. Report, Anthem  (ANTM) - Get Anthem Inc. Report, Las Vegas Sands  (LVS) - Get Las Vegas Sands Corp. Report, Lam Research  (LRCX) - Get Lam Research Corporation Report, Halliburton  (HAL) - Get Halliburton Company Report, Crown Castle International  (CCI) - Get Crown Castle International Corp. (REIT) Report and Discover Financial Services  (DFS) - Get Discover Financial Services Report.

How to Trade Chipotle After the Earnings Report

Crown Castle is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stock? Learn more now.

The U.S. economic calendar is light this week until Thursday.

4. -- Apple Launches iPad Pro With M1 Processor

Apple  (AAPL) - Get Apple Inc. Report unveiled Tuesday a series of changes and updates during "Spring Loaded," its first product-reveal event of the year, such as a new 12.9-inch iPad Pro that features the same Apple-designed M1 processor used in the MacBook line.

Analyst Dan Ives of Wedbush said in a research note that in the current work-from-home environment brought on by the pandemic, "Apple has seen a major renaissance of growth from its iPad ... showing 40%+ YoY growth the last few quarters as more employees/students went through an iPad refresh."

"We estimate less than half of iPad users globally have gone through a refresh the last year with some clear pent-up demand that these new iPads will unleash in the next few quarters thus giving Apple another product tailwind," he said.

Apple also introduced AirTag, an iPhone accessory designed to locate keys and other items. It will be available beginning April 30, for $29. 

Updates to its iPhone were minimal, but Apple did unveil an iPhone 12 in purple.

"Taking a step back, we believe Apple is still in the middle innings of its biggest product cycle year ever across iMacs, iPads, AirPods, Apple Watch, and of course the iPhone 12 supercycle, which is set to be followed by the iPhone 13 unveil this Fall," Ives said.

Apple is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.

5. -- Plans Collapse for European Soccer Super League

Plans for a proposed European soccer Super League collapsed after the six Premier League clubs - Chelsea, Manchester City, Tottenham, Arsenal, Manchester United and Liverpool - announced their withdrawal.

Manchester City was the first club make an official announcement. Within hours, the five other clubs followed suit.

"Manchester City Football Club can confirm that it has formally enacted the procedures to withdraw from the group developing plans for a European Super League," the club said in a statement.

The Super League's Dominoes Come Crashing Down

Publicly traded Manchester United  (MANU) - Get Manchester United Ltd. Class A Report fell 0.74% to $16.10 in premarket trading Wednesday.

JPMorgan Chase  (JPM) - Get JP Morgan Chase & Co. Report had agreed to finance the breakaway league, with initial costs estimated at around €3.5 billion.