Netflix, Procter & Gamble earnings, CVS CEO shakeup: Morning Brief
On today's episode of Morning Brief, Hosts Seana Smith and Brad Smith analyze the market open and discuss some of the biggest stories of the trading week. The Nasdaq Composite (^IXIC) popped at the start of Friday's session, shooting 0.5% higher while the Dow Jones Industrial Average (^DJI) fell into negative territory. Netflix (NFLX) reported better-than-expected third quarter results, sending the streaming giant’s shares higher and fueling bulls' confidence. Citi managing director Jason Bazinet tells Yahoo Finance, “The fundamentals were really good, so there's nothing really to pick out there. What I'm a little bit nervous about is what I would just call the sort of shifting bull case on the stock." He explains that the bar keeps getting higher for the bull case of the stock with accelerating multiple expansion. Procter & Gamble (PG) reported mixed first quarter earnings Friday morning. The company's adjusted earnings per share of $1.93 surpassed the expected $1.90. However, revenue fell short of estimates, coming in at $21.74 billion, just below the anticipated $21.96 billion. Following the report, CEO and President Jon Moeller joins Yahoo Finance Executive Editor Brian Sozzi to discuss the company's performance. Moeller addresses a key question for the North American market: "Can we grow meaningful unit volume at the new prices that we've moved to as a result of the commodity cost increases?" He notes that they achieved this, with volume up 4% in the North American business this quarter. Mega-cap tech stocks, which are part of the Magnificent Seven, will kick off earnings season with Tesla (TSLA) to report third quarter earnings results next week. With speculation forming around the Federal Reserve's future interest rate moves, JonesTrading Chief Market Strategist Michael O'Rourke breaks down what it means for small-cap (^RUT) stocks. "Regardless of the fact that we have a pretty strong economy right now, Q3 GDP looks like it's going to be above 3%. So that all plays to the small-cap rotation. Basically, in the high interest rate environment, you saw a lot of investors flock to the Mag seven names because they had size and safety," O'Rourke tells Seana Smith and Brad Smith. According to a Wall Street Journal report, OpenAI and Microsoft (MSFT) have engaged an external adviser to determine the equity stake Microsoft will receive for its $14 billion investment in OpenAI. This evaluation comes as OpenAI transitions from a nonprofit to a for-profit corporation. Santosh Rao, Manhattan Venture Partners head of research explains, "I think you're going to see a lot of this back and forth going on because this whole space is really developing... But I don't think in the end, it's a too huge market, too important a technology to get it into their ecosystem. So there will be compromises. There will be some arrangement. But at the end of the day, you're going to see this because it's a high-stakes game going on in AI, so these kinds of battles do happen — especially in the initial stages that we are in," Rao tells Yahoo Finance. CVS Health (CVS) CEO Karen Lynch will be replaced by longtime executive David Joyner following extended profit struggles, according to the Wall Street Journal. CVS shares fell by over 6% in Friday's pre-market session. This post was written by Melanie Riehl
