Making sense of the markets this week: April 21, 2024

Perhaps the silver lining is that accountants and financial planners will likely be quite happy with these changes. The more complicated we make the tax code, the more valuable tax-savvy advice becomes, especially for long-term planning. It will be interesting to see how many Canadians choose to sit on their capital gains, hoping that the next government reverses course before they have to realize any taxable income. That might be a big gamble, as the next elected government might choose to raise capital gains even higher (depending on which party ends up in a minority or majority government).

For more reading, MoneySense investing editor-at-large Jonathan Chevreau summed up the immediate reaction of financial experts and mainstream media in regards to these changes on his website Findependencehub.com, and you can read my take on the new capital gains rules at MillionDollarJourney.com.

Netflix subscribers up, but stock chills on lower reporting in future

Netflix had a massive earnings per share beat on Thursday but presented a cautious forecast for the rest of the year.

Perhaps the biggest takeaway from the earnings report was that streaming memberships were up 16% (to 269.6 million) in the first quarter of 2024, which were well above the 264.2 million predicted. But with that high note, Netflix also stated it would no longer be reporting membership numbers going forward, as the company is now more focused on profit and free cash flow as its metrics of choice.

Despite the solid first-quarter bottom line, Netflix’s slight downgrade of future projected revenues had shares down 5% in after-hours trading on Thursday. And according to Reuters, shares were down as much as 6.22% to $572.58 in premarket trading Friday.

That said, shareholders are likely still pretty happy with the company, as Netflix shares are up about 80% over the last year.

Netflix co-CEO Ted Sarandos highlighted the company’s first forays into live programming and video games, saying “We’re in the very early days of developing our live programming and I would look at this as an expansion of the types of content we offer, the way we expanded to film and unscripted and animation and most recently games. We believe that these kinds of event cultural moments like the Jake Paul and Mike Tyson fight are just that kind of television, and we want to be part of winning over those moments with our members as well, so that for me is the excitement part of this.”

U.S. banks beat estimates 

U.S. bank earnings herald the beginning of a new season of earnings reports. The first quarter was largely kind to the banking sector, with every company beating earnings predictions.