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Here are the most important things to know about Wednesday before you hit the door.
1. Netflix redemption?
Netflix reports third-quarter earnings after the bell on Wednesday. The once beloved streaming stock got pummeled this quarter as increased competition in the streaming wars and a slump in subscriber additions have worried investors about the future of the highly-valued technology stock. Shares of Netflix are down more than 20% since its second-quarter earnings showed a rare loss in U.S. subscribers and a large miss on international subscriber adds.
“We are incrementally cautious on the 3Q U.S. subscriber outlook,” said Evercore ISI analyst Vijay Jayant in a note to clients.
Evercore ISI downgraded its subscriber outlook earlier this month. It is now expecting 6 million international subscriber additions, while Netflix is guiding for 6.2 million additions. Domestically, Evercore estimates 700,000 new subscribers, lower than the 800,000 forecast by Netflix.
2. Bank of America vs. low rates
Investors will be eyeing earnings from Bank of America before the bell on Wednesday, following beats from other major U.S. banks J.P. Morgan Chase and Citi on Tuesday. The current lower interest rate environment is likely to hinder the bank’s net interest margin growth, a widely-watched measure of profitability. Bank of America chief financial officer Paul Donofrio warned in July another cut from the Federal Reserve, which came to fruition, would cause the profitability gauge to slow more-than-expected.
Barclays is expecting Bank of America’s fee and loan growth to offset the net interest margin hit. The firm expects EPS to rise 2% since last year and revenues to rise 1% year-over-year. This would mark the 21st straight quarter of revenue growth for the bank, according to Barclays.
Overall, earnings season is off to a strong start. Including those that reported Tuesday morning, 26 of of the 34 S&P 500 companies that have reported positive EPS growth, according to The Earnings Scouting Report.
3. Retail sales
We’ll get a read on the health of the U.S. consumer on Wednesday, a bright spot of the otherwise slowing economy. The Commerce Department is set to release retail sales at 8:30 a.m. and economists are estimating a 0.2% rise in retail sales in September, according to data surveyed Dow Jones.
Retail sales increased 0.4% in August, driven higher by a jump in auto buying and strong online sales. The modest slowdown in sales in recent months follows signs that consumer confidence, while still strong, has stumbled as the U.S.-China trade war has escalated.
Major events (all times ET):
8:30 a.m. Retail sales
8:30 a.m. Business Leaders survey
10 a.m. Business inventories
10 a.m. NAHB survey
10:45 a.m. Chicago Fed President Charles Evans
1:00 p.m. Dallas Fed President Robert Kaplan
3:00 p.m. Fed Gov. Lael Brainard
4 p.m. TIC data
Abbott Labs (before the bell)
Bank of America (before the bell)
U.S. Bancorp (before the bell)
PNC (before the bell)
Bank of New York Mellon (before the bell)
IBM (after the bell)
Netflix (after the bell)
CSX (after the bell)
— with reporting from CNBC’s Michael Bloom