Netflix beats Q4 but shares dip as Warner Bros Discovery deal clouds near term outlook

South African Market Summary

South African equities advanced modestly, with the All Share Index rising 0.35% to 120,534.40 points and the Top 40 gaining 0.37% to 112,690.82 points, supported by easing inflation expectations and a constructive policy outlook. SARB Governor Lesetja Kganyago said inflation is on course to reach the revised 3% target in 2026, with scope for a further 50 basis points of rate cuts under current projections. Attention now turns to next week’s MPC meeting and inflation data, while corporate governance concerns surfaced around Mr Price’s proposed NKD acquisition.

European Market Summary

European equities weakened, with the STOXX 600 falling 0.7%, marking its sharpest two-day decline in two months amid renewed tariff uncertainty linked to US rhetoric on Greenland. France’s CAC 40 slipped 0.6% to a one-month low, while Germany’s DAX fell 1%, despite a sharp improvement in German investor sentiment. Citi downgraded continental Europe to neutral, citing rising transatlantic tensions. Stock-specific moves were mixed, with Renault and TotalEnergies advancing on operational updates, highlighting continued dispersion as earnings season unfolds.

American Market Summary

US equities suffered their sharpest one-day sell-off in three months as renewed tariff threats from President Donald Trump reignited volatility concerns. All three major indices closed sharply lower, triggering a broad risk-off move that lifted gold to record highs, pressured US Treasuries and pushed Bitcoin down more than 3%. The VIX jumped to 20.09, its highest close since late November, alongside elevated trading volumes. Investor unease centred on proposed tariff increases against multiple European countries, reviving fears of a renewed global trade shock.

Asian Market Summary

Asian equities extended losses for a third consecutive session as geopolitical tensions linked to renewed US rhetoric on Greenland weighed on risk sentiment ahead of President Donald Trump’s Davos address. The global bond sell-off showed signs of stabilising, offering limited relief. Macro signals were mixed: Taiwan reported record export orders in 2025, driven by sustained AI-related demand and pointing to continued momentum into 2026, while China–North Korea trade rebounded sharply. In corporate flows, Aware Super’s investment in Asia-Pacific data centres supported confidence in the region’s digital infrastructure growth outlook.

Currency Market Summary

The South African rand weakened through most of Tuesday’s session as risk appetite deteriorated amid rising geopolitical tensions and weaker-than-expected domestic mining output. Globally, the US dollar slid sharply, falling to near three-week lows against the euro and Swiss franc after renewed White House rhetoric on Greenland triggered a sell-off across US assets. The dollar index dropped 0.53%, its worst one-day performance in six weeks. Meanwhile, the yen remained under pressure as Japanese government bond yields surged on fiscal expansion concerns ahead of snap elections.

Commodity Market Summary

Oil prices eased as expectations of a build-up in US crude inventories and renewed tariff-related geopolitical risk outweighed supply disruptions in Kazakhstan. Temporary shutdowns at the Tengiz and Korolev fields supported prices earlier in the week, but analysts now expect US crude stocks to have risen by around 1.7 million barrels. Market sentiment was further pressured by President Donald Trump’s insistence on pursuing control of Greenland, reviving fears of tariffs on Europe and slower global growth. In contrast, gold surged to record highs on heightened safe-haven demand.

BHP Group Limited (BHP) -2.07%

BHP reported a strong operational performance for the half year to December 2025, underpinned by record output at its copper and iron ore assets amid supportive commodity prices. FY26 group copper production guidance was increased following record throughput at Escondida and improved outlooks at Antamina, while WAIO delivered record first-half iron ore volumes. Steelmaking and energy coal output also rose. The group highlighted resilient Chinese demand, accelerating Indian consumption and a long-term copper growth pipeline supporting medium-term value creation.

Merafe Resources Limited (MRF) -0.89%

Merafe reported a weak operational outcome for the quarter and year ended December 2025, reflecting challenging market conditions across its ferrochrome operations. Attributable ferrochrome production fell sharply year on year following the suspension of smelter operations within the Glencore Merafe Chrome Venture, resulting in a 63% decline for the full year. Chrome ore output was broadly stable despite minor equipment-related disruptions, while attributable PGM concentrate production increased modestly, supported by higher feed tonnages. The results highlight ongoing pressure from subdued ferrochrome market fundamentals.

Netflix Inc. (NFLX) -0.84%

Netflix beat fourth-quarter revenue and earnings expectations, driven by strong holiday viewership, live sports streaming and flagship content releases, but shares fell after management flagged near-term uncertainty linked to its all-cash acquisition of Warner Bros Discovery. Revenue modestly exceeded forecasts, while advertising revenue is set to double in 2026 as Netflix expands formats and international live events. The group guided to full-year revenue slightly below consensus at the low end and paused share buybacks to preserve liquidity, highlighting a strategic pivot towards scale, advertising monetisation and premium content integration.

3M Company (MMM) -6.96%

3M delivered a mixed fourth-quarter performance and guided to 2026 earnings slightly below market expectations, reflecting uneven global demand despite continued margin discipline. Consumer segment sales declined amid weaker US retail conditions and softer discretionary spending, while management flagged ongoing pressure in roofing granules and automotive aftermarket early in 2026. Cost controls, pricing actions and product refreshes supported margin expansion, reinforcing progress towards longer-term targets. Management expects a modest macro improvement in 2026, although tariff risks remain embedded in guidance and represent a potential downside risk.

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