Netflix misses Q3 earnings on Brazilian tax hit but maintains solid revenue and upbeat Q4 outlook

South Africa

South Africa’s Top 40 and All Share indices fell 2.31% and 2.18%, respectively, closing at 101,623.97 and 108,902.00 points, despite a 1.6% month-on-month rise in the composite leading business cycle indicator for August. Transnet plans to invest R127 billion over five years to modernise rail lines and ports, following R24 billion allocated in the previous year and R25 billion in the current year. Fitch expects a revised 3% inflation target in November’s medium-term budget. Central Bank Governor Lesetja Kganyago noted that discussions with National Treasury are ongoing regarding the timing of lowering the inflation target.

European Union

European shares edged higher, with the STOXX 600 up 0.2% after a 1% gain in the previous session. French stocks reached record highs, led by luxury groups LVMH and Hermes, while Edenred surged 19.6% following strong Q3 sales. Industrial stocks advanced, with Airbus and Safran rising over 1.5%. Investor sentiment was bolstered by easing U.S.-China trade tensions and reduced banking sector concerns. European leaders, including the EU, UK, France, Germany, and Ukraine, issued a joint statement backing Ukraine and supporting diplomatic efforts to resolve the conflict, reinforcing political stability in the region.

United States

U.S. markets closed mixed as strong earnings attracted investors to industrials and capital goods. The Dow advanced, while the Nasdaq slipped slightly and the S&P 500 remained flat. General Motors, Coca-Cola, and 3M posted strong results, raising forecasts and boosting shares. Aerospace and defence companies also increased guidance amid solid demand. The ongoing government shutdown complicates data flow for the Federal Reserve, though economists anticipate two further 25-basis-point rate cuts by year-end. President Trump expressed optimism on reaching a fair U.S.-China trade deal, with markets focused on his upcoming meeting with Xi Jinping.

Asia

Asia-Pacific markets mostly declined as investors assessed Japanese trade data and the new government. Japanese exports rose 4.2% year-on-year in September, ending a four-month decline, supported by growth to Asia but missing analysts’ 4.6% expectations. Japan’s new cabinet was sworn in, with Shinjiro Koizumi appointed defence minister and Satsuki Katayama becoming the first female finance minister. Investors are monitoring potential fiscal and monetary policy shifts under Prime Minister Sanae Takaichi, amid broader regional trade dynamics and uncertainty regarding U.S.-China relations, which continue to influence market sentiment across the Asia-Pacific region.

Commodities

Gold prices declined as investors booked profits and monitored easing U.S.-China trade tensions ahead of U.S. inflation data. Oil prices rose for a second day, supported by sanctions-related supply risks, expectations of a U.S.-China trade deal, and plans to replenish the U.S. Strategic Petroleum Reserve. Crude, gasoline, and distillate inventories fell, while geopolitical developments, including postponed Trump-Putin talks and Western pressure on Russian oil exports, added volatility. Analysts noted that supply risks and strategic stockpile purchases have underpinned crude prices, offsetting recent five-month lows caused by high production and trade tensions.

Currencies

The South African rand weakened amid a stronger dollar and retreating commodity prices, reversing a recent rally prompted by hopes of removal from the FATF “grey list.” The dollar eased slightly in early Asian trade, retreating from recent highs against the yen, which has lost 2.5% this month amid investor anticipation of Japan’s expansionary fiscal policy under Prime Minister Sanae Takaichi. The dollar index was largely unchanged at 98.888. Market attention remains on the ongoing U.S. government shutdown, which constrains economic data flow, and potential impacts on the Federal Reserve’s policy path in the coming months.

Foschini Group Limited (TFG) -16.64%

For the six months ended 30 September 2025, The Foschini Group reported a 12.7% rise in group sales to R29.2 billion, or 3.5% excluding White Stuff. Online sales surged 55.3%, contributing 14.7% of total retail sales, with TFG Africa’s Bash platform driving a 40.2% increase. Market share was maintained in apparel and expanded by 20 bps in homeware. Despite tight cost control, subdued sales growth and gross margin pressure led to negative operating leverage. Group finance costs rose 14.5%, reflecting the White Stuff acquisition and IFRS 16 lease-related charges from store expansion and renewals.

South32 Limited (S32) +3.35%

South32 reported a strong September 2025 quarter, maintaining FY26 production guidance across all operations. Payable copper equivalent output at Sierra Gorda rose 12%, while manganese production surged 33% as Australia Manganese executed its recovery plan. Alumina and aluminium output each grew 1%, supported by improved supply and operational efficiency. The company received US$117 million in dividends and US$81 million in Sierra Gorda distributions, strengthening its financial position. South32 advanced development at Hermosa and welcomed US backing for the Ambler Access Road, reinforcing its focus on high-quality, energy transition-aligned base metals projects.

Oasis Crescent Property Fund (OAS) 0.00%

Oasis Crescent Property Fund reported solid interim results for the six months ended 30 September 2025, underpinned by disciplined asset management and global diversification. Total income rose 13.7% to R81.4 million, while distributable income increased 4.4% to R40.8 million. The distribution per unit grew 5.6% to 62.7 cents, and NAV per unit advanced 2.3% to 2,820 cents. Although headline earnings per unit fell 29.6% to 78.2 cents due to fair value adjustments, the Fund continues to trade at a 27% discount to NAV, supported by steady returns from its South African and global property investments.

Zeder Investments Limited (ZED) +5.00%

Zeder reported a 21.9% decline in net asset value per share to R1.68 for the six months ended 31 August 2025, mainly due to special dividends paid and lower valuations of unlisted investments. The group recorded a 143.9% increase in headline and attributable losses per share to 10.0 cents, reflecting valuation adjustments partially offset by dividend income. Loss before tax widened to R147 million from R71 million. No ordinary or special dividends were declared during the period, as Zeder continues to focus on managing its investment portfolio amid subdued market valuations.

Netflix Inc. (NFLX) +2.79%

Netflix missed third-quarter earnings expectations, posting net income of $2.5 billion and diluted EPS of $5.87 versus analyst forecasts of $3.0 billion and $6.97, impacted by a $619 million Brazilian tax expense. Revenue met estimates at $11.5 billion, with an operating margin of 28%, below the 31.5% guidance excluding the tax charge. The company highlighted record advertising sales and strong content performance, including K-Pop Demon Hunters. Netflix forecasts Q4 revenue of $11.96 billion and EPS of $5.45, slightly ahead of consensus, while focusing on subscription growth, selective intellectual property acquisitions, and expansion into advertising and gaming.

Capital One Financial Corporation (COF) +1.01%

Capital One reported strong third-quarter results, driven by robust credit card income and resilient consumer spending. Net interest income rose 54% to $12.4 billion, while non-interest income, including interchange and service fees, increased nearly 52% to $2.96 billion. Adjusted net income available to common shareholders more than doubled to $3.8 billion, or $5.95 per share, from $1.73 billion, or $4.51 per share, a year earlier. The company also authorised a $16 billion share repurchase programme. Shares gained 4.4% in after-hours trading, reflecting investor confidence in Capital One’s strong credit card franchise and resilience amid broader economic volatility.

Western Alliance Bancorporation (WAL) +1.13%

Western Alliance reported higher third-quarter profit, with net income attributable to common shareholders rising to $250.2 million, or $2.28 per share, from $196.6 million, or $1.80 per share a year earlier. Net interest income increased to $750.4 million, supported by higher lending fees. The bank’s provision for credit losses doubled to $80 million, mainly reflecting a $30 million reserve for a $98 million non-accrual Cantor Group V loan. Non-accrual loans grew by $95 million to $522 million. Shares rose 3.6% in extended trading, supported by analysts viewing recent credit events as isolated and the sector remaining fundamentally strong.

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