The daily business briefing: October 17, 2018

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1. Netflix crushes expectations, shares soar
2. Stock futures fall after Tuesday's big gains
3. Mary Bono resigns as head of USA Gymnastics
4. EU leaders meet to discuss Brexit impasse
5. Canada becomes second nation to legalize recreational marijuana

published 17 October 2018

1. Netflix crushes expectations, shares soar

Netflix shares shot up by 10 percent in pre-market trading early Wednesday after the streaming video powerhouse reported quarterly earnings that smashed Wall Street's expectations. Netflix said after Tuesday's close that it added about 1.1 million domestic subscribers and about 5.9 million more overseas, far exceeding the 673,800 domestic and 4.5 million international new subscribers analysts had projected. The addition of 7 million subscribers, roughly 1.8 million more than expected, brought the company's total to 137 million worldwide. The company also posted adjusted earnings of 89 cents per share, beating the 68 cents projected in a Refinitiv consensus estimate. Netflix is debuting a record amount of original programming, including new seasons of Orange is the New Black, BoJack Horseman, and other popular shows.

U.S. stock futures pulled back early Wednesday as concerns over trade tensions continued after Tuesday's strong gains. Futures for the Dow Jones Industrial Average and the S&P 500 were down by 0.4 percent, while those of the Nasdaq-100 fell by 0.5 percent. Federal Reserve minutes scheduled for release Wednesday could help steer stocks later in the day. On Tuesday, the Dow rose by 548 points or 2.2 percent. The S&P 500 jumped by 2.1 percent, and the Nasdaq Composite gained 2.9 percent. Better-than-expected earnings reports from Morgan Stanley, Goldman Sachs, and Dow members Johnson & Johnson and UnitedHealth on Tuesday helped offset concerns over rising interest rates and trade tensions that have battered markets recently.

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Mary Bono abruptly resigned as interim president and chief executive of USA Gymnastics on Tuesday after facing a barrage of criticism. Two-time Olympian Aly Raisman and others slammed Bono, who took over less than a week ago, because of the former congresswoman's work with a law firm linked to the cover-up of the Larry Nassar sexual abuse scandal. Another Olympic star, Simone Biles, criticized Bono for posting a photo to social media in which she blacked out a Nike logo on her golf shoes in response to Nike's inclusion of former NFL quarterback Colin Kaepernick in an ad campaign. Bono said she merely exercised her free-speech rights in her tweet, just as Kaepernick did by kneeling during the national anthem to support civil rights.

European Union leaders meet Wednesday to discuss breaking an impasse over Britain's looming exit from the trading bloc. Britain is scheduled to leave on March 29, but after a year and a half of talks, a deal is still proving elusive. EU Brexit negotiator Michel Barnier said the two sides are still pushing for an agreement by the March deadline, although they remain divided on how to avoid creating a hard border between Ireland, which is part of the EU, and Britain's Northern Ireland. British Prime Minister Theresa May will meet EU leaders at the crucial summit, but European Council President Donald Tusk warned the risk that Britain will leave with no deal has increased.

Canada at midnight became the second country, after Uruguay, to allow the legal sale, possession, and use of recreational marijuana. Provinces and territories will set the parameters of where pot can be purchased and consumed in their boundaries. While adults will be able to purchase dried weed and cannabis oil from licensed producers and retailers, it will be illegal to possess more than 30 grams in public, grow more than four plants in a household, and buy from an unlicensed dealer. Marijuana possession became a crime in 1923, and Prime Minister Justin Trudeau has argued that laws criminalizing marijuana haven't done anything to curb use.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.