The daily business briefing: July 18, 2019

(Image credit: LIONEL BONAVENTURE/AFP/Getty Images)

Jump to category:

1. Netflix subscriber growth falls short, sending shares falling
2. Amazon says Prime Day was a success, despite protests
3. House votes to repeal ObamaCare tax on expensive insurance plans
4. Stock futures fall as trade fears cast cloud on earnings season
5. Schumer asks FBI to look into FaceApp

published 18 July 2019

1. Netflix subscriber growth falls short, sending shares falling

Netflix shares plunged by more than 10 percent in extended trading Wednesday after the video streaming powerhouse reported that it added 2.7 million subscribers globally in the last quarter, falling way short of the expected five million. The company also said it lost 100,000 subscribers in the U.S., its first such decline. It had been expected to gain more than 300,000 U.S. subscribers. Netflix blamed the miss on several factors, including increased subscription prices in some regions. Earnings per share came in at 60 cents, beating the Refinitiv estimate of 56 cents. Netflix said it expected to do better in the third quarter partly thanks to strong viewership of the third season of Stranger Things.

Amazon sold 175 million items during its Prime Day event this week, beating the totals for last year's Black Friday and Cyber Monday combined despite strikes by some Amazon employees and a boycott effort. The online retail giant did not immediately release a dollar figure for Prime Day sales, but it said customers saved a total of $1 billion globally thanks to markdowns. "We want to thank Prime members all around the world," said CEO Jeff Bezos in a statement. "Members purchased millions of Alexa-enabled devices, received tens of millions of dollars in savings by shopping from Whole Foods Market, and bought more than $2 billion of products from independent small and medium-sized businesses."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

The Democrat-controlled House on Wednesday nearly unanimously repealed a steep tax on high-cost health insurance plans that was once considered a linchpin of the Affordable Care Act, or ObamaCare. The tax was intended to hold down soaring health-care costs by getting employers to curb costly plans and force employees to spend more on care, while also helping to pay for expanded health benefits for others. The tax was not scheduled to take effect until 2022, and it was opposed by unions, business groups, and Republicans. Despite the Trump administration reporting rising federal deficits, a bipartisan House majority decided to block the tax, a move that is expected to add nearly $200 billion to federal deficits over the next decade, according to the non-partisan Congressional Budget Office.

U.S. stock index futures edged down early Thursday as faltering talks on ending the U.S.-China trade war continued to weigh on markets and corporate earnings season got into full swing. Futures for the Dow Jones Industrial Average and the Nasdaq fell by 0.2 percent, while those of the S&P 500 dropped by 0.1 percent. Stocks closed down on Wednesday, with all three of the main U.S. indexes down by 0.4 percent or more. Shares of CSX plunged on Wednesday after the railroad giant posted quarterly results that fell short of expectations. United Airlines and Cintas beat expectations, as did Bank of America. Earnings reports continue to pour in on Thursday. Before the bell, Morgan Stanley reported earnings of $1.23 per share, exceeding expectations of $1.14 per share. Microsoft reports after trading closes.

Senate Minority Leader Chuck Schumer (D-N.Y.) on Wednesday asked the FBI to look into whether data shared with popular Russia-based FaceApp software could wind up in the hands of the Kremlin. Schumer said in a letter to FBI Director Christopher Wray that the app "could pose national security and privacy risks for millions of U.S. citizens." Earlier, the Democratic National Committee issued a security alert warning staffers of 2020 Democratic presidential candidates not to use the app, which uses artificial intelligence technology to distort photos sent by users, making them look older or younger. Some security researchers said the fears about the app, created by Wireless Lab of St. Petersburg, Russia, were overblown. The company said it does not share user data with anyone.

Explore More

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.