The markets have largely rallied since the November election result, and managed to squeak out a minor gain for the week after President Donald Trump's inaugural speech Friday. The Dow Jones Industrial Average (DJINDICES:^DJI) and S&P 500 (SNPINDEX:^GSPC) rose 0.48% and 0.34%, respectively, for the week.
"Trump has made it clear that as early as today, and certainly by Monday, we'll see actions in terms of the executive orders that will set the tone for the administration and convey his priorities. If we don't get anything dramatic in the address, we'll get it soon," said David Joy, chief market strategist at Ameriprise Financial, according to MarketWatch.
In other news, here are a handful of companies making big moves or big headlines this week.
Even bears sound like bulls
In one of the most entertaining bear-thesis arguments in my memory, a negative outlook seemed like a positive outlook for Netflix, Inc. (NASDAQ:NFLX). Just read this snippet.
"I'm in my fifth year [of doubting Netflix], so clearly my one-year price targets are not to be relied upon," Wedbush analyst Michael Pachter said Thursday on CNBC's Trading Nation. In his post-earnings note, he admitted, "It is likely that we will be wrong for a while longer, as there is more quality content than ever before and Netflix has certainly had its share of hits."
He even raised his 12-month price target to $68 from $60, despite that being a far cry from Netflix's per-share value of $138. Perhaps Pachter will end up being correct as competitors latch on and clone Netflix's binge-watching and original content-creation strategies. You can't argue, however, that Netflix is currently killing it in terms of subscriber growth.
Netflix added 7.05 million new streaming video customers during the fourth quarter, finishing the year with 93.8 million subscribers worldwide. That was far ahead of the prior year's fourth-quarter level of 5.59 million new subscribers and well ahead of the 5.2 million it predicted in October.
Looking ahead, there's little question about Netflix's strategy: profits can wait, focus on global expansion.
You can see the impact in the graph above, and while that's not adjusted-EBITDA (earnings before interest, taxes, depreciation, and amortization, investors have proven to be willing to wait on profits, and are optimistic that these strategies will keep Netflix one step ahead of the competition.
Say it ain't so, Cameco (NYSE:CCJ). Cameco closed 18% lower on Wednesday, Jan.18th, after the company announced preliminary 2016 results the prior evening. It's not a typical strategy for the company, which it noted in the press release, but due to the extraordinary asset impairment charge from management revaluing its core assets in the current market, it was forced to explain itself.
More specifically, the results of the impairment charge will result in an after-tax charge to net earnings in a range of $180 million and $220 million, or $0.45 to $0.56 per share. Without context, that doesn't mean much, but when you consider the net income through the first three-quarters of 2016 was a meager $0.14, investors realize what a punch in the gut the charge is.
Sure, this is brutal for investors during the short term, but it really doesn't change the long-term outlook, or the fact that the company had appeared to be turning the corner during the back half of 2016. The uranium market has hit hard times, but that's slowly turning around, and Cameco plans to increase its uranium production substantially over the next several years, banking on rising prices due to depleting secondary uranium stockpiles. However, as Wednesday reminded investors, this is a risky stock.
Rent-A-Center feels your pain
Cameco isn't the only company suffering from a disappointing preliminary earnings announcement. In fact, Rent-A-Center, Inc. (NASDAQ:RCII) closed roughly 18% lower on Thursday after the figures hit the news feeds.
Rent-A-Center noted its comparable sales at its core U.S. business -- roughly half of its store count -- dropped a staggering 14.2%. Comparable-store sales at its Acceptance Now stores were up between 1% to 2%.
Even worse, Rent-A-Center expects profits to be much lower than the prior year's fourth-quarter expectations. It now expects to post a loss of between $0.20 to $0.30 per share, worse than guidance of a $0.10 per-share loss and a far cry from last year's $0.54 per-share result.
It's been a challenging year, and the fourth quarter extended that rather than offer a glimmer of hope that the company would be turning the corner. Declining comparable-store sales and profits, not to mention the extensive POS management system issues, led to the firing of former CEO Robert Davis. Risk-welcoming investors could find a bargain here, but count me out for now as there appears to be another challenging year ahead of the company.