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US pre-open: Futures rise on Netflix earnings, China stimulus

(Sharecast News) - US stock futures were pointing to a positive start on Wall Street on Wednesday, with the S&P 500 poised to hit another record high on the back of strong quarterly earnings from Netflix and news of stimulus in China. Futures on the Dow were up 0.1%, but rising 0.4% and 0.7% on the S&P 500 and Nasdaq, respectively.

Markets across Asia and Europe were broadly higher earlier on after China's central bank said it would cut the amount of cash lenders must hold in the latest move designed to bolster the country's ailing economy. Pan Gongsheng, governor of the People's Bank of China, said the reserve requirement ratio would be trimmed for all banks from 5 February, by 50 basis points to 10%.

On Tuesday, Beijing said it was considering a £220bn rescue package for Chinese stock markets, which have struggled compared to other benchmarks worldwide.

A number of other heavyweight names will report earnings on Wednesday, including AT&T, Abbott Laboratories and Freeport-McMoRan before the opening bell, with Tesla, IBM and Lam Research scheduled after the close.

Netflix, which published its quarterly results after the bell on Tuesday, was rising strongly pre-market after the streaming giant reported that subscriber numbers increased by 13.1m in the fourth quarter to 260.3m, as revenue growth of 12.5% year-on-year beat analysts' forecasts. Futures were up nearly 10%.

"Netflix's latest numbers shake off any suggestion the company is struggling to find new ways to grow. It has seen a big jump in the number of subscriptions and its original content is proving to be popular with consumers, even receiving 18 Oscar nominations this week across 10 of its original content films," said AJ Bell investment director Russ Mould.

"A clampdown on password sharing was always going to be a risky move but it seems to be paying off. Households around the world have become used to Netflix as being one of their essential services, they simply cannot bear to live without it. Any freeloaders who used to borrow passwords from friends and family are now signing up themselves, exactly as Netflix had hoped."

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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