Daily newsletter · Wed 21 Oct 2026
 | Sharespective Wall Street, before morning tea | Daily newsletter Wed 21 Oct 2026 |
 Ad Break Plus: SpaceX's AI business now brings in more money than Starlink. |
Good morning. The Dow rose 529.85 points on Tuesday, or 1.02%, to 52,495.88. Investors favoured industrial and healthcare companies over technology, and the small-company Russell 2000 index gained 1.65%.
The S&P 500 added 0.28% to 7,712.57, and the NASDAQ Composite slipped 0.02%. The bigger moves came after the bell. Netflix fell about 5% in after-hours trading on a softer forecast, while SpaceX rose about 2% after its revenue more than doubled.
In company news, Braze jumped 51.70% after Salesforce agreed to buy the marketing-software company for US$47.50 a share in cash, about US$5.66 billion in all. Elsewhere, Hasbro rose 11.20% because its card games had a strong quarter and it raised its full-year forecast. Finally, 3M gained 5.78% after beating profit forecasts and lifting its guidance.
The Dow carried the bags.
Market snapshot
S&P 500 7,712.57 ▲ 0.28% | | NASDAQ 26,424.82 ▼ 0.02% | | NZX 50 13,631.69 ▼ 0.15% |
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ASX 200 8,816.86 ▼ 0.33% | | GM US$77.09 ▼ 6.84% | | Braze US$45.57 ▲ 51.70% |
| MEDIA |
Netflix cut its advertising forecast, and the shares fell about 5% after the close
Netflix closed Tuesday at US$68.69, down 1.66%, ahead of its results. Once they landed, the shares fell another 5% or so in after-hours trading.
The quarter itself was fine. Revenue rose 12% to US$12.9 billion. Earnings came to 87 US cents a share, ahead of the 82 cents Netflix had guided to, and the operating margin rose to 34.6% from 28.2% a year earlier.
The forecasts did the damage. Netflix now expects about US$2.7 billion of advertising revenue this year, down from about US$3 billion. It blamed a slower rollout of some of its advertising tools.
The December quarter looks softer too. Netflix expects earnings of 67 US cents a share, and the job cuts announced last week take about 1.2 percentage points off its margin.
There is a local footnote. The cheaper plan with ads arrives in New Zealand in March 2027, in the first batch of the 15 countries getting it next year.
Yeah, but the advertising cut is US$300 million in a business heading for US$51.1 billion of revenue this year. Our read is that the number matters less than the reason. Netflix has pitched advertising as its next big source of growth, and a slow start says something about how ready the product is. |
| SPACE |
SpaceX's revenue rose 161%, and most of it came from AI rather than rockets
SpaceX's revenue rose 161% in the September quarter to US$14.58 billion, against the roughly US$12.7 billion expected. The shares closed at US$147.79, down 0.11%, before the results.
So where did the growth come from? The AI division, which SpaceX calls Super Intelligence, brought in US$7.56 billion. That is nine times the US$813 million of a year earlier. It sells computing power to other businesses and runs Grok, the chatbot.
Connectivity, which is mostly Starlink, grew 69% to US$5.25 billion. The business made money doing all this, with operating income of US$2.8 billion.
The spending is enormous, though. SpaceX put US$19.6 billion into new equipment and buildings in the quarter, US$16.4 billion of it on AI computing. It had 1.7 gigawatts of computing capacity at 30 September and is aiming for more than 2 gigawatts by the end of the year.
Worth pondering SpaceX spent more on equipment in three months than it brought in as revenue. That is the same bet that unsettled technology shares last week, and the results show it is working for now. The question for the long run is whether the computing stays in demand once everyone else has built theirs. |
| AUTOS |
GM beat forecasts and raised its cash outlook, and the shares still fell 6.84%
General Motors closed Tuesday at US$77.09, down 6.84%. Its adjusted earnings rose 32% to US$3.70 a share in the September quarter, on revenue of US$50 billion.
So why did the shares fall? The answer is costs. GM expects US$1.5 billion to US$2 billion of commodity and related inflation this year, on top of US$2.5 billion to US$3.5 billion in tariffs. GM says copper is at a record and steel at a four-year high.
Memory chips are on the list too. Data centres are buying them up, and a modern car is full of them. Chief executive Mary Barra named memory alongside logistics and commodities as a pressure on the business.
Next year brings more of the same. GM expects commodities alone to add US$1 billion to US$1.5 billion of costs in 2027.
The cash outlook went the other way. GM now expects US$11.5 billion to US$12.5 billion of automotive free cash flow, the cash left after running and investing in the business, up from US$9.5 billion to US$11.5 billion. It also approved a US$20 billion buyback, worth more than a quarter of the company.
The tell pricing in 2027. GM sets none of the prices for copper, steel or chips. I'd want to see whether it can pass those costs on to buyers, because the US$20 billion buyback gets paid for out of that profit. |
Newsworthy numbers
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63.9 million Netflix shares the company bought back in the September quarter, for US$4.8 billion. It was the biggest quarterly buyback in its history. | | 13.6 million Starlink subscribers at the end of September, up from 12 million three months earlier. |
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US$600 million what Magic: The Gathering brought Hasbro in the September quarter, the first time the 33-year-old card game has passed that mark. | | US$4.4 billion what Americans are expected to spend on Halloween costumes this year, according to the National Retail Federation. Candy gets US$4.1 billion, which rather misses the point of trick-or-treating. |
Worth a read
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01 | One place in Australia abolished stamp duty and boosted economic activity — Ahmed Yussuf on the ACT's slow swap of stamp duty for a land tax, begun in 2012. In Victoria, stamp duty took A$9 billion of the A$12 billion people spent moving house in 2022-23. |
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02 | Feed me, Seymour! People are hungry for carnivorous plants — Danny Jensen on the Venus flytrap boom. California Carnivores had its best year in four decades in 2025, and sales are up another 30%. |
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03 | A Mexican surveillance giant you've never heard of is now watching the US border — José Olivares on Grupo Seguritech, a former home-alarm business that has built or run more than 188 command centres across Mexico. |
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04 | Scientists discover a bizarre Jurassic "squid" unlike anything ever seen — Dean Lomax of the University of Manchester describes the chunkiest belemnite ever found, a 160-million-year-old squid relative from Wyoming. Only two specimens are known. |
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05 | Can building more roads make traffic worse? Here's the mathematics behind it — Milad Haghani of the University of Melbourne shows how adding a shortcut can lift everyone's commute from 70 minutes to 80. |
Wrapping up
Australia's September inflation figures land on Wednesday 28 October at 11.30am Sydney time. They are the last big number before the Reserve Bank of Australia decides on 3 November, at 4.30pm in Auckland and 2.30pm in Sydney.
American Airlines reports before Thursday's open in New York, and its fuel bill is the line to watch. Intel follows on 29 October. Here, the NZX is shut on Monday for Labour Day.
The kiwi firmed for a third straight session, and USD/NZD eased to 1.76. USD/AUD held at 1.43.
Seventeen days until New Zealand votes. See you tomorrow.