What’s News in Markets: Netflix’s Blockbuster Quarter, Oracle Gains, GE Aerospace Jumps

Summary

WSJ What’s News in Markets: Netflix’s Blockbuster Quarter, Oracle Gains, GE Aerospace Jumps Release Date: January 25, 2025

In this episode of WSJ What’s News, hosted by Francesca Fontana, listeners are provided with an in-depth analysis of the week's most significant market movements and the underlying news driving them. The episode covers the robust performance of major stock indexes, breakthroughs from leading companies like Netflix and Oracle, and the impressive results from GE Aerospace.

Market Overview: A Bullish Week for the S&P 500

The week marked a positive trajectory for the stock market, underscored by President Donald Trump's inaugural week back in the White House. Underlining his administration's pro-business stance, Trump reiterated plans to cut corporate taxes and reduce regulatory burdens, which bolstered investor confidence. Additionally, his comments on tariffs, where he expressed a preference to avoid imposing new tariffs on China, "somewhat eased investors' worries about tariffs" (00:36).

Key Highlights:

• S&P 500: Closed at its first record high of 2025.
• Dow Jones Industrial Average: Rose by 2.2%.
• Nasdaq: Increased by 1.7%.
• Both the S&P 500 and Nasdaq marked their second consecutive week of gains.

Francesca Fontana emphasized the significance of these movements, noting, "All three indexes ended higher for the second week in a row" (00:36), reflecting sustained investor optimism.

Netflix's Strategic Price Increases Amid Record Subscriber Growth

Netflix emerged as a standout performer this week, capitalizing on its surging demand by implementing strategic price hikes across its subscription tiers. The company reported record subscriber gains in the fourth quarter, driven by popular content such as the second season of Squid Game, the action thriller Carry On, and the live-streamed heavyweight boxing match between Jake Paul and Mike Tyson.

Price Adjustments:

• Standard with Ads: Increased by $1 to $7.99 per month.
• Standard without Ads: Rose by $2.50 to $17.99 per month.
• Premium Tier: Up by $2 to $24.99 per month.

Fontana highlighted the market's positive reception to these changes: "Netflix shares jumped 9.7% on Wednesday and ended the week with a gain of nearly 14%." (00:36). This surge reflects investor confidence in Netflix's ability to monetize its expanding subscriber base effectively.

Oracle’s Strategic Move into Artificial Intelligence with Stargate Project

Oracle made significant headlines by being selected as a key partner in the ambitious Stargate project—a $100 billion artificial intelligence (AI) infrastructure initiative. Announced on Tuesday, the project includes collaboration with major players such as SoftBank, OpenAI, and Abu Dhabi’s MGX, with total spending projected to reach $500 billion over the next four years.

Fontana outlined the scope of this collaboration: "Oracle would be part of Stargate, a $100 billion artificial intelligence infrastructure project" (00:36). While details remain sparse, with questions lingering about individual investments and return strategies, the announcement was well-received by investors eager to see large-scale tech investments in AI.

Market Reaction:

• Oracle's Stock: Rose by 6.8% during the session and amassed a 14% gain for the week.

This strategic positioning within the AI sector underscores Oracle's commitment to staying at the forefront of technological advancements, aligning with investor expectations for growth in big tech investments.

GE Aerospace’s Stellar Performance Post-GE Split

GE Aerospace, the jet engine manufacturer that became an independent entity earlier in the year following GE's significant corporate restructuring, delivered impressive financial results that exceeded Wall Street’s expectations. Chief Executive Officer Larry Culp highlighted the company's strong performance, attributing it to heightened demand fueled by ongoing issues in the aerospace industry.

Key Performance Indicators:

• Fourth Quarter Orders: Increased by 46%.
• Forecast for 2025: Culp anticipates continued growth.

Fontana provided context to the sector's dynamics: "Airlines have been desperate for engines and other parts due to aircraft production delays at Boeing and Airbus" (00:36). Additionally, supply chain improvements and increased supplier reliability have contributed to GE Aerospace’s robust performance.

Stock Performance:

• GE Aerospace Shares: Rose by 6.6% on Thursday, ultimately closing the week up by over 7.5%.

This growth trajectory positions GE Aerospace favorably in a challenging industry landscape, demonstrating resilience and strategic foresight in addressing supply chain and production hurdles.

Conclusion: A Promising Start to 2025

The episode concludes with an optimistic outlook for the stock market, driven by favorable policy signals from the new administration and strong performances from key industry players. Francesca Fontana encapsulates the sentiment by stating, "All in all, the S&P 500 notched its first record close of 2025... and all three indexes ended higher for the second week in a row." (00:36).

For listeners eager to delve deeper into the week's market movements, Fontana directs them to additional resources available in the Wall Street Journal’s Score. The episode underscores a week of significant gains and strategic advancements, setting a positive tone for the months ahead.

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Produced by: Anthony Fancy
Supervising Producer: Talia Arbell

Have a great weekend and see you next time!

Transcript

[A]

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[B]

I'm Francesca Fontana for the Wall Street Journal, and this is what's news in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Welcome back, everybody. We had a short trading week this week with Monday off for MLK Day, which was also the day of the inauguration. And President Trump's first week back in the White House has been a pretty good one for the stock market. Trump has reiterated plans to cut corporate taxes and regulation since being sworn in, while also somewhat easing investors worries about tariffs. He told Fox News he would rather not have to use his tariff plan against China. Plus, this week, traders got to see a strong start to earnings season and more on that in a second. All in all, the S&P 500 notched its first record close of 2025 on Thursday, and all three indexes ended higher for the second week in a row. The Dow rose 2.2, while the S&P 500 and the Nasdaq each added 1.7%. First up, let's talk about the streaming giant Netflix. Netflix is ramping up US Prices in order to cash in on its surging demand. On Tuesday, the company posted record subscriber gains in the fourth quarter and said that the price tag on its monthly subscriptions will be going up. So let's talk numbers. The standard with Ads option will cost $7.99 a month, up $1 from $6.99. The standard plan without ads will go up by two and a half bucks to $17.99. And the premium tier is going up by two bucks to $24.99. And viewers really flocked to Netflix during this quarter, whether to watch the second season of Squid Game or the action thriller Carry on, neither of which I've seen, or or the November heavyweight boxing match between Jake Paul and Mike Tyson that streamed live. And I now remember I caught like two seconds of they were all huge hits for Netflix. So as you may expect, Netflix shares jumped 9.7% on Wednesday and ended the week with a gain of nearly 14%. As Trump's first week back in office got underway, we also got some big news that moved AI stocks, so let's focus on Oracle. On Tuesday, the new administration said that Oracle would be part of Stargate, a $100 billion artificial intelligence infrastructure project, along with the Japanese conglomerate SoftBank OpenAI and Abu Dhabi's MGX. It's a lot of spending, up to $500 billion over the next four years and not a whole lot of details. Key elements of the plans have yet to be disclosed, though we did find out that Microsoft and chip makers ARM and Nvidia were also named Stargate Technology Partners. But still, there were many basic questions left unanswered in the announcement, like how much are individual companies each investing? Or how will they get a return on their investment? Etc, etc. But it seemed like investors cared about the gist, the bottom line of big tech investing in AI in the US and it seemed like that was good enough for them. Oracle led a tech rally on Tuesday, with the stock gaining 6.8% during the session and 14% on the week. Last but not least, let's talk about GE Aerospace some context. GE Aerospace is the jet engine maker that became a standalone company back in April after GE's power business was spun off. It was the big General Electric breakup, and it was GE Aerospace's latest results that really flew past Wall Street's estimates. Chief Executive Larry Culp said that the company ended 2024 with robust demand for its services and products, with fourth quarter orders up 46%, and he predicts more growth in 2025. Airlines have been desperate for engines and other parts due to aircraft production delays at Boeing and Airbus, which we've talked about on this podcast before, as well as supply chain shortages and the durability problems that are ailing newer Eng. And while supply issues continue to cause problems for the aerospace industry, the CEO also said that the company is seeing improvements among its key suppliers. GE Aerospace shares jumped 6.6% on Thursday, retreating a bit the next day, and ended the week up more than 7.5%. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in the Score. My column in the Wall Street Journalist Exchange section today's show was produced by Anthony Fancy with supervising producer Talia Arbell. I'm Francesca Fontana. Have a great weekend and see you.