Stocks Sink On Soaring Inflation; Netflix Pummeled By Goldman Downgrade

deadline.com:

Dismal monthly inflation data hit stocks Friday with tech, internet and media taking a beating and Goldman Sachs slapping rare ‘sell’ rating on Netflix and a few others.The bank downgraded the streamer from ‘neutral’ on economic and competitive jitters and cut its price target to $186 from $265 – the lowest on the Street.“We have concerns around the impact of a consumer recession as well as heightened levels of competition on demand trends, both in the form of gross adds and churn, margin expansion and levels of content spend,” said Goldman analyst Eric Sheridan in a note to clients.Netflix shares closed down 5.1% at $182.94.

That’s a long way down from its 52-week high of over $700. Year to date, it’s lost almost 70% after missing on its subscriber numbers and outlook last quarter.Analysts and economists worry about slower consumer spending as inflation tightens its grip and prices surge from gas to food to housing.

The U.S. Bureau of Labor Statistics reported this morning that annual inflation in May hit a new 40-year high at 8.6%. That’s how much prices have risen year over year.

The Federal Reserve has been hiking interest rates to try to cool of the economy and dampen prices but that has its own pitfalls, including the risk of recession.Netflix is now a “show me story,” Goldman said, citing rivals Disney and Amazon whose stocks are also being pummeled today amid the downdraft (off, respectively, 3.7%% and 5.6%).Apple fell 3.8%.The Nasdaq lost 3.52% at the close.