First FANG stock report, home sales, J&J earnings: 3 things to watch for on Wednesday

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Reed Hastings attends the Netflix & Mediaset Partnership Announcement, Rome, 8th October 2019.

Ernesto S. Ruscio | Getty Images

Here are the most important things to know about Wednesday before you hit the door.

1. Where will Netflix trade on Wednesday?

Netflix was the first of the so-called FANG stocks to report its fourth-quarter earnings.

The company’s revenue came in slightly above expectations, reporting $5.47 billion in sales versus an estimate of $5.45 billion.

Netflix missed analysts’ expectations for domestic subscriber adds, however. The company grew US membership by 550,000 in the fourth quarter, versus 589,000 expected, per FactSet estimates.

Shares of Netflix were volatile in after hours so traders will be eager to see where it ends up during regular trading hours Wednesday. The shares were last down about 2%, but traded higher initially following the report Tuesday evening.

2. Johnson & Johnson also reports

Johnson & Johnson is set to report quarterly results on Wednesday before the bell.

The pharmaceutical and consumer packaged goods company is expected to have earned $1.87 per share in the fourth quarter, slightly down from the $1.97 a share earned in the same quarter a year ago, according to FactSet.

Johnson & Johnson has a good track record of beating Wall Street earnings estimates. According to Bespoke Research Group, it has topped expectations 95% of the time during its last 73 reports.

Shares of Johnson & Johnson have had a rocky year as the company dealt with the opioid and talc powder litigation. The stock gained less than 10% in 2019, lagging the S&P 500′s near 30% rally.

3. Existing home sales to rebound?

Investors will also keep on eye on the latest home sales data on Wednesday.

Home-buying slumped 1.7% in November, bringing the annual rate to 5.35 million, as many Americans priced out of the market by rising prices and a shortage of sales listings.

The number of homes for sale at the end of November was the lowest on record for the month, according to the National Association of Realtors, which began tracking this metric in 1999. There were just 1.66 million homes on the market, down 5.7% compared with November 2018.

Economists polled by Dow Jones expect existing home sales to rise 1.5% to an annual rate of 5.43 million in December.

Major events (all times ET):

10:00 a.m. Existing home sales

Major earnings:

Johnson & Johnson (before the bell Wednesday)

Fifth Third (before the bell)

Abbott Labs (before the bell)

Texas Instruments (after the bell)

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