The Compound and Friends Netflix Reports, Why the Bull Market Has Legs Into Year-End With Nick and Jessica, Warner Bros for Sale, Unemployment Cracks Appear
46 snips
Oct 21, 2025 
Nick Colas and Jessica Rabe, co-founders of DataTrek Research, dive into the intricacies of Q3 earnings season and why it's crucial for the market rally. They dissect S&P companies' earnings performance and explore surprising profitability in sectors like financials and utilities. The discussion then shifts to Big Tech's operating cash flows and CapEx strategies, alongside Netflix's evolving approach amid stiff competition. Finally, they analyze concerning trends in unemployment and how AI might impact entry-level job markets.
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Earnings Beats Have Been Exceptionally Strong
- S&P companies have delivered unusually large earnings beats in recent quarters, inflating investor confidence.
- Analysts paused sandbagging estimates, so current beat percentages look smaller despite strong fundamentals.
Margin Expansion Is Broad, Not Just Tech
- Net margin improvement in Q3 is broad-based, not just a technology phenomenon.
- Five sectors (financials, tech, utilities, industrials, materials) drive most of the expected margin gains.
Utilities And Financials Defy Typical Cycles
- Financials and utilities have shown surprising profit expansion, suggesting a mid-cycle dynamic.
- Utilities re-rating reflects yield plus growth expectations as rates fall and electrification demand rises.
