Review & Preview: Netflix Goes for Legacy

Dec 05, 2025 19:01:00 -0500 by Alex Eule | #Markets #Review & Preview

Time Capsule. Inflation is under control, or at least it was in September. That was the big reveal in today’s release of the personal consumption expenditure index. The September PCE, delayed by the government shutdown, rose 2.8% year over year, in line with economists’ forecasts.

The growth in core PCE, which excludes volatile categories like food and fuel, was also up 2.8%, but it slowed from August. That’s a big deal for the Federal Reserve, which closely tracks the core index.

“Fed officials should be able to focus on the wavering labor market and cut interest rates by another quarter percentage point at their final meeting of the year next week, thanks to relatively stable inflation data,” my colleague Nicole Goodkind wrote today.

The major indexes jumped on the PCE news, before giving back most of the gains. Investors might have had second thoughts, given that the 2.8% core increase is still above the Fed’s 2% inflation target. While the Fed may be all but guaranteed to cut interest rates next week, next year’s monetary policy is far from certain.

In Barron’s newsroom, corporate dealmaking overshadowed the inflation news, with Netflix announcing that it would buy Warner Bros. Discovery’s film studio and streaming platforms for $83 billion, including debt.

Until a few days ago, Netflix was seen as a longshot in the Warner Bros. sales saga. But it offered a big number that, for now at least, beat a rival deal from Paramount Skydance. Netflix investors aren’t thrilled about inheriting legacy media assets. The streamer’s stock fell 2.9% today and is down nearly 6% over the last week.

Most analysts think it’s overpaying for the assets, which include Warner Bros. film studio, HBO and HBO Max. In a joint press release, the companies touted nearly 90 years of media franchises from The Wizard of Oz and Casablanca to Friends, The Sopranos, and Harry Potter. Combined with Netflix properties like KPop Demon Hunters and Squid Game, the companies said they would “define the next century of storytelling.”

But Warner Bros. Discovery stock finished the day at $26.08 below Netflix’s $27.75 offer, indicating that investors have doubts about the deal going through. It’s likely to take 12 to 18 months and there are considerable questions about government approval in both the U.S. and Europe.

You can find all of Barron’s deal coverage here.

Watch our TV show on Fox Business Saturdays and Sundays at 9:30 a.m. and 10:30 a.m. ET. This week, investing insights from KKR’s Henry McVey. Plus, a look at why the market is bullish on Alphabet and a change that’s coming for retirement savers.

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Dow Jones Industrial Average

47,687.15

-267.84

-0.56%

S&P 500 Index

6,835.12

-35.28

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NASDAQ Composite Index

23,498.81

-79.32

-0.34%

Market Data as of

The Hot Stock: Ulta Beauty +12.7%
The Biggest Loser: Paramount Skydance -9.8%

Best Sector: Communication Services +1.0%
Worst Sector: Utilities -1.0%

Created with Highcharts 9.0.1Friday, Dec. 5Index performanceSource: FactSetAs of Dec. 9, 3:55 p.m. ET

Created with Highcharts 9.0.1Dec. 9-0.5-0.4-0.3-0.2-0.100.10.20.30.40.5%Nasdaq CompositeS&P 500Dow industrials

This Weekend’s Magazine

Illustration: Illustration by Peter Crowther

The Calendar

Wall Street anticipates a quarter-point rate cut at next week’s main event, the Federal Open Market Committee’s monetary-policy meeting on Tuesday and Wednesday, culminating with Jerome Powell’s press conference at 2:30 p.m. Powell is expected to deliver a “hawkish cut”, meaning he won’t signal any future rate cuts early next year. The current Fed Chair has stressed that there are risks to both sides of the Fed’s dual mandate, stable prices and maximum employment, and monetary policy should reflect that risk.

A few megacap companies report results during an otherwise quiet earnings calendar: Adobe and Oracle on Wednesday and Broadcom and Costco Wholesale on Thursday.

What We’re Reading Today

Join Barron’s Live at noon on Monday. Barron’s Lauren Rublin and Ben Levisohn talk about stocks in the news, what’s ahead for the Fed, and how to prepare your portfolio for the new year.

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