Netflix earned more than expected, but its stock still fell

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Netflix reported its results after the market closed on Tuesday. It earned 87 cents a share, more than the 82 cents Wall Street expected, and revenue of $12.87 billion matched forecasts. But its stock fell about 5% in after-hours trading. The reason: Netflix said it expects $13.44 billion in revenue over the holiday quarter, a bit less than the $13.51 billion analysts were hoping for.

During the regular trading day, the Dow jumped about 530 points, or 1%, and smaller companies did even better. Oil prices cooled off after a morning spike, which helped stocks recover early losses. Big tech names like Apple and Meta slipped. Tesla and Meta report their own results after the close on Wednesday.

Why it matters to you: If you watch Netflix, you're part of the forecast. Investors care less about what a company just earned than about what it will earn next, and that depends on whether people like you keep paying, upgrade or put up with ads. A tiny miss on the future can matter more than a beat on the past.

Your money

What a 7% mortgage rate really costs

A mortgage is a loan to buy a home, usually paid back over 30 years. The average 30-year mortgage rate is about 7.4%, according to Freddie Mac, up from about 6.3% a year ago. New data on Tuesday showed pending home sales, which count signed contracts to buy homes, fell to a record low in September.

Here's why one percentage point matters so much. Borrow $300,000 for 30 years at 7.4%, and you pay about $2,077 a month. At 6.4%, it's about $1,877. That's roughly $200 a month, or more than $70,000 over the life of the loan.

The lesson works for any loan, from a car to a credit card: small rate differences add up when you borrow a lot or borrow for a long time. That's why your credit score matters. A better score usually gets you a lower rate.

Stock of the day

General Motors GM −6.8%

GM's quarter beat expectations: it earned $3.70 a share on $50 billion in revenue and announced a $20 billion plan to buy back its own stock. Its shares still fell 6.8%. GM narrowed its full-year guidance, the profit forecast a company gives investors, but kept the middle of the range at $15 billion, so it didn't raise expectations. It also warned that raw material costs, including memory chips, will come in at the high end of its forecast.

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Netflix makes money from subscriptions and from ads. Would you rather pay more for no ads or pay less and watch ads? What would make you cancel?

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Magic: The Gathering is Hasbro's moneymaker

Hasbro, the company behind Monopoly and Nerf, just had a huge quarter thanks to a 33-year-old card game. Sales of Magic: The Gathering topped $600 million in a single quarter for the first time, and Hasbro raised its forecast for the year. Its stock jumped about 11% on Tuesday.

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