CrowdStrike falls on outage, energy sector struggles: Morning Brief

On today’s episode of Morning Brief, hosts Seana Smith and Brad Smith discuss the market open and some of the key events dominating this trading week.

All three major averages (^DJI, ^IXIC, ^GSPC) opened lower on Friday, with the Dow Jones Industrial Average down more than 0.3% at market open. Tech indices are dragged lower as markets react to global power outages related to a CrowdStrike (CRWD) update. Cybersecurity firm CrowdStrike has identified the source of the disruption as a flaw in a single update for some Microsoft (MSFT) Windows hosts. CrowdStrike’s CEO says the issue has been identified so that companies can fix it. Defused Cyber ​​Deception researcher and founder Simo Kohonen emphasizes CrowdStrike’s reputation as “the best cybersecurity company in the world,” noting that their extensive customer base reinforces the scale of the problem. He adds, “I think CrowdStrike will be having a lot of conversations with their current and future customers about what they’re doing differently. They may have some short-term losses because of it, but they’re still an incredibly reputable vendor.”

Netflix (NFLX) stock is in a rally after reporting its second-quarter earnings after the market closed on Thursday. The streamer beat estimates and revealed that it added 8 million subscribers despite missing Wall Street’s expectations for third-quarter earnings. TD Cowen CEO John Blackledge notes that management expects margins to continue to expand next year and points to ad growth: “They were pretty bullish on the long term. And also on the short term. They expect ad growth to reach critical levels by next year across all 12 AVoD (advertising-based video on demand) markets.”

With the Russell 2000 (^RUT) small-cap index up nearly 200 points in the past week and a half, Carson Group chief market strategist Ryan Detrick discusses why the potential rotation out of big tech might not be entirely “shocking.” “I think we expected that (out of tech). And quite frankly, guys, we think it’s going to continue,” he says, adding, “That’s not to say we hate tech. We’re more neutral on tech, but we really think that these other undervalued, underappreciated, underinvested areas are probably going to do pretty well in the second half of this year.”

Finally, the energy sector is falling, as SunPower (SPWR) shares fell about 30% Friday morning after the company reportedly notified dealers that it would no longer support new leases and would halt deliveries as of Sept. 17. The move comes after the company announced in April that it would have to restate nearly 2 years of financial results. Similarly, Plug Power (PLUG) shares are falling after the company announced a $200 million common stock offering. The company said the offering is for “general corporate purposes.”

This post was written by Melanie Riehl