July 11, 2019 at 09:41AM
Boeing’s stock, the largest component of the Dow, finished the session down slightly and is hovering around where it began the year. The shares are down about 7% since the second 737 Max crashed on March 10. “That’s pretty stable for a company that could be in serious trouble from a host of demand issues (ie not selling many planes,) regulation, legal (lots of people going to sue), cash, a loss of confidence, and a growing perceptions the company lost sight of safety in search of profit,” said strategist Bill Blain of London-based Shard Capital, which oversees more than $1 billion in assets. He went into the specific Boeing issues to paint what he believes to be a bleak picture, not only for the stock, but for the rest of the market as well.
For one, he says, it’s unlikely that the 737 Max, with its inventory piling up in airport parking lots, will get back in the air this year. “Boeing is hemorrhaging cash to build an aircraft no-one can fly — not a great strategy,” Blain wrote. So, the company’s trying to rush deliveries of other aircrafts to make up for it.
That, however, has presented its own issues, including problems with 787 Dreamliners, which the New York Times NYT, -0.58% reported are suffering from “shoddy production and weak oversight” at Boeing’s Charleston factory. So what’s it all mean for investors?
Another problem is the manufacturer’s approach of upgrading its old aircraft instead of designing new ones. “It made commercial sense for Boeing to keep upgrading and upscaling the ,” Blain said, “because it kept the factories delivering and they could tell regulators it was just an upgrade not a new design saving billions on testing and training.” But that led to cost-cutting that compromised the 737 Max.
From: The FxPro News Team https://fxpro.news/daily-forex-outlook/how-this-one-stock-could-ultimately-be-responsible-for-killing-the-bull-market-20190711/
Selected by fonecable.com
- NEWS: Trump says ‘great news out of Turkey’ October 17, 2019 at 06:33PM
- NEWS: Erdogan and Pence reach a deal to suspend Turkish incursion in Syria – report October 17, 2019 at 06:20PM
- NEWS: Trump picks his own Doral resort to host G7 summit October 17, 2019 at 05:45PM
- NEWS: Tusk: If there is an extension request, I will consult member states October 17, 2019 at 05:42PM
- NEWS: Tusk: We are waiting for votes from UK and EU parliament October 17, 2019 at 05:28PM
Top Posts & Pages
- NEWS: UK Times says Corbyn preparing to support a 2nd referendum on possible new Brexit deal October 17, 2019 at 12:48AM
- NEWS: UK fin min Javid to promise to launch “a decade of renewal” October 17, 2019 at 12:39AM
- NEWS: PBOC sets USD/ CNY reference rate for today at 7.0789 (vs. yesterday at 7.0746) October 17, 2019 at 02:15AM
- NEWS: FX option expiries for Thursday October 17 at the 10am NY cut October 17, 2019 at 02:14AM
- NEWS: Singapore exports fall for the seventh month October 17, 2019 at 01:56AM
- NEWS: More on the Australian jobs report and the drop in the unemployment rate October 17, 2019 at 01:40AM
- AUD/USD Breakout Higher in Focus as Australian Unemployment Drops
- NEWS: AUD higher on the unemployment rate drop in Australia, September jobs report October 17, 2019 at 01:36AM
- NEWS: Trade ideas thread - European session 17 October 2019 October 17, 2019 at 06:36AM
- NEWS: Australian employment report: Unemployment rate 5.2% (expected 5.3%, prior 5.3%) October 17, 2019 at 01:30AM