I thought the market would be up today. I was wrong. But it did have a nice late day recovery. That would suggest that Monday might a a good up day, but the virus is changing faster than all who are trying to chase it with a fix.
I took a look at Boeing's stock chart. Boeing has had its share of problems with the grounding of the 737 Max a year ago. And the recent news suggests Boeing will be able to put the Max back in the air soon. But the virus is a new wrinkle for this company. Airline companies are getting hit hard; Demand is through the floor; Flights are being cut back; Opec can't get a handle on crude prices and wants to cut production but one Opec partner is being difficult. I am enjoying the cheap gas but I hope I am not shooting my self in the foot by saying that.
Boeing is the largest export company in the U.S. and contributes much to the U.S. balance of payments. The airliners are getting hit hard and it look like the losses are going to be huge. If the airlines are not making any money, how will they fund their new plane purchases from Boeing? This virus action could throw the entire airline industry for a loop. And Boeing, IMO, will not escape.
My town is the aircraft town. Spirit makes a large part of the 737 fuselages. Spirit finally had to lay off 2800 people about 6 weeks ago because of the Max grounding and has now been thinking of firing production back up just so the lay offs don't leave town for another job. The layoffs have affected many local small suppliers that also support out local aircraft industry. Boeing makes a lot of jobs in Kansas and all kinds of layoff help and training programs, at state level, are being put in place.
Here is Boeing's 5 year stock chart. It is not looking good for the home team. From a technical chart perspective it is very important that Boeing can hold this price of $255.00.
If the stock breaks that red line going across the chart at $257.00 then the next stop is $ 120.00. The good thing in this chart is this has been a high volume sell off so maybe the weak sellers are out of the way and some strong buyers step on Monday and start buying. If no buyers, look out below.
Here is an article from last year when the Max was grounded to give you all some perspective of how much of the Dow's and S&P 500s action is made up of Boeing.
https://www.cnbc.com/2019/03/11/boeing-alone-will-cost-the-dow-more-than-200-points-as-stock-heads-for-big-decline.html
Here is an article that is a little more recent.
https://www.reuters.com/article/us-boeing-stocks-graphic/dow-heavyweight-boeing-ending-strong-decade-with-whimper-idUSKBN1YL275
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It also has been discussed the that Apple is getting back to work in China. Well, good for China; Good for Apple. But Boeing builds its products in the states and creates a lot of jobs in this country. If this virus continues and knocks the airline industry for a loop, then Boeing will not escape and a lot of jobs will be disappearing for a while.
Y'all have a good weekend.