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  • The Dow industrials are on the verge of a ‘golden cross,’ even as BlackRock predicts recession like no other

    The Dow industrials are on the verge of a ‘golden cross,’ even as BlackRock predicts recession like no other

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    Despite worries about inflation and an impending recession, there is at least one sign that some bullish market technical analysts might latch onto.

    An upbeat golden cross appears to be forming in the Dow Jones Industrial Average 
    DJIA,
    -0.90%
    ,
     more than nine months after a bearish death cross formed back in March, as the hawkish agenda of the Federal Reserve shattered bullishness on Wall Street.

    A golden cross occurs when the 50-day moving average for an asset price trades above the 200-day MA, while a death cross, comparatively, is when the 50-day falls below the long-term average.

    The 50-day moving average for the Dow stands at 32,200.32, at last check Friday afternoon, while the 200-day sits at 32,460.71, a roughly 260-point difference that could be traversed in the coming week or two, based on its current trajectory.


    FactSet

    A golden cross would mark the first for the Dow industrials since 2020 of August, according to Dow Jones Market Data.

    The bullish chart formation also would appear at an odd time for investors, with an apparent uptrend materializing in the stock market, even as the threat of a recession in 2023 grows.

    Read: Financial markets are flashing a warning that a recession is imminent: here’s what it means for stocks

    See: Goldman Sachs CEO says recession is likely, with 35% chance of a soft landing

    BlackRock, the world’s largest asset manager, is anticipating a unique recession unlike others that we’ve seen in U.S. history.

    “The new macro regime is playing out. We think that requires a new, dynamic playbook based on views of market risk appetite and pricing of macro damage,” wrote BlackRock’s Investment Institute team led by Jean Boivin.

    The BlackRock team said markets aren’t necessarily pricing in the recession that is being predicted.

    “Central banks appear set on doing ‘whatever it takes’ to fight inflation, making recession foretold, in our view,” the team at BlackRock wrote.

    As MarketWatch’s Tomi Kilgore notes, crosses, overall, aren’t necessarily good market-timing indicators.

    Check out: MarketWatch’s live blog of the market

    On top of that, MarketWatch columnist Mark Hulbert concludes that the U.S. stock market on average has performed no better in the wake of a golden crosses as it did at other times.

    In many cases, a golden cross can help put an asset’s move into perspective, however, they tend to be well telegraphed.

    Interestingly, the recession is also being widely predicted and some don’t think investors are getting the memo. As BlackRock notes, investors aren’t reflecting the damage that is to come, particularly as earnings expectations from American companies are right-sized.

    So, it might be worth it for investors to take any golden crosses in assets with a grain of salt.

    So far, the Dow industrials have outperformed over the past three months, up about 5%, compared with a decline of 2.5% for the S&P 500
    SPX,
    -0.73%

    and an 8.2% drop for the Nasdaq Composite
    COMP,
    -0.70%
    .

    Over the past three months, the Dow industrials have recent in aggregate on the back of gains in shares of Caterpillar
    CAT,
    -1.56%
    ,
    Boeing Co.
    BA,
    +0.20%

    Merck & Co.
    MRK,
    -1.86%
    ,
    IBM
    IBM,
    -0.47%

    and Travelers Cos.
    TRV,
    -1.10%
    .

    For the year so far, the Dow is down 7%, while the S&P 500 is off 17% and the Nasdaq is down nearly 30%.

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  • China Eastern takes delivery of the world’s first made-in-China C919 jet | CNN Business

    China Eastern takes delivery of the world’s first made-in-China C919 jet | CNN Business

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    The world’s first C919, a Chinese-made narrowbody jet, was delivered to launch customer China Eastern Airlines

    (CEA)
    in Shanghai on Friday and took off for a 15-minute flight to mark the historic moment.

    The plane, a rival to the Airbus

    (EADSY)
    A320neo and Boeing

    (BA)
    737 MAX single-aisle jet families, is expected to make its maiden commercial flight next spring, according to state-owned Xinhua News Agency.

    It was certified for safe operations in September and mass production in November.

    The plane, delivered to China Eastern, has 164 seats and was painted with “the world’s first C919” on its side in Chinese and English. Its maiden route will be between Shanghai and the capital Beijing, industry sources have said.

    China Eastern said Friday it plans to receive the remaining four of its first batch of C919 orders over the next two years, according to Shanghai’s The Paper, a state-owned newspaper. That compares with earlier plans to get all four next year.

    The airline did not respond immediately to a request for comment.

    China’s narrowbody jet ambitions intensified over the last few years amid conflicts with the United States from trade to technology that made China increasingly concerned about being overly dependent on Airbus and Boeing.

    Commercial Aviation Corp of China (COMAC) is expected to produce around 25 C919s per year by 2030, far lower than the current monthly rates of narrowbody production at its rivals, according to Jefferies analysts.

    COMAC did not immediately respond to request for comment.

    The C919 currently relies heavily on Western components, including engines and flight control systems, from companies such as GE

    (GE)
    , Safran

    (SAFRF)
    , and Honeywell International

    (HON)
    .

    China is trying to raise the proportion of domestic parts in the C919 and an alternative engine called the CJ-1000A is under development.

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  • S&P 500, Nasdaq post worst day in month after strong data fuels worry about Fed rate hikes

    S&P 500, Nasdaq post worst day in month after strong data fuels worry about Fed rate hikes

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    The S&P 500 and Nasdaq Composite indexes recorded their worst day in almost a month on Monday, after a hotter-than-expected U.S. services-sector reading fueled concerns that the Federal Reserve may need to be even more aggressive in its inflation battle.

    How stocks traded
    • The Dow Jones Industrial Average
      DJIA,
      -0.26%

      finished down 482.78 points, or 1.4%, at 33,947.10.

    • The S&P 500
      SPX,
      -1.79%

      ended 72.86 points lower, or 1.8%, at 3,998.84.

    • The Nasdaq Composite
      COMP,
      -11.01%

      closed down 221.56 points, or 1.9%, at 11,239.94.

    • Those were the largest declines for the S&P 500 and Nasdaq Composite since Nov. 9, according to Dow Jones Market Data.

    Stocks finished mixed on Friday, although they clinched gains last week, following a robust November jobs report, which stoked fears that inflation might not be so easily defeated.

    What drove markets

    Strong wage growth numbers released Friday were followed up on Monday by a robust reading for the U.S. services sector — both of which helped to stoke fears that the Fed’s interest-rate hikes, along with the central bank’s modest balance-sheet unwind, haven’t had much of an impact on the tight labor market.

    The ISM barometer of U.S. business conditions in the service sector came in stronger than expected, rising to 56.5% in November, a healthy showing that signals the U.S. economy is still expanding at a steady pace.

    “If nothing else, the ISM services report is being interpreted as very strong, and thus the economy is overheating and that means more Fed tightening,” said Will Compernolle, a senior economist at FHN Financial in New York. “Consumer resilience has proven to be more intense than I would have expected. In the two most interest-rate sensitive sectors — housing and autos — tightening has channeled into markets in meaningful ways.”

    But there has been so much pent-up demand, that higher interest rates haven’t been cooling overall spending as much as the Fed would like because companies are still having to fill a backlog of orders, he said via phone.

    In other economic data, the final November S&P Global U.S. services PMI edged up to 46.2 from 46.1, but remained in contractionary territory.

    November jobs data released on Friday showed average hourly wages grew over the past year by more than 5% as of November, beating economists’ expectations and stoking concerns that robust wage growth would continue to fuel inflation, market strategists said.

    Worries about a more-aggressive Fed also helped to drive Treasury yields higher, adding to the pressure on stocks. The yield on the 10-year note rose 9.6 basis points to 3.6% on Monday. Treasury yields move inversely to prices, and yields had fallen sharply over the past month, driven by shifting expectations about the pace of Fed rate hikes.

    Monday’s ISM services figure “surprised to the upside, suggesting that the economy is still running above its long-run sustainable path and that the Fed is going to have to slow the economy more than expected in 2023,” Bill Adams, the Dallas-based chief economist for Comerica Inc. CMA, said via phone.

    In other markets news, signs that China’s government is easing its COVID restrictions helped Hong Kong’s Hang Seng Index
    HSI,
    +4.51%

    finish with a 4.5% gain.

    See also: Chinese ADRs and casino operators rally on signs of easing COVID

    Meanwhile, oil futures ended lower on Monday, a day after Sunday’s decision by OPEC and its allies to keep production quotas unchanged.

    Falling equity prices helped drive the CBOE Volatility Index
    VIX,
    +8.87%
    ,
    also known as the VIX, back above 20 on Monday. The volatility gauge had fallen sharply in recent weeks as stocks rallied, potentially signaling complacency that could ultimately hurt stocks, said Jonathan Krinsky, chief market technician at BTIG, in a note to clients.

    Companies in focus

    –Jamie Chisholm contributed reporting to this article.

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  • 5 cheap industrial stocks with upside as investors look outside tech for the next leaders

    5 cheap industrial stocks with upside as investors look outside tech for the next leaders

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  • Donald Trump’s Boeing 757 rehabbed and back in West Palm Beach | CNN Politics

    Donald Trump’s Boeing 757 rehabbed and back in West Palm Beach | CNN Politics

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    CNN
     — 

    Whether Donald Trump is prepared to take-off on another bid for the presidency remains up in the air, but his fabled Boeing 757 is definitely getting off the ground.

    According to flight data studied and analyzed by CNN and aviation experts consulted by CNN, Trump’s jet has spent several hours over the last week running pattern flights above a small airport in Lake Charles, Louisiana, likely testing various updated components before heading to the Palm Beach International Airport, where it arrived Wednesday evening. Trump has previously indicated that the plane would be in Louisiana for repairs.

    The plane’s arrival in West Palm Beach comes less than three weeks before the 2022 midterm elections and with the political world on constant watch for Trump to announce another run for the White House. While Trump’s world has felt under siege with multiple investigations and legal actions open against him, the return of so-called “Trump Force One” to its home base could provide a jolt to Trump’s fans.

    The arrival of the plane at the airport that’s just 15 minutes from Mar-a-Lago is a significant indicator that not only is it airworthy – the 31-year-old jumbo jet had been idle for the four years of Trump’s presidency and many months afterward – it may be getting prepped to assume its former life as Trump’s biggest campaign prop.

    CNN has reached out to a representative for Donald Trump for comment on the plane’s activity and has not yet received a response. The plane appeared to be in use Saturday as Trump traveled to Texas for a rally, according to a tweet from Trump aide Dan Scavino Jr.

    Trump’s jet has twice in recent days made a series of short flight loops at varying altitudes, taking off and landing at Chennault International Airport in Louisiana. Some of the flights lasted less than 10 minutes, according to the data, and did not go beyond altitudes of 3,000 feet. Others were longer, 20 to 30 minutes, at altitudes ranging from 9,000 to 23,000 feet.

    “It is common after a plane has had upgrades – or other new equipment or general avionic tweaks – for pilots to make a series of test flights to ensure safety and function,” said Peter Goelz, a former managing director of the National Transportation Safety Board. “The series of passes at different altitudes, such as the ones completed in Louisiana, are indicative of standard checks.”

    That the plane, which Trump purchased in 2010 from the late Microsoft founder Paul Allen, has been improved to the point of taking flight is a recent development. In March 2021, CNN was first to report Trump’s once omnipresent 757 was sitting idle on a tarmac at a small New York state airport with one engine shrink-wrapped, mechanically grounded. It remained just north of New York City at Stewart Airport in New Windsor, New York, for several more months before it was flown to Louisiana on November 1, 2021, according to flight tracker information obtained by CNN.

    That flight was presumably made with an engine worthy enough for the plane to obtain a Special Flight Permit – or “Ferry Permit” – from the FAA, multiple experts told CNN. The permits allow registered planes to be approved for flight. According to FAA data, a reason for granting a ferry permit is for an aircraft to fly to a location where “repairs, alterations, or maintenance are to be performed, or to a point of salvage.”

    CNN has requested a confirmation of the ferry permit issued for Trump’s plane, which is owned by DJT Operations LLC, from the FAA and has not yet received the information.

    A standard passenger Boeing 757-200 series has about 228 seats. Trump’s custom 757 features 43 seats – along with a main bedroom, guest suite, dining room, VIP area and custom galley. Trump has mainly flown to-and-from various destinations on his much smaller, eight-seater, 1997 Cessna 750 Citation X. That plane does have a small Trump-family crest painted on the fuselage but lacks the giant Trump name on its outside.

    According to flight records, when Trump is not on the Citation, he typically flies on chartered planes belonging to other people.

    Yet in July of this year, the 757, a regular backdrop for Trump’s campaign appearances and rallies during the run-up to the 2016 election, was featured in a slick video posted by Eric Trump to social media. That video featured the 757 getting a new paint job at a hangar in Louisiana.

    “She’s back,” he wrote.

    In the caption of Eric Trump’s Instagram post of the video, the former President was quoted teasing the rebirth of his beloved private plane, saying the sparkly new exterior tune-up done so “Trump Force One” – the plane’s nickname – could be “back to the skies in the Fall of 2022, or maybe sooner.”

    The reveal of the new paint job showed a fresh, gold “TRUMP” on the fuselage, and a new addition of an American flag on the tail. The paint job was completed in 26 days, according to Tyson Grenzebach, of Landlocked Aviation, who in a July interview with Louisiana Radio Network said his company did full “scuff, sand and paint” on Trump’s plane.

    Though the interior, exterior and – as of Wednesday – the sky worthiness of Trump’s 757 appears to be updated, according to experts who spoke to CNN, the purpose of getting the plane ready for some sort of grand reveal near the midterms or a campaign announcement has yet to be confirmed by the former president.

    For Trump, the plane is one of his prized possessions. He oversaw the hundreds-of-thousands-of-dollars’ worth of renovations done to his prized possession shortly after he took ownership; any metal in the plane’s interior – lights, seat buckles, handles, latches, knobs – was plated in 24-karat gold.

    In March of last year, following CNN’s story about the 757, Trump did release a statement confirming his plane was in “storage” and getting repairs.

    “When completed, it will be better than ever, and again used at upcoming rallies!” wrote Trump wrote at the time.

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  • China’s answer to Boeing and Airbus isn’t as ‘homegrown’ as it seems. Here’s why | CNN Business

    China’s answer to Boeing and Airbus isn’t as ‘homegrown’ as it seems. Here’s why | CNN Business

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    Hong Kong
    CNN
     — 

    China is claiming a historic win this week after its answer to Boeing and Airbus, the C919, took to the skies for its first commercial flight.

    Beijing calls the aircraft its first large homegrown passenger jet. It’s a prominent symbol of Beijing’s broader “Made in China” strategy, a campaign to reduce national reliance on foreign manufacturers.

    But instead of boosting China’s global stature in technology innovation, experts say the C919 is a symbol of its continued reliance on the West.

    That’s because a large chunk of the plane’s parts come from foreign suppliers, predominantly in North America and Europe. Chinese state media has said about 40% of the model’s components are imported, though experts say the real proportion is much higher.

    While it is normal for manufacturers to source equipment for their planes from around the world, “the C919 is unique in that almost nothing that keeps it in the air is from China,” said Scott Kennedy, who spent two years leading a team that researched China’s decades-long efforts to develop its own commercial aircraft.

    Their conclusion? “The C919 is primarily a non-Chinese airplane with Chinese paint on it,” said Scott, trustee chair in Chinese business and economics at the Center for Strategic and International Studies (CSIS) in Washington.

    The C919 was built by the Commercial Aircraft Corporation of China (COMAC), a state-owned enterprise based in Shanghai, with the stated goal of letting “China-made large aircraft fly in the blue sky.”

    One cannot overstate how difficult that is, according to Shukor Yusof, founder of Endau Analytics, which tracks the aviation industry.

    Currently, only a handful of countries in the world make their own planes — and for good reason, he said, citing extremely high obstacles, such as serious technical expertise, rigorous regulatory requirements and eye-popping amounts of time and resources.

    The C919, for instance, has already cost an estimated $49 billion, according to CSIS, though it says pinning down precisely how much is an almost impossible task because COMAC’s finances are opaque.

    While it’s not COMAC’s first homegrown plane, more attention has been directed to this model because of its size.

    The C919 can seat up to 192 passengers and fly up to 5,550 kilometers (about 3,500 miles).

    COMAC’s first commercial plane, by comparison, is a much smaller regional jet called the ARJ21, which can only fly up to 3,700 kilometers (2,300 miles) and accommodate up to 97 passengers.

    COMAC is also working on a long-range, widebody plane called the CR929. But the project, a joint effort by China and Russia, has likely stalled since Russia’s full-scale invasion of Ukraine last year, said Kennedy.

    “That plane will probably never be more than a photo, never be more than a drawing,” he told CNN. “No one is going to be supplying technology to a Chinese-Russian joint venture.”

    The C919’s maiden commercial flight took place Sunday, flying passengers from Shanghai to Beijing for China Eastern Airlines

    (CEA)
    .

    China hopes the C919 will become its alternative to Boeing’s 737 and Airbus’s A320 and cement its status as a high-tech superpower, says Kennedy.

    But because the government has touted the aircraft as a homemade success, analysts have been quick to point out just how much is made outside China.

    In a 2020 analysis, CSIS estimated that approximately 90% of the C919’s main or large-scale component suppliers were from North America and Europe, with only 10% coming from China and other countries in Asia. Yusof cited a similar estimate.

    Kennedy said while it was possible the proportion had changed since the 2020 report, he thought it was unlikely given how tough it would be to change suppliers during the aviation certification process.

    The C919 got the green light for commercial service and mass production in mainland China late last year, after years of delays.

    The C919 passenger jet being welcomed on landing in Beijing on Sunday.

    China has acknowledged the criticism. “Some people have been questioning whether the C919 can be called a domestically-manufactured aircraft when it relies on imports,” Chinese state-run tabloid Global Times said in an editorial Monday.

    “It is true that there is a long list of foreign suppliers for the C919.”

    The aircraft contains “Honeywell’s

    (HON)
    electricity system and landing gear, GE’s

    (GE)
    flight recorder, CFM Leap’s engine, Parker Aerospace’s flight control system and fuel system, Rockwell Collins’ weather radar and simulate system, and Michelin’s

    (MGDDY)
    tires,” the outlet noted. All are US or European companies.

    The government’s position is that other manufacturers often rely on imports, too.

    Boeing and Airbus also depend on “high-quality global suppliers,” state-run newspaper China Daily said in an editorial Wednesday.

    America’s Boeing

    (BA)
    sources about 40% to 50% of components for planes such as its 787 Dreamliner from outside the United States, according to Yusof. Airbus

    (EADSF)
    , a European plane maker, also sources from countries such as Malaysia, he said.

    China has made no secret of its ambition for COMAC to eventually compete against Airbus and Boeing, which currently command virtually the entire market.

    Yusof said this was unlikely to happen anytime soon.

    For one, COMAC hasn’t distinguished its planes enough to convince carriers to make the switch. Its technology is “already available in the Airbus and in the Boeing planes,” he said.

    It could also take many years for its planes to be certified by US and European aviation regulators.

    But once production ramps up, it’s expected to win more orders at home, or in developing countries where carriers may not be able to afford the current market leaders’ prices. In Indonesia, domestic airline TransNusa became COMAC’s first overseas customer last year.

    “It should be greatly appreciated that another country apart from the Europeans and the Americans are providing an alternative aircraft in the commercial market,” said Yusof.

    But even if China were to price its planes more aggressively, it will take a long time to win people over, he added.

    “Airlines in the world will not be easily persuaded to buy one, because there’s always a stigma [with new players] whether you like it or not,” Yusof said.

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