Story Stocks®
Updated: 25-Mar-20 15:09 ET
Boeing leads the Dow 30 higher as Senate has a deal on stimulus bill (BA)
- Boeing (BA +32%) is by far the leading Dow 30 gainer today as the Senate reportedly has agreed on a stimulus package.
- The final details of the bill will probably be released later today, but Boeing had been requesting $60 billion in federal loans.
- The question is what kind of strings Congress is attaching, like an equity stake, bans on buybacks etc. Based on the move in the stock today, we suspect word may be leaking that the strings are not too thick.
- Another minor catalyst today may be a CNBC.com report that says Boeing plans to restart 737 Max production by May.
- Boeing's current position, which was reaffirmed a few weeks ago, was that BA was expecting a mid-2020 timeframe. So this is generally in-line with that, perhaps a little earlier than expected. And while consumers are not expected back on planes soon, it's important for BA to get the process started as it will take many months to retrofit all MAX planes and train pilots.
- Finally, we think the stock is also higher from a macro sense. The stimulus bill could inject a measure of confidence in the average consumer that the economy will recover at some point and people will spend and get back on planes. Also, we think headlines about China re-opening stores and glimmers of hope in Italy are making consumers realize that we too will get through this in a reasonable time period.
