Dow dropped 118, decliners over advancers 4-3 & NAZ gained 14. The MLP index added 2 to the 309s & the REIT index fell 2+ to the 424s. Junk bond funds inched higher & Treasuries had limited selling which increased yields. Oil rose slightly in the 68s after OPEC+ again delays phase-out of production cuts (more below) & gold was off 10 to 2665.
Dow Jones Industrials
Boeing (BA), a Dow stock, is issuing layoff notices to more than 100 employees across Florida starting in Jan, according to a Worker Adjustment and Retraining Notification Act letter. Locations include Titusville & the Kennedy Space Center, where BA plays a key role in the aerospace industry. In 2023, the company spent over $1B with suppliers in Florida, underscoring its economic influence in the region. BA issued a statement attributing the layoffs to its need to "align workforce levels with financial realities and a more focused set of priorities." In Oct, BA issued cuts to approximately 17K employees who were expected to leave the company in mid-Jan. The cuts, which came after a labor union strike, equate to 10% of its workforce. "We are adjusting our workforce levels to align with our financial reality and a more focused set of priorities," BA said in Oct. In an Oct 23 statement, CEO Kelly Ortberg said the company is "at a crossroads." He said that trust in the company has eroded & it is saddled with too much debt. Still, he foresaw great opportunities ahead including a backlog of roughly half-a-trillion $s & "a customer base that want[s] us and need[s] us to succeed." "So, my mission here is pretty straightforward. Turn this big ship in the right direction and restore BA to the leadership position that we all know and want," said Ortberg. Experts in the field are worried about what this could mean. "I’m very concerned for the people and the program," local space expert & founder of the online publication Space Upclose Ken Kremer said. BA, which has more than 170K employees worldwide and 2348 in Florida, has faced financial pressures in recent years. For the first 9 months of fiscal 2024, the company reported $51.3B in revenue, a drop from $55.8B during the same period in 2023. The stock was up 10¢.
Boeing announces layoffs as concerns about the company continue to grow
The OPEC+ oil producers' alliance has postponed plans to unwind several formal & voluntary crude production cuts into 2026 amid a lukewarm outlook for global demand, according to delegate sources & internal documents. Under its formal output strategy, the broader OPEC+ coalition is now restricting its combined production to 39.7M barrels per day (bpd) until Dec 31, 2026, after previously only applying this quota throughout 2025. 8 OPEC+ members will now extend their 2.2M-barrel-per day voluntary production decline into the first qtr & will begin hiking production incrementally in Apr- Sep 2026. Several OPEC+ members will also be postponing the unwinding of a 2nd 1.7M-barrels-per-day cut until the end of next year. This latter production decline was previously only set to last thru 2025. Despite these sets of production trims & ongoing conflict threatening the hydrocarbon-rich Middle Eastern region, global oil prices have remained subdued for the better part of this year, under pressure from a tepid demand outlook. The Brent contract with Feb expiry & front-month Jan Nymex WTI futures were both trading flat today. Adding to geopolitical uncertainty is the imminent White House return of Pres-elect Donald Trump — who has led his electoral campaign on pledges to further unleash the output of the world's largest oil producer.
OPEC+ members to delay oil production increases
Southwest Airlines (LUV) raised their 4th-qtr forecasts, citing strong demand & higher fares, sending shares in the carriers higher. LUV said that 4rth-qtr unit revenue will
likely rise 5.5-7% from last year, up from a previous
forecast of an increase of no more than 5.5%. The airline said its network changes aimed at culling unprofitable flights are paying off & that demand into next year appears solid. “The
Company is encouraged by recent revenue trends and forward bookings,
including fourth quarter holiday travel, and currently expects strong
revenue trends and tactical initiative performance to carry into 2025,” LUV said. LUV also said it would complete its first sale-leaseback of aircraft in the first qtr. American Airlines (AAL) said that it expects unit revenue in
the last 3 months of the year to be on par to up as much as 1% over
the same period of 2023, compared with an earlier estimate for unit
revenue to be down as much as 3% from last year. AAL also raised
its adjusted earnings estimate to 55-75¢, up from 25-50¢ a share. A day earlier, JetBlue Airways (JBLU) raised its revenue forecast for the qtr & told staff it would further cut unprofitable routes & make tweaks to its summer 2025 Europe schedule later this week. LUV stock rose 1.49, AAL stock rose 2.15 & JBLU stock was up 12¢.
Southwest and American airlines raise sales outlooks
Stocks drifted lower as investors waited for tomorrow's crucial jobs report. UnitedHealth Group (UNH), another Dow stock, is under a cloud after its CEO was killed yesterday & related news stories.
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