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Move Over Bitcoin, Boeing Stock Flies as Surprise Trade War Hedge

Last Updated March 4, 2021 2:39 PM
Samantha Chang
Last Updated March 4, 2021 2:39 PM

By CCN.com: Move over bitcoin. Boeing stock has emerged as a surprising hedge against a volatile stock market amid escalating trade wars.

Bitcoin evangelists like Circle CEO Jeremy Allaire claim that BTC is being embraced by investors as a “safe haven asset” to hedge against stock market volatility.

Is bitcoin is a safe haven asset?

Proponents of the bitcoin-as-hedge argument claim this is because there’s an inverse correlation between the bitcoin price and stock-market movements.

However, that does not appear to be the case in recent days. For example, on the days the Dow tumbled last week, so did the bitcoin price.

Critics also insist that no asset that’s as volatile as bitcoin could reasonably be considered a “safe haven” against an unstable stock market. Investors usually seek safe havens in assets that are less volatile than the ones they’re seeking refuge from.

bitcoin price chart
Bitcoin evangelists claim BTC is a hedge against stock market volatility. | Source: WorldCoinIndex

Boeing is one of the top 5 most popular stocks among hedge funds

Meanwhile, Boeing is increasingly being touted as a financial hedge. This is noteworthy because airlines are not typically considered safe investment bets.

However, Boeing is trying to change that negative perception. Case in point: Hedge funds just released their second-quarter trades. And Boeing has emerged as one of the most popular stocks right now (i.e. – stocks with the most hedge fund dollars invested).

According to TipRanks , Boeing is included in 19% of the 363 hedge funds surveyed by RBC Capital. Indeed, a Wall Street consensus of 32 financial analysts rate Boeing a “strong buy.”

Boeing stock is currently trading at roughly $356. However, the average price target among analysts is a bullish $412.

move over bitcoin boeing stock market hedge
A consensus of 32 financial analysts currently rate Boeing stock a “strong buy.” | Source: TipRanks

Boeing stock continues to remain a favorite on Wall Street despite the two fatal crashes that recently occurred involving Boeing’s 737 Max plane.

Boeing reacted by grounding about 600 of its airplanes, according to Bloomberg . However, the Federal Aviation Authority just indicated that the 737s could be ungrounded as early as October. This is likely a catalyst for bullish analyst outlooks.

China-US trade tensions could be easing

Meanwhile, there’s growing optimism that the US-China trade war is easing. China reportedly wants to resolve its bitter trade dispute with the United States through “calm” negotiations and “resolutely opposes” any escalation.

According to a government transcript reported by Reuters , Vice Premier He Liu made the assertions during a tech conference in Chongqing, China. Liu, who is Chinese president Xi Jinping’s top economic adviser, has been leading the trade talks with the United States.

“We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war,” Liu reportedly said. “We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world.”

Liu added that U.S. companies are especially welcome in China and will be treated well. That said, there is still no official confirmation of this from the Chinese government. So stay tuned.