The Dow slid back into the red on Monday, diving below the 26,400 mark as investor sentiment on corporate earnings whipsawed back into bearish territory. Meanwhile, President Trump provided embattled aerospace giant Boeing with some cringeworthy advice about how to cure its ailing performance.
The Dow Jones Industrial Average flashed red at the bell and remained in negative territory throughout the session. The DJIA closed at 26,384.77 for a loss of 27.53 points or 0.1 percent. The S&P 500 and Nasdaq also posted minor declines, dropping 0.06 percent to 2,905.58 and 0.1 percent to 7,9765.01. All in all, it was a forgettable day for the US stock market.
This morning, Wall Street approached earnings seasons with a bit more caution than it had last Friday when it surged nearly 270 poitns.
Banking giant Goldman Sachs published its first-quarter report ahead of the bell, disclosing better-than-expected profit ($5.71 per share) but also a sharp 13 percent drop in revenue ($8.81 billion).
Goldman’s mixed results complicate what – led by JPMorgan’s record performance – had initially appeared to be a surprisingly positive earnings season. However, that hype likely had more to do with how low analysts had set their expectations than how bullish the earnings actually were.
Meanwhile, US President Donald Trump dished out some cringeworthy business advice to the Dow’s largest component, Boeing.
Writing on Twitter, Trump advised the embattled $215 billion aerospace giant to – wait for it – “FIX the Boeing 737 MAX,” which has suffered under an avalanche of controversy due to two tragic crashes within the past six months.
“What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name. No product has suffered like this one. But again, what the hell do I know?”
While I’m not privy to closed-door discussions held among Boeing’s senior management, I imagine fixing the faulty software that allegedly contributed to those crashes has factored into the agenda.
Boeing stock fell 1.1 percent on the day to $375.46.
But wait – that’s not all! Trump revealed that Boeing should add “some additional great features” to the 737 MAX. He stopped short of explaining what those “great features” should be or how the company could rush them to market without causing the aircraft line to remain grounded even longer than the six to nine months analysts have already previewed.
Finally, Trump told Boeing that it should rebrand the 737 MAX, as if that would remove the stigma associated with flying on the aircraft model associated with 346 deaths.
If this tweet was an audition to succeed Dennis Muilenburg as CEO of Boeing following his presidency, the former “Apprentice” star should probably avoid getting his hopes up.
Luckily for Trump, it increasingly looks like he will have at least another four years before he needs to start preparing for his post-presidency swan song.
According to economists at Goldman Sachs, the “advantage of first-term incumbency and the relatively strong economic performance” will allow Trump to eke out a victory in a “close call” election.
“President Trump is more likely to win a second term than the eventual Democratic candidate is to defeat him,” Goldman economists wrote.
The firm noted that betting markets still favor a generic Democratic candidate over a generic Republican candidate.
“While we believe the majority of market participants expect President Trump to win a second term, we note that prediction markets point in the opposite direction and imply that the Democratic candidate has a 56% probability of winning and the Republican candidate has a 44% chance.’
However, with an increasingly crowded field, the eventual Democratic nominee could emerge from the primary bloodied, providing Trump with the edge he needs to score an electoral victory even if he once again loses the popular vote.
Last modified: September 23, 2020 12:39 PM