TradeApp offers Boeing CFDs so it’s only natural we shed some light on how two major fatal crashes in five months are affecting the market perfomance of the aerospace giant.
Both accidents involved its flagship 737 Max 8 jet. First, a Lion Air flight crashed in Indonesia in October, and then another brand-new aircraft owned by Ethiopian Airlines crashed in early March. There were no survivors in either of the crashes. Investigators are open to the possibility that both crashes occurred for similar reasons. After the second incident, a lot of countries around the world immediately grounded their 737 Max fleets. The latest bad news arrived on 14 March, when the United States also grounded its 737 Max planes.
Shares of Boeing fell 3% immediately after President Trump announced the grounding. The shares then rebounded indicating an adversity event of sorts had always shrewdly been factored in the price of Boeing stock. Even with that little upturn, however, the stock was still down more than 10% since the crash, wiping more than $25 billion off the company's market value. (Incidentally, Boeing’s stock performance in the week following the Ethiopian Airlines crash makes for interesting viewing when juxtaposed with the altitude from both crashes.)
The 737 Max is something of a company darling. Just this last January, Boeing confirmed plans to increase monthly output of 737 Max from 52 to 57, even after the October crash. Not entirely unexpected, given the flagship aircraft accounts for approximately 25% of total company sales.
So, is this a good time to buy Boeing with the dip in stock value and all? Or is it wiser to just sit tight and wait for more information which is bound to be forthcoming with black boxes being analysed in France? While there are subscribers to both strategies, we suggest to not forget that Boeing’s stock price more than doubled over the past two years, making the company the largest U.S. industrial firm by market value. That said, it might get worse before it gets better for Boeing because of impending lawsuits, compensation of client airlines and delays of deliveries.
On the safe side, always remember that in online trading—more so with CFDs—one can make a profit even when a particular asset takes a nosedive.
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