After markets closed last week, Boeing (BA) announced that it would cut a whopping 10% of its workforce, or 17,000 jobs. It will also delay the first delivery of its 777X jet, pushing the production date by a year.
For the third quarter, Boeing pre-announced quarterly revenue of $17.8 billion and a GAAP loss of $9.97 a share. Its operating cash flow of negative $1.3 billion is a worry. The firm will need to sell shares to raise cash. That may prevent agencies from downgrading their debt.
At an all-time high of 5,800, the S&P 500 (SPY) has a good chance of marching higher for the rest of the year. The Federal Reserve cut interest rates last month by 50 bps. This increased the attractiveness of risky, highly valued technology stocks. The magnificent seven firms (like Microsoft) and artificial intelligence suppliers will likely continue their uptrend.
Loose credit conditions benefited Blackrock (BLK), which posted a $221 billion quarterly inflow. Additionally, JPMorgan (JPM) and Wells Fargo (WFC) are more attractive holdings. Despite posting a decline in net income (year-on-year), the bank business will thrive in a lower-rate environment.
Investors should continue to hold an overweight in U.S. stocks. Conversely, avoid TD Bank (TD), a Canadian bank. The firm must pay a fine of over $3 billion to settle anti-money laundering charges.
