Dow Jones Industrial Average (DJIA) futures were flat in early trading Wednesday, pointing to nervous stock market on Wall Street. All eyes are on Boeing (NYSE: BA) – the Dow’s largest constituent – as it lines up to report earnings before the bell.
The firm is expected to post a 46% decline in profits, just hours after the departure of top executive Kevin McAllister. As the 737 MAX fallout continues to plague Boeing, the sentiment is poor going into today’s report.
“There’s a growing sentiment inside the rank and file at Boeing that whatever comes out of its quarterly earnings tomorrow it is going to be very bad” – Jon Ostrower, editor-in-chief Air Current.
Dow futures trade flat on Wednesday
Dow Jones Industrial Average (DJIA) futures struggled for direction overnight, hovering 30 points lower at 5.56 am ET. Traders are sitting on the sidelines ahead of key earnings reports today from Boeing, Microsoft (NASDAQ: MSFT), Tesla (NASDAQ: TSLA), and PayPal (NASDAQ: PYPL).
Boeing battered by 737 MAX concerns
It’s almost a year since the first of two fatal crashes involving the Boeing 737 MAX. A fault in the plane’s software has been connected to the death of 346 individuals, subsequently grounding all 737s.
Boeing took another hit this week as leaked internal memos revealed that a senior test pilot raised concerns about the software back in 2016. In light of the news, Boeing fired its chief executive of Boeing Commercial Airplanes last night. No surprise after Ralph Nader called for heads to roll at Boeing.
The grounding is expected to hit Boeing’s bottom line hard, with analysts expecting a 46% decline in profits. But investors will have bigger questions on today’s call. Specifically, when will the 737 be back in the air?
Dow Jones poised for fireworks
As the Dow’s largest constituent by weighting, Boeing stock can act as a serious market mover. In the absence of larger macro headlines (like Trump-China trade war and Brexit), today’s trading direction will be largely determined by the results and subsequent comments at Boeing.
Elsewhere, DJIA constituent Microsoft will report earnings later this evening. Sentiment is much more positive for the tech company, with strong growth expected in the cloud computing department.
“Cloud-services industry will grow at nearly three times the rate of overall IT services through 2022. Cloud infrastructure-as-a-service will grow at 27.5% in 2019 to $38.9 billion” – MarketWatch.
This article was edited by Samburaj Das.
Last modified (UTC): October 23, 2019 11:16