Boeing shares fall as union resists directors’ proposal

  • Boeing shares opened Wednesday about 3% lower than the previous session.
  • On Tuesday night, management withdrew its September 23 salary increase offer.
  • Hurricane Milton is expected to hit Florida on Wednesday night.
  • The Dow Jones advances, leading other indices despite the impending storm.

Boeing (BA) continues to languish Wednesday as the airline company faces more setbacks due to its workers’ strike. BA shares have fallen as much as 3% midweek after management withdrew a pay rise offer to its union, which was unconvincing in the past two weeks.

In contrast, the Dow Jones Industrial Average (DJIA)an index that includes Boeing, is leading the US equity market’s gains higher. At the time of writing, the Dow is up 0.3%, while the NASDAQ gains 0.1%. The DJIA also advanced on Tuesday.

The market is preparing for Hurricane Milton to make landfall Wednesday night near Tampa, Florida. Forecasters expect the storm to cause a 15-foot storm surge that could flood low-lying areas of western Florida and say wind gusts should reach between 100 and 140 miles per hour.

On the low side, RBC Capital Markets expects insurance companies to suffer a $60 billion loss from the storm, similar to Hurricane Ian in 2022. However, Fed Watch Advisors estimates insured losses could range from $100 billion. $ in a low scenario and $175 billion in a higher scenario.

Boeing Stock News: When it rains, it pours

Boeing shareholders are used to bad headlines by now. Boeing stock has been in a downtrend since February 2019, so the latest news is more of the same.

On September 23, Boeing offered a 30% pay increase and a performance bonus. However, he withdrew that offer Wednesday night, saying the International Association of Machinists and Aerospace Workers union would not budge.

That union, which comprises some 33,000 Boeing employees, remains steadfast in its demand for a 40% pay increase and, more importantly, a defined benefit pension. It appears to be the pension that Boeing management opposes most strongly.

Boeing Commercial Airplanes CEO Stephanie Pope called the union’s demands “non-negotiable.”

Ratings agency S&P highlighted the withdrawal of the offer as a warning of a credit rating downgrade, saying Boeing could be headed toward junk status. That could make it difficult to raise debt and therefore force the aerospace firm to dilute shareholders by issuing new shares into the market.

S&P estimates that Boeing is losing $1 billion per month due to the strike and will likely total $10 billion in 2024. Additionally, S&P analysts do not believe Boeing is likely to meet its goal of 38 737 MAX aircraft completed per month. until mid-2025. Boeing delivered seven fewer planes in September than in August because workers went on strike on September 13.

Speaking of the 737, the US Federal Aviation Administration issued a safety alert on Tuesday for the plane due to stuck or limited movements in some of the planes’ rudders. Pilots were told to use a specific safety checklist before flying. When it rains, it pours.

Boeing Stock Forecast

Boeing shares are in a tailspin. BA shares have fallen more than 42% this year alone. The weekly chart below shows that the only real support lies at $120, almost 20% below the current price action. That $120 level provided a base of support in 2022 on two main occasions.

To find relief, the market needs to push Boeing stock above the $160 to $164 range where support existed earlier in the year. For now, most technical traders will notice the red histogram bars on the MACD, which is in a bearish crossover pattern, and stay away.

BA Stock Weekly Chart

Source: Fx Street

You may also like

South Korea’s billing bills
World
Flora

South Korea’s billing bills

A bill was approved yesterday, Wednesday, by South Korea, which prohibits the use of mobile phones in the classrooms, as

Waking Kit transferred 750 BTC to Binance
Top News
David

Waking Kit transferred 750 BTC to Binance

Against the background of correction, large holders of bitcoin and Ethereum demonstrate conflicting strategies. Some fix profit, others buy on

Bitcoin price analysis
Top News
David

Bitcoin price analysis

The price of bitcoin (BTC) is faced with difficulties due to sales pressure. During the week, BTC decreased by 3%.