Last week’s Capital Wave Forecast called for “dire” market conditions, with a proviso. I said things could be “worse than that if we don’t see immediate relief, from all quarters where it must come from.”
Monday proved to be dire, at least for most of the day. Across the board, benchmarks made new intraday lows, and, in closing, posted new 52-week lows for the Dow, S&P 500, and Nasdaq Composite.
But benchmarks closed off their intraday lows, a relief, considering Monday could have been a blowout.
Initial jobless claims for the week ending March 21, 2020, was a record 3.28 million.
That’s 11.6 times more than the week before when 281,000 claims were filed, and 4.72 times the previous record of 695,000 Americans who were seeking benefits way back in the week ending October 2, 1982.
But that didn’t stop the Dow Jones Industrials Average from soaring 1,083.79 points, or 5.05%, to 22,552.17.
At least until you dig a lot deeper into what everyone loves about them, how supposedly liquid they are, and what risks the “sponsors” and “authorized participants” who create, redeem, and trade them and all their underlying parts, really pose to the $5 trillion industry.
When it comes to ETFs, the truth is, it’s all good…until it isn’t…
If it doesn’t get its troubled 737 Max planes certified by U.S. and international regulators and in the air by this summer, it’s dwindling cash and negative cash flow from operations will implode its stock.
But, unfortunately for them, the 787 Max isn’t Boeing’s only aircraft problem.
Regulators are investigating the company’s 787 Dreamliner over whistleblower claims that its oxygen systems don’t work, that managers let defective parts get through quality control checks, and that, when workers installed planes’ floorboards, they let three-inch-long razor-sharp shards of titanium fall the plane’s sensitive electronic equipment.
But, also, despite all its problems, Boeing isn’t going out of business. It’s too important to the American military and the U.S. economy.
But that doesn’t mean it’s not too big to fail (in terms of its stock price).
Investors should be asking themselves what to do with Boeing shares at a time like now: buy, sell, or hold?