Boeing Recovers From Trade War Threats Between US and China

Despite Boeing’s positive earnings and the upbeat overall outlook for its performance this year, threats of a possible trade war caused by tariffs being imposed on imports between the United States and China has slightly pushed shares of the aircraft company during a number of trading sessions last week.

More than two weeks ago, Boeing shares also slipped by around 5% as the markets raised its concerns on U.S. President Donald Trump’s plans of imposing heavy tariffs on aluminum and steel imports on top of $50 billion worth of tariffs placed on Chinese imports. During the same time, Boeing shares has also recorded a decline of more than 9% over the month also due to market fears of a trade war possibly having a negative effect on American company profits.

Last week, Boeing shares suffered after Beijing announced tariffs on more than a hundred American products that will affect mostly whiskey production companies and automobile makers. This announcement was in response to U.S. President Trump’s own tariffs imposed on Chinese imports.

Shares of Boeing lost around 4% during last week’s trading session on Wednesday. Shares of its rival company Airbus also logged losses during the same trading session. Continuous tension between the United States and China over the past couple of weeks have weighed down the stock price of the company.

However, some analysts have stated that the price reaction of Boeing shares may be overblown as the company has all the resources and projects to help it weather through possible trade wars which may take place.

Upbeat Year for Boeing

After performing positively last year, Boeing has increased its delivery forecast this year. The company stated during its earnings call last January that it expects to deliver around 810 to 815 commercial aircraft this year and still has plans to boost production further as the market demand continues to grow.

The stock alone have rallied by 6% during its January earnings call has now recovered by almost 3% during the most recent trading session trading at around $336.40 per share close to Boeing’s 50-day moving average.This is after the stock suffered almost 6% from Wednesday until Thursday’s session.

This year, aside from boosting its production, the company also plans to increase its 737 Max 7 line whose test flight has been started late last month. Its first wide-body 787-10 which is longer by eighteen feet compared to the 787-8 and 787-9 was also handed over to Singapore Airlines last month.

Read More: Boeing Shares Suffer From Trade War Fears

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