News of a second tragic accident in a matter of months involving Boeing’s 737 MAX airliner has seen shares in the company come under some extreme selling pressure in pre-market trade. With the stock sitting around 10% lower at present, this is contributing to some significant losses for DOW futures and as further details of the incident become available, fresh weakness both for the stock and the broader index could be seen.
Elsewhere there’s still no progress being reported regarding the US-China trade deal, which is again undermining sentiment. The decision by Chinese regulators to ground local airlines’ fleets of 737 MAX aircraft – the only government agency to do so yet – could however be seen as applying a degree of pressure on Washington. Friday’s better than expected wage growth news is another negative for stocks as the inflationary pressures here will make it that bit more difficult for the Fed to call an end to quantitative tightening, unless it can declare this is nothing more than a short term blip.
Ahead of the open we’re calling the DOW down 130 at 25320 and the S&P down 3 at 2750.
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Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies