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Airlines celebrate, soaring stock market



Investors did not hesitate to invest in the summer vacation atmosphere on Wall Street, because even in the face of rising uncertainty on Monday, Monday’s performance is very impressive.

The number of COVID-19 cases in the United States has skyrocketed, and some people worry that failure to control the epidemic may lead to new measures, such as closure. However, market participants are concerned about more positive news, Dow Jones Industrial Average (DJINDICES: ^ DJI), S&P 500 (SNPINDEX: ^SPX)with NASDAQ Composite Index higher.

Today’s stock market

index

Percentage change

Point change

Dow

+ 2.32%

+580

S&P 500

+ 1

.47%

+44

NASDAQ Composite Index

+ 1.20%

+117

Data source: Yahoo! Finance.

The best-performing stocks in the stock market on Monday included aviation stocks. Even if they are quite sensitive to coronavirus-related news, the optimism that pushes the market higher will help boost their prospects. And, good news from Boeing (New York Stock Exchange: BA) It may herald the end of at least one painful chapter.

Airline fare

Among the main carriers, Southwest Airlines (New York Stock Exchange: LUV) Leading by nearly 10% increase. American Airlines Group (NASDAQ: AAL) The gap with 8% is not far away, and United Airlines Holdings (NASDAQ: UAL) with Delta Airlines (New York Stock Exchange: DAL) This is followed by 7% and 6% gains, respectively.

In particular, Southwest Airlines benefited from the praise of Goldman Sachs analysts. The Wall Street giant raised its view of Southwest Airlines from “sell” to “buy” and raised its price target per share by $12 to $47. Goldman Sachs has mixed views on the aviation industry, and analysts now expect that airlines will not be able to fully restore their pre-Coronavirus status by 2023. However, Southwest Airlines has a strong balance sheet, and its emphasis on domestic travel has given it a competitive advantage over the more internationalized American Airlines, Delta Airlines and United Airlines. There, international travel restrictions may last longer, thereby extending the recovery period.

More broadly, investors fundamentally like what they see. The increasing flow rate will also have a lot of hope for the load rate. Some carriers have even begun to relax their previous anti-coronavirus measures and no longer require the middle seat to be empty. American Airlines hopes to book all flights by July 1st at the earliest, and United also intends to begin to accommodate 3 seats at the same time as soon as possible.

White 737 Max 8 aircraft on airport taxiway is missing ILS mark

Image source: Boeing.

Maximum flight

Boeing (Boeing) shares rose 14%, airlines may also benefit from it. The aviation manufacturer was approved to start a test flight of this long-landing 737 MAX aircraft, and today it has conducted its first flight to certification.

From the perspective of Boeing, the benefits of taking a MAX plane are obvious. However, it is unclear how much demand the major air carriers will have. During the Coronavirus crisis, airlines have grounded a large portion of their existing fleet, and restoring passenger traffic to the existing capacity will require a substantial increase in passenger flow.

Airlines that have acceptable financial status may still choose to do so. Increased efficiency and other benefits have prompted people to place high demands on the 737 MAX, and then many accidents have forced it to be grounded. However, because airlines are under huge financial pressure, it is dangerous to assume that all deliveries will still proceed as previously expected.

Today’s airlines look healthier and the situation seems to be improving. However, there are still a lot of uncertainties affecting aviation stocks, and investors need to be prepared to welcome the bump.




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