Breakfast on Wall Street: Taking the Lead
Take the lead
Aircraft manufacturers are busy securing numerous aircraft orders at the Farnborough Airshow in the United Kingdom, one of the world’s largest aviation events, despite production and delivery delays and supply chain issues. The event, which began Monday and ends Friday, has recorded 191 aircraft orders so far. According to trade organization ADS Group, the first day of the airshow saw about $50.72 billion in contracts signed.
Instant: Boeing (BA) landed the most orders (118) on the second day of the event, including 20 777-9s (not yet certified) for Qatar Airways. The airline plans to put the planes into service in the first quarter of 2026. Korean Air also ordered at least 40 wide-body aircraft from Boeing. Rival Airbus (OTCPK:EADSF) secured 69 orders, including 20 A350-900s for Japan Airlines and 20 Airbus A330neos for Vietjet. Airbus also showcased its A321XLR, the world’s longest-range single-aisle aircraft.
Perspectives: Aircraft manufacturers are facing supply chain challenges, while Boeing continues to face increased scrutiny given recent safety incidents and quality issues. However, Boeing management appeared more confident on the first day of the show, predicting improved production in the second half of 2024 and steady production of 38 737 Max planes per month by the end of the year. Airbus management, however, warned of ongoing constraints on aircraft components.
Other updates: Embraer (ERJ), which has yet to sell any commercial aircraft at the show, announced several developments for its E-Jet aircraft, including an automatic takeoff system for the E2 aircraft. GE Aerospace (GE) and Pratt & Whitney also secured aircraft engine orders at the event.
Even more disappointment
Tesla (TSLA) slipped by 7.8% AH reported Tuesday that its second-quarter earnings, margins and cash flow missed expectations and that it expected slower growth for the year. In a conference call following the earnings release, Musk said that EV discounts have made it difficult for Tesla, but he believes that will only be a short-term problem. He added that Tesla is on track to deliver an affordable model in the first half of 2025, while the robotaxi event has been postponed until October 10. Tesla is also pausing its plans for a Gigafactory in Mexico, citing the risk of tariffs if Donald Trump is elected. Separately, Musk launched a poll on whether Tesla should invest $5 billion in xAI, with nearly 70% of the vote in favor. (135 comments)
Margin Warning
Alphabet shares – both GOOG and GOOGL – fell by 2.2% AH reported better-than-expected second-quarter results on Tuesday. While Alphabet’s cloud revenue beat estimates (and topped $10 billion for the first time) and core search returned to form, YouTube ads fell just short of consensus. On a call with analysts, CFO Ruth Porat said third-quarter operating margins will reflect “higher levels of investment in technical infrastructure, as well as increased cost of revenues due to the acceleration of hardware launches in the third quarter.” But Alphabet continues to expect operating margin expansion in 2024 versus 2023. (50 comments)
Beware of the ether
All U.S.-listed exchange-traded funds that track ether (ETH-USD) prices ended their first trading session lower on Tuesday, as the cryptocurrency fell and concerns about net inflows persisted. The nine ether spot ETFs recorded net inflows of more than $106 million, while their total trading volume was about $1.05 billion, less than what bitcoin (BTC-USD) spot ETFs recorded in their debut. Now that the funds are live, investors are focusing on whether ether-holding ETFs can achieve net inflows comparable to their bitcoin counterparts, although skepticism remains prevalent. (3 comments)
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