Monday Takeaways: Boeing Nosedives and Apple Tries to Set a New Course

Shah Gilani|March 18, 2024

While the Fed likely intended to stay the course at their meeting this week… a wrench has just been thrown into their plans.

Inflation may be headed in the right direction… but there’s a big hiccup coming.

I explain what’s going on and what to watch in today’s Takeaways video.

Plus… I have some advice for anyone holding poor, poor Boeing stock… or looking at the airline sector as a whole.

All that… and a look at Apple’s new partnership with Alphabet… in the link below.

Click on the image below to watch it.

 

Transcript

Hey, everybody. Shah Gilani with your Monday Takeaways.

Market just opened, and it’s off to another rollicking start. Yeah, heading to new highs again and again and again.

What’s the takeaway there? Momentum is your friend, people, until something changes. Momentum is your friend. The trend is your friend.

Can we go higher? Can we keep going higher? Yes. Is it scary? Yes. Does it make sense? No, it doesn’t always make sense.

And this time, probably less so than lately.

What do I mean by that? Oil prices are starting to tick up. Hmm. What is that going to do to inflation? Inflation seems to be – while rearing its head here and there – in a good trend… i.e. down. So expectations are that as inflation comes down, it may not get to the 2% level the Fed wants to see it at, but it’s going in the right direction and investors are happy with that and they think eventually the Fed’s going to cut.

So oil prices ticking up may throw a bit of a wrench in that. So the takeaway is to keep an eye on oil prices. If WTI heads back up to the $80s… gets above $90… or, heaven forbid, above $100, that whole inflation story, inflation coming down, that’s going to turn around in about a New York minute.

So we’re keeping an eye on oil prices over here. You need to keep an eye on oil prices where you are.

Gasoline prices are going back up. A couple of months ago, it was less than $4 where I am. This weekend, $4.49. Gasoline prices are going up, so that’s going to impact inflation.

Why is that important? Because we had some pretty stronger than expected inflation numbers last week.

And this week, on Wednesday, we have the Fed talking rates. Are they going to raise? No. Are they going to cut? No. They may threaten to raise if inflation turns back around, if things don’t continue on a good trajectory. They put that out there before. I don’t know if the markets would really react too negatively to that, but they’re not going to like it. Are they going to cut? No, they’re not going to cut because inflation’s kind of ticked up a little bit. So they’re not going to cut.

What are they going to say about the economy? It’s strong, people. Are they going to say it’s getting weaker? No, I don’t think so. They’re going to probably have to talk about the facts.

And so what does that mean? I think it’s going to be about indecision. It’s going to be about investors scratching their heads and going, “What did they just say?” They said, “Yeah, we’re going to continue the fight.”

And maybe we’ll, there’s some talk, maybe they would raise the level of inflation they’re willing to accept as opposed to bringing it down to 2%. Maybe they’d be like, “Okay, maybe here was close to our goal.” I don’t know. That’s going to be an interesting subject if they bring it up. I don’t know that they’re ready to do that.

But there is some chitter chatter out there about the Fed may be raising the level of inflation they’re willing to accept. So this meeting, if that comes out, that’s a bit of a game changer. We’ll see how the market reacts to that, but it’s going to be an interesting Fed meeting. It always is. I frankly think they’re getting less interesting and more boring. Markets are doing their own things.

But the takeaway is you got a Fed meeting because they do move markets and not always, but they can. So the unexpected is likely to move the market, if we get anything unexpected from the Fed. So there’s your takeaway. Boring, but keep an eye on the Fed this week. Wednesday, in particular.

I can’t not talk about Boeing. I’m sorry. This poor company, which, if you own Boeing, you’re sick to your stomach. If you fly on any Boeing jets, new jets, you’re probably scared. I know I am.

What happened to Boeing? The stock is getting killed. And you know what? I don’t see any hope. So if you own Boeing, people, you might want to think about dumping it. How long are you going to have to hold it for it to get back to anywhere worthwhile? My answer to that is, I don’t know, maybe the 12th of never. Look, Boeing is just an absolute mess.

So how bad is Boeing this morning? It doesn’t matter. Boeing pops now and then. Boeing is going to pop now and then and it’s not popping say down 2.45%. So if you look at it and say, okay, maybe we try and catch this falling knife. No, because Boeing, the lows on October 25th of ’23 was $176. We’re at $178 now, people. So it’s going to test the lows. And if it breaks those lows, who knows where Boeing is going to go.

Do you want to own Boeing? No. You don’t want to own Boeing. Be careful out there. It’s a mess. More stuff has happened.

Now it’s going to start to impact some of the airlines. So if you own airline stocks, your take away there is keep an eye on your airline stocks. Maybe put some stops in there because some of the airline stocks who aren’t going to get delivery of Boeing jets, who are going to cancel orders for Boeing jets, are going to get aligned for anything else they can get, including used stuff, but they don’t want used stuff. They want new jets. So you know where they’re going to go. They’re going to go to the other guys and they’re going to have to get in line, a long line, a getting longer line.

You might want to take a look at their stock.

Last but not least, as far as takeaways go. Alphabet, aka Google, GOOG. That’s the stock that I recommended to my subscribers on the 15% dip. We’re happy campers because that dip has turned into a nice bounce and we’re already up nicely and we’re going to get better.

Stocks up really nicely today. Why? Because Apple is supposedly in talks with Alphabet about using the Gemini, Google’s Gemini AI, in the Apple ecosystem, I guess. Not just the smartphones, but throughout the ecosystem. Why not? They haven’t built their own and they need something and they better step up quick because they’re falling behind.

Apple stock is terrible and it’s terrible because the refresh cycle for the 15 was a bust. The 16 is going to have to have something in it. The smartphone, Apple 16, is going to have to have AI in it. If not, people, then the stock is going to go a lot lower because that refresh cycle is going to be a bust.

Apple is a problem. And as far as the stock goes, this news is great for Google this morning because Google stock this morning, oh, up 6%. Nice. Apple stock this morning, up to 4%. But in the pre-market, it was up. It was like just a tiny bit. So it’s gotten a little bit of a pop as the market opened because people are like, okay, if Apple is going to start to incorporate this, then maybe it’s a buy down here. Maybe. It’s worth it at some point to buy it down here. This is a good, if you want to buy it on the dip, this would be a spot to take a shot at it.

But keep an eye on both Apple and Google. We bought the dip in Google. Might be time to buy the dip in Apple. But if Apple decides that they’re not going to use it or the licensing is too expensive and it’s going to cost too much as far as what the new upgrades are going to cost on the phone and/or services, then remains to be seen. But so far, AI incorporated into Apple products at some point, maybe sooner than later, a good day for Apple for a change.

That’s it for your Monday Takeaways. Be safe out there.

Oh, it’s another record day on Wall Street. Cheers everybody.