Monday Takeaways: Can Boeing Reverse Course with a New CEO?

Shah Gilani|March 25, 2024

We’re back with a fresh round of Monday Takeaways. This week, we’re starting right where we left off last Monday… with Boeing (BA).

That’s right – poor, poor Boeing.

We’ve talked at length about all that’s been ailing Boeing recently.

The big news today is that Boeing’s CEO Dave Calhoun is stepping down after the big wave of safety problems that has been plaguing the stock.

A lot of investors will naturally wonder… will a new CEO be enough to turn Boeing around?

We’ll get into it in today’s video.

I’ll also talk about a big trend that’s spreading across companies like Cisco (CSCO), Alphabet (GOOG), Amazon (AMZN) and many others.

If it keeps up, it could change the way consumers think about – and spend – their money. And that could have a major impact on the markets.

Lastly, I want to share some thoughts on the VIX and why I think investors should be following it closely – especially right now.

Click on the image below to watch today’s video.

 

Transcript

Everybody, Shah Gilani here with your Monday Takeaways. It’s a short trading week, so I’m gonna keep it short on the takeaways.

Top of the news really is, I think, Boeing’s CEO stepping down.

That should be old news. That should have happened a while ago. But the takeaway there is, it’s not likely all his fault. It seems to me like a culture problem at Boeing. So no matter who replaces the CEO, I gotta worry about what’s going on throughout Boeing.

However, a change at the top can change culture and the takeaway there is take a look at Boeing stock. At some place, I think Boeing stock is worth a shot. Is it an easy upside play? No, I don’t think so, but I think at some point and we’re getting kinda close to support.

We touch on it stock is up today, but I think it’s worth a shot, not a kinda swing for the fences play, but a shot. So take a look at Boeing. See what you make of that. Next up, I wanna talk about layoffs.

There’s been a lot of layoffs lately, to name just a handful of companies that are laying off workers, Cisco, Alphabet, Amazon, UPS Estee Lauder, Chrysler parents, the lantus.

A lot of companies are laying off. Now that’s a worry for a couple of reasons. If we continue to see layoffs, that’s likely to impact consumer confidence.

If consumers are worried that they may be next on the list of job cuts, they may stop spending as robustly as they have it and putting stuff on their credit cards a lot of stuff.

That could impact investor sentiment. If consumers look like they’re going to turn and worries about job losses, start to permeate the economy, investors are gonna take note. The takeaway there is, let’s just all keep an eye on layoffs and what’s happening, how big they are, what industries right now, it’s across the board. Every this there isn’t a single industry that hasn’t had layoffs.

And the same time, the S and P is up almost ten percent this year in twenty twenty four, nine point seven percent. So everything’s been going really good in spite of the fact that people can’t be blind to the fact that there are increasing number of layoffs. So the takeaway there is keep an eye on consumer confidence and of course we’re always watching investor sentiment there. But I got a feeling we’re gonna see more of that and I am concerned that consumers having loaded up their credit cards with crazy amounts of debt at interest rates that are staggering.

Something might give.

Last but not least, my takeaway which is a little bit longer term but could pop in any moment is there’s been a dampening dampening down of volatility and you just need to look at the VIX to get the intent of what I’m saying and what investors are doing, it’s got a thirteen handle. Investors traders are selling Vix options. Why? Because they don’t think the Vix is going to go up. So they’re selling call options. They don’t think the Vix is gonna go down there selling post options. So the selling of options on the VIX keeps it pretty low.

On top of that, investors are back to like what they were doing in twenty eighteen. It’s just selling volatility across the board, selling options buying stocks or stocks that they own and selling calls against them. So selling calls, actors selling calls, reduces the bags. It dampens volatility.

And then there are now, probably close to seventy five billion dollars worth of ETFs whose strategies are cover call writing. Why? For income, it’s called derivative income. So you would put a covered call play on if you own the stock to try and get some more interest on your on your stock.

Even though you have a dividend, let’s say Well, hey, if you sell call options on it and you keep selling call options every month or every quarter, you can have additional income. That’s called derivative income. We’re seeing a lot of that started to happen. And volatility has been tapped down and that’s fine, except it gets worrisome when investors are using this vol selling trade again for income.

We saw that in and really the the manifestation of the massive amount of doing that was back in February of twenty eighteen when we had the Volmageddon and Volmageddon was people were doing all this selling volatility. Other markets, you know, it’s strong. It’s going up. And, you know, the selling volatility is just for income.

It’s as great. This is a no brainer trade. Head funds were doing it in size.

And guess what happened? We had a bike in volatility, a massive spike in volatility because of massive amount of selling and stops being hit. And two ETFs got blown up. Right?

So I’m not saying we’re headed there again. I’m not saying we’re going to have another ball again, but the takeaway here is keep an eye on the VIX. If it starts to rise and if it starts to make some pops, that’s short covering of the vol trade. That’s people who sold volatility, trying to buy that back because they’re afraid the market might spike in terms of volatility.

If it does and the Vicks spikes, let’s say doesn’t have to spike a whole lot. You get to fifteen, sixteen in a hurry, and people will start panicking.

Guess what? Then they’re gonna start selling. They’re also gonna start taking profits. Which could trigger stops, which could cause a a cascade of selling, which would increase the vix and all of those vols sellers. All those vol selling traders are gonna get hammered.

So keep an eye on that, people. Because I’m starting to see an awful lot of it and I’m hearing a lot of people talking about what they’re doing with it. I’m like, okay, this is really getting pervasive and this happened again in twenty eighteen. This is maybe like deja vu all over again. Those are your takeaways for this week.

Be careful out there. Catch you guys next week.