Why Is Boeing (BA) Stock Trending Today?

  • Shares of airplane manufacturer Boeing (BA) gained nearly 2% on Tuesday early afternoon.
  • The company seeks to have the troubled 737 Max jetliner back to serve Chinese airspace.
  • BA stock possibly increased on a possible remarketing if no solution materializes soon.
BA stock - Why Is Boeing (BA) Stock Trending Today?

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Shares of embattled aerospace specialist Boeing (NYSE:BA) are moving higher as management redoubles efforts to convince China’s regulators to move the manufacturing giant’s troubled 737 Max jetliner back into service in Chinese airspace. BA stock gained nearly 2% in the early afternoon session, possibly due to the underlying company suggesting it may remarket the Max jets if no solution materializes soon.

China’s Civil Aviation Authority (CAAC) on Tuesday stated that it met with Boeing executives last week in Beijing, per TheStreet. The issue at hand focused on the ongoing effort to allow the Max to return to service in China.

Following two high-profile fatal accidents, China represented the first nation to ground the Max in March 2019. Since then, its government has yet to lift the ban. This circumstance leaves almost 100 delivered Max jetliners in storage in Chinese airports. Further, more than 100 new Max jets await delivery to enterprises in the nation.

According to a Reuters report, the CAAC stated that the “purpose of the meeting was to review improved aircraft training plans for the model.” Further, the news agency stated that the “CAAC said it would release a revised report when the questions raised at the meeting were resolved.”

A Wrinkle for BA Stock

Per Reuters, the “day after the Sept. 14 meeting, Boeing’s top executives said the planemaker would begin to remarket some 737 MAX jets earmarked for Chinese customers because it could not wait indefinitely while U.S.-China political tensions snarl deliveries.” The news probably helped lift BA stock because the underlying company added economic leverage to the negotiations.

Boeing CEO Dave Calhoun acknowledged that resuming deliveries to China represented a critical catalyst to the aerospace firm’s future. However, the chief exec also acknowledged that selling planes to China in the near term (approximately a year or two) was unlikely.

Boeing CFO Brian West provided additional commentary on the matter. “We have deferred decisions on those planes for a long time,” West told an industry conference in Washington. “We can’t defer that decision forever. So we will begin to remarket some of those airplanes.”

While BA stock increased during the afternoon session, the matter comes at a geopolitical sensitive cycle. Amid Russia’s invasion of Ukraine — an attack that has failed to meet Moscow’s primary expectations – the Kremlin seeks closer ties with Beijing. While this circumstance appears to put China in the driver’s seat, it also cannot afford to anger the U.S. lest China hurt its own economic ambitions.

Investors may be anticipating a positive outcome for Boeing as a result. Certainly, BA stock makes for interesting viewing.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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