October 2, 2024
Escalation in the Middle East Boosts Oil and Defense Stocks; Airlines Weak + Boeing Considers Billions-Dollar Capital Increase
Oil stocks benefited from news of a potential conflagration in the oil-rich Middle East, as this raises the risk of a shortage of the commodity. Chevron $CVX (-0.38%) , ExxonMobil $XOM and ConocoPhillips $COP (+1.15%) gained as much as 2.4 percent in New York. In Europe, TotalEnergies $TTE (+0.64%) and Eni $ENI (-0.49%) rose by as much as 1.4 percent. It is also not unusual during wartime for defense contractors to see their stock prices rise. In the U.S., for example, Lockheed Martin $LMT (+0.87%) and RTX $RTX (+0.29%) gains of up to 2.7 percent in some cases; in Europe, Rheinmetall $RHM (-0.63%) was particularly in demand, with a gain of more than 5 percent. BAE Systems $BA. (-0.99%) were up 3 percent.
The situation was different for shares of tourism companies and airlines. For the latter, risks are rising due to higher jet fuel prices. In addition, some travel destinations may be off the table for the time being, and the threat of terrorist attacks is growing. Investors in Tui $TUI1 (-0.19%) saw their shares drop by 2.5 percent. As for the share price of Lufthansa $LHA (-0.22%) fell by more than 2 percent. IAG $IAG (+0.29%) lost 3.9 percent. Shares of U.S. airlines such as American, Delta, and United Airlines fell by as much as 2.4 percent.
The U.S. aircraft manufacturer Boeing $BA (-0.11%) is reportedly considering a capital increase in the double-digit billions amid its ongoing crisis, according to insiders. The company is considering issuing new shares worth at least $10 billion (just under 9 billion euros), the Bloomberg news agency reported on Tuesday, citing people familiar with the matter. The fresh capital from shareholders is intended to replenish the manufacturer’s coffers, which have been steadily depleting as a result of the years-long crisis—marked by flight bans and production restrictions—as well as the recent strike by tens of thousands of employees. A Boeing spokesperson declined to comment. According to insiders, it will likely take at least a month before Boeing gets serious about such a capital increase
Economic Data, Quarterly Results
Stock market holiday in China
Ex-dividend dates for individual stocks
Cisco Systems $0.40
Quarterly Results / Corporate Events in Europe
7:00 a.m. Grenke New Business 3Q
9:00 a.m. Gea Group Capital Markets Day
No time specified: TotalEnergies Investor Day – 2024 Strategy & Outlook
Economic Data
- 11:00 a.m. EU: August Eurozone Labor Market Data: Unemployment Rate FORECAST: 6.4% Previous: 6.4%
- 2:15 PM US: ADP Labor Market Report: September Private-Sector Employment FORECAST: +128,000 jobs; previous: +99,000 jobs
