What’s Our Potential Pick-Up Point for Boeing?
After sharing levels we’re watching for several holdings last week, we were asked by more than a few members about a potential pick-up point for Boeing ($BA) shares. Following that question, BA shares headed lower on news we discussed this morning, Boeing engineers and technical workers rejecting a four-year contract offer.
The same members represented by the Society of Professional Engineering Employees in Aerospace (SPEEA) also voted to declare a strike when the contract expires on October 6. Our understanding is Boeing’s proposal capped inflation-tied raises at 3% with workers arguing for something higher.
With direct labor representing a rather small portion of an aircraft’s cost, given Boeing’s backlog and the focus on increasing aircraft production levels, odds are we will see a meeting of the minds between the two parties take place. The question on our mind is with six weeks until that October 6 deadline, how quickly might such an understanding come about?
While this injects some uncertainty into the mix, we doubt Boeing’s current management team is looking for a repeat of the strikes that plagued the company in 2024 and 2025. With that in mind, we are eyeing the $205-$210 level for BA, but we will also want to watch for a flattening in the MACD indicator in the bottom panel.
Treading Carefully
We’re likely to take our time deploying any capital in the very near-term, given the big items the market will face this week, including Treasury Secretary Scott Bessent’s 2 PM ET press conference Monday, Nvidia’s ($NVDA) earnings after Wednesday’s market close, and Fed Chair Kevin Warsh’s Jackson Hole comments Friday. As each of those events unfold, we’ll adjust our thinking as needed.
We’ll also need to keep tabs on what is shaping up as a potential trade war between the U.S. and Canada. President Trump said that effective January 1, 2027 he will raise tariffs on imports of cars, trucks and auto parts from Canada to 50% from 25%. And if we had to guess, our thinking is Trump did not care for Canadian Prime Minister Mark Carney’s comment this morning about there being little chance of resuming trade talks before the U.S. mid-term elections in November. Should we see tit for tat tariff moves continue, it will rekindle uncertainties in the market while also leading folks, including us, to revisit inflation prospects.
This is just another reason to tread carefully in the very near-term, not only with Boeing shares but the others we discussed with you last week. That’s especially the case with trading volumes likely to be at seasonally low levels this week and next.
More Pro Portfolio:
- We’re Scooping Up Shares of a Chip Company and a Well Positioned Retailer
- We’re Tracking 27 Portfolio Signals Across Our Investing Themes
- Weekly Roundup: Geopolitics Wins Out, But Portfolio Continues to Outperform
At the time of publication, TheStreet Pro Portfolio was long BA and NVDA.
