WSJ Markets Email - Interesting snippets on Boeing, S&P and John Maynard Keynes!

Winner: Boeing and the Risk Trade

It has been a long time since anyone has called Boeing a winner, but the company’s stock staged a big rebound this week. Shares were up about 26% through Thursday, far and away the biggest move among the 30 Dow components.

Boeing managed to get two customers to defer, rather than cancel, orders for 737 MAX planes, and a prominent hedge fund, Dan Loeb’s Third Point, took a position in the company’s debt.

Boeing sits in the middle of many of the swirling issues in the markets. Its primary customers are airlines, which are under duress. They need business people and tourists to resume traveling. And for that to happen, the economy needs to recover, and progress needs to be made toward a coronavirus vaccine.

If those things don’t happen, it is hard to see how Boeing grows. Wall Street estimates, according to FactSet, call for the company to lose $4.17 a share this year.

Moreover, Boeing shares are still down nearly 60% from their 2019 record of $441. What this week’s rally in the stock really illustrates is the degree to which the risk trade has retaken the market.

Despite all the lingering issues, the S&P 500 is up nearly 40% in just the past 50 trading days, according to LPL Financial strategist Ryan Detrick. That is the largest such rally since 1957. Similar rallies have led to more gains over the ensuing 12 months, he said.

n this day in 1883, John Maynard Keynes was born in Cambridge, England. Between World War I and World War II, Keynes devised the theories that led to massive government intervention in economies around the world. His criticisms of free markets, however, did not prevent him from making a small fortune on the stock market.