When the Dow Industrials gained 100 points the other day as Boeing was getting clobbered, I compared it to a runner with a broken foot sprinting 100 meters in under 11 seconds. Bulls looked nearly as impressive on Wednesday, hanging tough while FedEx shares were getting the stuffing knocked out of them. The stock was down $17, or nearly 10 percent, but if this unnerved institutional traders, you couldn’t tell from the tape. DaBoyz actually managed to levitate Boeing by $4.50 — no small feat when you consider that the aircraft manufacturer’s worries are as big as FedEx’s. Indeed, there would appear to be no relief in sight for either company. It will take FedEx years to build a ground-delivery system capable of handling e-commerce orders without becoming increasingly dependent on Amazon’s already formidable network. There is no jackpot at the other end, either, since home deliveries of small packages will be much less lucrative than the business-to-business shipping at which FedEx has long excelled.
Max-Out in January
As for Boeing, it will stop building its biggest-selling jetliner, the 737 Max, in the wake of two crashes that killed 346 passengers. The company announced it would halt the Max assembly line in January, but no one can say for certain when or even whether production will resume. Can the stock market continue to rampage with two of America’s most important companies on the ropes? Probably not. In the last few days, the bull market’s steep trajectory has gone flat as DaBoyz gingerly attempt do distribute as much stock as they can before pulling the plug. I still foresee a bullish year ahead for stocks, in large part because Trump is looking more and more like a two-term president. But that doesn’t mean we won’t see a very nasty correction between now and then. As most of you would surely agree, this would be an unsurprising time for one to start.