- Vaccine news sends markets and travel industry names higher.
- Boeing share prices are recovering according to an anticipated path, but it will take time before financials significantly improve.
- While the results of the prelim efficacy analysis are undoubtedly positive, this marks the start of a long road ahead.
- As expected, market leaves behind the Boeing 737 MAX crisis and acts on the pandemic developments.
- This idea was discussed in more depth with members of my private investing community, The Aerospace Forum. Get started today »
It has been a green day on the markets, setting new highs. The new highs are driven by positive vaccine news where the Pfizer/BioNTech COVID-19 vaccine showed to be 90% effective. It has given the markets a lot of upward momentum. The travel industry is faring well on the news. I haven’t been holding any airline shares for almost a year now, but the US Global Jets ETF (JETS) is up more than 13% of the time of writing and other names in the travel and entertainment business or exposure to those industries are up significantly as well.
Some names that I own are up significantly:
- AerCap (AER) closely tied to the commercial aircraft and airline industry gained over 30%.
- Boeing (BA) gained 14.3%.
- Airbus (OTCPK:EADSF) gained 17.5%.
- Apple Hospitality REIT (APLE) (with a suspended dividend) gained 17.4%.
- EPR Properties REIT (EPR) (with a suspended dividend) gained 40%.
Am I happy with these one day moves? I certainly am, but I also need to admit that these were some of the most beaten-down names in my portfolio. In this analysis, I will explain how Boeing is following the path I had expected.
Boeing: Underperforming today in my portfolio
Before we look into the path that’s currently being followed, let’s take a moment to address that Boeing is the trave industry (related) underperformer in my portfolio today. I think many people will be quite fast with pointing out that due to the Boeing 737 MAX crisis, Boeing’s performance is dampened while Airbus is doing nicely. However, the main reason in my view why Boeing is underperforming in my portfolio is because the EU will be imposing tariffs on Boeing aircraft. I don’t consider it a constructive move, but a largely symbolic one as the parties involved seek for a resolution.