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Boeing will take a $5.6 billion hit from 737 MAX mess: Morning Brief

Friday, July 19, 2019

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All eyes will be on Boeing (BA) after the company said it would take a massive second quarter charge on the idling of its 737 MAX, the troubled flagship plane at the center of two deadly crashes. Of the 30 stocks that make up the Dow Jones Industrial Average (^DJI), Boeing carries the largest weight — but the stock rose in after-hours trading. The controversy will cost Boeing $5.6 billion in revenue and profit in Q2, the aerospace giant said.

Separately, investors will get a pulse of the current state of the transportation industry when Kansas City Southern (KSU) reports quarterly results ahead of the opening bell. Analysts polled by Bloomberg are expecting Kansas City Southern to report adjusted earnings of $1.61 per share on $706.23 million in revenue.

The transport sector has been in focus this week, after a mixed bag of quarterly reports. Trucking company J.B. Hunt (JBHT) kicked things off on a positive note with better-than-expected results, but rail giant CSX (CSX) spooked investors by slashing its outlook amid the ongoing U.S.-China trade war. Union Pacific (UNP) also cited trade tensions, but managed to boost its quarterly profit.

Meanwhile, American Express (AXP) will also deliver quarterly results ahead of Friday’s opening bell. The charge card giant is expected to report adjusted earnings of $2.03 per share on $10.86 billion in revenue.

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Speaker of the House Nancy Pelosi talks with an aide as she walks through statuary hall heading to an event advocating for the "Raise the Wage Act" and a national $15 an hour minimum wage shortly after asking President Donald Trump to delay his State of the Union Address due to the ongoing partial government shutdown on Capitol Hill in Washington, U.S., January 16, 2019. REUTERS/Yuri Gripas

House votes to raise minimum wage to $15 an hour: The U.S. House of Representatives has passed a bill that would gradually raise the federal minimum wage to $15 an hour, but the legislation is unlikely to pass the Republican-controlled Senate. The federal minimum wage has been stuck at $7.25 an hour since 2009 — that’s the longest stretch of time without an increase since the minimum wage was established in the 1930s. [Yahoo Finance]

Union Pacific CEO: Trade tensions are 'definitely' impacting business: The CEO of Union Pacific (UNP) says the railroad business is feeling the heat from U.S. trade tensions. “There [are] some unique impacts that are happening to the railroad that aren't reflective of the U.S. or global economy,” Lance Fritz, CEO of Union Pacific, the largest publicly-owned U.S. railroad tells Yahoo Finance. “We definitely see a trade impact on our grain exports.” [Yahoo Finance]

Microsoft beats Q2 estimates as cloud business holds momentum: Microsoft (MSFT) topped quarterly sales and profit projections, fueled by steady demand for cloud-computing services and a surprisingly strong Windows business. The software giant forecast promised robust growth will continue into next year. [Bloomberg]

U.S. tells T-Mobile, Sprint to wrap up divestiture deal -source. The U.S. Justice Department has told T-Mobile US (TMUS) and Sprint (S) to wrap up a deal by the end of next week to sell assets that need to be divested or face a lawsuit aimed at stopping their proposed merger, a source familiar with the deal said on Thursday. [Reuters]

Why US regulators are struggling to step up to regulate Facebook's Libra: Regulators, lawmakers on Capitol Hill, and the Libra Association itself appear to agree that regulation is needed to ensure that Facebook’s (FB) new digital currency is safe and secure to use. But no one appears to have a clear framework for who should take the first steps to actually doing something. [Yahoo Finance]


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