Why Boeing and the Airlines Are Flying Higher Today
What happened
Stocks were solidly higher on Friday, thanks to new data that suggests the economy remains strong, as well as talk of a potential China post-COVID reopening. Both pieces of news are positives for the airlines and their major suppliers, and the sector is outperforming the market as a result.
Shares of Boeing (NYSE: BA) traded up as much as 3% on Friday, while shares of United Airlines Holdings (NASDAQ: UAL) and American Airlines Group (NASDAQ: AAL) were up as much as 5% apiece.
So what
After a difficult few years, the airlines are on the upswing, but questions remain about how long the good times can last. Demand for air travel has come soaring back post-pandemic, putting the airlines in a position to begin rebuilding their balance sheets and thinking ahead to new aircraft orders.
The fear now is that inflation, and the Federal Reserve's campaign to keep it under control, will take the steam out of the economy and eat into future demand for plane tickets. The airlines have historically been a cyclical group, meaning they typically do not do well in times of economic distress.
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