Daily Brief - A high-flying opportunity

TLDR: The skies have been anything but friendly for Boeing lately, but Airbus on the other hand is soaring to new heights, leveraging Boeing's misfortunes to cement its position as the world's leading plane maker.

In 2023, Airbus delivered more aircrafts and secured more orders than Boeing for the fifth consecutive year. Despite Boeing's efforts, including significant new 737 orders and deals for the 787, the U.S. airframer's operational struggles continued. Issues with the 737 Max were highlighted early in 2024 when a door plug blew out of a Max 9 during flight, leading to a grounding of hundreds of the type.

Meanwhile, Airbus is not just flying high but soaring. As one industry analyst puts it, what used to be a duopoly is now skewing towards a two-thirds market share for Airbus.

Boeing is facing financial challenges, evidenced by their lack of annual profit since 2018. Their unexpected loss in the third quarter of 2023, largely attributed to complications in the Air Force One program, contrasts sharply with Airbus's consistent profitability, highlighting a clear disparity in their financial performances.

Moreover, Boeing's difficulties are compounded by the FAA's grounding of the Boeing 737 MAX fleet. This move not only casts doubt on the aircraft's future market potential but also raises concerns about Boeing's commitment to quality control.

On the other hand, Toggle AI has observed a pattern where significant increases in Airbus's stock price often lead to continued positive performance in its stock value.

Up, up and away!

Market Movers: When Boeing stock drops?

Here is the performance of US airline stocks on a median basis post Boeing's stock falling 20%:

1. Alaska Air (ticker: alk) with a 1-month return of 5.33%.
2. United Airlines (ticker: ual) with a 1-month return of 3.35%.
3. Delta (ticker: dal) with a 1-month return of 1.96%.
4. Southwest (ticker: luv) with a 1-month return of -0.87%.
5. American Airlines (ticker: aal) with a 1-month return of -7.63%.

Earnings Update: Tesla reports tonight

Tesla is anticipated to report revenue growth but profitability is expected to decline 36.4% compared to a year ago due to margin pressures stemming from cost-cutting efforts initiated in late 2022.

CEO Elon Musk's recent statement about seeking more voting control over Tesla has also raised some concerns. Musk, who currently owns 13% of Tesla, expressed his discomfort in leading Tesla's AI and robotics initiatives without having at least 25% voting control.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.

Asset Spotlight: XLE's MACD signals potential price rebound

Toggle's analysis of 12 previous instances where XLE's 12W, 26W MACD hit a recent low shows that such events were typically followed by a median increase in the ETF's price over the subsequent three months.

Additionally, XLE's 14D RSI is currently significantly low, a condition that has historically preceded a rise in price, although it often suggests a potential for continued median decline for about two more weeks.