Confirmed cases of COVID-19 are on the rise in some U.S. states, and hospitalizations in those areas are on the rise. The stock market shook the worsening pandemic news on Monday, with the Dow Jones Industrial Average (DJINDICES: ^ DJI) up 1.3% at 12:35 pm EDT.
Actions of Boeing (NYSE: BA) They were ready on Monday, as the next phase of the process for the 737 Max to fly again was scheduled to begin. Intel (NASDAQ: INTC) It also rose along with the market despite the downgrade of analysts.
The Boeing 737 Max faces more test flights
Last week, Boeing’s changes to the flight control system on the 737 Max grounded responsible for two fatal crashes were tested on a series of certification test flights. This week, regulators will subject the plane to another series of test flights.
Image source: Getty Images.
The Wall Street Journal reported Sunday that a series of test flights with federal pilots will begin as early as this week as part of an operational readiness review. The flights will further test the changes made to the 737 Max’s flight control system.
If the tests are successful, the Federal Aviation Administration is expected to lift the order that grounded the 737 Max in September. Bringing the aircraft back into the air will still require completion of pilot training mandates and maintenance requirements, but the diarySources consider that the 737 Max is authorized to carry passengers by the end of the year.
It is unclear if there will be many passengers to transport. Demand for air travel is still deeply depressed due to the pandemic, and the 737 Max’s return could coincide with a second wave of the new coronavirus this winter. While passenger volumes have improved, TSA data shows that the total number of travelers who passed through checkpoints in the first five days of July decreased nearly 70% from the same period last year.
Boeing shares rose along with the overall market on Monday, 1% earlier in the afternoon. Getting the 737 Max to fly again will solve a big problem for the company, but the pandemic can lead to a drop in demand for many years.
Intel degraded into PC weakness
A combination of an expected slowdown in the PC market and share losses in Advanced micro devices analysts led in Goldman Sachs downgrade Intel shares on Monday. Goldman downgraded its semiconductor giant rating from “neutral” to “sell,” and lowered its price target from $ 65 to $ 54.
Goldman’s channel checks revealed a slowdown in PC versions for the second half of this year. In the first quarter of 2020, the global traditional PC market fell 9.8% year-over-year in part due to supply constraints related to the new outbreak of coronavirus in China. In the US, the rise in work from home amid the pandemic caused a surge in demand for laptops, but that strong demand is unlikely to last during a recession.
Goldman also discovered that Intel was losing market share in the server PC and CPU markets to AMD. In the PC market, AMD’s Ryzen processors have given Intel its first taste of real competition in years. In the server market, AMD’s EPYC processors have provided customers with a viable alternative to expensive Intel chips. Goldman expects Intel’s gross margin to decline in the coming years as it faces increased competition.
The downgrade was not enough to derail Intel’s shares on Monday. Shares rose about 0.3% in the early afternoon.
