Based
Investors are dancing on Boeing and one of its biggest suppliers this morning after a harrowing malfunction at 16,000 feet over the weekend in which a door panel tore off a new 737 Max 9 jetliner mid-flight.
Air safety officials ordered the grounding of the Max 9, one of Boeing’s best-selling models, and airlines around the world canceled hundreds of flights while awaiting instructions from regulators in the United States. United and elsewhere.
The latest update: The NTSB said yesterday that the piece of fuselage that fell from the plane was found in a yard in Portland, Oregon.
Boeing shares fell nearly 9 percentand Spirit Aerosystems, which makes the Max 9’s door panel, or “intake,” leaked in pre-market trading. Shares of Boeing, a major defense contractor, have risen sharply since the outbreak of war in October between Israel and Hamas. But its shares remain well below the levels they reached in early 2019 following the huge buzz around the fuel-efficient Max.
This latest incident could deal a major blow to Boeing’s recovery plan, as well as its reputation. No one was injured on the Alaska Airlines flight Friday evening. But it is the latest in a series of safety lapses before and since two fatal crashes involving Indonesia’s Lion Air and Ethiopian Airlines in 2018 and 2019. The crashes, of different versions of the Max, were linked to a malfunction of the computer system which overrode the pilots’ commands. . The plans remained blocked worldwide for almost two years after the accidents.
737 deliveries delayed after Boeing found problems with Spirit working made on the plans last year. Boeing’s wide-body Dreamliner was also grounded as the company worked to address FAA safety concerns. “The problem is what’s happening at Boeing,” John Goglia, an aviation safety consultant and plane crash investigator, told the Times.
Boeing CEO David Calhoun expects 2024 to be a year back. Instead, the company canceled a leadership retreat, Bloomberg reported, and worked over the weekend with the FAA to provide its airline customers with instructions on how to inspect their plans. Boeing is expected to hold a company-wide meeting tomorrow, during which Calhoun said it will put more emphasis on safety.
Questions also swirl around Alaska Airlines. The company had stopped flying the plane long distances over water following concerns about a pressurization indicator.
THIS IS WHAT HAPPENS
Congressional leaders reach agreement on government spending. The deal caps overall spending at about $1.66 trillion, consistent with the agreement reached last year between President Biden and Kevin McCarthy, the former Speaker of the House. But it is not certain that there are enough votes to convince the conservatives and avoid a partial government shutdown in less than two weeks.
“Oppenheimer” and “Succession” win big at the Golden Globe Awards. The film about the father of the atomic bomb won five awards, making it the Oscar favorite, while “Succession” took top honors for a TV series, winning four. It’s too early to tell whether the ceremony’s broadcaster, CBS, or its organizers, Penske Media and investor Todd Boehly, emerged victorious.
A commercial spaceship is heading to the Moon. A Vulcan rocket blasted off this morning, carrying a robotic lander (and the remains of Gene Roddenberry, the creator of “Star Trek”). The spacecraft, built by a joint venture between Boeing and Lockheed Martin, is the first of several launches planned this year, as a number of companies hope to erode SpaceX’s dominance of the space launch industry.
A radio and podcast giant files for bankruptcy protection. Audacy, America’s largest radio company, owner of WFAN Sports Radio and 1010 WINS in New York, filed for chapter 11 in Texas this weekend to reduce its debt. The company has been hit hard by a slowdown in advertising.
A growing conflict between Ackman and Business Insider
Bill Ackman’s fight against elite universities has expanded in an unexpected way: The parent company of Business Insider, the publication that last week accused his wife of plagiarism, said it was reviewing its journalists’ reporting in light of this cover.
And Ackman, who has loudly called for Claudine Gay’s ouster as Harvard president, has stepped up his campaign against his wife’s alma mater, MIT, including its senior leaders and professors.
Media giant Axel Springer said it would review Business Insider’s processes, After Ackman criticized articles that claimed his wife, former MIT professor Neri Oxman, had plagiarized other researchers in her 2010 dissertation. While Oxman apologized for any academic infractions and said that she asked for corrections, Ackman questioned the motives behind the cover.
Although Springer is known for its hands-off approach to its media outlets, which also include Politico and German newspapers Die Welt and Bild, the publisher has said it wants to “ensure that our standards as well as our journalistic values were maintained.” (Semafor reported that some Springer executives were concerned that media coverage of Oxman, who was born and raised in Israel, could be viewed as anti-Semitic and anti-Zionist.)
Business Insider defended itself. The media’s global editor-in-chief, Nicholas Carlson, written in an internal memo that he stuck to the publication’s cover. The decision was motivated by “truth and responsibility,” he said.
Meanwhile, Ackman called for MIT professors’ papers to be reviewed for plagiarism, use artificial intelligence tools to review their work. He also suggested that similar efforts be undertaken in other universities and at Business Insider.
The claim continues her campaign against Sally Kornbluth, the president of MIT, who critics say has failed to sufficiently combat anti-Semitism on campus. (She also testified at the same congressional hearing last month that helped reveal the fate of Gay and Liz Magill, the current former president of the University of Pennsylvania.)
New reports about Musk’s drug use raise questions about behavior
Elon Musk made waves in 2018 when he smoked marijuana during an interview on Joe Rogan’s podcast, with footage of him holding a joint quickly becoming a topic of discussion about the billionaire’s behavior and memes Internet.
Musk didn’t break any laws, since recreational marijuana in California, where the show was recorded, is legal. But a Wall Street Journal article accusing him of consume other substancessome of which are illegal, has reignited the debate on his behavior.
Tesla and SpaceX executives discussed Musk’s actions, including the use of ketamine (for which he said he had a prescription), LSD and psychedelic mushrooms, according to The Journal. Tesla board member Linda Johnson Rice became so frustrated with the issue that she chose not to run again in 2019, the report added.
Why is this important, according to Le Journal:
Using illegal drugs would likely constitute a violation of federal policies that could jeopardize SpaceX’s billions of dollars in government contracts. Musk is intrinsic to the value of his companies, potentially putting at risk an estimated $1 trillion in investor-owned assets, tens of thousands of jobs and much of the U.S. space program. …
In addition to violating federal contracts, any type of illegal drug use would violate company policies at both SpaceX and Tesla and raise questions about Musk’s executive role at the publicly traded Tesla company, where the board of directors has a duty to shareholders to oversee management.
Elon Musk refuted the report: posting on his social network X that after smoking on Rogan’s show, he agreed to three years of random drug testing at the request of NASA. “No trace was found of any drugs or alcohol,” he wrote.
He later added that the media “nothing will stop to destroy
Investors don’t seem bothered. Tesla shares fell only slightly in premarket trading.
“It’s like having the best bows and arrows in the gunpowder era.”
— Mike Madrid, an anti-Trump Republican strategist, on Nikki Haley’s emergence in fundraising from deep-pocketed donors. The former South Carolina governor’s supporters include investor Stanley Druckenmiller and metals magnate Andy Sabin (and Democratic tech entrepreneur Reid Hoffman), but Haley continues to trail Donald Trump in two-way Republican primary polls numbers.
The week ahead
There are plenty of things on the calendar this week to keep Wall Street busy, including JPMorgan Chase earnings and the latest inflation report. Here’s what to watch.
Tomorrow: Grocery chain Albertsons reports third quarter results.
THURSDAY: The December Consumer Price Index report is should show headline inflation rose slightly last month, while “core” inflation, which excludes food and fuel, slowed slightly. A more favorable reading could make markets more volatile, as Wall Street has already started lowering its expectations for a first-quarter Fed rate cut as inflation concerns persist.
Fast Retailing, the parent company of Uniqlo, reports its quarterly results.
Friday: This is a boon for revenues. On deck are Bank of America, Bank of New York Mellon, BlackRock, Delta Air Lines, JPMorgan Chase, UnitedHealth Group and Wells Fargo.
SATURDAY: Taiwan holds a crucial presidential election, as Beijing increases pressure on the self-ruled island to unify.
QUICK READING
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Berkshire Hathaway settled a lawsuit on the valuation of Pilot Travel Centers, the truck stop chain of which Warren Buffett’s conglomerate bought control from the Haslam family. (CNBC)
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The proposed $14.1 billion sale of US Steel to Japan’s Nippon Steel challenges President Biden’s efforts to increase domestic industrial production. (NYT)
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“Wall Street Double Down on Bonds» (WSJ)
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