Global stocks mixed as Airbus, Boeing soar on travel recovery hopes

NEW YORK – Global stocks were mixed yesterday amid lingering inflation concerns, while shares of Boeing and Airbus surged on expectations of a strong travel industry recovery amid the post-Covid-19 reopening.

Wall Street equities mostly rose after new filings for US unemployment benefits hit a new pandemic low and Republicans offered an infrastructure package that somewhat narrowed the gulf with the White House.

The Dow and S&P 500 finished higher, while the Nasdaq was essentially flat.

European stocks were less jubilant, with London and Frankfurt down.

But Paris closed higher, driven by planemaker Airbus’ confident predictions of ramping up production to meet increased demand in the years ahead.

The European firm revealed it will produce more single-aisle aircraft in 2023 than before the coronavirus crisis, stoking hopes of recovery in pandemic-hit aviation sector.

Airbus stock gained more than 9% to trade at almost €107 (RM540).

“The aviation sector is beginning to recover from the Covid-19 crisis,” Airbus chief executive Guillaume Faury said in a statement.

The company said it expects the commercial aircraft market “to recover to pre-Covid levels between 2023 and 2025, led by the single-aisle segment”.

Back on Wall Street, Boeing also had a good session, gaining nearly 4%. 

And other industrial companies such as Caterpillar and Honeywell International posted strong gains on expectations that the reopening of the economy will boost manufacturing.

However, optimism about the broader global economic recovery remains hobbled somewhat by fears that an inflationary spike could force central banks to rein in monetary stimulus earlier than expected.

The yield on the 10-year US Treasury note rose back above 1.6%, an indication of rising expectations on inflation.

“Global markets continue to grapple with persisting inflation concerns and optimism of economic recoveries,” Charles Schwab analysts said in a note.

But investors were heartened by a US$928 billion (RM3.84 trillion) infrastructure offer from Senate Republicans, which moves them somewhat closer to President Joe Biden’s latest US$1.7 trillion proposal, although significant differences remain between the parties, including how to pay for the spending.

The Business Roundtable said it was “encouraged” by the latest development, adding that “policymakers should seize the opportunity for bold, bipartisan infrastructure legislation”. – AFP, May 28, 2021