“Commodities tend to zig when the equity markets zag.” – Jim Rogers

1. Boeing Eyes Raising More Debt as 737 MAX Costs Rise — Boeing is examining plans to issue more debt to bolster finances strained by the mounting fallout from the grounding and halted production of its 737 MAX, according to people familiar with the matter. The aerospace giant had about $20 billion in available funds at the end of the September quarter, but costs associated with the MAX crisis are rising. Analysts expect Boeing to raise as much as $5 billion to help cover expenditures that could top $15 billion in the first half of this year. In addition to spending on maintenance for the grounded MAX fleet and finished planes, the company plans to close its $4 billion acquisition of an 80% stake in the Brazilian plane maker Embraer’s commercial airliner business. Boeing also has to repay some existing debt and fund shareholder dividends. In addition, Boeing (NYSE:BA) is reassigning 3,000 workers to other jobs, but does not expect to furlough any staff, as it halts production of its grounded 737 MAX in mid-January. Major supplier Spirit AeroSystems (NYSE:SPR) meanwhile said it would offer voluntary layoffs to some employees due to a lack of “clarity on the timing for resuming MAX production.” The announcements come after American Airlines (NASDAQ:AAL) and Mexico’s Aeromexico disclosed they were the latest carriers to reach settlements with Boeing over losses resulting from the 737 MAX crisis.
2. AAII Sentiment Survey — In the latest survey, the percentage of bullish investors in the weekly AAII survey has fallen for a third straight week down to 33.07%. This is the lowest level of bullish sentiment since the first week of December, when 31.72% of respondents were bullish. Granted, these declines have not brought bullish sentiment to any sort of extremely low level. In fact, it is now just about in line with the average reading of the past year, 33.41%.

Meanwhile, Nearly 30% of investors reported as bearish this week, which was an 8.01 percentage point increase from last week. That marked the third-largest one week jump in bearish sentiment of the past year. Granted, this increase was also about a third and half the size, respectively, of the past two larger increases of 24.14 percentage points in August and 16.11 percentage points in May. Despite the relatively large move higher, bearish sentiment is now right in line with its average of 30.3% over the past year.

3. Iran Admits to Shooting Down Jetliner — For days, Iran’s government had denied responsibility for the crash of a Boeing (NYSE:BA) 737-800 near Tehran, though it’s now calling the incident that killed 176 people a “disastrous mistake.” The country’s air defenses were fired in error while on alert after Iranian missile strikes targeted U.S. bases in Iraq. Local officials had previously pointed to an engine failure as the cause of the crash. The plane’s turbines were made by CFM International, a joint venture between General Electric (NYSE:GE) and France’s Safran (OTCPK:SAFRY).
4. SEC to Propose Exchanges Revamp Data Feed Policies — a proposal advanced by the SEC takes aim at a two-tier system that allows trading platforms like the New York Stock Exchange (NYSE:ICE) and Nasdaq (NASDAQ:NDAQ) to charge their largest customers higher fees for faster proprietary feeds, leaving smaller players to rely on a slower public stream. If the regulator decides to issue an order after receiving public input, the exchanges and FINRA would have to create a new governance plan, which would also be published for public comment before the SEC takes it into consideration.
5. Consumer Electronics Show 2020 Recap — Uber (NYSE:UBER) and Hyundai Motor (OTCPK:HYMLF) are partnering to develop electric air vehicles, joining the global race to make small self-flying cars to ease urban congestion. Samsung Electronics (OTC:SSNLF) demonstrated what it called the world’s first artificial human, Qualcomm (NASDAQ:QCOM) launched an autonomous driving computer and Toyota (NYSE:TM) said it’s building the prototype city of the future in Japan. Amazon (NASDAQ:AMZN) is also teaming up with Lamborghini and Rivian to offer its Alexa voice assistant in vehicles.

The week ahead — Economic data from Econoday.com: