U.S. markets closed
  • S&P 500

    -38.67 (-0.84%)
  • Dow 30

    -59.71 (-0.17%)
  • Nasdaq

    -295.85 (-1.92%)
  • Russell 2000

    -47.02 (-2.13%)
  • Crude Oil

    -0.14 (-0.21%)
  • Gold

    +21.40 (+1.22%)
  • Silver

    +0.23 (+1.05%)

    +0.0009 (+0.08%)
  • 10-Yr Bond

    -0.1050 (-7.25%)

    -0.0070 (-0.52%)

    -0.3740 (-0.33%)

    -3,117.41 (-5.47%)
  • CMC Crypto 200

    -74.62 (-5.18%)
  • FTSE 100

    -6.89 (-0.10%)
  • Nikkei 225

    +276.20 (+1.00%)

The Zacks Analyst Blog Highlights: Boeing, Hexcel Corp, American Airlines, Delta Air Lines and Diageo

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·6 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

For Immediate Release

Chicago, IL – October 2, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: The Boeing Company BA, Hexcel Corporation HXL, American Airlines Group Inc. AAL, Delta Air Lines, Inc. DAL and Diageo plc DEO.

Here are highlights from Thursday’s Analyst Blog:

New WTO Ruling Ignites Fresh Spark in Transatlantic Trade War

The World Trade Organization (WTO) recently gave the European Union (EU) the green signal to impose tariffs worth $4 billion on U.S. exports in retaliation to the U.S. government’s unlawful aid to Boeing. No doubt, the latest ruling added fuel to the long-standing trade feud prevalent between these two nations, with jet giants Boeing and Airbus at the center of the conflict.

Background of the Feud

In 2004, the U.S. Trade Representative (USTR) filed a formal complaint with the WTO against European governments for the subsidies they provided to Airbus. The complaint mentioned that interest rates charged for the loans that the government gave Airbus were much lower than what commercial lenders charged. In addition, Airbus repaid the money, only after it delivered the aircraft to customers. That, according to Boeing, gave Airbus a significant competitive advantage, considering the capital-intensive nature of the commercial airplane business.

In retaliation, the EU filed a counter-complaint alleging that the U.S. government subsidized Boeing’s commercial airplane business through defense and NASA pacts. This was probably the start of the trade war between America and the EU that has only expanded over time.

What Led to the Tariff Imposition?

The conflict rekindled in October 2019, when, following a WTO ruling, Washington slapped 10% tariffs on Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the EU. The tariff worth $7.5 billion, however excluded EU-made aircraft parts used in Airbus' Alabama assembly operations or those used by rival U.S. planemaker Boeing, for safeguarding U.S. manufacturing jobs.

Naturally, this antagonized the EU government and since then it has been petitioning for levying a similar tariff on U.S. exports. Notably, the latest ruling is only one-third of the EU’s request for imposition of a $12 billion tariff on U.S. goods. However it was much more than $300 million anticipated by the U.S. government.

Who Will be Affected?

Per major media sources, the EU is aiming its tariffs at coal producers, farmers and fisheries, wine, cheese, whiskey, in addition to aircraft makers.

Within Aerospace, while aircraft manufacturers are anticipated to directly feel the heat of the conflict, parts-makers like Teledyne Technologies and Hexcel Corp. are also expected to suffer, albeit to a lesser extent. This is because the global aircraft supply chain is spread across various nations and no one country possesses everything to manufacture planes without depending on global supply. For instance, although based in Connecticut, Hexcel Corp. has production facilities in the EU. Maybe that’s why the U.S.-imposed tariff on EU goods exempted aircraft parts. However, the back-to-back trade war is going to have an impact on them as well.

Airlines, consumers of aircraft manufacturers, will also get affected. Since such high tariffs tend to push up the cost of aircraft, be it U.S.-made or European, jet carriers will have to bear the same. This will add to the perils of the airline industry, which has been the worst affected due to the travel restriction across the globe caused by the coronavirus outbreak, since mid-March. In particular, with American Airlines and Delta Air Lines operating maximum Airbus fleets among U.S. carriers, once the recent WTO ruling is imposed, these airlines will face operational loss.

Following the October ruling, Wine & Spirits Wholesalers of America (WSWA) estimated that the 25% tariffs implemented might result in the loss of nearly 36,000 jobs in the beverage alcohol industry. In 2019, as stated by the Distilled Spirits Council of the United States, the U.S. spirit industry’s exports to the EU, its largest export market, fell 27% year over year. No doubt, the latest WTO ruling will cause the U.S. export figures to the EU to fall further, thereby adding to the concerns of wine stocks like Diageo.  

To Conclude

Tit-for-tat tariffs imposed are hurting companies and consumers on both sides of the Atlantic. So, both the United States and EU, as urged by experts, should come to a negotiation for a sustainable trade deal so that both the economies, which have just started to recover from the pandemic-led turmoil, can survive over the long term.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.

The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.

Click Here, See It Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339




Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Boeing Company (BA) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
Hexcel Corporation (HXL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research