President Donald Trump's second term could turn the tide on American manufacturing...
The lead-up to the recent U.S. election threw every market sector into uncertainty. Solar stocks, oil and gas, financials, and cryptos all had a stake in the outcome.
But the future was especially cloudy for manufacturers...
Trump's 2017 tax policies were a windfall for American manufacturing. They reduced businesses' tax rates and made it easy for manufacturers to expense things like equipment and machinery.
But it was unclear if the tax bill would be renewed, especially if Kamala Harris won the presidency in 2024.
Manufacturers faced a huge overhang as the election approached. But now that Trump's tax cuts are sure to be continued, the wind is at their backs.
That's setting up a remarkable opportunity for one business in particular. It's a company that's deeply unpopular today... And that means in a manufacturing turnaround, it's poised for some of the biggest gains.
Corporate espionage... terror at 16,000 feet... and a multibillion-dollar company in disgrace.
It may sound like I'm describing the contents of a paperback spy thriller... but these were the scandals that haunted aerospace giant Boeing (BA) last year.
The plane, defense, and spacecraft manufacturer suffered a relentless year of bad press. On January 5, 2024, a Boeing plane door malfunctioned just 20 minutes after takeoff, opening a hole in the cabin and forcing an emergency landing.
Nearly 200 Boeing aircraft were grounded after the incident... And more defective doors were found.
Eleven days later, an anonymous whistleblower stated on aviation site Leeham News's forum that "the reason the door blew off is stated in black and white in Boeing's own records."
A month later, a National Transportation Safety Board report confirmed the whistleblower's accusations.
In March, it happened again. A gear collapse caused a Boeing craft to veer off its runway after landing.
Sentiment around Boeing plunged to a level of hatred few companies in history have faced. Combined with a deeply uncertain manufacturing market, it's no wonder shares of Boeing fell 32% in 2024.
But now, the tide is changing in the manufacturing sector. And the outlook on Boeing is already changing with it...
We can see it in the company's price action. A great way to find inflection points in a stock is to compare its daily price action with its long-term trend. One useful measure for that is the 200-day moving average (200-DMA).
This metric averages the last 200 days of a stock's price action. This average smoothes out the noise of daily price moves. When the stock trades below its 200-DMA, it means prices are in a long-term downtrend, and vice versa.
Boeing's stock price plunged for much of 2024, causing its 200-DMA to fall with it. But today, the bottom may be in. Take a look...
Boeing's long-term trend line has finally started to flatten out. What's more, the stock is in an uptrend, with the price trading above its 200-DMA for the first time in more than a year.
Even though this company is beaten down and despised today, Boeing offers an ideal way to play the manufacturing comeback.
After a disastrous 2024, sentiment surrounding Boeing has nowhere to go but up. And the price trend is already in an upswing – which gives us an ideal entry point.
Boeing is in a classic setup for outperformance. With all its problems last year, this is the kind of stock you may hate to buy... But hated stocks have a way of exceeding all expectations.
Good investing,
Sean Michael Cummings
Further Reading
"In just seven months, one stock went from a top market performer to a bona fide crash victim," Brett Eversole writes. Investors are worried the "miracle" asset driving this company is overhyped. But this sell-off is giving investors an opportunity to get in – before the stock takes off again... Read more here.
"Boring or not, this currency is worth watching right now," Brett writes. After sentiment collapsed at the end of 2024, one of the world's most important currencies is starting to turn higher. And history shows this could be the start of a multimonth, double-digit rally... Learn more here.
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
JPMorgan Chase (JPM)... financial giant
Moody's (MCO)... credit-ratings firm
Charles Schwab (SCHW)... brokerage services
Cisco Systems (CSCO)... networking tech
Palantir Technologies (PLTR)... defense software
Fortinet (FTNT)... cybersecurity
Zillow (Z)... online real estate
Expedia (EXPE)... online travel agency
Netflix (NFLX)... video streaming
Marriott International (MAR)... hotels
Wyndham Hotels & Resorts (WH)... hotels
Live Nation Entertainment (LYV)... live events
Walmart (WMT)... discount retail king
Sprouts Farmers Market (SFM)... grocery stores
British American Tobacco (BTI)... cigarettes and alternatives
Franco-Nevada (FNV)... gold royalties
Agnico Eagle Mines (AEM)... gold
Ameren (AEE)... utilities
NEW LOWS OF NOTE LAST WEEK
Cable One (CABO)... cable television
Danaher (DHR)... science, health, and tech
Merck (MRK)... pharmaceuticals
Conagra Brands (CAG)... packaged foods
D.R. Horton (DHI)... homebuilder
Lennar (LEN)... homebuilder
Ford Motor (F)... automaker
Ball (BALL)... aluminum manufacturing
Halliburton (HAL)... oil services
