“A ‘good’ landing is one from which you can walk away. A ‘great’ landing is one after which they can use the plane again.” – Pilot’s Proverb
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It’s to the credit of Airbus that its executives did not engage in any public gloating, even subtly, after the January 2024 incident in which the doors blew out from a Boeing 737 MAX 9 airliner in midair. Airbus chief executive Guillaume Faury was reported to have repeatedly urged staff to stay humble. Perhaps it’s because Faury understood that, as the saying goes, “There but for the grace of God go I.” Certainly Airbus knows how difficult it is to sustain and even expand profitability amidst challenging manufacturing and engineering conditions, along with the pressures of a massive backlog (and lineup of impatient customers).
Almost two years later, it’s Airbus that is facing a challenging week. The European aerospace giant disclosed a critical software deficiency that had caused the unintended activation of the elevator of an A320 airliner, resulting in the plane abruptly pitching downward in midair and forcing an emergency landing. (Nobody on board the JetBlue flight was hurt). The company then announced the discovery of a flaw in “a limited number” of metal panels that will require a different set of remedies for its A320s. This second problem prompted Airbus to warn that it would likely miss its 2025 delivery target of 820 jets by 30. Airbus’s ADR (EADSY) fell 3.2% on Monday, the day of the announcement.
Coincidentally, the negative news came around the same time that Boeing CFO Jay Malave suggested that numbers for 737 and 787 deliveries would likely improve in 2026, with a potential corresponding impact on cash flow. That had some investors hopeful that after several false starts, Boeing’s long-awaited turnaround was at hand. (Boeing surged 10.1% after Malave’s comments.)
It’s Boeing’s turn to return the favor and refrain from gloating. That should not be difficult – Boeing does not have much to gloat about, despite this week’s positive developments. Boeing shares have yet to recover from the fallout of the Alaska Airlines catastrophe – BA 0.35% is down 17.5% since Jan. 4, 2024, the day before the blowout.
Nevertheless, many analysts continue to maintain positive outlooks on the company, viewing the company and its share price as likely to recover – eventually. This is likely in large part due to the nature of the airliner industry. The industry is essentially a duopoly with considerable barriers to entry. With both members carrying an extensive backlog, Boeing’s customers really had no place else to take their business.
Boeing also benefits from its status as the only U.S. manufacturer of large passenger jets: If for nothing else but national pride, the company enjoys strong bipartisan support from the government of the country that invented the airplane. Even President Trump, who has been vocal about Boeing’s shortcomings (particularly regarding delays in delivering the new Air Force One), has stumped for the company with foreign governments on his trips abroad, such as during his visit to Qatar back in May.
What does this mean for Airbus? The Europeans also view Airbus with a certain amount of regional and nationalistic pride, so if these events were to cause a similar level of fallout, it’s reasonable to expect some tacit support amidst any regulatory crackdown. It helps, of course, that Airbus’s recent difficulties have not resulted in any visible disasters – or any loss of life. Perhaps that explains why Airbus shares bounced back yesterday, with EADSY closing up 4.9%.
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Q: Are U.S. AI companies making the right choice in focusing on a relatively closed-source business model?
A: Long term AI winners will be those focused on cost and flexibility, similar to other technology adoption. Over the decades big software projects have been 1/3 software, 1/3 hardware, and 1/3 labor. What the split is on major AI initiatives in the future is unclear
Catch up with FS Insight
We believe the bearish sentiment that we have seen for much of 2025 reflects the fact that many investors sold at the tariff lows and missed out on many of the 10 best days. By the way, many of the 10 best days happen in the final weeks of the year.
Technical
Both RSP and IWM look to be rapidly approaching key resistance, so breakouts in both should serve as a bullish catalyst for the U.S. stock market, likely in late December into January 2026.
Crypto
Bitcoin led yesterday’s rebound on strong volume. This suggests better odds of a sustained move and provides confirmation that the idiosyncratic seller is gone. Meanwhile, U.S. spot demand appears to be returning as the Coinbase–Binance spread continues trending higher.
News We’re Following
Breaking News
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Markets and economy
- Early holiday shopping reflects the economy: Fine, with potential cracks AX
- Trump proposal would weaken vehicle mileage rules that limit air pollution AP
Business
- Micron stops selling memory to consumers, demand spikes from AI chips CNBC
- Trump’s South Korea tariff cuts are major boost for Hyundai and GM CNBC
- EU launches antitrust probe into Meta over use of AI in WhatsApp REU
- Salesforce beats on earnings, issues better-than-expected revenue forecast CNBC
Politics
- Elise Stefanik is Johnson’s latest challenge as he struggles to keep control of the House POL
- Trump pardons Texas Democrat indicted on bribery charges WSJ
- New York Times sues Pentagon over press access REU
Overseas
- Europe scales back plan to make massive loans to Ukraine WSJ
- Honduras election on knife-edge as count delayed by technical glitch BBC
Of Interest
- D-Day veteran Charles Shay, who saved lives on Omaha Beach, dies at 101 in France AP
- Childhood deaths to rise for first time this millennium SEM
- The world has more billionaires than ever WSJ
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| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 12/4 | 10:00 AM | Sep F Sep P Durable Gds Orders | n/a | 0.5 |
| 12/5 | 10:00 AM | Dec P Oct P UMich 1yr Inf Exp | 4.4 | 4.5 |
| 12/5 | 10:00 AM | Dec P Oct P UMich Sentiment | 52 | 51 |
| 12/5 | 10:00 AM | Sep PCE m/m | 0.3 | 0.3 |
| 12/5 | 10:00 AM | Sep Core PCE m/m | 0.2 | 0.23 |
| 12/5 | 10:00 AM | Sep PCE y/y | 2.8 | 2.7 |
| 12/5 | 10:00 AM | Sep Core PCE y/y | 2.8 | 2.90511 |
| 12/8 | 11:00 AM | Nov Sep NYFed 1yr Inf Exp | n/a | 3.24 |
| 12/9 | 6:00 AM | Nov Sep Small Biz Optimisum | n/a | 98.2 |
| 12/9 | 10:00 AM | Oct Sep JOLTS | n/a | 7227 |
| 12/10 | 8:30 AM | 3Q ECI QoQ | 0.9 | 0.9 |
| 12/10 | 2:00 PM | Dec 10 Oct 29 FOMC Decision | 3.75 | 4 |
