CNBC Daily Open: Boeing tumbles on Max crisis

Boeing shares tumble #

Boeing shares experienced a significant drop of 8% after the Federal Aviation Administration ordered inspections for several Boeing 737 Max 9 aircraft. The decision was made following the incident where a door plug blew out during an Alaska Airlines flight. Additionally, United Airlines discovered loose bolts on door plugs of multiple Boeing 737 Max 9 planes.

Markets get a tech boost #

Wall Street’s main indexes showed gains at the beginning of the week, driven by the performance of tech shares. The S&P 500 closed with a 1.41% increase, while the Nasdaq Composite, heavily influenced by tech stocks, jumped 2.2%. This marked the Nasdaq’s best performance since November 14. The Dow Jones Industrial Average also ended the day up 0.58%. In Asia, the Nikkei 225 index reached a fresh 33-year intra-day high, driven by gains in the tech sector.

New and shiny AI chips #

Nvidia unveiled three new graphics cards, namely the RTX 4060 Super, RTX 4070 Ti Super, and RTX 4080 Super. Ranging in price from $599 to $999, these cards are aimed at boosting Nvidia’s presence in consumer GPUs for “local” AI, allowing AI applications to run on personal computers or laptops from home or an office.

Housing market kickstart #

December saw a sharp drop in mortgage interest rates, which is expected to jumpstart the spring housing market of 2024. Rates are nearly one percentage point lower compared to October, and further declines are anticipated, according to a consumer survey by Fannie Mae. In 2020 and 2021, the average rate for a 30-year mortgage hit record lows below 3%, resulting in a historic surge in homebuying activity and a significant increase in prices, only to more than double in 2022.

Morgan Stanley’s preferred picks #

Morgan Stanley highlights its “most preferred” European internet stocks for potential gains in 2024. Improved fundamentals and falling interest rates are creating a favorable outlook for internet stocks in Europe, according to the investment firm.

The bottom line #

The aviation industry is facing a challenging start to the year, with recent incidents adding to the troubles faced by Boeing. Following an incident involving the 737 Max 9 planes, the FAA has grounded these planes globally, affecting around 171 aircraft. This comes after Boeing dealt with management changes and the worldwide grounding of the popular Boeing 737 Max 8 model following fatal crashes in 2018 and 2019. The incident raises questions about the quality checks and the future of airlines relying on the 737 Max planes.

On a positive note, American home buyers may see a comeback as mortgage rates decreased sharply in December. The latest Fannie Mae survey indicates a shift where more homeowners believe rates will decline rather than increase, signaling a potentially favorable environment for homebuyers.