Global business news twenty four hours a day. If Bloomberg dot Com the radio plus Globile Act and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters. I'm Charlie Pellett. Records today for the down Jones Industrial Average and the SMP five hundred index SMP five hundred, marking its longest winning streaking four months of speculation grows for looser global monetary policies a while a better than forecast profit report from JP Morgan Chase boosted optimism for
bank earnings SMP up eleven to sixty three. That is a gain of five tenths of one percent. Nas stank up twenty eight, a gain of six tenths of one percent. Down industrials up one thirty four, a gain of seven tenths of one percent. The tenure down eighteen thirty seconds yield one point five three percent, Gold down nine thirteen thirty four, a drop there of seven tenths of one percent. And crude oil West Texas Intermediate Crude up one points ex percent up to seventy four cents nine for barrel
of w T. I I'm Charlie Pellett. That's a Bloomberg Business Flash. This is taking stock with Kathleen Hayes and Pin Fox on Bloomberg Radio. Airlines stocks Delta Airlines, for example, saying that it would seek to boost the key passenger revenue yardstick because they're gonna reign in an expansion in seats that was set for later this year. That capacity would only increase about one percent in the fourth quarter. Investors like the news. The shares of Delta Airlines higher
today by more than three and a half percent. Here to tell us more about airline investing, Frank Collins. He is the chief executive and the chief investment officer of US Global Investors. Joining us from San Antonio, Texas. Frank always a pleasure tell us about jets, tell us about US Global Jets. That's the e t F. And what the news. The news today from Delta means, well, it's good. It's good news because all the negative going into the bricks that going into the quarter, and it was very
negative on global growth. And we saw that the airlines were sold down to such an extremely low level that companies like American Airlines then were trading at three times earnings three times and the industry itself trades it over six times, and when you look at transports, they traded eighteen and so the negative sentiments seems to now getting behind us, and they're starting to see these stocks have big pops, especially after Deutsche Bank made a call that
that they believe that this is the bottom and things will trade higher. All right, So this is what Deutsche Bank says. But what does Frank Colin say, because Delta said it's slowing the expansion of flights and seats because it wants to deal with the potential slide and passenger revenue. Well, Delta's concerned regarding particular Brickxit that the flights the British pound, that the volatility of the British pound has had a
big impact. Uh, and so the bri has come to America now for holidays that they're gonna have going to Europe, and that sort of travel is concerned, and so for going into the winter, they're going to cut that path route by six percent. However, they've got great growth in Asia and there's robust activity for all the big three, in particular United American and Delta in their Asian travel. So is it possible that the exchange Traded Fund will add non US flag carriers, we do, you know, that's
a good question. Um it's dominated by four of them, that Southwest, Delta, American and United about of the index and every balance of the quarter. And then we own other names based on who has the highest cask forward turn investor capital and revenue per share, and that would be Jet Blue, it would be Hawaiian Air, et cetera. And then we have twenties foreign names at one percent each and that's helpers mitigee this currency volatility and that
rebounces one supquarter. But it's all based on key metrics that value these stocks. So it's a smart betas are rules based thought process well. I note for example of that Quantas Airways is in the jets et f as well as China, Southern Airlines, Air Canada as well as Air China and WestJet correct in in order of when you look at the whole global scene, those foreign holdings have the highest cast forward turns invested capital on a relative basis and the highest UMU. The other the key
factors that revenue perceed mile revenue proceed mile. This is the one of the industry standards as far as UH input costs go to airlines. It's got to be jet fuel prices, right. It's a key component, there's no doubt about it. And the other part is it moves with the stock market. It is a greater beta in the stock market. So the stock markets up one percent, this category is up one and a half percent, Marcus off
one percent, it's down one and a half percent. Uh And I think the longer they go was showing these uh inexpensive pe ratios and rising dividends, and the dividend increased last year was almost a hundred percent increase in dividends. Uh And and they've been buying back their stock. I think that they're going to go to that re rating.
And that's always been the biggest money in the capital markets to him, is that when people will pay going from six dollars for that same dollars of earnings to twelve dollars, or they turn and get worried about the stock market and they just pay a less pe ratio for that same dollar earnings. Uh. The airline industry as a whole is the least expensive out of the approximately
hundred industries that make up the SMP five stocks. Frank, I know you've been paying attention to the news out of Farnborough, the Farnborough Air Show, which has just concluded orders for Boeing and Airbus commercial aircraft that came through from Farnborough. We're down about compared to last year's Paris Air Show. Is that of concern? No, I don't really think it's a concern. Um that I just don't feel
that's a big concern. Why is that Because if they're not ordering aircraft, does that indicate that maybe there is a glut of aircraft on the market. No, there's no glut. That that's a good question. In fact, Boeing is ten years backlog and when you fly you can still see that. I still because I'm a rapid fly millions of miles. Uh. A lot of these planes are not up to speed and so there's a big upgrade that needs to take place.
And uh, I think that some of that slow down those orders would be coming of the Middle East and out of Latin America, but the new order is coming out of the US. They remain strong and just finally frank new efficient engines, whether it's the Neo from air Bus or on the seven three seven or even the new geared turbo fan from ut X. Is that going to change the market profile of these companies. No, but
I'm so impressed, Pim. You just really get into those great details of these engines and uh, you know, it is fuel efficiencies everywhere. Uh, and I think it's a key component for upgrading on these airlines. So that's just gonna be a good business model for both Bowling UH and Airbus and the airlines. Thanks very much for spending time with us. Is Frank Holmes. He is the chief executive and the chief investment officer for US Global Investors,
joining US from San Antonio, Texas. Thanks for taking stock. I'm pim Fox. This is Bloomberg coming up, Bloomberg Law, a clash between Alphabet, parent company of Google and the European Union and the European Union's new antitrust commissioner. That's all coming up next.