Broadcasting live to New York, Bloomberg eleventh Rio to Washington, d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco, Bloomberg nine to the Country series Exam General one and around the globe the Bloomberg Radio plus Japp and Bloomberg Dot Gone. This is taking Stock. Coming up on taking stock. We're going to take stock of the aerospace industry. We're gonna take a look at Boeing, for example, Boeing announcing today billions of dollars worth of new orders for aircraft
and maintenance plans at the Farnborough International Air Show. Seeking with Howard you Bell from Jeffries. He's an aerospace and defense electronics analysts. He's going to tell us about all that and more. When it comes to the guys, I'm gonna fly right over to Charlie Pellett. Now he's in the Bloomberg Buos room with the Bloomberg Business Flash, and I think you very much, Kathleen Hayes, thank you him. Boeing shares their advancement right now by one and a
half percent. The a's the ticker it is at one thirty two oh four. Stocks are climbing SMPT five hundred index a trading at a record very close to a record now up ten points back at thirty nine a game there of five tenths of one percent. Stick around for the close. Will the SMP five hundred index be hitting a record down? Industrials up one oh one to eighteen thousand, two hundred forty seven, a gain there of six tents of one percent. The nastack Compositive Index up
thirty eight points. Nastack did trade above five thousand right now up by eight tenths of one percent. Tenure down twenty thirty seconds, yield there one point four two percent, and we've got gold down three seventy ounce to twelve thirteen fifty four, a drop there of three tents of one percent. We are just about thirty minutes away from al Coah's results. What should we be expecting? That question for Anthony Young, he's a metals and mining analysts with mcquarie.
He was our guest just about an hour ago right here on taking stock. Well, I mean, this quarter is somewhat unique given the split at the company is going to be occurring at the company. So the split and
will pay a major factor in this earnings release. UM investors are looking for further details on that, but then also fundamentally UM trying to figure out, you know, what's going on with the aluminium business and what's going on with the downstream or their industrial business, and looking at the UM drivers that are impacting that and the profitability that they're ample to generate in those two companies once
they split. And again ALCA after the bell shares up now by two point one percent, recapping SMP up ten, a gain of point five percent three two on Wall Street. Now the other stories making news. Thank you, Charlie from the Bloomberg news Room. I'm Jill Schneider. This news update is brought to you by the Jeep Grand Cherokee, the most awarded suv ever. The Grand Cherokee continues to raise the bar with its luxurious interior and legendary four by
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a ray of light between the buildings. Every street that runs east to West will be cast in a warm glow just after eight p m. Global News twenty four hours a day, powered by more than journalists and analysts in more than one twenty countries. From the Bloomberg News Room. I'm Jill Schneider, Charlie, and we thank you. What again recapping? We do have equities trading higher SLM P five, How did it index up nine to nine? That is a gain of point four. I'm Charlie Pellett and that's a
Bloomberg business flash. This is taking stock with Pim's box, and Kathleen has on Bloomberg Radio bowing growing more optimistic about airplane orders, increasing its long term forecasts on the expectation that demand for air travel the expanding around the globe, led by China and though developing countries. Here to discuss this is Howard your Bell, senior equity research channelists for Aerospace and Defense Electronics at Jeffreys here in New York City.
How Ared, Welcome to the show. Well, it is interesting that you know that I think that the the figure of course that Boeing is looking at five point nine trillion dollars over twenty years. That's a lot of money and a lot of airplane orders, but the fact that China and developing countries are going to be leading it not totally. If that's been really continuation of a trend. I think we've all forgotten there's a large and growing
middle class in China. Howard, I wonder if you could speak a little bit more broadly about the Farnborough Air Show, which actually closed early today because of a torrential downpour. What's at stake there, I mean, taking place in Britain, And what if you give us your thoughts about Brexit the UK industry and orders for these international companies. That's a mouthful. Yeah, well, that's why I give it to you at a time. Oh I will well, I'm dodging
that bullet. But um, first, I'd say that Brexit is an unfortunate event. But um, and it creates a little bit of friction for air travel. Um. But but I'm not sure it's going to be you know, a big calamity over the long haul. I mean, if we look at UK air travel, it's about two and a half percent of global traffic. And if if you assume, um, it takes maybe ten out at worst, it's just a
couple of percentage points of loss. Second, what happens is it does make it cheaper to manufacture in the UK, and over time, whether it's UM, Boeing or Airbus or whomever, UM, Britain will become a bit more of an export economy than than it's possibly been. And maybe the last point I make in terms of Brexit, that's unfortunate, you know, in terms of friction, um, it just now means um, the Brits will have to be in the same line going to the EU as the Americans. Well, a little
more competition maybe. But it's interesting that what the came out of the air show this year is the industry broadly expecting fewer aircraft orders. Were Boeing's talking up the least the longer term view? Is that consistent? Yes, I think so. I mean we we have down orders this year.
I mean when you have a seven year backlog in some categories, it's hard to um, you know, wait, I mean airlines want to be patients, they want to target deliveries, they want to see exactly what their fleet fleets are and and it's really a smart idea not to necessarily buy a twenty or twenty five year asset based on one year's worth of business. Howard, what is your thought on investing in Boeing at the present time. I think the stock is down about five five and a half
percent so far this year. Yes, um it was, it is, but um it's actually it was actually up in the last quarter despite all the volatility and the market just shade. I we like it longer term when we have as a buy. I think the you know, they've had a couple of events this year that have been unfortunate. The biggest has probably been um, you know, miss missing um costs on the case for tanker, but I think they have those risks understood. There's a substantial free cash flow
going forward. Um as the company continues to go down on the improve on the learning curve, on building the seven eight seven and the model mix works in their favor. So in terms of the health of the company, the bottom line, the revenues, where is bowing in its cycle? Now? I grew up in Olympia, Washington, so I remember when Boeing was fully ensconced in Washington State, and of course it's it's spread its operations around the world. Where is
it now? Well? Still, the vast majority of production is is in UM is in Seattle, and of course all seven three sevens are built there today. UM there's a split between South Carolina and UM Everett for the seven eight sevens, and I think that's frankly, you know, healthy, You create a little bit of sibling rivalry, rivalry if you want to call it that. UM. The the ability of bowing to now source from more places is good UM.
But I also think what's happened has been that with recent wage agreements and other factors, the company is now in a position to actually do more by excuse me, do more make inside than by UM. The productivity of the I AM is terrific and it's and it's making people outside have to step up their game in order
to sell the Bolling Howard. I was noting over the weekend that there're being, of course, many changes inside the aircraft extended American Airlines, premium economy sections, the companies that make the equipment that goes into the planes. Are there any that you think investors would benefit from owning? Well, we don't have a buy on B Aerospace, but they
are the premier provider of seats and cabin interiors. They have a leading share of galleys, and I do agree with you, Pim that UM as airlines have become more full um load factors average or more. In many cases, people realize there's no such thing as a free seat where they can leave their stuff and work, and they have to pay for it. And so what better way to do it than um to offer better comfort with seats. And that's been a big effort by both Boeing and Airbus,
but also by b Aerospace to do it right. Thank you very much for spending time with us. Howard Rebel. He is a senior equity research analyst aerospace in the defense electronics industry and a managing director at Jeffreys and Company. You're listening to taking stock and this is Bloomberg. This is taking stock on. Kathleen Hayes a long with pim Fox. So we're gonna be finding out next how to make some income in a low deal, low growth environment.