Boeing Acquisition, Elections & July 1, 2024 Week Ahead

The month of July seems to be off to a busy start with news from American aerospace giant Boeing, global elections results, and upcoming financial and economic releases taking centre stage.

Let’s take a look at the latest news that could shift the markets and this week’s upcoming events and economic releases. 

Boeing’s Multibillion-Dollar Deal 

Boeing (BA) is having a mixed couple of months. On the one hand, it has undoubtedly been under the radar due to news on the crashes of planes that used its parts and supplies. Moreover, it is facing fraud allegations and has lost about 27.6% of its value since the start of the year. As such, the US Justice Department has to decide whether it wants to prosecute Boeing or not by July 7. 

On the other hand, Boeing revealed on Monday, July 1, that it will be buying Spirit AeroSystems, a “major supplier.” The multi-billion dollar purchase would, according to Boeing, help it solve quality problems, monitor production practices, and “fully align the production and safety systems with its workforce.”

However, although the prospects may seem rosy, it is important to note that this deal can only be completed once regulators and Spirit’s shareholders approve it. While the actual implications of this deal are yet to be seen, Boeing largely expects the acquisition to be closed by the middle of 2025. (Source: The New York Times)

Global Elections 

Elections are continuing all over the world, potentially shifting the course of the economy and the financial markets. Here are the main highlights:

France’s First Round 

In France, it was recently revealed that Marine Le Pen’s National Rally won the first round of the elections, marking a distinct advantage to the nationalist right-wing ahead of the second round next Sunday.

The results of these elections could shift the French markets, especially in light of the fact that “markets have been in turmoil since Macron called the snap election on June 9, leading the worst bond rout since the sovereign debt crisis.”  

US’ First Presidential Debate

The first round of the heated US presidential debates between President Joe Biden and former US President Donald Trump took place last Thursday, June 27. The debate comes ahead of the upcoming US elections on November 5, 2024. 

According to some experts, as many market watchers believed that Trump “won” the debate, the US dollar rose “indicating increased confidence among investors in the stability and growth potential of the US economy under Trump's leadership.” In addition, US stock futures rose on Friday. Only time will tell how else the markets will react in the months leading up to the election.

The UK’s Upcoming General Elections 

The UK general election is scheduled to take place on Thursday, July 4, and polls seem to predict a win for the opposition Labour Party led by Keir Starmer. Many believe that Starmer can help regain England’s economic stability, which was put to the test in the Rishi Sunak era as the UK slipped into a recession. This, as a result, can shift the Forex market, in general, and the sterling, in particular.

Economic Data to Keep in Mind

Other economic events to keep tabs on this week include the following:

Eurozone Inflation

The Eurozone’s inflation rate in June is set to be released on Tuesday, July 2. Many economists expect the data to show a modest drop in headline inflation. If these projections materialise, it would mark a much-needed cooldown from May’s heights.

US NFPs

US Nonfarm Payrolls (NFPs) are expected to be reported on Friday, July 5 and economists project an addition of 189,000 jobs in June, which would show resilience in the US labour market. The results can also have an impact on the markets, but it is yet to be determined what it would be.

Minutes & Comments from Central Bank Policymakers

Both the Federal Reserve (Fed)  and the European Central Bank (ECB) are expected to release the minutes of their June meetings this week on Wednesday and Thursday, respectively.

Furthermore, Fed Chair, Jerome Powell, and ECB President Christine Lagarade are set to take part in a panel discussion on “monetary policy in an era of transition” this Tuesday in Portugal.  What will these powerful central banks and their policymakers reveal?

Conclusion

The week ahead is set to be busy with ongoing elections, news from big corporations, and key economic releases taking place. 

What will the week reveal about the global economies as we head deeper into the month of July? Only time will tell.