Stocks Enter Q3 With A Fresh Face & Full Of Optimism 🎯 EV’s Are On The Move With Some Fresh Investments & Highly Anticipated Deliveries 🚚 $BA Is In Legal Trouble We Break Down Why 🤓
We have a fresh quarter which meant a new opportunity for stocks to climb to new highs and boy do we have some winners on the day. came raging back like a bull popping up 6% through the trading ahead of delivery results that come in Tuesday 👀. Lets dive straight into our indexes and get into the details here:
The Dow Jones Industrial saw a mini rise of 0.1%
The S&P500 gained 0.3%
The Nasdaq Composite lead our indexes with a 0.8% rise.
Now lets dive straight into our news of the day and kick over the boiling pot that is the DOJ vs battle ⚔️.
Boeing Faces Criminal Charges: A Breakdown of the Justice Department’s Proposal
The US Justice Department is set to criminally charge Boeing with fraud over two fatal crashes, and is offering the company a plea deal to avoid a trial. This move comes after the Justice Department found that Boeing breached a 2021 agreement that had shielded it from prosecution. In this post, we’ll break down the proposed deal, the potential consequences for Boeing, and what it means for the company’s future.
The Original Agreement
In 2021, the Justice Department agreed to hold off prosecuting Boeing in exchange for the company’s commitment to overhaul its compliance practices and submit regular reports. The agreement was set to expire after three years, but a mid-flight emergency on an Alaska Airlines-operated flight in January 2024 occurred just two days before the agreement was set to end.
What Happens Next?
The Justice Department is giving Boeing until the end of the week to respond to the plea offer, which is being presented as non-negotiable. If Boeing refuses, prosecutors plan to take the company to trial. A courtroom battle would carry risks for both sides, including the potential for harsher penalties and prolonged uncertainty for Boeing investors, suppliers, and employees.
What if Boeing Pleads Guilty?
If Boeing pleads guilty, it could face significant consequences, including:
A felony conviction, which could disrupt the company’s ability to secure government contracts, including those with the US military.
A $487.2 million financial penalty, with half of the amount credited for previous penalties.
Restitution, the amount of which would be decided by a judge.
Probation for three years.
A requirement for the company’s board to meet with victims’ family members.
The Role of an Independent Monitor
The proposed plea deal includes the appointment of an independent monitor to audit Boeing’s safety and compliance practices for three years. This monitor would act as the government’s eyes and ears, and the company would foot the bill. The use of corporate monitors has been renewed under the Biden administration, and companies typically fight against these terms.
Future Risks
The plea deal would not resolve or provide immunity to Boeing for any other conduct, including the January 5 incident. This means that the company could still face further legal action and penalties in the future.
Electric Vehicle Stocks Surge: Rivian, Li Auto, and Tesla See Gains 📈
The electric vehicle (EV) sector saw a surge in stock prices on Monday, with Rivian, Li Auto, and Tesla all experiencing significant gains.
Rivian Stock Jumps 3.9%
Rivian’s stock price ended the day up 3.9%, according to data from S&P Global Market Intelligence. The gain was driven by positive analyst notes from RBC Capital and Canaccord Genuity. RBC Capital raised its one-year price target from $11 per share to $14 per share, while Canaccord Genuity maintained a buy rating and raised its one-year price target from $20 per share to $30 per share.
Li Auto Stock Soars 6.7%
Li Auto’s stock price closed out the day up 6.7%, according to data from S&P Global Market Intelligence. The gain was driven by the company’s better-than-expected vehicle delivery results for June. Li Auto delivered 47,774 vehicles in June, representing a nearly 47% year-over-year increase.
Tesla Stock Rises 5.5%
Tesla’s stock price was higher by 5.5% as of 11:10 a.m. ET Monday morning. The gain was driven by optimism ahead of the company’s second-quarter EV delivery data, which is expected to be reported on Tuesday. Strong delivery reports from Chinese EV makers, including Nio, Li Auto, XPeng, and BYD, also contributed to the gain.
Chinese EV Market Recovery
The Chinese EV market has been crucial for Tesla, whose most productive factory is in Shanghai. The market has been recovering from demand headwinds in 2022 and 2023, with many Chinese EV makers reporting strong June and second-quarter deliveries. BYD, in particular, sold more than 426,000 fully electric vehicles in the second quarter, up about 21% year over year.
What’s Next for EV Stocks
While the gains are welcome news for EV investors, there are still risks to consider. Li Auto stock, for example, is still down roughly 49% across this year’s trading, and the company’s valuation is sensitive to macroeconomic and geopolitical risk factors. Tesla’s profit margin will also be closely watched when it releases its full second-quarter financial report.
Overall, the surge in EV stocks on Monday is a positive sign for the sector, but investors should remain cautious and keep an eye on the underlying fundamentals of each company.
