BREAKINGVIEWS

American Airlines has jumbo-sized seating dilemma

10 July 2020

The Dallas-based carrier’s un-socially distanced cabins have displeased passengers and health officials. But a look at its finances suggests the alternative would be big losses. It’s hard to see how American can please the many people who have stumped up to keep it airborne.

Covid will drag on Boeing profit for years

10 July 2020

Certification flights for the 737 MAX are a step toward putting the $100 bln plane maker’s cash cow back in service. But monthly production next year will be about half what was planned before the pandemic. That alone probably means at least a 20% hit to profit.

Gold’s enduring high gives miners room to be bold

10 July 2020

Bullion has breached $1,800 per ounce amid fears of a viral surge. Mine bosses’ enthusiasm to develop lower grade reserves that only make sense at exalted price levels is usually dampened by worries of a sharp snapback. An extended Covid-19 tail means more will take the chance.

Sugar war divides food group fitties from fatties

10 July 2020

UK Prime Minister Boris Johnson plans to ban junk food promotions, the Times reported. The pandemic is spurring a new crackdown on unhealthy snacks. Giants like Nestlé were already curbing their sweet cravings. Others like Cadbury-owner Mondelez have less room to shape up.

DiaSorin offers rare bright spot in Italian gloom

10 July 2020

The $11 bln company’s Covid-19 kits may not be as iconic as Prada bags or Ferrari cars. But they sell like hot cakes in a pandemic. If the virus wanes, so will its tests' appeal. Still, DiaSorin’s biotech focus is a step-up from traditional Made in Italy products.

China can turn the other cheek, for now

9 July 2020

The U.S. government slapped sanctions on Chinese officials for abuses of Muslim Uighurs, escalating tensions. Beijing may want to drop a trade deal in retaliation but patience is more useful. Xi Jinping will want threats in his back pocket following the November election.

Mortgage IPO brings past crises to the fore

9 July 2020

Quicken Loans parent Rocket Companies is profitable, growing, top of its industry and has cutting-edge tech. Founder Dan Gilbert even drove Detroit’s revival. But as crashes like 2008 showed, economic pain hits specialist lenders hard. This time is unlikely to be different.

Trump case gives mogul presidential wannabes pause

9 July 2020

The U.S. Supreme Court ruled a prosecutor can obtain Donald Trump’s financial records. Congress had less luck in another case, but the decision clarifies what information White House candidates can keep under wraps. That sets a new bar for other business leaders who want the job.

Biden task force lacks sense of dollars

9 July 2020

A wish list from the U.S. presidential candidate’s advisers runs the gamut from universal healthcare and zero emissions to racial equity and infrastructure spending, plus tax increases. Missing is much, if any, clarity on the financial equation. Trillions of dollars are at stake.

Biden policy palette would paint Wall Street blue

9 July 2020

Proposals from a task force working for the U.S. presidential hopeful would leave high finance worse off, from splitting up banks and raising taxes to giving Americans accounts at the Fed. They’re just ideas, but the broad outlines of a Democratic presidency are becoming clearer.

Volatile markets make case for stock deals

9 July 2020

Buyers like Simon Property and Cineworld who have used cash to lunge after strategic targets are dropping their deals like a bad habit. Uncertain asset prices, liquidity crunches and pre-Covid valuations are all to blame. Transactions using stock have a better chance of closing.

SAP will struggle to walk, chew gum at same time

9 July 2020

The $190 bln software group is weathering the Covid storm: CEO Christian Klein kept sales rising while also slashing costs. Yet keeping up with fast-growing U.S. rivals like Salesforce requires investment. That implies a margin hit, and disappointment for cash-hungry investors.

Rolls-Royce flies closer to credit-card max-out

9 July 2020

The British jet engine maker led by Warren East incinerated 3 bln pounds in the last six months due to aviation lockdowns. At least another 1 bln may disappear in the next. Extra credit lines look increasingly like bandages over a balance sheet in need of serious surgery.