Market Morning: Boeing 737 Emergency, Apple Credit Card, Bed Bath & Beyond Brexit

Stock Market Roundup

Irony: Boeing 737 MAX 8 Makes Emergency Landing On Way to Parking Due to Ban

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A Southwest Airlines (NYSE:LUV) Boeing (NYSE:BA) 737 MAX 8 had to make an emergency landing in Florida after engine problems. The plane wasn’t carrying any passengers besides the crew and the plane was on the way to being parked in a California desert due to the global ban of the 737 MAX series. Southwest Flight 8701 returned to Orlando International Airport after performance issues with one of its engines, though the problem is thought to be unrelated to the software issue that may have caused the two previous crashes of the 737 MAX. Instead of flying to California now, the plane will stay at a maintenance center in Orlando and Boeing will check it out there.

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Apple Credit Card Underwhelms Some, Whelms Others, Overwhelms None

Apple (NASDAQ:AAPL) is going into the credit card business with Goldman Sachs (NYSE:GS) but has chosen daily cash back as its rewards rather than the fancy newfangled rewards and bonuses and miles you typically get with other credit cards. The card can only be used on Apple Pay and the card is titanium but only offers 1% cash back. Maybe people will want it just because it looks cool. An interesting anti theft feature on it though is linking transactions with Apple Maps to confirm location when the card is being used. Matt Schulz, chief industry analyst at CompareCards, wasn’t impressed. “The average credit card holder with no allegiance to Apple is simply looking for a card that either has the lowest interest rate or the best rewards and they are not going to be swayed by the Apple logo.”

Bed Bath & Beyond Board Break Up Beginning?

Bed Bath & Beyond (NASDAQ:BBBY) activist investors are getting tired of the decline of the company, which has lost about 80% of its value since 2015, and they’re going to try to shake things up with a proxy fight to replace the entire Board of Directors. According to the investor groups which together control about a 5% stake, the company has failed to adapt to customers shopping online more and more and expecting unique experiences when shopping. In other words, there isn’t much beyond Bed and Bath anymore, and they want the company to go way beyond again, like maybe what happened in that movie Click. The one with the remote control. In its defense, the company said that it was aiming for profitability over sales growth, and attacked the investors for not providing any ideas prior to their public attack, saying that they were going to increase shareholder value. In response to the attack though, shareholder value has increased by 22%, so that worked. The founders of the company, who established it in 1971, are still on the board and control about 2.7% of the company.

Yield Curve Inversion From Overnight Through 1Y to 10Y

The inversion of the yield curve triggered last week continues. The effective federal funds rate is currently higher at 2.41% than the 1Y, 2Y, 7Y, and 10Y yields. The spread between the 2Y and the 10Y though, which is the more watched spread on the yield curve, has actually steepened though, to 17 points. So this might be a temporary thing and may not portend and imminent recession, unless the 10Y-2Y starts going negative as well, but even then we have a while before a recession kicks in, as this doesn’t typically happen until the yield curve steepens again, which takes a year or more from when it first goes negative, historically speaking.

Brexit Plan B Vote at 7PM UK Time

Brexit Plan B is being voted on again, which is just another rehash of the same vote that has already been taken but with a few added tweaks so as to allow it to be voted on again a third time. This time there appears to be a slim chance that May’s deal will finally pass, since hard line Brexiters are now concerned that parliament having taken control of the process, could end up canceling Brexit entirely. May’s deal may be the best that Brexit supporters can get. If the deal passes, expect British stocks to explode higher and a relief rally to be triggered across the globe. Results will be announced 9pm UK time. But knowing what’s happened until now, the process will probably be extended anyway until we all devolve back into Australopithecines.

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