30 October 2020

1) The Boeing Aircraft Co. is selling new bonds to help repay its nearly $3 billion dollars of debt. Boeing announced the sale just minutes after a downgrade to the company’s credit rating. Fitch Ratings put out a report reducing Boeing’s credit rating down to BBB-, the lowest investment-grade rating, with a negative outlook. The company has burned through about $22 billion dollars of its free cash since March 2019, when the company’s best-selling jet, the 737 MAX, was grounded. It is anticipated that it will take two years until Boeing’s financial metrics return to that of a credit rating one level higher.

2) The Philippines has removed a major hurdle in advancing oil exploration with Beijing in the South China Sea, but the two nations will have to navigate their overlapping claims in the area to reach a deal. The island nation has lifted a six-year ban on oil exploration to stop activities that might annoy China. The Philippines has recently toughened its stance against China and is leaning back towards the U.S. It is estimated that 4 trillion cubic feet of gas reserves, that’s worth billions of dollars, could be found in South China Sea areas that is claimed by the Philippines and disputed by China. However an international arbitration court has ruled in favor of the Philippines in 2016. The two nations could set aside the ownership issue and proceed with joint development.

3) Exxon announces additional job cuts, that it intends to reduce its U.S. staff by around 1,900 employees. These reductions will be both voluntary and involuntary, a result of COVID-19 on the demand for oil aimed at improving efficiency and reducing costs. Amid declining oil prices, energy companies are taking drastic measures to improve their balance sheets, including reducing staff and in some cases suspending dividends, with the company’s fourth quarter dividend at 87 cents per share, although this is the first time since 1982 that it didn’t raise its dividend.

4) Stock market closings for – 29 OCT 20:

Dow 26,659.11 up 139.16
Nasdaq 11,185.59 up 180.73
S&P 500 3,310.11 up 39.08

10 Year Yield: up at 0.84%

Oil: down at $36.10