TRUMP'S MIDDLE EAST TOUR SECURES MASSIVE DEALS

The US secured $2 trillion in new investment commitments during Trump's Middle East tour, but Moody's decision to downgrade the US credit rating reflected concerns over the country's ballooning debt levels.

Opportunities and Challenges

Despite both positive and negative news,. Over the past few days, during President Trump's whirlwind Middle East trip, accompanied by various CEOs, the White House touted major business deals. Certain companies, such as Boeing, which received substantial jet orders as well as commitments from Saudi Arabia for its large defence spending package, outperformed an already rising market.

However, This initially caused markets to dip into the red, though they resumed their upward trend later. The move was largely symbolic, as other major credit agencies, S&P and Fitch, had already downgraded US debt to an Aa1 rating from a "perfect' AAA rating going back to 2011. Nevertheless, it marked the first time the US "lost" its triple-A rating across the board due to ballooning debt and increasing interest payments, which have become the second largest item after Social Security and ahead of defence. The White House hopes to agree on a spending deal before July 4th.

The Biggest Winner

The largest deal from Trump's visit came from Qatar,, including Boeing's record $96 billion jet order (with an additional $14.5 billion in orders from Etihad and $4.8 billion from Saudi AviLease). Boeing is also likely to receive a portion of, with the country committing up to $600 billion and the UAE committing an additional $200 billion.

While with the market, the orders were seen more as a vote of confidence than an immediate bottom-line impact. The 160 new jets add to Boeing's backlog of over 6000, including 30 units of the delayed 777X due to structural issues. However, investors will likely seek signs of improved delivery pace before the share price fully reflects the new orders. The main challenge that Boeing has faced lately is delivering, managing just 41 jets delivered to customers in March, compared to 71 from Airbus. Boeing customers - including Etihad - have long been frustrated at the slow delivery pace.

Boeing Breakout Wedge

Technicals suggest Boeing may be poised for a bullish continuation after breaking out of an open wedge pattern completed at $130. A higher move would open the door to the peak of $280, with resistance levels present at $220 and $240 in the interim. Conversely, a breakdown below $190 could expose lower levels of $175 and $160.

Source: SpreadEX / Boeing

Key Takeaways

Moody's downgrade of the US credit rating weighed on markets, but stocks ultimately rallied on the back of President Trump's Middle East tour, which secured $2 trillion in new investments. Boeing emerged as a major beneficiary, with large jet orders and defence contracts, though investors are most interested in seeing the company improve its delivery execution to capitalise on Boeing's backlog.