Stocks traded mixed for most of the day until President Trump announced the US would pull out of the Iranian nuclear deal. Upon this news the Dow fell 150 points but then rallied and closed the day up 3 points to 24,361 on higher trading volume. While analyst fear that walking away from the deal will hurt US business I have heard several CEOs say that the White House keeps them “in the loop’ on this stuff and if so then we might assume many companies, as in the case of Boeing, have been preparing for this event.
Seattle based global logistics company Expediters International reported better than expected earnings thanks to strong growth in trade from existing customers plus the addition of new customers. CEO Jeff Musser noted that shipping volumes are coming in line with historic trends and that with new efficiencies the company should continue to execute on the bottom line. For the first quarter revenues were up 20% which is the best revenue growth figure in years and the bottom line increased a whopping 51%.
The pullout from the Iranian deal could hit Boeing which has an estimated $20 billion worth of jet deals with Iran. A couple of weeks ago however CEO Denis “the Menace” Muilenburg noted that they had taken steps to mitigate any fallout should the deal be canceled and that with a backlog of over 5,800 airplanes feels they could easily find customers willing to take the Iranian designated jets. Iran on the other hand has an aging fleet and might turn to Airbus for the upgrade.
Oil prices reacted to the Iranian deal. WTI crude initially rose to $71 then fell by to $68 per barrel then rebounded after the official news came out and closed near $69.70 in a wild session. The bottom line on oil prices is that global demand is rising and the production surplus is going the way of the dodo bird. If Iran cannot sell oil due to sanctions then we could see prices move higher.