The Dow ended the week with a small gain of 40 points to 26,424 on light trading volume. There is cautious optimism over progress in trade talks with China. For the week the Dow gained 487 points or 1.8%.
The jobs report for March came in better than expected with 196,000 new jobs versus expectations calling for roughly 170k new jobs. The unemployment rate was steady at 3.8%. Wages grew at a 3.2% annual rate which was less than expect. Blue collar wages however grew faster than white collar wages.
Boeing CEO Dennis “The Menace” Muilenburg admitted yesterday that Boeing’s MCAS system had a hand in the Ethiopian Air crash. The gurus estimate that Boeing’s liability could reach $1 billion. Bloomberg detailed what happened in the cockpit of the Ethiopian Max before it augured in and it appears the MCAS gave a false reading right after takeoff and the pilots followed procedures to override the anti-stall system however for some unknown reason and contrary to procedures they kept the engines at near full throttle which in effect countered the steps they were taking to fix the problem and added to the chaos within the cockpit as alarms went off and lights were flashing. Takeoff speed was 270 mph, but it is estimated the plane was traveling at close to 570 mph when it crashed. This is terrible and should never have happened.
In the “never a dull moment” category, Tesla shares were squashed yesterday after it was reported that Q1 deliveries were lower than expected. The reason behind the decline was a large number of vehicles in transit with boatloads of cars being sent globally to China and Europe. Tesla produced 77,100 for the quarter but only delivered 63,000 and had an estimated 10,600 in transit. While deliveries were up 110% from Q1 2018 it is down 31% from Q4 2018. Bears who have bet against Musk were high fiving each other calling this the beginning of the end while bulls were eating crow.