Wall Street Breakfast Podcast: China Eyes Boeing 737 MAX Deal

Orders For U.S. Manufactured Goods Decline By Largest Margin In

Scott Olson

Listen below or on the go on Apple Podcasts and Spotify

China may end Boeing (BA) freeze with 737 MAX deal – Bloomberg. (00:23) OpenAI pursues more Microsoft (MSFT) money to build ‘magic intelligence in the sky’. (01:25) Ajinomoto (OTCPK:AJINF) to acquire Forge Biologics for $620 million in all-cash deal. (03:00)

This is an abridged transcript of the podcast.

China is considering resuming purchases of Boeing’s (NYSE:BA) 737 MAX aircraft when the U.S. and Chinese presidents meet this week at the APEC Summit in San Francisco,

Bloomberg reported Sunday night, terms of a potential agreement are still under discussion, and could change or fall apart before President Biden and President Xi meet on Wednesday.

According to the report, an announcement could take the form of a memorandum of understanding rather than a formal order.

Boeing (BA) has not made any significant sales of its 737 MAX narrowbody jets in China since at least 2018, before two crashes led to a global grounding of the model and deteriorating relations between the two governments stifled commercial dealmaking.

Boeing (BA) already has ~85 737 MAX jets intended for China in storage, and restarting deliveries could help it reach its target of shipping 375-400 737 MAX jets this year.

Premarket Boeing is up 3.7%.

Earlier this year, Microsoft (NASDAQ:MSFT) invested in OpenAI to the reported tune of $10B, and now the company’s CEO says he hopes Microsoft will continue to invest in the company.

OpenAI CEO Sam Altman told the FT in an interview that it’s seeking even more cash as it looks to create more sophisticated models of artificial general intelligence.

Altman said “There’s a long way to go” and “Training expenses are just huge” in terms of getting from where they are to where they want to be.

“Right now, people [say], ‘You have this research lab, you have this API, you have the partnership with Microsoft, you have this ChatGPT thing, now there is a GPT store.’ But those aren’t really our products. Those are channels into our one single product, which is intelligence – magic intelligence in the sky,” he said.

He also framed the partnership with Microsoft (MSFT) as one where “we both make money on each other’s success, and everybody is happy.”

Artificial intelligence is seen as a catalyst that recently catapulted MSFT shares to all-time highs, as well as the company’s recent quarterly results.

Ajinomoto (OTCPK:AJINY) has agreed to acquire Forge Biologics.

Forge manufactures genetic medicines.

According to the press release, Forge has an enterprise value of $620 million on a cash-free and debt-free basis. However, the acquisition price attributable to Forge unitholders is approximately $554 million dollars.

Pursuant to the all-cash deal, Forge will become a fully consolidated subsidiary of Ajinomoto (OTCPK:AJINY).

The deal is expected to be completed by the end of the fourth quarter of 2023.

Other articles to look out for on Seeking Alpha:

Apple is working on generative AI. Morgan Stanley shares how it could monetize it

Earnings Week Ahead: Walmart, Home Depot, Target, Alibaba, Cisco and more

UBS sees pickup in mergers and acquisitions next year

Moody’s cuts United States credit outlook to negative, reaffirms ratings

On our catalyst watch for the day,

  • OPEC will publish its Monthly Oil Market Report.

  • Archer Aviation (ACHR) will debut its Midnight aircraft at the Dubai Air Show. CEO Adam Goldstein will also deliver a keynote address as part of the show’s opening ceremony unveiling Archer’s plans to bring electric air taxis to the United Arab Emirates in 2026.

U.S. stocks on Friday ended with hefty gains.

The Nasdaq (COMP.IND) led gains among Wall Street’s major averages, rising 2.05% and notching its best day since May 26.

The S&P 500 (SP500) climbed 1.56%. The Dow (DJI) added 1.15%.

All 11 S&P sectors ended in positive territory, led by Tech and Communication Services.

The S&P’s advance last week marked back-to-back weekly gains for the first time in nearly a month. The gauge was up 1.31% for the week. The Nasdaq was up 2.37%, while the Dow was up 0.65%.

Friday’s economic calendar saw the University of Michigan’s gauge of consumer sentiment weakening for a fourth straight month in November. Moreover, year-ahead inflation expectations reached their highest level since April.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. The Dow is down 0.06%, the S&P 500 is down 0.2% and the Nasdaq is down 0.3%. Crude oil is flat at more than $77 per barrel.

In the world markets, the FTSE 100 is up 0.7% and the DAX is up 0.4%.

The biggest movers for the day premarket: Harmony Gold Mining Company (NYSE:HMY) shares surged as much as 10% after it reported a 7% increase in gold production in Q1.

On today’s economic calendar:

11 am the Fed’s Lisa Cook will give the opening remarks at the Federal Reserve Board Conference on Nontraditional Data, Machine Learning, and Natural Language Processing in Macroeconomics, Washington, D.C.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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