Giles Coghlan LLB, Lth, MA
Financial Source
Markets are increasingly bullish on airlines with a string of positive headlines coming out this week. The CEO of American Airlines is reported to have told a JPMorgan conference that he has personally been buying other airline stock. United Airlines reports that following the Omicron Covid peak demand for travel exceeds prior expectations. Also, Delta Airlines, Southwest Airlines, American Airlines, United Airlines and Jet Blue have all upgraded current-quarter revenue forecasts with them all expecting a recovery in air travel demand.
So, is this time to start looking at buying airline stock? Southwest Airlines tends to give a stronger second half of the year, so could this be the right time to buy the stock ahead of a potentially stronger second half of the year?
Over the last 15 years, Southwest Airlines has risen 11 times between June 25 and December 02. The percentage of winning trades has been 73.33% and the average gain has been 11.32%.
Major Trade Risks:
-
Risk-off markets would typically result in stock weakness.
-
An aggressive rate hiking cycle by the Fed would also weigh on global stock prices.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended content
Editors’ Picks
EUR/USD trades sideways below 1.0450 amid quiet markets
EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familair range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro.
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision
GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick.
Gold price sticks to modest gains; upside seems limited amid USD dip-buying
Gold price attracts some follow-through buying at the start of a new week and looks to build on its recovery from a one-month low touched last Thursday. Geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, turn out to be key factors benefiting the safe-haven precious metal.
The US Dollar ends the year on a strong note
The US Dollar ends the year on a strong note, hitting two-year highs at 108.45. The Fed expects a 50-point rate cut for the full year 2025 versus 4 cuts one quarter earlier, citing higher inflation forecasts and a stubbornly strong labour market.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.