Boeing Tanker Ready For Iranian Missiles

Charts: The S&P 500 closed at 1146, up .45%. The market bumped repeatedly against stiff resistance at 1150, was knocked down, but held its own, hovering angrily just under that level, which is the bull market high. Support is at 1125 and under that 1120 is significant support.

Fundamentals: Trade data out of China came in stronger than expected. The Chinese government has been hinting that it is going to let its currency appreciate to slow down growth and today’s data made that seem more likely. This originally hurt material stocks. Then the US government said its February deficit was a record $221 billion, which hurt the dollar and sent materials gyrating. US sales and inventory data was better than expected. All this led to a wild ride on Wall Street.

Geopolitics: There have been several reports of CIA surveillance drones flying over the Somali capital city Mogadishu. The Somali Army and AU have been sporadically fighting Al-Shabab for a few weeks, making probing attacks here and there, seemingly avoiding an all out push in order to gather better intelligence. On Wednesday fighting in the big city flared up with 8 dead and scores wounded. The only reliable news source out of Mogadishu is a radio/TV station. Al Shabab has started beheading the reporters from the station so info is hard to come by. This does speak to Al-Shabab not doing that well in the fighting.
In Afghanistan, the US Fifth Stryker Brigade is beginning to secure the roads leading to Kandahar. Gen. McChrystal says that the Kandahar campaign will be different from Marja. In Kandahar the good guys will slowly build a noose around the city and even more slowly tighten it. Just because McChrystal was honest when he gave details of his Marja battle plan to the Taliban doesn’t mean he is being honest now when he says the attack will be in late summer. It isn’t his job to be honest. His job is to deceive.

Specific Stocks: Boeing has designed a refueling air tanker that is loaded with electronic countermeasures. The competing Airbus/Northrop design isn’t even in the running. It carries more fuel but has weak countermeasures. A few years ago the Airbus design was deemed better but since then Iran has developed a much stronger arsenal of missiles so Boeing is the winner. Over the next few decades the contract will be worth $100 billion.