SCAT Airlines expands fleet with Boeing 737 MAX jets

What happened: SCAT Airlines, a Kazakhstani carrier, announced on Wednesday an agreement with Boeing to expand its fleet with 737 MAX jets, although financial details were not disclosed. This follows a broader trade deal between China and the U.S., where China agreed to purchase Boeing jets, cut levies on select products, and expand agricultural trade. Notably, President Xi Jinping previously promised China would buy 200 Boeing 737s.

Market impact: This narrative drives Boeing's stock, as the Chinese order boosts its backlog and future revenue. However, Boeing's profitability remains uncertain due to past operational issues. The aerospace sector and related supply chains are affected, with investors reassessing Boeing's valuation based on the durability of these challenges.

What to watch next: Boeing's Q1 2023 earnings report on April 26, 2023, will provide insights into the impact of the Chinese order and operational challenges. Additionally, the U.S.-China trade relationship's evolution, particularly regarding levies and agricultural trade, will determine the sustainability of Boeing's recent gains.