Aloha,
Welcome back, Ladies & Gentlemen,to our regular schedule thread, SELL AMERICAN. With your host 007.
Say 007 what do you think AMR will do this week? Well Tom we will continue to see a downward trend in all stocks with AMR & the airline sector leading the way. DAL just furloughed another 1500 F/As this weekend. Oil has hit $30 a barrel and can only go higher. We all know the biggest cost to an airline is fuel.
Every time oil has stayed above $30 for more than 30 days, its recession time. Really? Yes, I believe the market has yet to factor the rising cost of oil. Rising cost of fuel will hit everones pocket book this winter. Arent the weather people calling for a much colder winter this year? Yes, looks like our old friend El Nino is back. So it looks like people will have to spend more money to heat their homes than fly on airplanes. Everything will get more expensive. We could see inflation return. This time, though, there is little room to lower interest rates to stop it.
With a recession people will be trying to save money and wont be able to afford vacations that include airfare. The airlines already have lost the business traveler and now it looks like the vacation crowd too. Then there is the BIG WAR factor. All in all, VERY tough times ahead for the airlines that could last for years. So you still say, SELL AMERICAN? Yes, I say sell everything you will need your cash for the long hard winter to come.
ALOHA, 007