Raphael Stevens

Boeing has given airlines instructions on how to inspect their 737 Max 9 jetliners, a step toward ending the grounding of the planes, people familiar with the matter told CNBC.
The FAA ordered airlines to stop flying dozens of the jets over the weekend, less than a day after a door plug blew open during an Alaska Airlines flight when it was at 16,000 feet.

The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland, Oregon, U.S. January 7, 2024.
NTSB | Via Reuters

Boeing has given airlines instructions on how to inspect their 737 Max 9 jetliners, a step toward ending the grounding of the planes, according to an internal message from company executives.
The Federal Aviation Administration ordered airlines to stop flying dozens of the jets over the weekend, less than a day after a door plug blew open during an Alaska Airlines flight as it was at 16,000 feet.

No one was seriously injured in the accident during Alaska Airlines Flight 1282, which was bound for Ontario, California, when the door plug blew, forcing it to return to Portland, Oregon, minutes into the flight.
It wasn’t immediately clear how long the inspections would take.
“Our teams have been working diligently – with thorough FAA review – to provide comprehensive, technical instructions to operators for the required inspections. This morning, our team issued the instructions via a multi-operator message,” said Boeing’s commercial airplanes president and CEO, Stan Deal, and its chief aerospace safety officer and senior vice president of global aerospace safety, Mike Delaney, in the internal message.
There are more than 200 737 Max 9 aircraft in fleets worldwide. United Airlines has a fleet of 79 737 Max 9s and Alaska Airlines has 65. The remainder are spread across other airlines.
“The FAA’s priority is always keeping Americans safe,” the agency said in a statement Monday. “In that spirit, Boeing 737-9 aircraft will remain grounded until operators complete enhanced inspections which include both left and right cabin door exit plugs, door components, and fasteners. Operators must also complete corrective action requirements based on findings from the inspections prior to bringing any aircraft back into service.”

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The spring housing market might be getting underway a little early this year.
A recent slide in mortgage rates pushed buyers back into the market.
Supply is still tight, but more houses could soon be available.

A sharp drop in mortgage interest rates in December may have kickstarted this year’s spring housing market early. Rates are about a full percentage point lower than they were in October, and consumers expect they will fall even more.
Optimism about mortgage rates increased sharply in December, according to a monthly consumer survey by Fannie Mae. For the first time since the survey was launched in 2010, more homeowners on net believe rates will go down rather than up, according to Mark Palim, deputy chief economist at Fannie Mae.

“This significant shift in consumer expectations comes on the heels of the recent bond market rally,” said Palim. “Notably, homeowners and higher-income groups reported greater rate optimism than renters.”
The average rate on the 30-year fixed has been on a wild ride since the start of the Covid pandemic. It hit more than a dozen record lows in 2020 and 2021, below 3%, causing a historic run on homebuying and a sharp rise in prices, only to then more than double in 2022. Rates hit a more than 20-year high in October 2023, hovering around 8% before falling back below 7% in December. Rates, however, are still twice what they were three years ago.

Ryan Paredes (R) and Ariadna Paredes look at a home being shown to them by Ryan Ratliff, a Real Estate Sales Associate with Re/Max Advance Realty, on April 20, 2023 in Cutler Bay, Florida. 
Joe Raedle | Getty Images News | Getty Images

Buyers are coming back. Washington, D.C.-area real estate agent Paul Legere hosted two open houses over the weekend — homes in the $1.1 million to $1.2 million price range — and said they were the busiest he’s experienced in the last year.
“Similar report from my co-worker,” he added. “Even on Saturday, during torrential rain, we both had over 10 groups of active shoppers. These were people that had been in the market and had slowed or put their search on hold and are coming back, earnestly looking for a new property.”

Looking for inventory

Legere said he expects to see “an infusion” of inventory in the next week or two. Tight inventory has helped keep prices higher, another hurdle for potential homebuyers.

“Homeowners have told us repeatedly of late that high mortgage rates are the top reason why it’s both a bad time to buy and sell a home, and so a more positive mortgage rate outlook may [incentivize] some to list their homes for sale, helping increase the supply of existing homes in the new year,” said Palim.
A recent report from Redfin, a national real estate brokerage, found demand starting to pick up in December as rates fell. Redfin’s Homebuyer Demand Index — a seasonally adjusted measure of requests for tours and other homebuying services from Redfin agents — was up 10% from a month ago to its highest level since August, according to the report. Pending sales, which measure signed contracts on existing homes, were down 3% from December 2022, but that was the smallest decline in two years.
Much will depend on both interest rates and home prices in the months to come. Prices continue to rise, due to lack of supply, and if rates continue to drop, price gains could accelerate. The lower the rate, the more potential homebuyers can afford.
While mortgage rates are expected to drop further, that will depend on the strength of the economy and inflation.
“The rate momentum is as good as the trajectory of economic data. So if the data continues to do what it has been doing, there’s no reason rates couldn’t go down into the 5’s, possibly even the high 4’s if some of the talking heads are right about recession in 2024,” Matthew Graham, chief operating officer of Mortgage News Daily, said on CNBC’s “The Exchange.”
The average rate on the 30-year fixed mortgage hit a recent low of 6.61% at the end of December, but is up slightly this month to 6.76%, according to Mortgage News Daily. More

United Launch Alliance’s Vulcan rocket successfully launched its long-awaited inaugural mission from Cape Canaveral, Florida, early Monday.
Vulcan successfully deployed its main payload, the Peregrine lunar cargo lander, for Pittsburgh-based Astrobotic, which aims to land on the moon Feb. 23.
ULA’s Vulcan represents the latest challenger to the launch business of Elon Musk’s SpaceX, with the companies fiercely competing for lucrative national security rocket contracts.

The brand new rocket, United Launch Alliance’s Vulcan Centaur, lifts off from Space Launch Complex 41d at Cape Canaveral Space Force Station in Cape Canaveral, Florida, on Jan. 8, 2024, for its maiden voyage, carrying Astrobotic’s Peregrine Lunar Lander.
Chandan Khanna | AFP | Getty Images

A new U.S. rocket reached orbit early Monday, and the launch was a big one — not just in scale of the vehicle, but also in significance for a market that has become dominated by a single player in recent years.
United Launch Alliance, or ULA, successfully launched its long-awaited inaugural Vulcan rocket from Florida’s Cape Canaveral. The 202-foot-tall rocket successfully deployed its main payload, the Peregrine lunar cargo lander, for Pittsburgh-based Astrobotic about an hour later.

Astrobotic’s Peregrine is bound for the moon, where it will attempt a landing on Feb. 23, potentially becoming the first American spacecraft to soft land on the moon since Apollo 17 more than 50 years ago.
Under a NASA-funded program known as the Commercial Lunar Payload Services initiative, Astrobotic’s mission represents one of six lunar launches of landers from three different companies slated for this year.

Taking on SpaceX

The United Launch Alliance Vulcan Centaur rocket is transported to the launch pad at the Kennedy Space Center in Cape Canaveral, Florida, on Jan. 5, 2024.
Chandan Khanna | AFP | Getty Images

The brand new rocket, United Launch Alliance’s Vulcan Centaur, lifts off from Space Launch Complex 41d at Cape Canaveral Space Force Station in Cape Canaveral, Florida, on Jan. 8, 2024, for its maiden voyage, carrying Astrobotic’s Peregrine Lunar Lander.
Gregg Newton | AFP | Getty Images

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Boeing shares tumbled in premarket trading Monday.
The Federal Aviation Administration grounded dozens of Boeing Max 737 9 planes after a plug door blew out midair during an Alaska Airlines flight.
Friday’s accident occurred just as Boeing has been trying to ramp up output of the Max and brings fresh scrutiny of Boeing’s quality assurances.

An Alaska Airlines Boeing 737 Max-9 aircraft grounded at Seattle-Tacoma International Airport (SEA) in Seattle, Washington, US, on Saturday, Jan. 6, 2024. 
David Ryder | Bloomberg | Getty Images

Shares of Boeing tumbled roughly 8% in premarket trading Monday, as investors digested the news that the Federal Aviation Administration had ordered airlines to ground dozens of Boeing 737 Max 9 aircraft for urgent inspections.
The FAA issued the order on Saturday after a door plug blew out in the middle of an Alaska Airlines flight on Friday when the nearly brand-new aircraft was flying at around 16,000 feet.

The incident again thrusts Boeing back into the spotlight. CEO Dave Calhoun has been trying to assure investors that Boeing is getting back on better footing after a string of problems including two crashes that killed 346 people, pandemic supply-chain havoc and a series of quality defects.
Large-scale groundings by aviation authorities are rare, but the FAA has been scrutinizing Boeing and its best-selling 737 Max since the fatal crashes in 2018 and 2019. Boeing said it agrees with the FAA’s decision to ground the Max 9 planes for inspections. It was working on drafting instructions with federal regulators for airlines to begin instructors.
Friday’s accident occurred just as Boeing has been trying to ramp up output of the Max.
“An escape of this nature makes one question the quality control of the 737 delivery ramp and the impact of inexperienced labor on both Boeing and its supply chain,” Bank of America aerospace analyst Ron Epstein wrote in an analyst note Monday, adding that the plane was delivered just months earlier. “This aircraft still had ‘new airplane’ smell and the sticker price in its window.”
The FAA on Saturday said around 171 planes would be affected by its emergency airworthiness directive, which applies to U.S. airlines and carriers operating in U.S. territory. Alaska Airlines and United Airlines are the largest operators of the 737 Max 9 model, of which around 215 are flying worldwide, according to Cirium.

Of the 171 aircraft grounded under the directive, United Airlines has 79 and Alaska has 65, while the remaining 74 are spread across six other airlines.
The National Transportation Safety Board over the weekend described a harrowing few minutes onboard the Alaska Airlines flight, starting with a loud bang and a force so violent it tore off headrests and seatbacks, and blew open the cockpit door.
A schoolteacher found the door blown-out plane panel in his backyard, the NTSB said late Sunday.
Images shared on social media showed a hole in the side of the aircraft and passengers using oxygen masks. The flight — Alaska Airlines Flight 1282 — returned to Portland, Oregon, shortly after departing for Ontario, California.
Russ Mould, investment director at AJ Bell, noted that Friday’s incident is the latest in a “string of problems for the company,” and suggested airlines using 737 Max planes will be “thinking long and hard about their future aircraft requirements.”
Shares of Boeing’s European rival Airbus gained 1.7% by mid-morning on Monday as investors speculated that it could take market share from the U.S. powerhouse.
“There are naturally questions being asked about the quality checks and whether Boeing is trying to do too much too fast,” Mould said.
“Boeing’s management will be under considerable pressure from the regulators and customers to explain what’s going on, which means considerable headwinds ahead for the business. It’s no wonder investors have raced to sell the shares as the risks to the investment case have just shot up.” More

Moderna said its Covid vaccine generated about $6.7 billion in sales in 2023, meeting its forecast for the year.
But revenue from the shot fell around two-thirds from the more than $18 billion it booked in 2022. 
Moderna’s announcement, which came ahead of its presentation at the annual J.P. Morgan Healthcare Conference, illustrates the steep drop in demand for Covid products last year as cases and public concern about the virus dwindled front their pandemic peaks.

Nikos Pekiaridis | Lightrocket | Getty Images

Moderna on Monday said its Covid vaccine sales plunged by about two-thirds in 2023 to $6.7 billion, as fewer people rolled up their sleeves for an updated version of the jab.
The revenue from the shots met Moderna’s forecast for the year, even as sales plummeted from the more than $18 billion the company booked in 2022. 

Moderna’s announcement, which came ahead of its presentation at the annual JPMorgan Healthcare Conference, shows the steep drop in demand for Covid products last year as cases and public concern about the virus dwindled from their pandemic peaks. Weakening demand for the company’s shot, its only commercially available product, led shares of Moderna to fall nearly 45% last year. 
Roughly $6.1 billion of Moderna’s revenue related to the shot came from sales of the vaccine. Another $600 million was deferred revenue related to the company’s work with Gavi, a nongovernmental global vaccine organization that coordinated a global shot distribution program, Moderna said in a release.
Moderna during its third-quarter earnings report in November forecast at least $6 billion in full-year Covid vaccine sales, but did not provide a range for that guidance. In August, before the rollout of its latest version of the jab, the company said it expected the shot to rake in $6 billion to $8 billion in revenue.
The company noted that the vaccine won 48% of the U.S. Covid vaccine market share last year. That’s up from the 37% market it captured in 2022. 
But the biotech company expects sales from the shot to drop even further in 2024. It reiterated its companywide full-year sales guidance of roughly $4 billion on Monday. Notably, that forecast includes revenue from its vaccine against respiratory syncytial virus, or RSV, which could win Food and Drug Administration approval in April. 

Moderna said it expects to return to sales growth in 2025 with the launch of new products. The company currently has 45 products in development, nine of which are in late-stage trials. They include Moderna’s combination shot targeting Covid and the flu, which could win approval as early as 2025.
The company said it expects to “break even” by 2026. More

Boeing is under renewed scrutiny after a blocked exit door blew out midair during an Alaska Airlines flight on Friday.
No serious injuries were reported on Alaska Flight 1282.
Boeing has been working to get its 737 Max program back on track after two fatal crashes, the Covid-19 pandemic’s supply-chain havoc, and a series of smaller but troubling quality issues in recent months.

Boeing’s new 737 MAX-9 is pictured under construction at their production facility in Renton, Washington, Feb. 13, 2017.
Jason Redmond | Reuters

Boeing’s plan to get back on solid footing after a series of quality flaws in its best-selling jet suffered a near-disastrous blow Friday when a plane panel blew out during an Alaska Airlines flight, leaving a gaping hole in Row 26.
The Federal Aviation Administration less than a day later ordered a grounding of most 737 Max 9 planes, affecting some 171 aircraft worldwide, so they can be inspected. On Sunday, the the agency said, “they will remain grounded until the FAA is satisfied that they are safe.”

Several factors onboard Alaska Airlines Flight 1282 Friday afternoon — including its lower-than-cruising altitude and unoccupied seats where it mattered most — helped avoid serious injury, or worse, for the flight’s 171 passengers and six crew. The force from the event was so violent it appeared to have ripped some headrests and seatbacks out of the cabin, according to early details of the federal investigation.
The terrifying incident means renewed scrutiny for Boeing, which has been working to get its 737 Max program back on track after two fatal crashes, the Covid-19 pandemic’s supply-chain havoc, and a series of smaller but troubling quality issues in recent months.
The 737 Max 9 flown by Alaska Airlines on Friday was delivered less than three months ago.
“The fact that it was a practically brand-new aircraft is a cause for concern,” said Jim Hall, a former chairman of the National Transportation Safety Board.
United Airlines and Alaska Airlines, the largest operators of the 737 Max 9, on Saturday said they suspended flights with those planes, forcing the carriers to cancel more than 400 flights.

‘Transitional year’

Boeing’s leadership has spent roughly five years regrouping after the 2018 and 2019 fatal crashes of its smaller and more popular Boeing 737 Max 8, which prompted a worldwide grounding of the both the Max 8 and Max 9, the two types flying commercially.
It successfully won back regulator approval to allow carriers to fly the planes in late 2020 and has won hundreds of new orders for the planes as airlines trip over each other to secure new jets, which are sold out for most of this decade at Boeing and rival Airbus.
Boeing has been trying to ramp up production of the workhorse jet while simultaneously stamping out quality issues such as rudder system bolts that were possibly loose and holes that were incorrectly drilled on certain aircraft. Those defects prompted additional inspections and in some cases slowed down deliveries to airlines.
Boeing still hasn’t won regulator approval for carriers to start flying the smallest Max 7 and largest Max 10 models.
“I’ve heard from a few of you wondering if we’ve lost a step in this recovery,” Boeing CEO Dave Calhoun told Wall Street analysts on an earnings call in October. “You might not be surprised to hear that I view it as exactly the opposite. Over the last several years, we’ve added rigor around our quality processes.”
Calhoun said last month in a statement announcing a new COO that 2024 would be a “significant transitional year in our performance as we continue to restore our operational and financial strength.”
Wall Street analysts expect Boeing to post its sixth consecutive quarterly net loss when it reports results on Jan. 31, according to FactSet estimates. They also expect the manufacturer to be profitable this year, starting in the first quarter.
Shares of Boeing gained close to 37% in 2023, the stock’s best percentage gain since 2017 and its first annual gain since a modest rise in 2019.

Flight risk

Jennifer Homendy, the chair of the National Transportation Safety Board, which is leading the investigation into Friday’s accident, said at a press briefing Saturday night in Portland, Oregon, that the probe is centered around the Alaska Airlines flight and the plane, not the entire fleet of Boeing 737 Maxes.
There will be big questions to answer about how exactly the panel blew out at 16,000 feet, putting a plane full of passengers at risk.
Fuselage supplier Spirit Aerosystems said it installed the plug door, an emergency exit door that’s cut into the plane but not intended for use under certain plane configurations, like those on United and Alaska, and is therefore sealed off. A Boeing spokeswoman declined to comment on whether Boeing is the last to seal the door before the planes are delivered to airlines, citing the ongoing investigation.
John Goglia, a former member of the NTSB and a transportation safety consultant, said that the Alaska Airlines incident will likely be a “blip” for Boeing but argued federal regulators should further scrutinize Boeing as it gears up to produce even more 737 Maxes.
“If I was the FAA, I’d say, ‘Show me six months where you don’t have any assembly problems,'” he said. “The FAA needs to slow Boeing down.”
According to Jefferies, the 737 Max 9 represents just 2% of Boeing’s backlog of more than 4,500 Max planes. It’s far less popular than the Max 8, which accounts for around 68% of the Maxes that customers have ordered from Boeing.
And while the planes will remain grounded for the time being, some safety experts don’t expect the same level of impact on the company as it saw after the 2018 and 2019 Max crashes, in which a piece of flight-control software was implicated.
Richard Aboulafia, managing director at aviation consulting firm Aerodynamic Advisory, said the problem on the Alaska Airlines plane appears to be a manufacturing problem, not an inherent design flaw.
That should make the investigation and recovery easier for Boeing, he said.
And, of course, there’s the fact that no one died following Friday’s flight in contrast to the 346 people who were killed in the 2018 and 2019 crashes.

Narrowly escaping tragedy

No serious injuries were reported after the Alaska Airlines flight.
No one was seated in 26A and 26B, the window and middle seats next to the panel that blew out. The plane hadn’t yet reached cruising altitude — which can be double the 16,000 feet where the incident occurred — also helping matters, because passengers and flight attendants weren’t walking around the cabin.
As of Saturday night, the NTSB was asking the public for help finding the lost door, which investigators believe landed in a Portland suburb.
“We don’t often talk about psychological injury, but I’m sure that happened here,” Homendy, the NTSB chair said at a news conference in Portland on Saturday night.
“We are very, very fortunate that this didn’t end up as something more tragic,” Homendy said. More