The Dow Jones Industrial Average (DJINDICES:^DJI) was down 0.4% at 10:30 a.m. EST Monday as relations between the U.S. and Iran soured after a U.S. airstrike killed a key Iranian general late last week.
Apple (NASDAQ:AAPL) stock was unchanged, despite an analyst predicting a delayed launch of iPhones supporting the fastest 5G technology. Shares of Boeing (NYSE:BA) weren't so lucky, tumbling on a bevy of negative reports related to the 737 Max.
Analyst sees 5G iPhone delay
The anticipated launch of an iPhone that supports 5G wireless technologies is seen by some as a key catalyst for the company this year. While iPhone sales tumbled in fiscal 2019, a 5G iPhone could reverse that trend, at least temporarily.
If analysts at Susquehanna are right, most of the benefit of 5G could leak into 2021 for Apple. In a note on Monday, Susquehanna predicted that Apple will indeed launch a 5G iPhone in September, but it will only support a slower variant of 5G.
There are different types of 5G networks. The 600MHz 5G network that T-Mobile has launched nationwide is a low-band 5G network, providing an average 20% increase in download speeds compared to existing 4G LTE networks. High-band networks, using millimeter wave (mmWave) frequencies, will be much faster but aren't yet widely available in the U.S.
Susquehanna expects Apple to launch an iPhone that supports the slower low-band 5G in September, with versions that support mmWave coming 3-4 months later. The delay is due to Apple's use of its own antenna modules instead of third-party modules, according to Susquehanna.
Shares of the tech giant were flat on Monday morning. Helping the stock was positive commentary from JPMorgan, which said that it still sees long-term upside potential despite a historically high valuation.
Coming off an 85% gain in 2019 and valued around 25 times earnings, Apple will need to put up stellar results this year to keep the stock afloat.
More problems for Boeing's 737 Max
Things are not going well for Boeing's grounded 737 Max. The company announced last month that it would suspend production of the troubled airplane starting in January, effectively killing its optimistic forecast for getting the plane back in the air. Former Boeing CEO Dennis Muilenburg was fired just before Christmas as the crisis escalated.
Over the weekend, the New York Times reported on a new problem with the 737 Max. After Boeing performed an internal audit at the request of the Federal Aviation Administration, the company found an issue with wiring on the plane. Two bundles of wiring may be too close together, creating a short circuit risk that could potentially bring down the plane if pilots failed to respond correctly.
In addition, the Wall Street Journal has reported that the FAA is considering requiring mandatory flight-simulator training for 737 Max pilots before they can fly the plane. Such a requirement could further delay the return of the 737 Max to the skies.
As the 737 Max crisis continues, Boeing is reportedly considering boosting its balance sheet with more debt, according to the Journal. The company is also reportedly mulling deferring capital expenditures, freezing acquisitions, and cutting spending.
With problems mounting for the 737 Max, it may be quite a while before the planes are cleared for service. Boeing stock was down 1.3% on the flood of negative news.