What happened

If one of the nation's most important industries, aviation, is on the ropes, and the head of aviation at one of America's biggest blue chip industrial companies has just announced he will resign on Sept. 1, what conclusions should investors draw from this?  

Maybe it's all pure coincidence. But investors seeing these two situations play out today voted with their feet by exiting shares of General Electric (NYSE:GE) on news that the CEO of its aviation division, David Joyce, is retiring.

General Electric shares fell as much as 5.5% in Monday trading but rebounded to close slightly lower by 0.1%.

Cartoon man in suit and tie tugging on a pulley to lift up a falling stock chart arrow

Image source: Getty Images.

So what

Credit for the recovery goes to the Federal Reserve, which on Monday afternoon promised to expand its economic stimulus by buying corporate bonds, supporting their value and helping to lower the interest rates that heavily indebted companies like GE must offer investors to buy their bonds.  

Now what

This move by the Fed will help GE, which is carrying more than $88 billion in corporate debt. But it doesn't solve GE's underlying problems today: trying to sell airplane engines to manufacturers like Boeing and Airbus, which are struggling to sell airplanes to airlines whose passenger traffic is way off in the age of the coronavirus.

Helping none of this is the fact that China just reported a new COVID-19 outbreak in its capital city, and that Utah and Oregon have suspended their plans to reopen their economies in the face of rising incidences of infection.  

With U.S. cases of coronavirus surging past 2.1 million today, and worldwide cases approaching 8 million, the prospect for air travel recovering still looks pretty slim in the near term. The fact that the head of GE's airplane engine business has decided to retire certainly doesn't suggest that he is any more optimistic than I am.