The Dow Jones Industrial Average added 435 points today as Salesforce (CRM 7.00%) continued its impressive two-day run after reporting better-than-expected earnings earlier this week. Aerospace giant Boeing (BA 7.54%) also helped drive the Dow higher, as it closes in on what could be a lucrative new contract.
On the macroeconomic front, new employment data offered a conflicting view of the economy. Unemployment claims remained near historic lows, with jobless claims falling 11,000 for the week ending May 28 and totaling only 200,000.
However, ADP reported that private payrolls only added 128,000 jobs in May. That was far below estimates and was also below April’s numbers. Indeed, the jobs number was the weakest since the economy began to recover from the worst of the COVID-19 pandemic.
Salesforce is off to the races
Salesforce didn’t beat earnings by much, but the results came in better than expected and it was all the market needed to see to plow into the stock. Salesforce stock rose 10% yesterday and then added another 7% today.
In addition to beating on revenue and sales, management also raised the company’s guidance and now expects the cloud-based software giant to generate adjusted earnings of roughly $4.75 per share on total revenue of no less than $31.7 billion for the full 2023 fiscal year.
Not only is Salesforce improving its revenue and profitability, but management continues to see a giant market opportunity ahead. Management believes the company’s total addressable market will grow to $284 billion by 2026. That indicates that there’s still a lot of revenue to capture from here.
The pandemic has only accelerated the need for companies to further digitize their operations, and Salesforce can greatly assist companies as they move to the cloud. The company also offers many tools to help companies better leverage data and go remote at the drop of a dime such as Slack, which they acquired last year.
Boeing nearing a deal with Delta
Shares of Boeing took flight today, gaining almost 8% after Delta Air Lines CEO Ed Bastian said it is working on a potential deal with the aircraft maker to purchase as many as 100 of Boeing’s 737 MAX 10 jets.
“We’ve been trying to get a deal done with Boeing. We’re keeping our eye on that, and hopefully, we’ll be able to figure that out,” Bastian said at a conference held yesterday.
A contract with Delta would show the industry that Boeing’s MAX series jets can compete in the marketplace. After the MAX model was involved in two fatal crashes in late 2018 and early 2019, Boeing halted sales to fix the issue, which put a financial burden on the company. However, after being relaunched, the company has since managed to secure roughly 1,000 orders for the MAX model, according to Barrons.
In other positive news for Boeing today, Germany’s government said it plans to purchase 60 Chinook helicopters from the company as part of a plan to increase military spending.
The deal could be valued at as much as $4 billion, according to rumors. Some investors believe Germany’s move could hint at a broader global trend to increase military spending, largely due to Russia’s ongoing invasion of Ukraine, which would likely benefit Boeing.