Insights

Why Shares of General Electric Fell Today

What happened
Shares in industrial giant General Electric (NYSE: GE) fell more than 6% by midday today. The fall comes in concert with a day of negative sentiment over the economy and the aerospace sector in particular. 
It’s no surprise to see GE stock down heavily on Monday when Boeing and other aviation stalwarts are down big, given the importance of commercial aviation (and Boeing) to GE’s prospects. GE Aviation remains the company’s most significant profit and cash flow generator.
In addition, GE’s position as the world’s leading aircraft engine company means the aviation industry is always front and center in GE’s world. Therefore, when the market stresses economic growth prospects, it’s also worried about transportation activity, which means fewer flights and less demand for aircraft engines and aftermarket parts. 
Image source: Getty Images.

So what
The market is worried about growth today because of the tightening of COVID-19 restrictions in China. The lockdowns will hurt economic growth and air travel in particular.
In addition, GE’s cost and supply chain issues (which cut across all its segments) have magnified partly in response to significant supply chain dislocations created by lockdowns in Shanghai and the war in Ukraine. With neither of those looking like they will end quickly, it’s understandable if investors start pricing in lower earnings expectations for GE; as a reminder, management has already guided toward the low end of its earnings range for 2022. 
Now what
As ever, watch events. While both of the circumstances referred to above don’t seem likely to change anytime soon, they are both consequences of political decisions. As such, they can both be resolved in due course so that the global economy can get back into recovery mode.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Shares in industrial giant General Electric (NYSE: GE) fell more than 6% by midday today. The fall comes in concert with a day of negative sentiment over the economy and the aerospace sector in particular. 

It’s no surprise to see GE stock down heavily on Monday when Boeing and other aviation stalwarts are down big, given the importance of commercial aviation (and Boeing) to GE’s prospects. GE Aviation remains the company’s most significant profit and cash flow generator.

In addition, GE’s position as the world’s leading aircraft engine company means the aviation industry is always front and center in GE’s world. Therefore, when the market stresses economic growth prospects, it’s also worried about transportation activity, which means fewer flights and less demand for aircraft engines and aftermarket parts. 

Image source: Getty Images.

So what

The market is worried about growth today because of the tightening of COVID-19 restrictions in China. The lockdowns will hurt economic growth and air travel in particular.

In addition, GE’s cost and supply chain issues (which cut across all its segments) have magnified partly in response to significant supply chain dislocations created by lockdowns in Shanghai and the war in Ukraine. With neither of those looking like they will end quickly, it’s understandable if investors start pricing in lower earnings expectations for GE; as a reminder, management has already guided toward the low end of its earnings range for 2022. 

Now what

As ever, watch events. While both of the circumstances referred to above don’t seem likely to change anytime soon, they are both consequences of political decisions. As such, they can both be resolved in due course so that the global economy can get back into recovery mode.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!