Headline Edge: How News On Boeing's 737 Is Affecting Different Markets

One of the biggest global stories of the last week has been the developing situation surrounding Boeing Co. BA and the implications of the tragic Ethiopian Airlines crash of a Boeing 737 MAX 8 aircraft that claimed the lives of all 157 passengers and crew.

It was the second such crash of a Boeing 737 MAX 8 in less than a year. And as the story continues to unfold, authorities, investigators, and journalists have been attempting to piece together exactly what went wrong and whether more planes are at risk.

The tragedy has made its way to Wall Street as well. Boeing’s largest overnight drop ever put investors on high alert, and the market is trying to figure out what the consequences of the crash will be.

According to Yewno|Edge, an AI-driven investment research platform, the 737 MAX currently represents the No. 1 risk factor for Boeing investors.

Yewno|Edge ranks the top topics, or concepts, that companies may be exposed to in the news cycle or in their everyday operations. Predictably, Sunday’s crash and subsequent fallout have driven a lot of attention to the safety of Boeing’s planes. The result of that is Boeing shares have become highly reactive to any headline expressing sentiment regarding the 737 Max or airlines in general.

Image courtesy of Yewno|Edge

These exposures and sentiment correlations—as well as other concept exposures with negative sentiments trends related to Ethiopian Airlines and the Federal Aviation Administration—are fluid, meaning they could change with the news cycle. So while it’s still too soon to tell how impactful the most recent 737 headlines are going to be on Boeing’s long-term reputation, it’s likely that Boeing shares are going to be highly volatile so long as this story and investigation stay in the headlines.

More impactful to the wider market, and something sure to feel the impact of additional scrutiny into the 737 MAX 8’s safety, are the other concepts with a high rate of exposure to Boeing.

While we can get a glimpse of just how drastically Boeing’s negative sentiment is weighing on concepts like “Aircraft” and “Federal Aviation Administration” in the charts listed alongside them, we can also see the array of companies also feeling the impact of those concepts. Below is a quick search performed in Yewno|Edge’s Key Developments feed for the concepts “Boeing 737 MAX,” “Airliner” and “Aircraft” narrowed to include only those developments impacting U.S. companies within the Transportation sector.

Image courtesy of Yewno|Edge

As you might expect, airliners American Airlines Group Inc. AAL and Southwest Airlines Co. LUV are each being impacted by headlines expressing their decision not to ground their fleet of Boeing 737 MAX aircraft. The extent of these particular headlines impact on each security can be seen in the gauge to the right of each security’s name and daily price change.

As more news, statements, and opinions come to the fore, it’s likely more airlines and industries will feel scrutiny mount with regard to the cause of the 737 crashes. Whatever the investigation unravels, and whatever steps are taken to avoid another tragedy, the impact of these developments will likely reverberate beyond the memory of most market watchers.

Yewno is a content partner of Benzinga