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Airline stocks find themselves in a precarious situation right now.
In April, these businesses received $25 billion in bailouts from the U.S. government to continue paying their hundreds of thousands of employees.
Under the terms stipulated by the government, the airlines weren't allowed to make any layoffs or job cuts until Sept. 30.
The government hoped the money would be enough to tide the airlines over until October, when travel was expected to pick back up again...
But that clearly hasn't happened. You see, the number of passengers going through TSA is down 74% from a year ago.
And with COVID-19 cases surging again, it doesn't seem like this trend will reverse itself soon...
So, that's why Money Morning Quantitative Trading Specialist, Chris Johnson, covered the earnings report of one very important airline set to release its numbers later today: United Airlines Holdings Inc. (NYSE: UAL).
After finding loopholes in the government bailout, United told 36,000 employees (about 40% of its workforce) that they could be furloughed.
How well UAL does (or not) after it reports will give us an idea of how safe people feel traveling during the pandemic. If more people are flying, that could be a healthy sign the economy is returning to normal.
UAL's report will also help us trade Alaska Air Group Inc. (NYSE: ALK) and Southwest Airlines Co. (NYSE: LUV), both of which release earnings on Thursday.
Southwest, which has never had an involuntary furlough, told employees that cuts will happen unless passenger numbers increased by 3x before the end of the year.
But that doesn't necessarily make LUV a sell because analyst expectations are already so low.
Here's what Chris Johnson had to say about Southwest Airlines on his most recent "Markets Live" broadcast...
Are These Airline Stocks Buys? Chris Johnson Explains...
What's Next on Markets Live
Chris will be back live again tomorrow (Wednesday) at 8:45 a.m. ET. If you'd like to follow up with Chris about the airline stocks or any other companies you have questions about, join in and ask your question(s) in the chat.
You can also catch Andrew Keene tomorrow at 12 p.m. ET for a look at how to scan the options market for trade ideas from the biggest players. If a signal from one of these "smart money" traders meets his criteria, you could potentially copy these trades for fast profits.
Both will be using technical analysis and their proprietary trading tools to analyze and find options patterns in companies like Twitter Inc. (NYSE: TWTR), Intel Corp. (NASDAQ: INTC), Live Nation Entertainment Inc. (NYSE: LYV), and Kimberly-Clark Corp. (NYSE: KMB) - all of which report earnings on Thursday.
Remember to sign in on the live chat to ask Chris and Andrew questions about options, specific stocks, the macro environment, and anything else you're watching today! They love getting trade ideas from the audience.
Tune in to both streams right here.
If you would like to watch Chris' entire stream from today, go here and scroll down to "Recent Livestreams," and catch all our recent broadcasts at your convenience.
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