Airbus Is Struggling. And a Contract to Build a Mars Spacecraft Can’t Lift the Earthbound Gloom.

Illustration by Elias Stein

Text size

Last week, European aerospace giant Airbus was picked to design and build a spacecraft headed for Mars, only to find itself dragged back to earth.

The plane maker announced that it has won a contract with the European Space Agency for its joint mission with NASA to bring samples from Mars back to Earth. Airbus will build the Earth Return Orbiter, as well as a small rover to collect samples, for the five-year mission set to launch in 2026. The contract is worth €491 million ($577 million), the company said.

Despite the win, Airbus stock fell 5.29% on the week—it’s down 49% year-to-date—as investors remained focused on more prosaic concerns. Delta Air Lines, a major buyer of Airbus aircraft, announced it was reducing purchase commitments by more than $5 billion through 2022 to better match timing of deliveries with financial needs. Airbus, like rival Boeing, has been hurt as air-travel demand has plummeted due to the pandemic.

Then, the World Trade Organization ruled that the European Union can impose tariffs of €3.99 billion annually on Boeing jets and other U.S. goods, in retaliation for Washington’s subsidies to the U.S. carrier. This came after the WTO authorized the U.S. to impose $7.5 billion in tariffs on Airbus jets and other products.

Citi analysts said the ruling may push both sides to reach an agreement, avoiding a prolonged trade battle. But that wouldn’t offer much of a boost, since most of Airbus’ deliveries in North America over the next two years come from tariff-free Canada and the U.S.

Could Mars be more welcoming?

Last Week Drifting

Third-quarter earnings season began, with tech lifting the market, led by Apple, which introduced its 5G phones on Tuesday, and Amazon.com, which launched its Prime Day sales event. Citigroup and JPMorgan Chase reported decent quarters, but shares fell, as Covid-19 numbers rose in both the U.S. and Europe. Jobless claims rose. A Friday rally faded. On the week, the Dow industrials squeaked up less than 0.1%, to 28,606.31; the S&P 500 edged up 0.2%, to 3483.81; and the Nasdaq Composite nosed up 0.8%, to 11671.56.

On the Road Again

President Trump, recently hospitalized for Covid, said that White House physicians gave him the go-ahead to begin rallies again—and that he was now “immune.” His doctors said he had two consecutive negative antigen tests, but information was sketchy.

Stressing the Herd

Covid hospitalizations rose, putting new strains on hospital systems. Some 22 states recorded 1,000 new cases as the death toll neared 220,000. Still, states continue to reject broad lockdowns or mandate mask-wearing, and the administration seemed to favor a herd immunity policy. The first U.S. case of a Covid reinfection surfaced in a man hit by different strains of the virus. Johnson & Johnson temporarily shut down vaccine trials over an illness, and Eli Lilly paused its antibody trial with Gilead Science’s remdesevir over safety concerns. Talks resumed on new relief measures after Trump told Treasury Secretary Steven Mnuchin “to bring home the bacon.”

Barrett on Barrett

Supreme Court nominee Amy Coney Barrett underwent an expedited Senate confirmation hearing. Democrats criticized a rush to vote as the election nears, and raised fears she could help overturn the Affordable Care Act and tilt the election to Trump. Barrett said she had “no agenda” while parrying questions about Supreme Court decisions on abortion, same-sex marriage, and climate change.

Prize Economists

Two Stanford economists, Paul Milgrom and Robert Wilson, won the Nobel Memorial Prize in economics for their pioneering work in auction pricing.

Annals of Deal-Making

Mallinckrodt filed for bankruptcy. In February, the company closed its opioid unit. Opioid claimants will get payments of $1.6 billion and 20% of the company…Chicken processor Pilgrim’s Pride agreed to pay a $110.5 million fine over price-fixing charges…The Organization for Economic Cooperation and Development released a global tax plan for multinationals, which the administration opposes…A flock of biotechs have gone public in October, including Kronos Bio, Shattuck Labs, and Spruce Biosciences, all of which surged. Codiak BioSciences listed on Wednesday and fell. More coming…Blackstone Group sold BioMed Realty Trust from one fund to another for $14.6 billion, a $6.5 billion gain.

Email: editors@barrons.com