Japan plans to buy 100 Boeing planes from the United States. At the same time, Japan will increase its rice imports from the US by 75%. Additionally, Japan is set to invest $8 billion in agriculture and other American products. It will also raise its defense spending with US firms to $17 billion each year, up from $14 billion. Following these announcements, Boeing shares are trading at $230.95 in premarket trading. This is an increase of $2.72 or 1.19% from the last closing price of $228.23. There is also a price gap between $234 and $243 that has existed since January 2024. We see the purchase of 100 planes as a strong positive sign for Boeing. Traders looking at options might want to consider near-term call options, as the stock price gap could serve as a technical target. This news could help close that gap. However, this good news must be balanced with recent issues, like the Alaska Airlines incident on January 5th, which has kept market volatility high. As a result, options prices are elevated, so we recommend using bull call spreads to lower premium costs. This strategy allows traders to benefit from potential price increases while managing risk in a choppy market. The increase in defense spending with U.S. firms also presents a bigger opportunity. We see this as a positive factor for the whole sector, including companies like Lockheed Martin and Northrop Grumman. Traders might diversify their investments by looking at defense-focused ETFs. Moreover, Japan’s commitment to purchasing billions in agricultural products is important. In 2023, Japan was already the fourth-largest market for U.S. agricultural exports, totaling over $13.2 billion. This new agreement will significantly boost this trade. We expect it will support agricultural commodity prices and companies like Deere & Company. Historically, Boeing’s stock has bounced back sharply after major orders, especially after overcoming negative press, such as the issues with the 737 MAX. This pattern suggests that, despite some risks, there is substantial potential for the stock to rise. We believe that preparing for a quick, though potentially volatile, recovery is the best approach.

here to set up a live account on VT Markets now