Goodmorning and Happy Tuesday!

For those who weathered the storm and held through the horrific market crash of August 2024, pat yo self on the back - because yesterday marked the 8th consecutive day the S&P 500 and Nasdaq roared green while the Dow clinched its 5th consecutive green day…

(Source: Giphy) 

S&P 500 and Nasdaq to the Dow be like: “You gotta pump those numbers up, those are rookie numbers in this racket…” 

In short, with a nice closing of +0.5% for the Dow, and a rally of +0.9% and +1.3% for the S&P 500 and Nasdaq, the bulls are living the life as the market is making its way back to its All-Time High parade (hopefully)... 

Hell, even Gold clinched its spot at $2,500 per troy ounce marking the first time ever a gold bar is worth $1 million dollars. See: Call your grandpa and congratulate him on this lifetime achievement. 

(Source: Yahoo Finance) 

So yeah, it seems like everyone and their dogs are in good spirits as we head into the opening bell. Well, except for CEOs who missed their numbers on earnings season. The CEO Swap virus is getting about as infectious as the dang Monkeypox outbreak in Africa right now. 

(Source: Giphy) 

However, in light of what seems to be a roaring market rally with All Time Highs once again in sight, the big story this morning comes at the hands of America’s separated at birth step-children. Alaska and Hawaii…

Specifically, Alaska Airlines and Hawaii Airlines who’ve just been given the green light by the Department of Justice to partner up and dominate its other 48 siblings in the land of the free. 

(Source: Benzinga) 

Now for those just catching up to this story, the initial talks of this merger took place back in the latter part of 2023 as Alaska Airlines agreed to acquire Hawaiian for $18 per share, which includes taking on $900 million of Hawaiian’s net debt. (Aka Hawaiians $1.9 billion get out of jail free card) .

However, because this merger would make Alaska Airlines the fifth largest airline in the U.S., (still only being half the size of United Airlines as a whole) the biggest hurdle for the deal to fall in place was clearing an antitrust review from the DOJ. Because apparently being the fifth largest airline puts them at risk of monopolizing the airline industry? 

(Source: Giphy) 

Yet now, as of this morning, the DOJ has cleared the two companies, wishing them a happy marriage and future. This catapulted Hawaiian Airlines stock on a frenzy this morning reaching a nice 7% boom in pre-market trading, while Alaska Airlines remained about as flat as Kevin Spacey’s acting career. 

(Source: Barrons) 

This of course, had Hawaii’s Governor Josh Green as high as a kite, saying this merger will offer more travel options for Hawaii residents and local businesses - while Alaska’s CEO, Ben Minicucci, is all about expanding presence in tourist destinations and tapping into Asia. 

But what’s really interesting about this, is how the two companies look separately as we continue heading towards 2025. For instance, the sugar daddy of this merger, Alaska Airlines, has definitely had a rough year. Even though the stock is up a measly +0.46% over the past five days, the stock is down a cruel -8.82%. 

(Source: Google Finance) 

Which is surprising considering they cruised by their recent EPS estimates by a nice +7.35% while only missing revenue by -1.32%. But with that said, Alaska Airlines revenue is up +2.08% year-over-year. So there’s that.

On the other hand Hawaiian Airlines, the tropical temptress, not only saw its shares catapult by 7% in pre-market trading after the DOJ nod - but, they’re up +13.19% YTD and a whopping +28.12% in the past five days. Of course, this is mainly due to the momentum that their $900 million monkey on their back is likely to be relieved from this merger, but still, with an earnings as piss poor as they’ve had… it’s clear that Wall Street 101 has struck again. 

(Source: Market Watch) 

For example, Hawaiian Airlines completely whiffed on both top and bottom line estimates recently as EPS and revenue missed estimates by -4.98% and -1.97%, respectively. However, the trailing 12-month results are uglier than a mud fence as net income, net profit margin, and operating income all plunged -447.99%, -431.03%, and -255.12% YoY. Geeeezus…

(Source: Giphy) 

So clearly, Hawaiian Airlines is definitely set to benefit the most from this merger with Alaska Airlines. However, even though the DOJ has seen this merger as harmless as a kitten in a room full of laser pointers - the next hurdle lands in the hands of the U.S. Department of Transportation. If they give the green light, well then it’s game on baby. 

(Source: Giphy) 

Now of course, only time will tell if this merger is the start of something beautiful or just another JetBlue-Spirit fiasco (considering Alaska plans to keep Hawaain as a standalone brand), but still the momentum is still hot, and Hawaiian Airlines stock is responding well to it.

So with that said, as we head into this morning's trading chaos, keep a close eye on these two stocks. As we’ve seen, the bulls are definitely in town and running the show… meaning, things could get spicy real fast this Tuesday. In the meantime, stay safe and stay frosty, friends! Until next time…

Stocks.News holds positions in United Airlines as mentioned in the article.