November 12, 2019
Latest News

Stocks: Defense shares surge on spending

 (L-R) US First Lady Melania Trump, US President Donald J. Trump, Polish President Andrzej Duda, and Polish First Lady Agata Kornhauser-Duda watch a flyover by US Lockheed Martin F35 planes from the South Lawn after particvipating in a signing ceremony in the Diplomatic Reception Room of the White House in Washington, DC, USA, June 12, 2019. EPA-EFE/FILE/SHAWN THEW

(L-R) US First Lady Melania Trump, US President Donald J. Trump, Polish President Andrzej Duda, and Polish First Lady Agata Kornhauser-Duda watch a flyover by US Lockheed Martin F35 planes from the South Lawn after particvipating in a signing ceremony in the Diplomatic Reception Room of the White House in Washington, DC, USA, June 12, 2019. EPA-EFE/FILE/SHAWN THEW

New York (USA), Jun 25 (efe-epa).- The United States may have held off on an airstrike against Iran in favor of sanctions, but US stock investors are decidedly choosing aerospace and defense, according to a Dow Jones Newswires report made available to EFE on Tuesday.

This year, investors have been on the offense when it comes to buying the defense sector's stocks. The SPDR Aerospace & Defense Exchange Traded Fund is up 30 percent in 2019, roughly twice that of the Utilities Select Sector SPDR Fund. Utilities are an attractive portfolio destination for investors seeking a "defensive" position.

In the past month, the disparity has been more striking - the aerospace/defense ETF's gains are nearly three times that of utilities.

Thanks to this surge, now the defense stocks have nearly caught up with utilities over the past 12 months after a brutal selloff to close out 2018.

Among the best performers in recent weeks are well-known defense contractors Lockheed Martin Corp. and Northrop Grumman Corp., while smaller Kratos Defense & Security Solutions Inc., which provides technology to the Defense Department, and Axon Enterprise Inc., maker of Tasers and body cameras, have also soared.

Part of the bullishness stems from a bigger budget for national defense. In late May, the Senate Armed Services Committee voted to advance the National Defense Authorization Act for 2020.

The committee's markup of the act, which specified dollar amounts, included $750 billion in funding for national defense.

One apparent beneficiary was Kratos, according to some analysts, who noted spending that appeared to be related to Kratos' Valkyrie drone.

The belief that the aerospace-and-defense industry stands to benefit from big US government spending has helped the ETF rise even as one of its big components has stumbled.

Boeing Co., the largest company in the ETF by market capitalization, has risen in recent weeks, but its May tumble on concerns about the safety of the company's 737 MAX have kept shares at a loss of 1.9 percent since the end of March.

Meanwhile, utilities stocks, while up in recent weeks as interest rates touch fresh multiyear lows, can't keep up in 2019. The Utilities Select Sector SPDR Fund was little changed on Monday, while the SPDR S&P Aerospace & Defense ETF slipped 0.2 percent.

dj/hh

News history
Tesla stock has risen this month as its 3rd-quarter numbers approach

By David Marino-Nachison

Australian Navy begins sea trials of 3rd air warfare destroyer

Sydney, Australia, Sep 16 (efe-epa).- Australia has begun the first phase of sea trials of its third and final Air Warfare Destroyer, the Department of...

Nissan Motor CEO steps down in the wake of bonus scandal

Tokyo, Sep 16 (efe-epa).- Hiroto Saikawa stepped down from his post as chief executive officer of Nissan Motor on Monday and has been replaced by Yasuhiro...

Trump says US is "locked and loaded" to respond to attack on Saudi oil

Washington DC, Sep 15 (efe-epa).- The president of the United States on Sunday warned that his administration was "locked and loaded" to respond to a recent...

Nissan CEO steps down over bonus scandal

Tokyo, Sep 9 (efe-epa).- Nissan Motor's CEO, Hiroto Saikawa, will step down on 16 September on the back of an investigation into over payments the executive...

Volkswagen to pay multi-million-dollar settlement over 'dieselgate' Australia

Sydney, Australia, Sep 16 (efe-epa).- German car giant Volkswagen has agreed to pay millions in compensation to those affected by its diesel emissions...

General Motors braces for first nationwide strike in 12 years

Washington DC, Sep 15 (efe-epa).- The United Automobile Workers trade union on Sunday called for a nationwide strike of 48,000 employees at General Motors,...

Mexico seeks to topple Brazil's Volkswagen Guinness World Record

Puebla, Mexico, Sep 15 (efe-epa).- The Mexican state of Puebla over the weekend attempted to take the Guinness World Record for the most Volkswagen vehicles...

Argentina's gov't to present new budget amid economic woes

Buenos Aires, Sep 15 (EFE).- Finance Minister Hernan Lacunza will present the proposed 2020 budget to the Argentine Congress this week, a budget that will...

World's biggest oil producer reduces output by 50 percent after Saudi attacks

By Suleiman al-Assad

Battle to power electric vehicles reaches Sweden

By William Boston

Are central banks losing their clout?

By Randall W Forsyth

Ecotourism, the answer to Latin America's rural development needs

By Maria Jose Brenes

Havana-based cigar maker says it doesn't foresee Helms-Burton lawsuits

Havana, Sep 13 (efe-epa).- Habanos S.A., a Spanish-Cuban joint venture that is a leading maker of Premium cigars, said Friday it does not believe it is at...

US pledges to increase trade with Brazil, without mentioning bilateral deal

Washington, Sep 13 (efe-epa).- US Secretary of State Mike Pompeo promised his Brazilian counterpart here Friday that exchanges of goods and services between...

Mexicans make drinking straws from reeds to curb use of plastic

Jose de Jesus Cortes

London, Sep 13 (EFE).- The London Design Festival returns this weekend to the British capital with events and facilities bringing together the best of the...

China exempts US soy, pork products from tariffs ahead of US negotiations

By Paula Escalada Medrano.

Vaping giant Juul Labs debates pushing back on US' new ban on e-cigarettes

By Jennifer Maloney

Trump's plans for oil drilling in Arctic refuge clear big hurdle

By Timothy Puko

IMF: US-CHINA TRADE WAR STARTING TO WEIGH ON GLOBAL ECONOMY

Washington, Sep 12 (efe-epa).- The International Monetary Fund said Thursday that the trade war between the United States and China is already triggering a...

Argentina’s obsession with the dollar, a vicious circle amid a crisis

By Rodrigo García

New tariffs applied on Chinese imports to the US

Beijing, Sep 12 (efe-epa).- China's Customs Tariff Commission of the State Council has postponed the planned 25 percent tariffs on 16 products from the...

EU's top diplomat visits Mexico to boost trade agreement

By Eduard Ribas i Admetlla

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.