Why are US military defence stocks down so much? ITA (iShares US Aerospace & Defense Etf) is down 16% over the past month, along with companies like Raytheon and Lockheed Martin.
I am aware of production bottlenecks and rising energy costs which cuts into their margins. But also there's ground troop buildup and a huge consumption of missiles and armaments that will take years to replenish unless the government steps up to assist manufacturers to expand capacity.
Is the market just assuming that peace will come soon and there won't be changes to the defence budget/contracts?
Posted by ian_coke77
6 Comments
It does not help that the usa is blackmailing allies/customers or not delivering per contract. In Europe there is a growing sentiment to no longer buy us weapons as it is seen as unreliable supply.
Its called profit taking….. How much is it up still since last year or two years ago.
Think mostly people just tracking profits in anything they have gains in .
Might be repositioning to other things that have dropped more.
Or just taking profits and waiting out the downturn
They have stolen Nato money and they are refusing to deliver what Switzerland ordered.
Personal opinion, please hold hate – The market might be expecting this to stop soon.
There was uncertainty about war with Iran which has now been priced in. Buy the rumor sell the news. Iran war was a local top for the defense sector. Now you need rumors of the next war, which we don’t have, yet.