5 Defence Stocks That Have Soared This Month
The state of world affairs has deteriorated dramatically over the last 2 years. The Russia / Ukraine conflict has now been followed by Israel/ Palestine. The sad reality is that war can potentially bring immense profit for defence companies. Today, we’ll review the performance of 5 such companies. Following that, we’ll check over the top tradeable events of the coming week.
The World at War
The US fiscal 2024 National Defense Authorization Act has requested $886.3 billion in US defense spending for the coming year. That’s an increase of 3.3% year-over-year.
This discouraging rise is a direct result of the ongoing Russia/Ukraine conflict and the latest flare-up in hostilities between Israel and Hamas in Palestine. It’s a reflection of the US’ ongoing support of key international allies.
The main beneficiaries of that spending — the defence companies themselves, of course. But in anticipation of that proposed increase, the stock of these companies has already started to increase in value over the last few weeks.
5 stocks that are on the rise in October
1. Boeing Co. (BA)
BA stock, 1 month.
Source: Trading View
Boeing Co. is one of the world’s largest aerospace manufacturers, producing commercial planes, rockets, satellites, telecommunications equipment, and missiles. It’s one of the world’s leading global defence contractors, and has over 140,000 employees worldwide.
The impact of the conflict in Palestine is clear to see on the chart above. at the start of the month. Boeing’s stock value had been in a sustained bearish movement for the last few months. Speculation around the conflict, however, caused BA stock price to climb from 184 USD to 199 USD, an 8% increase in value in just 3 days.
2. Northrop Grumman Corp. (NOC)
NOC stock, 1 month
Source: Trading View
Northrop Grumman is another US aerospace and defence tech company. It is one of the world’s largest weapons and military technology producers and has over 90,000 employees across the world.
NOC’s stock performance stuttered preceding the outbreak of hostilities, the impact of which is clear to be seen in the chart above. Stock price rose by 19% in the immediate aftermath.
3. General Dynamics Corp. (GD)
GD stock, 1 month
Source: Trading View
The General Dynamics Corporation produces a range of vehicles and systems specifically for the US military, including combat vehicles, submarines, surface ships, aircraft, and weapons systems. The US defence supremo has 100,000 employees worldwide.
GD stock climbed 13.9% following the Israel/Palestine unrest, and it’s clear to see that investors were backing the company to make a sustained charge in the wake of the tragic news.
4. KBR Inc. (KBR)
KBR stock, 1 month
Source: Trading View
KBR Inc. is headquartered in Houston, Texas, and has over 20,000 employees worldwide. The company’s government solutions segment is in line to get a boost from the ramp-up of the Homesafe project in mid-2024.
KBR stock jumped up 9.2% on the news that hostilities in the Middle East had suddenly recurred after 7 October.
5. Leidos Holdings Inc. (LDOS)
LDOS stock, 1 month
Source: Trading View
Leidos Holdings Inc. provides a range of services to the US government and commercial clients, including engineering, logistics, information technology, and scientific research. Leidos has over 38,000 employees worldwide.
LDOS stock moved up 16.9% in the days following the re-engagement in Palestine.
These charts look almost identical to one another, and for good reason. It’s 62 years since President Eisenhower warned of the dangers of the Military-Industrial complex, but it’s clear that it’s alive and kicking.
Are you trading any of these?
Do you have any reservations about trading military/defence stocks? Which of these stocks are you looking at? Let us know over on Twitter (X) at @_contentworks.
Top fundamental events week commencing 23.10.23
There’s not a huge amount to shout about this week. Here’s what’s coming up…
Monday
● No major events are planned.
Tuesday
● GBP — Unemployment Rate
● EUR — German GfK Consumer Confidence; German HCOB Manufacturing PMI Flash
Wednesday
● AUD — Inflation Rate YoY
● EUR — German Ifo Business Climate..
● CAD — BoC Monetary Policy Report
● USD — Fed Chair Powell Speech
Thursday
● EUR — ECB Interest Rate Decision; ECB Press Conference
● USD — Durable Goods Orders; GDP Growth Rate QoQ Adv
Friday
● USD — Core PCE Price Index MoM; Personal Income; Personal Spending MoM; UoM Consumer Sentiment Index
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The Contentworks team
