We’re racing toward the close of the first-quarter and it’s been a wild start to the year for stocks.
The entire market has been undercut by volatility.
Trade wars, DOGE cuts, interest rate uncertainty, and shaky economic indicators have taken their toll on consumers, corporations, and investors.
As of right now, the S&P 500 has tumbled 9.5% in the past month, while the Dow is down 8%.
Standing in stark contrast, however, are defense contractors, which have recovered from their initial early-year stumble.
To wit:
- Lockheed Martin (NYSE: LMT) is up 10.5% in the past month.
- Northrop Grumman (NYSE: NOC) is up 12%.
- And General Dynamics (NYSE: GD) is up 8%.
This is reassuring, to say the least.
There was simply too much uncertainty swirling around the defense sector in January and February — more than I’ve ever seen or even imagined.
President Trump’s demand that the Pentagon cut spending and Elon Musk’s infiltration of the Defense Department — along with the potential end to the war in Ukraine — had America’s arms dealers reeling.
However, things look to be settling down — at least for the time being.
An effort to gut the Pentagon’s budget seems to have been bargained down to a digestible reduction in staff and a “refocusing” of DOD priorities.
Shout out to Defense Secretary Pete Hegseth on that one.
Hegseth attempted to calm nerves in a video address imploring the public to take talk of Pentagon budget cuts with a "gigantic grain of salt."
"Ever since I've taken this position, the only thing I've cared about is doing right by our service members — soldiers, sailors, Marines, airmen, and guardians," Hegseth said. “In short, we want the biggest, most badass military on the planet."
Aiding Hegseth was an outcry from Republican defense hawks and congressmen who were mortified by the thought that their constituents and donors would be negatively affected by Elon Musk and his chainsaw. (Never mind the implications for America’s defensive capabilities.)
Remember, as I pointed out last month, the defense department is the largest employer in the United States, with a combined military and civilian workforce of over 2.8 million people.
Additionally, military bases and arms production and testing facilities are scattered across the United States — including red and purple states like Virginia, Alabama, Texas, Florida, Colorado, and Mississippi, as well as blue states.
More importantly, though, the return to reason was backed up by a brand-new funding commitment, as the House’s stopgap budget bill aims to increase defense spending by $6 billion — even as it cuts non-defense funding by $13 billion.
So I’m happy to report that despite talk of cutting the defense budget in half and raiding the Pentagon for spare change, national security remains a priority for this government.
And on top of that, we have a huge spending boom in Europe adding yet an even bigger tailwind…
AI has a Dirty Secret...
AI has a dirty secret...
Companies have been “stealing” our personal data to train their AI models.
And thanks to the U.S. government enacting an obscure Korean War-era law...
This secret has led to the discovery of the easiest passive income stream we’ve ever seen.
Starting at just $10 and five minutes to get set up...
You could start receiving regular passive payouts of as much as $3,452.50 per month in “AI Equity Checks.”
Get all the details on this easy passive AI income stream here.
America’s foreign military sales reached $118 billion in 2024, up from a record $81 billion in 2023.
And Europe has been at the front of the line.
American arms exports to Europe doubled from 2015–2019, when Russia first annexed Crimea through military force. And they more than tripled from that level in the period from 2020–2024.
As a result, Europe now accounts for the largest share of U.S. arms exports — edging out the Middle East for the first time in two decades.
More money is set to pour forward in the months and years ahead.
European Commission President Ursula von der Leyen even laid out a plan to “urgently” increase defense spending with a cash infusion of 800 billion euros ($841 billion).
“Europe is ready to massively boost its defense spending, both to respond to the short-term urgency to act and to support Ukraine but also to address the long-term need to take on much more responsibility for our own European security,” she said in a statement.
She also called it an “era of rearmament.”
That means U.S. defense contractors will continue to thrive — regardless of what happens with Ukraine.
That goes double if the Pentagon is able to fend off drastic cost-cutting measures — and triple if Republicans in Congress are able to override Trump and Musk to raise defense spending.
So if you’re looking for wealth preservation and market-beating returns at a time of intense volatility, then make sure to check out my Secret Stock Files investment service.
You can find my latest report here.
Fight on,
Jason Simpkins
Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more...
In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor's page.
Be sure to visit our Angel Investment Research channel on YouTube and tune into Jason's podcasts.
Want to hear more from Jason? Sign up to receive emails directly from him ranging from market commentaries to opportunities that he has his eye on.
@OCSimpkins on Twitter
Tidak ada komentar:
Posting Komentar