They've always negged for resources. Nothings changed.
Not to mention they conducted multiple (advanced) ballistic missile tests during these hard hitting and stringent sanctions
North Korea Thread: DPRK Launching Missiles With New ICBM
- Thread starter newarkhiphop
- Start date
They've always negged for resources. Nothings changed.
Not to mention they conducted multiple (advanced) ballistic missile tests during these hard hitting and stringent sanctions
Birnin Zana
Honorary Wakandan
Trump, Kim handshake, talk of peace lowers U.S. defense stocks.
Talk of peace between the U.S. and nuclear-armed North Korea sank defense stocks Tuesday.
While the broad U.S. stock market reaction to the historic agreement between President Trump and North Korean leader Kim Jong Un to establish a new relationship committed to "peace and prosperity" was muted, shares of defense contractors took a dive.
Shares of Raytheon, which makes Patriot and Tomahawk missiles, closed 2.8% lower. Lockheed Martin, which supplies the Pentagon with air and missile defense systems as well as the F-35 Stealth fighter jet, tumbled 1.3%. And Northrop Grumman, which has increased its focus on cyber warfare and missile defense systems more recently, declined 1.5%. Boeing, which makes Apache helicopters and aerial refueling aircraft, dipped 0.1%. General Dynamics, a Navy shipbuilder, fell 1.6%.
By contrast, the Dow Jones industrial average finished the day virtually unchanged with a loss of less than 2 points.
Any political or diplomatic developments that lower the chance of military conflict cools investors interest in defense-focused companies, says Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, MA.
“If weapons are used they need to be replaced," says McMillan. "That makes war a growth story for these stocks, and one of the big potential growth stories recently has been North Korea," he continued, adding, "What the agreement does, at least for a while, is take military conflict off the table."
While peace overtures between the long-time enemies will put "defense stocks on the defensive" in the short term, investors shouldn't worry about long-term problems for makers of military equipment, explains Gary Kaltbaum, president of Katlbaum Capital Management.
"Funding," he says, will be "plentiful for years to come."
President Trump signed a $1.3 trillion spending bill in March that includes a $160 billion boost in defense spending over two years, "reversing years of decline and unpredictable funding," according to the U.S. Department of Defense.
And thawing relations between the U.S. and North Korea isn't likely to translate into lower defense budgets, Bloomberg Intelligence aerospace analyst George Ferguson noted recently. He expects U.S. military expenditures to continue to rise.
“If North Korea turns from a pariah state to being welcomed in the world community," Ferguson wrote in a recent report, "there are still enough trouble spots that require strong defense spending, supporting revenue and profit growth at prime defense contractors."
U.S.-based defense companies get a large portion of their sales from the Pentagon and U.S. government. Both Raytheon and Lockheed Martin, for example, get 70% of their sales from the U.S., according to Bloomberg.
That's likely why the handshake between Trump and Kim that made global headlines, and North Korea reaffirming its plans to work towards "complete denuclearization" of the Korean Peninsula, has not been a bullish development for defense stocks.
Talk of peace between the U.S. and nuclear-armed North Korea sank defense stocks Tuesday.
While the broad U.S. stock market reaction to the historic agreement between President Trump and North Korean leader Kim Jong Un to establish a new relationship committed to "peace and prosperity" was muted, shares of defense contractors took a dive.
Shares of Raytheon, which makes Patriot and Tomahawk missiles, closed 2.8% lower. Lockheed Martin, which supplies the Pentagon with air and missile defense systems as well as the F-35 Stealth fighter jet, tumbled 1.3%. And Northrop Grumman, which has increased its focus on cyber warfare and missile defense systems more recently, declined 1.5%. Boeing, which makes Apache helicopters and aerial refueling aircraft, dipped 0.1%. General Dynamics, a Navy shipbuilder, fell 1.6%.
By contrast, the Dow Jones industrial average finished the day virtually unchanged with a loss of less than 2 points.
Any political or diplomatic developments that lower the chance of military conflict cools investors interest in defense-focused companies, says Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, MA.
“If weapons are used they need to be replaced," says McMillan. "That makes war a growth story for these stocks, and one of the big potential growth stories recently has been North Korea," he continued, adding, "What the agreement does, at least for a while, is take military conflict off the table."
While peace overtures between the long-time enemies will put "defense stocks on the defensive" in the short term, investors shouldn't worry about long-term problems for makers of military equipment, explains Gary Kaltbaum, president of Katlbaum Capital Management.
"Funding," he says, will be "plentiful for years to come."
President Trump signed a $1.3 trillion spending bill in March that includes a $160 billion boost in defense spending over two years, "reversing years of decline and unpredictable funding," according to the U.S. Department of Defense.
And thawing relations between the U.S. and North Korea isn't likely to translate into lower defense budgets, Bloomberg Intelligence aerospace analyst George Ferguson noted recently. He expects U.S. military expenditures to continue to rise.
“If North Korea turns from a pariah state to being welcomed in the world community," Ferguson wrote in a recent report, "there are still enough trouble spots that require strong defense spending, supporting revenue and profit growth at prime defense contractors."
U.S.-based defense companies get a large portion of their sales from the Pentagon and U.S. government. Both Raytheon and Lockheed Martin, for example, get 70% of their sales from the U.S., according to Bloomberg.
That's likely why the handshake between Trump and Kim that made global headlines, and North Korea reaffirming its plans to work towards "complete denuclearization" of the Korean Peninsula, has not been a bullish development for defense stocks.
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Poetical Poltergeist
Precise and cold hearted
Jesus H. Christ
I died for your sins
Trump got finessed out the deal?
ZoeGod
I’m from Brooklyn a place where stars are born.
Multipolarity.
Futuristic Eskimo
All Star
The history of a multipolar world is much less stable and more violent.
This is utterly ridiculous.
Washington Post
55 mins ·
The film imagines Kim Jong Un as a beloved hero.
When a reporter asked if the United States had just produced North Korean propaganda, Trump cut off the question.
WASHINGTONPOST.COM
Reporters thought this video was North Korea propaganda. It came from the White House.
:smhkobe: 
88m3
Fast Money & Foreign Objects
88m3
Fast Money & Foreign Objects
The Onion
June 11 at 10:04pm ·
Donald J. Trump: "There was some negotiating involved in getting [Jong-un] to buy as many nukes as we wanted to sell, but by cutting the price, we came out with a deal that’s profitable for America and therefore good for the world."
POLITICS.THEONION.COM
Trump Touts Success Of Singapore Summit After Securing $10 Billion Trade Deal To Sell Nuclear Warheads To North Korea
SINGAPORE—Saying the agreement represents a major high point in American international relations, President Trump concluded his summit with Kim Jong-un Monday by securing a $10 billion trade deal to sell both strategic and tactical nuclear warheads directly to North Korea.
ZoeGod
I’m from Brooklyn a place where stars are born.
I am speaking as someone who is from a country that suffered tremendously from US unipolarity(FRAPH,US backed armed uprising in 2004,continuing US interference in Haiti’s elections and political parties). Haiti would be better off not dealing with the US because we keep getting burned. We want options. America is not the global force of good as it portrays. Doesn’t practice what it preaches. In a multipolar world we have options. It’s like many buy into this propaganda America is good. And funny enough a lot of y’all are black and should be the first ones to know how America truly is especially how it’s oppress black people systematically.
Futuristic Eskimo
All Star
If you're speaking from the perspective of being a Haitian, then I'm not going to argue with you regarding what is best for Haiti specifically, but there are regions of the world that welcome a US presence as a stabilizing force.
I also don't buy the notion that because a country has done some truly terrible things, that it can't be a net force for comparative good in the world. Things are a bit more complicated than slapping labels on things.
I get where you're coming from, though.
