May the Odds Be Ever in Their Favor... Especially Defense Stocks?!

Panem's Favorite Pastime: Investing in...War?!

Well isn't this just lovely? It seems the fine folks in charge of the money are getting all giddy about defense stocks. You know the ones that profit from… well everything I fought against. Conflicts in the Middle East squabbles in the Indian subcontinent and NATO allies suddenly finding their wallets to 'boost defense spending.' Makes you wonder if they've all been watching too many Hunger Games and thinking 'Hey that looks like a solid business model!' Turns out the odds are indeed in someone's favor – just not the people caught in the crossfire. As usual.

The Markets Are on FIRE (and Not in a Good Way)

According to the LSEG data the MSCI Europe Aerospace and Defense Index (USD) has apparently 'surged' by around 70% this year while the iShares US Aerospace & Defense ETF (ITA) has gained over 25%. Oh goodie. I'm sure the folks in District 12 are thrilled to hear their hard earned nonexistent wages are indirectly funding… well more potential reasons for them to need a mockingjay like me again. It’s like Peeta baking bread for the Capitol – except instead of nourishment it's…well more weapons of mass destruction.

Trump's 'Transactional' Take on Defense: A Game Changer?

Apparently President Trump's 'transactional approach' (code for 'shake down allies') and calls for everyone to spend more on defense have sent investors scrambling for defense assets. Kenneth Lamont from Morningstar seems to think so anyway. Rising tensions equals rising profits that’s the formula. I am sure President Snow would be very happy about this.

Since When Did 'Defense' Become the New 'Must Have' Accessory?

James Penny at TAM Asset Management is all in on rotating into defense stocks around the world particularly in the EU. You know because nothing says 'peace' like more weapons floating around. Asset managers have practically doubled their allocations to defense stocks since the Russia Ukraine conflict which begs the question: are we trying to solve problems or create new ones? Maybe they should try allocating some funds to…oh I don't know… actual solutions?

NATO's New 5% Rule: Is This 'Strategic Autonomy' or Capitol Style Overkill?

NATO allies have decided to bump up their defense spending goal to 5% of GDP by 2035. Five percent! That’s a lot of bread…I mean money. Tom Bailey from HANetf says Europe is waking up to the realization that they can’t just rely on importing U.S. military equipment anymore and needs to achieve "strategic autonomy." I wonder if they’ll start their own version of the Quarter Quell but with more weapons and less rebellious teenagers?

The Indo Pacific: The Next Arena?

And just when you thought things couldn't get any more delightfully dystopian market watchers are eyeing the Indo Pacific. Apparently the region is brimming with 'potential major geopolitical flashpoints,' from India's border squabbles to China and Taiwan's dance off and territorial claims. Mercer's Jay Love chimes in that defense stocks are just going to get more popular from here because well conflict sells. He did note that the profits of the companies aren't that great and they are relatively expensive to buy. Maybe it's time we invest in something that actually helps people instead of making sure they have better ways to hurt each other. Just a thought because let's face it the odds are never really in anyone's favor when the bombs start dropping.