Defence Stocks Plummet amid Threats of Peace Breaking Out on Korean Peninsula
ECONOMICS, 7 May 2018
New Matilda – TRANSCEND Media Service
War. What is it good for? Well, the economy, stupid. And conversely, if the prospects of war reduce, you can pretty much guess what happens to the fortunes of major defence companies.
(IMAGE: clement127, Flickr)
30 Apr 2018 – With South Korean president Moon Jae-in leading an extraordinary diplomatic ‘assault’ on North Korean president Kim Jong-un – a strategy which led to their historic meeting last week and an agreement to work towards stability in the Korean Peninsula – there are, sadly, going to be some losers from the march towards peace.
Reports Fortune magazine,
“On Friday, while the broader stock market as measured by the S&P 500 index remained largely flat, the S&P Aerospace and Defense Select Industry Index fell roughly 1.3%.
“The US’s five largest defense contractors shed about $10.2 billion in value on Friday alone. Lockheed Martin fell 2.5% to a valuation of about $92.1 billion; Northrop Grumman slid 3.4% to $56 billion; General Dynamics shed 3.8% to $60.7 billion; Raytheon dropped 3.6% to $50.8 billion; and finally, Boeing slid a much lesser 1% to $200.2 billion.”
The news is actually a bit worse – the S&P Aerospace & Defense Index is actually down 4.3% since the start of the week, with investors generally nervous that we’re at serious risk of entering a period of relative peace.
The Korean peace deal, of course, has a way to go yet, but if progress continues, investors should take comfort in the reality that we’ll almost certainly find a new ‘threat’ to the West to buoy US stocks.
Early front-runners would be China and Russia, and scrutiny is likely to intensify on Iran. New Matilda would like to formally nominate New Zealand, in preparation for next year’s Bledisloe Cup.
In the meantime, enjoy it while it lasts.
Go to Original – newmatilda.com
DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.