Has the stock market improved under Trump?

Thanks to Trump: secure returns with US arms companies

When the stock exchanges took off after Donald Trump was elected, the new US President's first draft budget included drastically increased military spending on the list of priorities. Because of the unclear counter-financing, the stock exchanges initially waited, but then prices went up. Trump's announcements alone spurred arms stocks and sparked the imagination of investors.

How arms stocks benefit from Trump

That arms stocks would benefit from Trump became apparent in May 2017, when one of the largest arms deals was agreed with Saudi Arabia - with a volume of around US $ 110 billion. A total of US $ 350 billion is targeted over a further ten years. Lockheed Martin alone secured orders worth over US $ 28 billion. General Electric accounts for around US $ 15 billion. Raytheon and Boeing also got a chance.

Once again, Trump sent arms stocks soaring. The stocks not only outperformed the market as a whole in the short term. The relevant NYSE / Arca Defense Index brought in 29.9% over two thirds more than the Dow Jones for the year.

Expand US supremacy

A closer look reveals, however, that the area has been growing strongly for years. It got its last boost, which continues to this day, in February 2016. At the time, Obama was still President, who was more cautious about military spending. The reason for the increase was the international hotspots, including what is recorded as the fight against terrorism.

Under Trump, the bull market in arms stocks continued unchecked. He wants to ensure the global superiority of the US military at all costs, especially over China and Russia. New aircraft, ships, missiles and missile defense systems are to be purchased. All of this is a long-term upgrade program. It will take a few more years for the navy to grow from 277 to 350 ships.

Ammunition for years to come

Lockheed Martin is still the front runner among the US defense companies. Its sales reached over $ 40 billion in 2016. Its share rose by a good 327% over a five-year period, while its competitor Raytheon has the same value. Northrop Grumman even managed to gain 469%.

Among the pure armaments stocks, the growth in value of the tank manufacturer General Dynamics is significantly lower at 255%. Here, however, the price increase has been strongest since Trump's election. Overall, it can be seen that arms stocks have been generating solid returns for a long time. Under Trump, the outlook has improved significantly. The upgrade program will spur the industry for years to come.

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