Defense Industry Expecting Boost from Trump Election: The election of Donald Trump as the next President of the United States should give a boost to the defense industry, although one analyst warns there may be new challenges that arise in the international market.
Stocks for defense firms, including Lockheed Martin, Raytheon, Northrop Grumman and General Dynamics jumped between five and seven percent the morning after the election, a sign of early investor confidence that the Republican control of the White House and both chambers of Congress will mean boom times for the military-industrial complex.
Byron Callan of Capital Alpha Partners believes a Trump White House, combined with a GOP-controlled House and Senate, should mean the next budget is “at least $18 billion more for FY17 than the [Obama] Administration’s request, with $10 billion or more of that going to investment. Thus, FY17 investment budget authority could be up 2%-3% from FY16, not the flat comp we expected.”
Jim McAleese, a well known industry analyst, predicts a jump in across the board funding, including an increase of $9-18 billion for Overseas Contingency Operations (OCO) funding and moderate top-line funding for the next budget.
