Latest news with #defensespending
Bloomberg
8 hours ago
- Business
- Bloomberg
Putin Says Russia to Seek Defense Cuts; How Much Depends on War
President Vladimir Putin said Russia plans to cut defense spending, acknowledging growing strains on the budget even as he insisted that reductions would depend on winning his war in Ukraine. Russia is spending 6.3% of gross domestic product on defense this year and 'that's a lot,' Putin told reporters in Minsk, Belarus, on Friday. 'It's one of the problems, including for the budget, that we have to resolve,' and Russia paid a price in inflation from the increased expenditure, he said.
Yahoo
20 hours ago
- Business
- Yahoo
Why defense ETFs and gold miner ETFs are seeing big inflows
Defense stocks have cooled off since their recent surge, but defense-related exchange-traded funds (ETFs) are still seeing inflows as NATO leaders commit 5% of their annual budgets to defense spending. Cinthia Murphy, VettaFi investment strategist, joins Market Catalysts to explain how these flows signal defense as both a tech and industrial play. She also takes a look at gold miner ETFs and explains why they're among the market's top performers this year. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. NATO leaders committed 5% of their annual budgets to defense spending at their annual summit this week. And while defense stocks have cooled since the recent spike, ETF flows suggest the defense rally still has some room to run and could even be an alternative way to play the tech trade. I want to bring in Cynthia Murphy, VettaFi investment strategist for this week's ETF report sponsored by Invesco QQQ. Great to have you here in studio with us. So, let's just begin why are we seeing some of these inflows and to what extent is it analogous to events that we've seen in the past where there is a ramp up in some of the defense prioritization among investors? You know, when it comes to thematic investing, defense has been one of the biggest themes so far this year. Outside of protection, things that we're going to talk in a minute about. And, you know, the news keeps supporting this as a good area of the market to be in. So, defense stocks are primarily industrial plays, but a lot of them have more and more tech stocks because defense today is both an industrial infrastructure effort. It's also a technology effort, an AI effort. And when you think about drones and all the new technology you're using, uh, for, for combat. And this week we had the NATO news where they're really upping their budget for defense spending. They went from 2% of GDP commitment to 5% GDP commitment. And not only that, but these countries have to actually show on an annual basis their plan. How are they going to allocate that budget? How are they're spending that money on actual defense, uh, you know, equipment and, and strategy? So it's a, it's a theme that just keeps on giving. I mean, some of these stocks, Rheinmetall, which is one of the biggest defense stocks, is a German company, is up over 250% in the last year. It's, uh, these are really, really strong performers and investors are buying the ETFs that, that tap into that space. Well, and Simeon, Cynthia mentioned a great point in that the battlefield is very different right now, because especially with some of the foreign actors that might try in times of conflict to tap into things like energy grids or natural resources, that also takes the mindset to what needs to be done within cyber security, what is already being done and where investors could also be thinking of that as a annexed defensive play. Yeah, I, I think maybe one of the questions is how insulated are these companies from the broader economy. Let's take the NATO, the NATO uptick and spending. Let's make kind of a bare case that they can't quite run deficits. We know they said they're going to run bigger deficits. They have in the past, but they can't do it like the US does. So let's suppose they keep their commitment, but it takes a nick out of their broader GDP growth. Are the defense names and the cyber security names narrow enough to benefit without the downside of perhaps a little touch of weakness in other parts of the European economy? I, I think it remains to be seen, but if you think about, I mean, we're talking arms dealers, we're talking about, you know, technology, uh, airplanes, like in the US would be like Lockheed Martin, Northman Grumman. I mean, they're, they're different companies that are, you know, kind of swimming above that pond because that market is so strong right now. And, and I think the specially strong plays here are Europe based plays more than the US because it has really been that effort there. So when you look at funds that invest primarily in Europe defense, like EUAD, that fund is up 65% so far this year. Uh, when you look at say SHLD, a shield, which has 50% US, 50% global, uh, that fund is up maybe 50%. So really they play really the European companies because they are committed to investing in these businesses and, and making it happen. You know, one of the other areas that you flagged to us as well, gold miners, still one of the year's best performing ETFs. What, what is the outlook for the second half of the year, given that we'd already seen some of the highs that were just mind-blowing that we were able to get to and, and how much of those flows could still see momentum from here? Yeah, it's, I mean, Simeon, we've been in this business long enough to know that gold miners ebb and flow. It's like almost every five years they have their moment in the sun and then nothing happens. And then they bust. Uh, this year, they're performing, outperforming gold two to one basically, 60% to 30%. Uh, all the conversation, I mean, JP Morgan just came out and pegged the price of gold at 4,000 by mid next year, uh, which is another big leg up from where it is today. And if you look at Q1 earnings, I think that's the big, a big catalyst here is Q1 earnings show these companies beating their, their earnings by big amounts. Like Newmont, I think beat earnings per share by more than 30%. So they are really resilient and they're doing well and, and folks are buying them. And they don't always do what gold does. Yeah. Yeah. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
21 hours ago
- Business
- Bloomberg
Putin Says Russia to Seek Defense Cuts Though It Depends on War
President Vladimir Putin said Russia plans to cut defense spending, acknowledging growing strains on the budget even as he insisted that reductions would depend on winning his war in Ukraine. Russia is spending 6.3% of gross domestic product on defense this year and 'that's a lot,' Putin told reporters in Minsk, Belarus, on Friday. 'It's one of the problems, including for the budget, that we have to resolve,' and Russia paid a price in inflation from the increased expenditure, he said.
Bloomberg
a day ago
- Business
- Bloomberg
NATO Leaders Flex Muscle to Avert a $1.5 Trillion War
By and Alberto Nardelli Save Hi, this is Milda Seputyte in Vilnius and Alberto Nardelli in Brussels. Welcome to our weekly newsletter on what's shaping economics and investments from the Baltic Sea to the Balkans. You can subscribe here. To much fanfare in the Hague this week, NATO leaders agreed to boost defense spending to 5% of gross domestic product and renewed their 'ironclad commitment' to mutual security. It was a win for Donald Trump, who has lambasted his European allies for underspending. In return, the US will remain committed to collective defense should a member come under attack.
Russia Today
2 days ago
- Business
- Russia Today
Trump hails ‘great' NATO summit
US President Donald Trump has called NATO's recent summit in The Hague 'great.' Numerous media reports had previously claimed the two-day event was almost solely focused on pleasing the American leader. 'A wonderful day with incredible and caring Leaders,' Trump wrote Truth Social on Thursday, pointing to the NATO members' latest commitment to hike defense spending to 5% of their GDP annually by 2035. He also claimed the meeting earlier this week was 'the most unified and productive in history.' However, not all NATO members agreed to the defense spending hike demanded by Trump. Spain reached a deal with the bloc just days before the summit that excluded it from the 5% target, according to Prime Minister Pedro Sanchez. He had earlier branded Trump's demand 'not only unreasonable but also counterproductive.' Slovak Prime Minister Robert Fico also said on Tuesday that his nation 'is capable of meeting NATO's requirements even without a substantial increase in defense spending to 5% of GDP.' He also maintained that Bratislava has 'other priorities in the coming years than armament.' The event was limited to just one working meeting lasting two and a half hours – reportedly because of Trump's dislike for lengthy sessions. The summit was also solely focused on increasing the defense spending of members, one of Trump's key demands on the bloc. After the meeting, the New York Times reported that the Ukraine conflict was pushed 'to the sidelines' of the event as its organizers sought to cast all controversial topics aside. Kiev's membership ambitions – something that used to be at the forefront of NATO discussions over the past years – were barely mentioned at this year's event and not included in the final declaration. Some European officials were also unhappy with the level of flattery used by NATO Secretary General Mark Rutte to win over Trump during the meeting, according to Politico. 'People are so embarrassed,' one official told the outlet, adding that 'the sucking up was pretty over the top.' Rutte reportedly called Trump 'daddy' during the summit and sent him a gushing message praising the US attack on Iran's nuclear sites ahead of the summit. The US president was quick to post the NATO chief's message online. The White House also shared a clip on social media showing Trump's participation in the summit and accompanied by Usher's song 'Daddy's home'.
