Aerospace & defense stocks and ETFs are ripping higher, thanks mainly to rising hopes for a US-China trade deal and improving growth outlook. With worries about trade and growth receding, investors have been rotating out of defensive areas of market and into cyclicals.
Cyclical sectors are most exposed to economic growth and trade, and this rotation could continue if the economy remains on solid footing and trade situation improves. Fed’s dovish turn has also boosted riskier areas of the market.
Rising geopolitical tensions have resulted in increased defense spending all over the world. Global air traffic continues to expand and rising middle class in emerging economies would be a key source of air travel demand going forward. This would continue to support the commercial aerospace businesses over the long-term.
The iShares U.S. Aerospace & Defense ETF (ITA - Free Report) is a market-cap weighted ETF. Boeing (BA - Free Report) gets almost 21% weighting in the fund. Other top holdings are Lockheed Martin (LMT) and United Technologies (UTX - Free Report).
The SPDR S&P Aerospace & Defense ETF (XAR - Free Report) follows an equal-weighted index while the PowerShares Aerospace & Defense Portfolio (PPA - Free Report) tracks a modified market-cap-weighted index.
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and ...
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit, so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.