Alain Fernandez @Epsilon2x - Twitter Profile

7 months ago

Defense stocks have nearly doubled since their April 2025 lows, with the SPDR S&P Aerospace & Defense ETF up close to 100%. Only gold miners have outperformed over that stretch, and the sector’s 10 month rolling return now exceeds the rebound seen after 2009. Bank of America says the rally is being driven by fundamentals, not hype. The U.S. defense budget has crossed $1 trillion, and NATO members are targeting 3.5% of GDP for core defense spending by 2035. If achieved, that could add roughly $370 billion in new annual spending outside the U.S. Analysts see shipbuilding, air and missile defense, and munitions replenishment as major growth areas. Prime contractors such as Northrop Grumman, RTX and L3Harris are viewed as key beneficiaries as global inventories remain depleted and geopolitical tensions persist. There is debate over how high spending can realistically go given federal deficits, but the broader direction appears upward. AI, automation and autonomous systems are also becoming central to modern warfare, potentially lifting margins for contractors that adapt quickly. After a near 100% move, valuation concerns are natural. Still, rising earnings estimates and multi year budget commitments suggest this may be the start of a structural upcycle rather than the end of a short term surge.

Benzinga's tweet photo. Defense stocks have nearly doubled since their April 2025 lows, with the SPDR S&P Aerospace & Defense ETF up close to 100%. Only gold miners have outperformed over that stretch, and the sector’s 10 month rolling return now exceeds the rebound seen after 2009.

Bank of America says the rally is being driven by fundamentals, not hype. The U.S. defense budget has crossed $1 trillion, and NATO members are targeting 3.5% of GDP for core defense spending by 2035. If achieved, that could add roughly $370 billion in new annual spending outside the U.S.

Analysts see shipbuilding, air and missile defense, and munitions replenishment as major growth areas. Prime contractors such as Northrop Grumman, RTX and L3Harris are viewed as key beneficiaries as global inventories remain depleted and geopolitical tensions persist.

There is debate over how high spending can realistically go given federal deficits, but the broader direction appears upward. AI, automation and autonomous systems are also becoming central to modern warfare, potentially lifting margins for contractors that adapt quickly.

After a near 100% move, valuation concerns are natural. Still, rising earnings estimates and multi year budget commitments suggest this may be the start of a structural upcycle rather than the end of a short term surge.

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Epsilon2x retweeted

Benzinga @Benzinga

about 1 year ago

Retiring with $2.5 million might sound like a new benchmark, but very few people actually reach it. According to Federal Reserve data analyzed by the Employee Benefit Research Institute, only 1.8% of U.S. households have $2 million saved for retirement. When the target moves to $2.5 million, the number drops even lower, likely hovering around 1%. The median retirement savings across all U.S. households is just $87,000. Even among those 65 and older, the average is about $573,000, still far below the $2.5 million mark. Reaching that level usually requires early planning, decades of saving, and consistent investing — along with enough income to absorb rising living costs. Still, hitting $2.5 million gives you real flexibility. Using the 4% rule, that nest egg can generate $100,000 a year, not including Social Security. Add in roughly $23,000 from benefits, and you’re looking at over $120,000 annually — enough to live comfortably in most parts of the country. For early retirees or those concerned about inflation, that number may need to stretch even further. But with proper planning, $2.5 million opens up options and security. If you're not there yet, that’s okay — the key is having a strategy that fits your goals, not someone else’s benchmark.