President Donald Trump took decisive action in the early evening on Thursday against a Syrian regime accused of attacking their own population with chemical weapons.
The Commander in Chief tasked two U.S. Navy destroyers to incapacitate the Sharyat airfield in Syria, known to be the origin of the planes that carried out the heinous and illegal attack on unarmed civilians. The message was clear: Syrian President Bashar al-Assad was to be punished for his crime against humanity, and the wartime atrocity that he had committed and is accused of attempting to hide.
From those Naval warships launched a combined 59 Tomahawk Cruise missiles, first deployed to the region during the 1991 Gulf crisis. All 59 detonated on target at Sharyat.
Now Raytheon, the manufacture of the missiles, is reaping an unexpected reward from an unconventional iteration of the so-called “Trump Effect”: A stock bump due to the missile’s mission.
“Investors seem to be betting President Trump’s decision to retaliate against Syria after the chemical attack on Syrian citizens earlier this week may mean the Pentagon will need more Tomahawks.“The Department of Defense asked for $2 billion over five years to buy 4,000 Tomahawks for the U.S. Navy in its fiscal 2017 budget last February.
“Nearly five dozen Tomahawk cruise missiles were launched at military bases in Syria from U.S. warships in the Mediterranean Sea late Thursday.
“Raytheon () wasn’t the only defense stock rising Friday either. Lockheed Martin ( ), which partners with Raytheon on the Javelin missile launcher system and also makes Hellfire missiles, gained nearly 1%.”
Investors will be keen to what follow up occurs in the wake of this international incident, as Russia, Syria, and the United States all have vested interests in the region, although none of them happen to see completely eye-to-eye on how best to handle the crisis.
Some speculators are pointing to evidence that the Pentagon is actively investigating the possibility of Russian complicity in the chemical attack and subsequent coverup, an accusation that the Kremlin is not likely to take lightly. Should a conflict arise from this delicate game of saber rattling, expect Raytheon and other contractors allied with the Department of Defense to outperform the market indexes in a significant way.
While President Trump has consistently been considered a fantastic boon to the American economy, this latest financial boost could come at quite the cost should Russia back the play of Assad and his sadistic regime, forcing further action by the United States.