Dem Sweep Seen Priced in for Defense Stocks

Dow Jones11-05 02:09

1308 ET - The Democrat sweep of Congress doesn't change much for defense stocks, Morgan Stanley analysts say in a note, and they continue to view the sector as attractive. Substantially lower odds of a $350 billion defense funding package passing through reconciliation are already priced into defense prime stocks, the analysts say. Funding to replenish missiles is also likely to remain a priority despite the change in power, they add. "Now that the sector has put the midterms behind it, we think this could present a clearing event, and refocus the market on the fundamental geopolitical demand dynamics providing support for Defense," the analysts say. Lockheed Martin, RTX, L3Harris, and Northrop Grumman all trade in the red, while Boeing gains 2%.

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