Back in September, President-Elect Trump spoke to the Union League of Philadelphia, promising to undo defense spending cuts made during the 2013 budget sequester. Trump has proposed to boost defense spending during the next ten years by more than $500 Billion. The spending will include:
- development of a state of the art missile defense system
- modernization of naval cruisers to provide Ballistic Missile Defense capabilities
- building up the Navy to 350 surface ships and submarines
- building up the Air Force to at least 1,200 fighter aircraft
It is not surprising that with Trump's surprise election victory on Nov. 7, the three Aerospace and Defense ETFs iShares U.S. Aerospace & Defense ETF (NYSEARCA:ITA), SPDR S&P Aerospace & Defense ETF (XAR), and PowerShares Aerospace & Defense Portfolio ETF (PPA) immediately responded by gains of approximately 9% over the subsequent week. More...