Last week, the consensus from the âexpertsâ was a lackluster payroll number. But I had a different perspective. And as it turns out, I was right on the money. (Not to brag, but that might help explain why Iâm Bloombergâs No. 1 economic forecaster.) Curious what my crystal ball is telling me will happen next? [â¦] Youâre receiving this email as part of your subscription to Andrew Zatlinâs Moneyball Daily [Unsubscribe]( [Moneyball Daily] A Surprising (and Potentially Profitable) Way to Support the Troops February 06, 2024 Last week, the consensus from the âexpertsâ was a lackluster payroll number. But I had a different perspective. And as it turns out, I was right on the money. (Not to brag, but that might help explain why Iâm Bloombergâs No. 1 economic forecaster.) Curious what my crystal ball is telling me will happen next? Read on⦠[CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »»]( For a transcript of this video, see below. This transcript has been lightly edited for length and clarity. A Surprising (and Potentially Profitable) Way to Support the Troops A funny thing happened last Friday: A strong payroll number came out â just as Iâd predicted. But the stock market didnât pull back. Iâll keep an eye on things this week, because Iâm forecasting a drop in the near future. In the meantime, let me tell you about a sector where Iâm seeing nothing but promise. Sales Are on the Rise An investment in military and defense stocks is about as bullish as you can get. After all, demand keeps growing. - In 2021, direct sales of U.S. military equipment came in at $105 billion. - In 2022, that figure jumped almost 50% to $154 billion. - And last year, sales reached $238 billion. Around the world, weâve got conflicts in Ukraine, China, and the Middle East. So it stands to reason that sales are climbing. The question is, will they keep climbing? A Surprising Nation Steps Up You bet. And thatâs thanks to a rising superpower in Asia. You see, the U.S. is the No. 1 arms exporter in the world. And Russia is No. 2. But Russiaâs ability to compete with America is dependent upon sales to India. One-third of Russiaâs arms are sold to India â at least, for a little while longer. In the past, the U.S. didnât want to sell arms to India because the country was playing games, and it wanted to buy from the U.S. and Russia. America also expressed concerns that India would even turn around and sell American-made weapons to Russia. But the tide is turning. Last March, India signed a deal to purchase $8 billion worth of U.S. equipment. Just a few weeks ago, it signed a $4 billion deal for even more weapons. Thatâs $12 billion that American companies are getting, and Russian companies arenât. The thing is, the recent deals with India arenât all about the money. Thereâs something else going on here⦠Strategic Partnerships Abound The U.S. now views India as a strategic partner. Amidst the conflict in Israel and elsewhere in the Middle East, the Indian Navy has been stepping up its involvement, taking action in Yemen and off the coast of Somalia, where pirates are a major problem. The U.S. is appreciative of Indiaâs defensive moves, so itâs providing the country with the weapons and equipment it needs to keep up its strength. Not far from India, though, another nation is purchasing more U.S.-made hardware. Iâm referring to Japan. Japan spends about $34 billion a year on U.S. military equipment. Now itâs doubling that spending to $68 billion. In case itâs not obvious, this is all great news for U.S. military and defense companies. As demand for their arms continues to rise, sales, earnings, and eventually stock prices, should rise, too. Ready to invest in this sector? Here are my thoughts⦠Donât Follow the Crowds A popular play here might be to go after some of the big names â Northrop Grumman (NOC), Lockheed Martin (LMT), or Raytheon (RTX). And those are all solid investments. But Iâm a supply-chain guy. I like to look deeper at secondary companies that provide the essential parts and materials needed to create weapons and equipment. Thatâs why Iâd look at Jabil (JBL), a technology company that contracts a lot of work for defense-contractor General Dynamics (GD). Iâd also look at shares of AAR Corp (AIR), an aviation company that signed a 15-year, $909 million contract in 2017 to provide supply-chain management to the U.S. Air Force. AIR has some political ties to Donald Trump, and its stock could jump considerably if Trump is elected in November. In it to win it, [Andrew Zatlin] Andrew Zatlin
Moneyball Economics Copyright 2024 © Moneyball Economics, All rights reserved. You signed up on
[]( Our mailing address is:
Moneyball Economics
1125 N. Charles Street
Baltimore, Maryland 21201
[Update Subscription Preferences]( | [Unsubscribe from this list]( | [Terms & Privacy]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended â as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. DISCLAIMERS: The work included in this communication is based on diverse sources including SEC filings, current events, interviews, corporate press releases, and information published on funding platforms, but the views we express and the conclusions we reach are our own. As such, this content may contain errors, and any investments described in this content should be made only after reviewing the filings and/or financial statements of the company, and only after consulting with your investment advisor. Actual results may differ significantly from the results described herein. Furthermore, nothing published by Moneyball Economics, Inc should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. Moneyball Economics is an independent provider of education, information and research on publicly traded companies, and as such, it accepts no direct or indirect compensation from any companies or third parties mentioned in any of our letters, reports or updates