Export of weapons and the Stock market

U.S. strengthened the role of the leading weapons supplier in the world, increasing its stake to more than two-thirds of all arms deals.

In 2008, the United States signed an agreement on arms transfers totaling $ 37.8 billion. This is 68.4 per cent of all transactions in the global weapons market, as well as a significant increase in U.S. sales (previous year U.S. weapons sales worth 25.4 billion dollars).

Increase in sales of American weapons in the world is due not only to major new customer orders from the Middle East and Asia, but extension of contracts for equipment and expansion of growth in the number of U.S. clients around the world.
Sales of weapons to developing countries in 2008 reached 42.2 billion dollars, it is only a nominal increase compared with 41.1 billion dollars in 2007.
U.S. is a leader not only in arms sales worldwide, but also in developing countries, U.S. companies have signed with these countries military contracts valued at $ 29.6 billion, a 70.1 per cent of all such transactions.

The study showed that major deals concluded with developing countries, the U.S. last year, included:

• A contract worth 6.5 billion dollars to supply air defense system for the United Arab Emirates
• A transaction at 2.1 billion related to the supply of fighters in Morocco
• And an agreement on the $ 2 billion to sell attack helicopters to Taiwan.

Other major agreements on arms transfers has been reached between the United States and India, Iraq, Saudi Arabia, Egypt, South Korea and Brazil.

This will have a lasting impact that will directly affect the stock market. It's no secret that most of the major contracts for the supply of arms are long-term nature. These contracts is not stopping after supplying arms. Although and it usually takes several years. These contracts have long-term continuation, which consists from the supply of spare parts, maintenance and further improvements.

All this gives the boot not only directly to companies that produce weapons, but also to various businesses in related industries, as well as companies engaged in the scientific developments.
Proceeding from the above, you can be certain that the shares of companies associated with the production of weapons for the foreseeable future is not in danger, and the expectation for their growth will be justified.
Can not say that arms production is the engine of the economy, but the increase in production and supply of arms certainly is supporting and stability of the economy as a whole, and thus directly and the U.S. stock market.

If earlier we spoke "What's good for GM, is good for U.S.", but now we have to change the subject. More actually now - "What's good for Northrop Grumman, is good for U.S."
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07.09.2009