To Market, To Market...

Last week:

Defense firms see more profit, shares rise

NEW YORK (Reuters) - Aerospace and defense companies Raytheon Co, L-3 Communications and Goodrich reported higher profits and forecast strong performance next year as the sector promises to hold up relatively well against the onslaught of the credit crisis and global economic downturn.

The results, which helped push their shares sharply higher, come after strong numbers from Lockheed Martin Corp and Northrop Grumman Corp earlier this week, marred only by rising pension liabilities after an abysmal few months in global investment markets.

"With the underlying defense business still doing well for most industry participants, pension is probably the biggest risk facing the defense industry," said Macquarie Research analyst Robert Stallard.

In a meeting with the editorial board of The Standard-Times, Rep. Frank, D-Mass., also called for a 25 percent cut in military spending, saying the Pentagon has to start choosing from its many weapons programs, and that upper-income taxpayers are going to see an increase in what they are asked to pay.

Frank further clarified: "We don't need all these fancy new weapons. I think there needs to be additional review."

Lot's of folks are outraged, outraged I tell you, over Frank's stated desire to implement what would amount to lethal cuts in defense spending in time of war.
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[But] Frank's goal is more short-term: damage defense stocks on the market.

Morgan Stanley cuts US aerospace, defense sector

Oct 27 (Reuters) - Morgan Stanley downgraded the U.S. aerospace and defense industry to "in-line" from "attractive" and said it prefers to be on the sidelines in defense ahead of the presidential elections.

Aerospace and defense sector has outperformed the Standard & Poor's for eight of the last nine years, and a recovery rally for defense stocks looks less assured in the first quarter this time, Wood wrote in a note to clients.

Wood also downgraded Rockwell Collins Inc, aerospace electronics company and Raytheon, the U.S. No. 5 defense contractor that makes Patriot and Tomahawk missiles, to "equal-weight" from "overweight."

I'm not a market forecaster, but if defense stocks do fall, this will be a likely turn-around point:

"I can give you at least four or five scenarios from where it might originate," Biden said to Emerald City supporters, mentioning the Middle East and Russia as possibilities. "And he's gonna need help. And the kind of help he's gonna need is, he's gonna need you - not financially to help him - we're gonna need you to use your influence, your influence within the community, to stand with him. Because it's not gonna be apparent initially, it's not gonna be apparent that we're right."

See also It and Frank Talk