European defenses when Washington meets Moscow
See Mike Dolan’s upcoming days in the US and global markets
European defence stocks, which have soared about 20% a year so far, surged by another 1% on Tuesday as US officials met Russian counterparts in Saudi Arabia for consultations about ending the war in Ukraine. I did.
The US market will close on Monday for President’s Day holidays and return in a relatively buoyant mood, with Treasury yields and stock near record highs even as the dollar rises again Futures are now stiffer.
However, it has attracted attention in Europe with what could prove politically and economically a groundbreaking week for the continent. Additionally, Europe’s broad stock indexes are bringing back valuable investors throughout the Atlantic this year. .
Eurozone stocks have grown at over 12% this year, almost four times the US benchmark, with record-breaking German DAX rising 14%.
Rebalancing through extreme evaluations is an important driver, but the prospect of increasing defence spending in Europe added a larger tail. The outcome of the German election had to ease the so-called “debt brake” embedded in the constitution, which is likely to determine whether Berlin’s new government would gain parliamentary support.
Portfolio investors are hoping to rethink some of the spending on public investment as a way to restart the German economy, and in the face of the potential for a US trade war, portfolio investors feel aversion to the region We encourage you to fix it.
And in the background, according to the Zew Economic Research Institute, the morale of German investors recorded the strongest increase in two years this month.
Defense takes center
But defense is at the forefront and center of the latest stock price movement, even some new speculation that the EU will return to joint sovereign borrowing as a possible route to increase spending in the region.
The European defence sector has surged once again, reflecting Washington’s decision to engage Russia in consultations this week without either Ukraine or the European Union government at the table.
German weapons maker Rheinmetall added another 2% to the 14% jump on Monday, but Thyssenkrupp considers a spin-off of the warship division, up 3% after rising nearly 20% on Monday.
Italy’s Leonardo rose another 2%, while Swedish’s serve rose 2.5%, while the UK’s BAE system also rose 1%.
The EU’s major states and British leaders met in Paris on Monday, adding that while they are ready to provide security assurances for Ukraine, it would be dangerous to close the ceasefire without a peace deal.