Trump Rocks the Summit 🎌
Trump Rocks the Summit
Geopolitics, that’s how we’re going to start Thursday! If you’re into aerospace and defense stocks like Lockheed Martin, BAE Systems, and Raytheon, you can’t be afraid to buy on a war scare! Unrest is demand, and cutting edge war tech for government eyes only is supply! Investors in the sector often take interest in NATO, which is?
The North Atlantic Treaty Organisation (NATO) was formed after the second world war so that in case of a third world war, an alliance was already ready and waiting! It costs a pretty penny to be in the club (minimum 2% of GDP into defense, which supports investors in that area), but it’s war insurance. An attack on one member is an attack on all members!
To be a fly on the wall of the summit yesterday, however, wouldn’t leave you inspired by a sense of team spirit among NATO “allies.” Hours before a series of concluding bilateral speeches, including one from the US President, Justin Trudeau decided to upset the applecart and bring US-Canada relations to ruin!
Unknowingly on hot mic, the Canadian Prime Minister used President Trump as his subject of comedy with world leaders. He joked about Trump’s lateness and said, “his team’s jaws dropped to the floor” after he suggested the G-7 be hosted at his Miami Golf Resort. It could’ve been worse, but it’s certainly not good. President Trump stormed back to Washington, calling Trudeau “two-faced” as he exited the venue.
Somewhat ironic internal wars within NATO have been in the offing ever since President Trump started chasing down unpaid membership fees (from countries like Canada). The problem is, there’s no enforcement mechanism. It’s all about horse-trading and cajoling, which is tough when that elusive third world war keeps fading in likelihood, and modern warfare becomes increasingly cyber.
Can you see NATO’s “2% of GDP into defense” goal turning into a rule, or dissolving entirely? NATO is something for nothing right now for many members, but like tick follows tock, wartime follows peacetime. This summit shows tensions ratcheting up, so does that strengthen defense stocks’ investment pitch?