The tomahawk cruise missiles used agains Al Shayrat airfield, which cost roughly $1-2 million each, are made by the company Raytheon. Right after the attack Raytheon saw its stock prices clime. However, Raytheon, and other firms which conduct defense contracting, have seen their stocks rising gradually ever since the election results in November. Weapons manufacturing stock oftentimes rises before war and armed conflict occur rather than after. This is not a new phenomenon. Before the Iraq and Afghan war we saw stocks from weapons manufacturers rise in the same way.
One other interesting piece of information is the possibility that Donald Trump might have profited from this rise in Raytheon stock. In 2015 the Federal Election Committee (FEC) released a document that disclosed Trump's holdings and one of his smaller investments was in this defense contracting firm. While some current articles have alleged that Trump still owns these stocks, no major news agency has been able to independently verify this.
At the time of writing, Raytheon's stocks have remained higher than they were before the cruise missile strike, but have settled down after markets opened on Monday.
Link: http://money.cnn.com/2017/04/07/investing/syria-raytheon-tomahawk-missiles/index.html
6 comments:
Given that Trump ran on a platform of opposition to interventionist military policies it is interesting, though not at all surprising, to see him pull a complete 180 now. Notably, Trump is unique as an American President since his business empire and holdings are more extensive than any Chief Executive before him and his cabinet is made up of a greater number of CEO's than most. As you mention, this has profound implications in that the potential for conflicts of interest is much more likely. I'll be interested to see the foreign policy course that Trump pursues in the near future and, accordingly, how weapons manufacturers respond.
Although trump outlined he would not drag the United States into another war in the middle east actions like this show his change of heart. In addition to this he has moved a carrier strike group to the Korean peninsula as in a apparent move to deter the North Korean governments nuclear missile tests. As mentioned actions like these have an effect on the stock market. War is profitable whether people can handle the thought or not. In reference to Raytheon their stock may have risen but it will soon drop as the Navy is going to begin replace the Tomahawk missile with a different platform.
This is an interesting post. It is a little bothersome that Trump has business connections related to this. It only shows how much intertwined his business and politics have the potential to be. I am curious how other policy decision along they way may reveal where his private business interests are.
I agree with the comments above. it will be interesting to see how this all plays out in the future. the economy usually does good during times of war. the manufactures of weapons are probably liking all this news about bombing because people are buying stock I there companies because they think that a war is coming. it will be interesting to see how trump handles these situations he has on his hands.
I agree with Zac, because Raytheon will see short term gain because of this isolated situation, but looking forward they may not be used for future operations depending on which direction the Trump administration decides to go in which as we all know is a tricky business to predict.
I also agree with Zach and that going into the future it will be interesting to see how the economy reacts to other events. As of now the stocks of weapon manufacturers are increasing and the bombing in Afghanistan probably further increased stocks of weapon manufacturers, however, in the longer scheme of things the economy will be negatively impacted even if the stock of weapons increases as the economy never responds well to war.
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