Chinese Spy Balloon ‘Graphic Reminder’ Of Geopolitical Market Risks—Here’s What It Means For Stocks

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The four largest U.S. defense contractors have tacked on $24 billion in market cap since the U.S. shot down a Chinese spy balloon.

But not all agree that there’s a stock play from the hoopla: Morningstar analyst Nicolas Owens toldin emailed comments Monday he’s “hard pressed to see an angle [for] any of the defense stocks.”Lockheed Martin’s F-22 Raptor fighter jet which downed the infamous balloon, are “having a moment,” there’s “no investable opportunity whatsoever” given the technology is far from new.

Nevertheless, Bank of America cautions geopolitics could rattle markets in either direction, noting the possibility of conflict between China and Taiwan, combined with escalating bloodshed between Russia and Ukraine,"represents a combustible configuration that could upend… growth and torpedo global earnings," while a ceasefire or peace framework could be"hugely bullish.

 

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