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Wall Street cheers defense in election season

Football fans aren’t the only ones talking about shut-down defenses. Wall Street is talking up U.S. defense stocks no matter who wins the presidential election in November.

“After five years of austerity in the defense budget, we expect defense spending to increase regardless of whether Hillary Clinton or Donald Trump wins the presidency,” Dan Clifton, a policy strategist at Strategas Research Partners, told clients in a research note Wednesday. But a Trump win would boost defense spending even more, he adds.

If Clinton wins, Boeing shares should benefit from the Democrat likely reinstating the ExportImport Bank, which supplies credit to foreign buyers of U.S. goods. If Trump wins, a broad swath of defense companies will gain favor, including LockheedMartin, a maker of combat aircraft and missile defense systems; General Dynamics, which makes combat vehicles; and Textron, which makes unmanned aircraft systems and surveillance systems.

Joe Quinlan, head of market and thematic strategy for Bank of America Global Wealth & Investment Management and U.S. Trust, is also bullish on defense stocks. “Geopolitical uncertainty will remain the order of the day over the near term,” he wrote in an essay. “Given this environment, and on the expectation that U.S. defense spending is bound to increase under either presidential candidate, we reiterate one of our high-conviction investment themes of ... U.S. defense companies.”