Lockheed Losses Mounting Quickly
Defence stocks have come under heavy selling pressure in recent trading in reaction to news of the Israel-Hamas ceasefire, which continues to hold for now. This week, selling has intensified in response to the prospect of an end to the Russia-Ukraine war. News that Trump is aiming to negotiate an end to the conflict has been met with criticism in the political world. However, the impact on defence stocks is undeniable with shares in big names such as Lockheed Martin plunging lower this week. Lockheed shares are down 7% so far this week, and down almost 33% from the 2024 highs.
Trump Urges US Arms Spending Cuts
Lockheed is also reeling in response to Trump’s declaration last week that US defence spending should be halved. The US currently spends around 3.5% of GDP on arms, compared with 2.3% in the UK and 2.1% in Germany. Trump’s comments have caused widespread selling across US defence names this week with the downside likely to continue on any headlines reflecting progress towards an end to the Russia-Ukraine war. While still early days, and with plenty of opposition from Zelensky over what is being agreed to and how it is being agreed, there is a clear shift in markets with European stocks soaring on the prospect of peace. As such, for now, big US defence names remain a strong sell.
Technical Views
Lockheed Martin
Viewing the stock on the weekly TF shows the severity of the reversal from 615 highs. Price has recently broken below the 439.70 support and below the rising long term trend line, a major bearish development. Focus is now on a move down to the 396 level next, in line with bearish momentum studies readings.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.