{"text":[[{"start":12.96,"text":"The grim reality is that defence stocks generally rise during periods of geopolitical turmoil. "},{"start":18.302,"text":"Investors use them to hedge against sell-offs in sectors that are not underpinned by humanity’s tragic propensity for violence. "}],[{"start":25.19,"text":"JPMorgan boss Jamie Dimon warned last week that conflicts in Ukraine and the Middle East are creating “the most dangerous time the world has seen in decades. ”"}],[{"start":34.07,"text":"Shares in big US military contractors, including Lockheed Martin and General Dynamics, have climbed 11 and 7 per cent respectively since October 6. "},{"start":43.224000000000004,"text":"That was the last trading day before a shock attack by Hamas on Israel set off massive retaliation on Gaza. "}],[{"start":49.75,"text":"Northrop Grumman is up 15 per cent. "},{"start":52.454,"text":"L3Harris Technologies is 7 per cent higher. "},{"start":55.297,"text":"Even RTX, which has been hit by manufacturing problems in its jet engine unit, has gained 4 per cent as both institutional and retail investors bought in. "}],[{"start":64.99000000000001,"text":"Even so, all five stocks are in the red for the year. "},{"start":68.557,"text":"On a forward earnings basis, valuations have barely budged. "},{"start":72.299,"text":"With the exception of Northrop, all are trading at or below their three-year averages. "}],[{"start":77.72,"text":"There are good reasons for that. "},{"start":79.724,"text":"For starters, defence stocks have had a strong run in the wake of Russia’s invasion of Ukraine in February 2022, with many setting new highs. "}],[{"start":88.53,"text":"At the same time, the link between conflict and US defence company profits are not straightforward. "}],[{"start":94.92,"text":"Dysfunction in Congress is one issue. "},{"start":97.512,"text":"The House of Representatives remains without a speaker. "},{"start":100.342,"text":"Bitter partisan bickering over the size of government spending and America’s obligations to help Ukraine have threatened to shut down the government. "}],[{"start":107.96000000000001,"text":"Russia’s challenges to Europe and Chinese sabre-rattling against Taiwan will nevertheless bolster military budgets. "},{"start":114.177,"text":"However labour shortages, supply chain disruption and drawdown of inventories can all reduce gains to arms groups. "}],[{"start":121.34,"text":"But it is the character of warfare rather than its incidence that matters most to the defence sector. "},{"start":126.419,"text":"Savage fighting has little impact if it is shortlived and localised, or characterised by insurgencies. "}],[{"start":132.04,"text":""}]],"url":"https://creatives.ftacademy.cn/album/127041-1698118097.mp3"}