Inter-Korean summit: Defence stocks lose 'Trump shine' on North-South meet

Since Donald Trump was elected president, the S&P 500 Aerospace & Defense Index hasn’t closed below its 100-day moving average. 

That’s set to change Friday, after an historic agreement to end the Korean War depressed stocks of US defense contractors.

“There will be an inevitable focus on spending cuts, and defense may be a target,” Greg Valliere, chief global strategist at Horizon Investments, wrote in a note. Defense spending and the stocks that benefit “both could level off in the next few years.”

Raytheon is down as much as 3.9 per cent and on pace to close lower for a fourth straight day. General Dynamics, Northrop Grumman. and Lockheed Martin are each down at least 2 per cent.

Even with recent declines, the aerospace and defense index remains higher by about 56 per cent since the November 8, 2016, election, about double the gain in the broader stock market.