Corporate giants such as Lockheed Martin, General Dynamics, and Northrop Grumman are expected to see improved sales due to increased global uncertainty, resulting in a projected rise in stock values. High Mobility Artillery Rocket Systems (HIMARS), AIM-120C-8 Advanced Medium-Range Air-To-Air Missiles (AMRAAM), and National Advanced Surface to Air Missile Systems (NASAMS) are among the year’s approved sales, with purchases made for Poland, Germany, and Ukraine respectively. The modes of purchase include direct commercial sales and foreign military sales, both subject to U.S. government approval. Recent data shows a significant rise in direct military sales from U.S. companies and through the U.S. government.
Enhanced Sales for Leading Corporations
Increased sales are projected for companies like Lockheed Martin , General Dynamics, and Northrop Grumman due to rising global instability. This is expected to further enhance their share values.
Significant Sales Approved
The approved sales for the year incorporated $10 billion worth of High Mobility Artillery Rocket Systems (HIMARS) for Poland, AIM-120C-8 Advanced Medium-Range Air-To-Air Missiles (AMRAAM) worth $2.9 billion for Germany, and National Advanced Surface to Air Missile Systems (NASAMS) assigned to Ukraine. These contracts were undertaken by Lockheed, Raytheon, and Kongsberg, respectively.
Methods of Foreign Government Purchases
Foreign governments have two primary means of procuring arms from U.S companies – direct commercial sales or foreign military sales. Both of these sales models necessitate approval from the U.S government.
Increased Military Sales
The fiscal year 2023 saw an increase in direct military sales by U.S. companies, amounting to $157.5 billion from $153.6 billion in fiscal 2022. Similarly, sales mediated through the U.S. government climbed to $80.9 billion, up from $51.9 billion the previous year.
These developments in defence sector sales not only impact the financial standing of these companies but also influence the dynamics of forex trading, potentially affecting assets connected to the U.S. defence sector.