There are all kinds of wild metrics to help track international security — take the famous Pentagon Pizza Index, which monitors spikes in Domino’s and Papa John’s orders as a proxy for Pentagon folks pulling late nighters when something is brewing.
Well, here are four less tasty but equally intriguing numbers Intriguers should know:
- 🇪🇺 116%
That’s how far stocks in Germany’s arms-maker Rheinmetall have soared just this year — a doubling in 11 weeks, and a 12-fold rise since early 2022.
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It’s all due, of course, not just to Russia’s invasion of Ukraine, but also the seeming US de-prioritisation of Europe’s defence, jolting the continent’s capitals into some historic moves like Germany’s easing of its constitutional debt brake.
And that’s enough to trigger talk of an EU defence sector supercycle, with spill-overs into supplying sectors (like energy, chemicals) and other markets (like Korea, where Hanwa has also doubled its market cap as it signs deals with Poland and Romania).
- 🇺🇸 10%
That’s how far down America’s Lockheed Martin is this year. Why?
- Trump remains wary of US security support for allies
- The Pentagon is also in the midst of a cost-cutting drive, and
- European and other capitals therefore want to limit any over-reliance on the US.
And that’s all while Lockheed has issued statements denying rumours of any ‘kill switch‘ allowing the US to disable allied F-35 fighter jets. The need to even dispel such a rumour still highlights a) the platform’s dependence on US support, and b) wobbling allied trust in that support (both Canada and Portugal have voiced F-35 doubts just this month).
- 🎖️ 11%
That’s how much Boeing’s stock has jumped since Friday. Why? President Trump just announced Boeing has won a $20B contract to develop the Air Force’s next 6th-generation F-47 fighter jet (rival Lockheed missed out, and its shares dropped 5%).
Trump said “an experimental version of the plane has secretly been flying for almost five years and we’re confident that it massively overpowers the capabilities of any other nation.“
But of course, it’s one thing to announce, and another thing to do. And that’s the challenge for Boeing, which is still dealing with multiple over-runs and missteps.
Still, Trump’s not shy about his reasons, including…
- 🇨🇳 36
The J-36 is China’s own presumed sixth-generation jet, which mysteriously appeared over Chengdu last week. Beijing has gone to extraordinary lengths to maintain its secrecy, including via vast blimp hangars plus new laws prohibiting hobbyists from uploading pics.
So to then casually fly this jet over a city of 21 million people, the same week the US announces its own sixth-gen plans? It has the hallmarks of a controlled release.
As for what we know? While China’s J-36 has an intriguing design (no tail), three engines (extra thrust), and advanced stealth features, there’s still a heated and nerdy debate around whether this is really another Sputnik moment for the US, or just a flying chassis.
INTRIGUE’S TAKE
Lord Ismay, NATO’s first secretary general, famously quipped that the alliance’s purpose was to keep the Americans in, the Russians out, and the Germans down. And the above numbers are a reminder we might now be witnessing the opposite: the Russians are back in, the Americans want out, so the Germans are stepping back up.
And while there’s been some gloom in Western media circles around the willingness or ability of Europe to fill any US void, things are moving. Rheinmetall’s CEO recently mentioned his firm is now single-handedly producing more artillery shells than the entire US. That’s presumably why Russian intelligence has tried to assassinate him.
Anyway, the other big trend here is in markets, with defence contractors now offering rare upward arrows on charts otherwise splashed red with tariffs and trade tensions. Double your money in 11 weeks? That’s crypto territory. And it’s triggering a shift in investor sentiment, with more managers quietly re-defining (or scrapping) ESG rules.
Sure, it’s partly out of pressure from investors experiencing FOMO; but it’s also partly a reflection of citizens re-evaluating their definition of good, to include a free world that can defend itself and its principles. Still, that’s never a simple nor easy shift to navigate.
Also worth noting:
- The euro has strengthened by 7% against the US dollar since its low in January as markets become more optimistic that Europe can address its defence, infrastructure, and other investment gaps.
- In a sign of the times, Rheinmetall (which was a state-owned firm during WWII) just overtook the beleaguered Volkswagen in market cap, and the two are in talks about Rheinmetall potentially repurposing VW auto-plants to make arms.