This discussion features Rocket Ron Epstein from Bank of America Securities, Sash Tusa of Agency Partners, and Richard Aboulafia from AeroDynamic advisory. They dive into the recent Wall Street successes amid tariff turmoil and rising U.S. debt, which is impacting the dollar's value significantly. The guests explore China's geopolitical maneuvers in Europe, touching upon trade negotiations and U.S. military support for Ukraine. The conversation also highlights mixed performance trends in the aerospace and defense sectors, shaped by legislative changes and international dynamics.
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insights INSIGHT
Commercial Aerospace Led H1 Outperformance
Commercial aerospace and OEMs drove first-half outperformance while core defense lagged.
Investors rotated into winners like Boeing, Embraer and GE Aerospace while defense names stayed mostly flat.
insights INSIGHT
Short-Term Mitigation Masks Long-Term Tariff Risk
Tariff effects are being managed short-term by companies via stockpiles and mitigations.
Bigger sustained aircraft or engine tariffs would cause major US demand disruption and delivery halts.
insights INSIGHT
Weak Dollar Multiplies Tariff Impact
A weaker dollar plus higher baseline tariffs can multiply imported goods' costs.
Simplistic 'weak dollar good for exports' thinking ignores reserve-currency effects and inflation risks.
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On this week’s Defense & Aerospace Report Business Roundtable, sponsored by Bell, Dr. “Rocket” Ron Epstein of Bank of America Securities, Sash Tusa of the independent equity research firm Agency Partners, and Richard Aboulafia of the AeroDynamic advisory consultancy join host Vago Muradian to discuss another record Wall Street week on strong employment despite tariff turmoil as Congress hands President Trump a legislative victory that will increase US debt by more than $3 trillion dollars that in turn has contributed to the weakest dollar since the financial crisis of 1973 with the greenback down 10 percent; the administration hinted at a series of tariff deals, including with Europe that would see baseline tariffs increase by 10 percent, but that news that is causing friction among European members with France’s industry and energy minister Marc Ferracci calling on union leaders to reject a deal that would force Europe to live with higher baseline tariffs; a fiscal drama in London as Prime Minister Sir Kier Starmer’s administration is forced by its own party to backtrack on benefits cuts, cause another bond crisis; China went on a charm offensive in Brussels, Berlin and Paris where Wang Yi also candidly admitted that China can’t afford for Russia to lose in Ukraine; Washington halts aid to Kyiv by falsely claiming US weapons are running out as Germany negotiates with Washington for more weapons for Ukraine, including two Patriot batteries and interceptors as Russia steps up strikes; Germany’s outspoken chief of defense, Lt. Gen. Alfons Mais, is sacked for being too blunt as Berlin prepares to order 1,000 new tanks and 2,500 armored fighting vehicles; a banner week for Airbus that sold more than $12 billion in new jets to Malaysia’s Air Asia; Embraer nails a $4 billion order with SAS for 55 jets as Air France KLM takes a 60 percent stake in the carrier; and Bombardier scores a big order with an unnamed customer.
Defense & Aerospace Report