Raytheon Technologies fell 0.5%, Redwire fell 3.6%. WTI crude oil is approaching $96. The Middle East situation is the most important macro backdrop. In theory, this is a direct positive for defense stocks, but Raytheon showed almost no correlation today—perhaps the market has already priced in the geopolitical risk premium at higher levels, or no one is waiting for the short-term catalyst due to the time lag between missile inventory depletion and the restocking cycle.
Geopolitical risks are rising, but defense stocks aren't going up. How do you interpret this divergence? 👀
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