U.S. Defense Stakes

[on-hold music] Welcome, Double Takers.

Always a pleasure to bring you what we hope is another fascinating conversation with subject matter experts on the hot topic du jour.

I'm Rafe Lewis, head of specialist research at BNY Investments, and with me, as always, is investigative research analyst Jack Incarnacio.

So almost from the day Donald Trump came back into office in January twenty twenty-five, defense stocks went on a tear.

Just look at the charts for companies like RTX or Lockheed Martin.

Divining why stocks move in any given direction is, of course, more art than science quite often.

But suffice to say, with Trump back in the Oval Office, investors saw an American executive hungry to increase America's firepower, footprint, and foreign weapons sales.

Yeah, that's right, Rafe.

And you could say the bullish fervor hit a zenith when President Trump a few months back made a push to increase US defense spending by more than fifty percent year over year, all while launching attacks, wars, or wars of wars with places like Iran, Venezuela, Cuba, and more.

But then the music kind of stopped.

Back to Rafe's point on divining stock movements, who can really say why? But if we at BNY Investments had to make a guess, it was the increasing realization that the president's lofty hopes for a ginormous increase in defense spending would not happen to the level he'd hoped.

But perhaps, uh, more salient, we believe, is this: Congress has been seriously flirting with a bill that would fundamentally alter the defense industry's relationship with Uncle Sam, giving the government the ability to take a given contractor's intellectual property and, in certain circumstances, hand it to another company of its choosing.

Yes.

So the Pentagon and government watchdog groups supporting this measure call this legislation a, quote, "right to repair law," meaning they believe it's the only way to ensure that the military can maintain and repair the systems and weapons it's purchased in a cost-effective and timely way.

But for defense contractors, they see a truly scary precedent that could not only materially impact their very business model, but could actually send shockwaves across many more industries, from tech to healthcare to transportation and beyond.

So with that in mind, listener, we thought we'd bring you not one, but two denizens of DC to discuss this right to repair bill, where it came from, why Washington wants it, and why American industry, from defense to much further afield, is fighting tooth and nail to stop it.

I'm pleased to introduce Moshe Schwartz of the lobbying firm Etherton & Associates, who specializes in national and homeland security, acquisition policy, and defense industrial policy.

Joining the conversation, too, is Margaret Boatner.

She's vice president for national security policy at the Aerospace Industry Association.

Margaret, importantly, was the US Army's lead executive for the design and implementation of acquisition policy affecting research and development and production of war-fighting capabilities.

So she's seen this issue from several angles.

Moshe, Margaret, welcome to Double Take.

Thank you.

Thank you.

So great to have you guys.

And, you know, it's an issue that we don't think really has had a lot of, uh, decent coverage out there, so but it's something clearly savvy investors are thinking a lot about, so getting some clarity on it, super-duper helpful.