Time to look at blue chip defense stocks as Middle East tensions rise

The rising global unrest in the Middle East and the Ukraine/Russia war combined with sticky inflation numbers has stopped the rally of the US S&P 500 index to 5,123.41 levels from an ATH 5,264.85. It was the second week in a row when the index lost some ground.

It posted its largest weekly loss of –1.55% YTD. The 50-day moving average is at 5,111.17, which will be tested in the coming weeks. The 100-day MA is at 4,910.93 at time of writing, or -12.5%, and the 200-day MA at 4,659.14 or -16%, again at time of writing.

2024 is turning out to be very successful year for our US stock picks, after we started the US column last September. My personal picks have enjoyed great success with one exception – in order of the pick:

• September: Nvidia [NASDAQ:NVDA] ($462.41 to $881.86 +90.7%,
• October: Skechers [NYSE:SKX] $48.29 to $56.17 +16.3%,
• November: Palantir Technologies [NYSE:PLTR] $17.79 to $22.67 +27.4%,
• December: General Dynamics [NYSE:GD] $244.83 to $287.87 +17.6%
• January: Palo Alto Networks [NASDAQ:PANW] $340 to $279.07 -17.9%
• February: Live Nation Entertainment [NYSE:LYV] $88 to $101.04 +14.8%
• March: Meta Platforms [NASDAQ:META] $506 to $511.90 +1.2%

This compared to the US S&P 500 index over the period from the end of August, 4,514.87 to 5,123.41 being up +13.5% (all data April 12th, 2024).

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This is all since we started the column in September 2023; it goes to show that stock picking using fundamental research and analysis can pay off – and you can beat the market - with six out of eight of my picks beating the market: this is a total equally weighted alpha return of 18.8% including PANW’s loss and META’s small gain beating the market’s return of 13.5% by 5.3%.