On Tuesday, the Senate approved a wide-ranging, $854 billion bill that includes a $675 billion allocation towards the Defense Department, accounting for almost 80% of the total bill. In short, the United States doesn’t skimp on defense spending and this is good news for exchange-traded funds (ETFs) like Direxion Daily Aerospace & Defense Bull 3X Shares (NYSEARCA: DFEN), which has been producing rapid-fire returns.
Such a large allocation towards defense didn’t receive much contention as Senators approved the bill 93-7. The measure now rests in the hands of the House, where lawmakers are expected to approve it next week–just days before a Sept. 30 deadline in order to avert a government shutdown.
“Critically, after subjecting America’s all-volunteer armed forces to years of belt-tightening, this legislation will build on our recent progress in rebuilding the readiness of our military and investing more in the men and women who wear the uniform,” said Senate Majority Leader Mitch McConnell, R-Ky.
McConnell’s comments buttress the willingness of the U.S. government to open their wallets for defense spending–an estimated $610 billion goes towards defense, besting the money spent by the next seven countries combined.
As far as U.S. equities go, defense stocks have been reaching all-time highs with names like Boeing, Raytheon, Lockheed Martin and L3 Technologies leading the way–a case for profit-hungry traders looking to get on the offensive with defense stocks.