Executives in the U.S. aerospace, defense, and government services industry are expecting moderate to strong economic growth, which is good news for leveraged exchange-traded funds (ETFs) like the Direxion Daily Aerospace & Defense Bull 3X Shares (NYSEARCA: DFEN).
The industry should also get a boost as executives are also predicting that mergers and acquisitions activity should increase or remain the same as 2018.
The data is derived from an annual mergers and acquisitions survey by investment banker KippsDeSanto & Co. According to the survey, deal makers are optimistic about overall economic growth and mergers and acquisitions activity in 2019.
Additionally, more than 80 percent of survey respondents predict that the federal midterm election results won’t have a profound influence on mergers and acquisitions activity. Political analysts were expecting a split Congress following the post-midterm election results that saw the Democrats take control of the House of Representatives.
Political gridlock could force less government spending for defense initiatives, but the survey is showing otherwise.
“Our 2019 survey results suggest continued strong mergers and acquisitions activity in the aerospace, defense, and government services sectors,” says Managing Director Kevin DeSanto.
“Through this report, we hope to present the market with a broader view of the underlying factors that drive the decision-making of dealmakers in these sectors,” Managing Director Bob Kipps added.
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DFEN seeks daily investment results equal to 300% of the daily performance of the Dow Jones U.S. Select Aerospace & Defense Index, which attempts to measure the performance of the aerospace and defense industry of the U.S. equity market.
Based on the survey results, defense spending is the most important factor influencing overall mergers and acquisitions deal activity within the U.S. DFEN was up 2.28 percent on Thursday as choppy trading in U.S. equities saw the major indexes fluctuate.
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