The War Trade That Didn’t Work 🌤️ The Morning Print

Good morning! 

Aerospace & Defense stocks experienced a classic "sell the news" event, as the day the war started marked the top for this group.

Today we're using Lockheed Martin as the case study.

Here's the setup.

In periods of conflict, the instinctive trade for many is to buy defense names.

At times that “obvious” positioning pays off, but just as often, it fails to deliver.

And this time, it didn't work.

The U.S. initiated its campaign against Iran on February 28, a Saturday.

That following Monday marked the peak for Lockheed Martin, and the stock has been in a downtrend ever since.

The question many are left asking: why would defense stocks peak right as conflict begins?

My answer would be that’s simply how markets operate.

The market is designed to fool the most amount of people, most of the time.