Wagner Rebellion Affects Defense Production

Shares of European and American defense production companies fell on Monday after an incomplete rebellion in Russia raised doubts about President Vladimir Putin's grip on power, resulting in a wave of profit-taking in a sector that has already benefited significantly from increased military spending. Shares of Italian company Leonardo, Swedish company Saab, and German company Rheinmetall dropped by more than six percent at one point, leading the losses in European stock markets. Shares of French aerospace company Dassault also fell by about five percent. Major American defense companies, such as Lockheed Martin, Northrop Grumman, and RTX, saw declines of about two percent each. General Dynamics' shares also dropped by 1.2 percent in morning trading in New York. Randy Frederick, a manager at Charles Schwab financial services, stated, "If Russia pulls back from its aggression in Ukraine, this could mean less military assistance to the country, which could certainly mean reduced sales of military equipment." However, he added, "If there is a drop in defense stocks, I suspect it will be relatively short-lived."