Why are US military defence stocks down so much? ITA (iShares US Aerospace & Defense Etf) is down 16% over the past month, along with companies like Raytheon and Lockheed Martin.
I am aware of production bottlenecks and rising energy costs which cuts into their margins. But also there's ground troop buildup and a huge consumption of missiles and armaments that will take years to replenish unless the government steps up to assist manufacturers to expand capacity.
Is the market just assuming that peace will come soon and there won't be changes to the defence budget/contracts?