Why Trump’s election win is sending shares of a German weaponry company to the moon
Here’s something students of history know is always a sign of good things to come!
Germany’s munitions industry is ramping up, sending shares of its largest weaponry manufacturer skyward as the world prepares for a second Trump administration.
Since Trump won the US presidential election Tuesday, shares of Rheinmetall AG, one Europe’s largest munitions manufacturers, have gained 16%. Traders are wagering on a boom in spending on European military and weaponry, a rational expectation in light of Trump’s combative relationship with America’s traditional military allies.
Trump has repeatedly expressed that America’s European partners in NATO, the alliance formed after World War II to counterbalance the power of what was then Soviet Russia, aren’t pulling their own weight. Throughout his first term he consistently demanded European countries boost their spending on defense, threatening to pull out of the alliance if they didn’t.
In February, as a candidate, Trump said he would “would encourage” Russia “to do whatever the hell they want” to countries that are “delinquent,” comments that seemed to turbocharge shares of European defense stocks like Rheinmetall, which has nearly doubled this year.
Since Russia’s invasion of Ukraine in 2022, European defense spending has gone up sharply in a boon to European armament companies. Rheinmetall this week announced that its quarterly sales were up nearly 40% over last year and its forecast revenues would hit a new record.
“We are experiencing growth like we have never seen before in the group,” Rheinmetall Chief Executive Armin Papperger said.
