Fox news reports today that “The missile, believed to be a Taepodong-2 with a range of up to 4,000 miles, would be launched from North Korea’s Dongchang-ni site on the northwestern coast, said the Yomiuri daily, Japan’s top-selling newspaper. It cited an analysis by the Japanese Defense Ministry and intelligence gathered by U.S. reconnaissance satellites. U.S. officials have said the North has been preparing to fire a long-range missile capable of striking the western U.S
The missile launch could come between July 4 and 8, given the North’s propensity to launch on U.S. holidays. July 8 is also the anniversary of former leader’s Kim Il Sung’s death.”
North Korea’s continues its saber rattling following its second nuclear test on May 25 in defiance of repeated international warnings. The regime declared Saturday it would bolster its nuclear programs and threatened war in protest of U.N. sanctions taken for the nuclear test. The Taepodong-2 could fly over Japan and toward Hawaii.
The question is, what would be the response to this threat, and what would be the US response going forward. Already mired in two middle eastern wars, defense spending may need to be increased to address the growing threat posed by North Korea, and a war that has not really ever ended.
Currently there are a few anti ballistic missile systems the US could use to disable threatening missiles lobbed from North Korea. Two of which are the Theater High Altitude Area Defense (THAAD), formerly Terminal High Altitude Area Defense, and The Aegis Ballistic Missile Defense System. Both of these projects involve defense companies including Lockheed-Martin, Raytheon, Boeing, Aerojet, Rocketdyne, Honeywell, BAE Systems, and MiltonCAT.
If you feel you would like exposure to this sector you may want to look to the ETF’s ITA, and PPA.
We have included the holdings for each fund below:
iShares Dow Jones U.S. Aerospace & Defense Index (ITA): up 7.8% year-to date
|TOP 10 HOLDINGS ( 62.23% OF TOTAL ASSETS)|
PowerShares Aerospace & Defense (PPA): is up 6.4%
|TOP 10 HOLDINGS ( 56.86% OF TOTAL ASSETS)|