Stock Strategist Industry Reports

U.S. Defense Budget Still Up in the Air

Chris Higgins, CFA

The defense budget for fiscal 2018 continues to wind its way through Congress. Since the U.S. government’s fiscal 2018 began on Oct. 1 without a budget, the Department of Defense is operating under a continuing resolution that lasts until Dec. 8; this freezes funding at fiscal 2017 levels and prohibits new program starts.

We think the most likely outcome is an extension of the continuing resolution into next calendar year, and we don’t think the U.S. defense stocks we cover will react to this development.