The U.S. President is trying to fire Fed Governor Lisa Cook. Trump’s “with cause” is dependent on the claim that Cook, in her mortgage applications, described separate properties in Michigan and Georgia as primary residences.
The U.S. Dollar index (DXY) traded steadily while treasury bond yields (IEF) (TLT) remained calm. The market’s lack of reaction suggests that her removal from the Fed will have no impact on monetary policy. In addition, markets did not react to Cook’s plans to sue to keep her job.
If successful, the President may potentially have more influence on the Federal Reserve’s decision-making. Investors are worse off when the central bank’s policy decisions are not independent from politics.
On the same day, the Trump Administration mulled over a partial government ownership in various U.S. defense contractors. This included Lockheed Martin (LMT), which makes fighter aircraft and munitions.
The government’s investments in MP Materials (MP) and Intel (INTC) change the company’s priorities. Similarly, LMT stock may underperform as the government influences business decisions. Still, Lockheed depended on 73% of its 2024 sales from U.S. government contracts.
Your Takeaway
Lockheed Martin stock trades closer to its 52-week low. Investors might consider Northrop Grumman (NOC), L3 Harris (LHX), and AeroVironment (AVAV) instead.
