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With a recession looming and Putin sabre rattling could UK defence stocks prove a countercyclical safe haven?

With a recession of as yet unknown severity a near certainty over the months ahead, stock market looks set to enter choppy…
The post With a recession…



With a recession of as yet unknown severity a near certainty over the months ahead, stock market looks set to enter choppy waters. There are strong signs that the summer optimism that surrounded a rebound for major indices was premature. What was once suspected as a bear market rally now looks like an obvious one from the rearview mirror and major markets have been in steep decline as September has progressed.

The S&P 500 has lost over 8% since the beginning of the month and the Nasdaq over 5%. Even the UK’s benchmark FTSE 100 index, previously insulated from the kind of declines growth-focused Wall Street peers have suffered by its heavy weighting to commodities and energy, has fallen 4.3% in September.

Energy and commodity stocks have proven a refuge due to soaring prices resulting from Russia’s invasion of Ukraine. Financial stocks can also be expected to attract renewed interest after the Fed yesterday raised its base interest rate by 0.75% for the third month in a row. Defensive stocks like consumer staples and utilities also historically do better than cyclical sectors that rely on discretionary consumer spending during economic downturns.

But another sector might also be worth close consideration – defence stocks. Defence stocks are not, despite the association, typically defensive. Countries tend to spend more money on defence when their tax receipts are looking healthy.

But that fiscal management of national defence spending goes out the window when electorates feel threatened. And there is probably no time in modern history when developed Western economies have felt as threatened as they do right now.

Russia’s invasion of Ukraine in late February sharply focused the attention of Nato members like Germany that had for years fallen behind in their commitment to spending a minimum 2% of GDP on defence. They, and several other major Western European economies, as well as Japan, South Korea and Taiwan further east, have significantly ramped up defence spending commitments in recent months.

The huge quantities of military equipment and ammunition being supplied to Ukraine’s armed forces, and rapidly spent keeping Russia’s invading forces from making further gains and recently counter-attacking, also needs to be replaced. Much more will also have to be delivered to Ukraine before there is any realistic hope of Russia being defeated, an outcome the West has heavily committed to supporting.

With Putin’s sabre rattling and nuclear threats this week also being interpreted as a new escalation in his proxy confrontation with the West, there is unlikely to be any imminent let up in renewed defence spending. If anything it is likely to increase and an economic recession as a backdrop will not, under the circumstances, prove a deterrent.

Defence stocks have been one of the few sectors to do well this year but they could still do much better if elevated military spending continues, as it seems certain to. That will draw the attention of investors with a strong incentive to put their money into countercyclical sectors over the near term at least, further boosting valuations.

If you do consider investing in defence stocks as a potential growth sector amid a broader bear market, which UK-based companies are worth your appraisal?


Source: Investors’ Chronicle


qinetiq group plc

Defence technology company QinetiQ had seen its valuation drop by around 17% from early August until this week but has been boosted again by Putin’s threats to resort to nuclear weapons.

It is estimated the UK could increase its service personnel count by 27%, as many as 42,000 new recruits, over the next few years. All of those troops will require the specialist training Britain’s armed forces are renowned for. That’s something QinetiQ, spun out from the UK government’s Defence Evaluation and Research Agency, is likely to benefit from as a provider of training and mission rehearsal systems.

BAE Systems

bae systems plc

BAE Systems, the defence and aerospace company, has seen its market capitalisation gain almost 46% this year and has held steady over the past few months while others in the sector have seen their valuations dip. If defence spending remains elevated or even increases from current levels, BAE will be in a very strong position to benefit.

The company is the UK’s largest defence group and generates the majority of its revenue from fighter jet programmes—especially the F-35 Lightning and the Eurofighter Typhoon. BAE’s customers include governments in the US, UK, Australia and Saudi Arabia.

Rolls-Royce Group

rolls-royce holdings

Unlike the other stocks mentioned here, Rolls-Royce is not a pure defence play with the majority of the company’s revenue coming from civil aerospace contracts providing and maintaining jet engines for civil airlines. However, its valuation is particularly low at the moment as a result of the impact of the Covid-19 pandemic leaving the potential for plenty of upside.

A recession would not be good for civil aviation but it can’t get much worse than the past couple of years. The group could also be significantly boosted by defence contracts with Rolls-Royce engines also used in military aircraft, transport vehicles and naval vessels.

Babcock International

babcock international

It’s been a volatile year for Babcock, which is also heavily exposed to the civil nuclear power sector as a specialist in the construction and decommissioning of nuclear power plants. But nuclear power has a bright future and Babcock also specialises in nuclear submarine construction and decommissioning.

The company also offers fleet management services for military vehicles and provides technical training and maintenance support for military infrastructure. It has a well-diversified client base with customers in the UK, Europe, Africa, North America and Australia.

Chemring Group

chemring group plc

Chemring Group’s share price is up 63% in the last 5 years, clearly ahead of the market. However, despite the rise in military spending this year more recent returns haven’t been as impressive and investors are disappointed by dividend growth.

Chemring has moved into profitability from losses over the past few years and dividends have been steadily growing, even if shareholders would like more. The company provides chaff for aircraft and makes sensors used in electronic warfare, explosive hazard detection and chemical and biological detection. It also develops and manufactures advanced expendable countermeasures and countermeasure suites for protecting air, sea and land platforms against the threat of guided missiles.

Higher international defence spending and a continuation of the war in Ukraine will see robust demand for all of those products and services.

The post With a recession looming and Putin sabre rattling could UK defence stocks prove a countercyclical safe haven? first appeared on Trading and Investment News.

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Here’s Why Your Boss May Reject Your Business Travel Request

People are taking vacations again, but a once dominant travel sector is struggling to recover.



People are taking vacations again, but a once dominant travel sector is struggling to recover.

Now that vaccines are readily available and President Joe Biden has declared that the pandemic is officially over, people are flying again. But they’re really not happy about it.

The research firm J.D. Power found that last year, when the airline industry first started to cautiously rebound, consumer satisfaction with airports reached an all-time high. But this was very likely both because of a relatively smaller sample size and that so many people were happy to fly again that they were willing to overlook a lot of what has become headache-inducing about modern airfare travel.

J.D. Power  (JD) - Get Inc. Report has found that this year, global passenger levels are nearly back up to 91% of pre-pandemic levels. 

Customer satisfaction has dropped sharply, 25 points on a 1,000-point scale, to 777, as more people have returned to airports, for reasons ranging from an increase in flight cancellations and delays to inflation-driven increases in the cost of airport food.

But while airlines are aware that customers aren’t happy, and that the Biden Administration might try to right the ship with proposals that airlines likely won’t care for, at least people are flying again.

But an additional survey by J.D. Power has revealed that while people are flying again, traveling for business (be it for in-person meetings or industry conferences), has been lagging behind and recovering at nearly the rate of traveling for pleasure. 

Is Traveling for Business on the Way Out?

J.D. Power’s research has found that many travelers doubt that travel levels will increase dramatically from where they are now, and that “a strong majority of executives believe their companies will spend less in the next six months compared to the same period in 2019, for instance, due to things like fewer trips overall or fewer employees sent when there is a trip scheduled,” according to their data.

Overall, business travel has returned to “about 81% of 2019 levels,” notes Managing Director Michael Taylor. “83% was our prediction for this quarter, we’ll see how well we did in a few weeks and add a predication for Q4.”

J.D. Power

Fears of recession and the rising costs of air tickets from inflation play a factor in the decline of business travel. But overall, the main reason is that many of us have gotten so used to working at home that two-thirds of employees would rather find a new job than go back to the pre-pandemic status quo. If employees feel they can get work done from home and don’t feel like braving traffic to return to the office, why would they feel they need to get on a plane?

So have services like Zoom (ZM) - Get Zoom Video Communications Inc. Report and Slack made the business trip redundant? Taylor has his doubts.

“But will people be meeting exclusively in the 'Metaverse' rather than in person? I do not think that will happen,” he says. “There is too much information to be gathered in face-to-face meetings, spoken and unspoken, to be replaced completely by virtual ‘reality.’”

Getty Images

So is This It for Business Travel?

Back in the heady pre-pandemic days three years ago, airlines could rely on the extra income from people whose jobs entailed a great deal of travel, and who had come to the realization that if they were going to spend a chunk of their lives on the road, they could splurge to make it a more comfortable experience. 

But if airlines want this sector to return, Taylor thinks it’s their duty to make it a more appealing option, because frequent delays and other headaches are enough to make anyone stick to Zoom.

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Airlines, Taylor says, must “create more of a “living room” experience for travelers, one that “makes travelers feel valued as patrons of the airlines, and makes people feel like individuals rather than cattle.”

Because while it’s hard to argue with the convenience, Taylor insists there is still something to be said for the occasional in-person meeting. 

“Millenia of evolution in mankind has created an awareness that can’t be described with words on a page or pixels on a screen,” he says. “People will still find advantages in meeting in-person rather than online.”

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PR Newswire
DULUTH, Ga., Sept. 28, 2022

In recognition of World Rabies Day on September 28, the d…




PR Newswire

In recognition of World Rabies Day on September 28, the donation is for use on tribal lands and underserved communities in collaboration with Greater Good Charities

DULUTH, Ga., Sept. 28, 2022 /PRNewswire/ -- Boehringer Ingelheim, a global leader in veterinary rabies vaccines, has expanded its commitment to help prevent rabies in dogs by donating nearly 100,000 doses of rabies vaccine. The donation is part of the relaunched SHOTS FOR GOOD℠ program and will be used on tribal lands and in underserved communities across the United States.

Rabies is a zoonotic, viral disease, which can be transmitted through wild animals and pets. Once clinical symptoms appear, rabies is virtually 100% fatali. Even though it is vaccine-preventable, around 59,000 people still die from rabies every year globallyii. Rabies is present on all continents, except Antarctica, with over 95% of human deaths occurring in the Asia and Africa regionsiii. It can pose a significant risk anywhere if dogs are not vaccinated. Dogs are the main source of human rabies deaths, contributing up to 99% of all rabies transmissions to humansiv.

"Boehringer Ingelheim fervently believes no animal should suffer from a preventable disease," said Dr. Julie Ryan-Johnson, head veterinarian for shelters at Boehringer Ingelheim and board vice chair for Greater Good Charities. "Together with Greater Good Charities we can fight the presence of rabies on tribal lands and in underserved communities to keep pets healthier and happier for longer."

Boehringer Ingelheim Animal Health established the SHOTS FOR GOOD initiative in 2019 in Puerto Rico and underserved communities in California, Nevada, Oklahoma, Texas, North Carolina, Louisiana, Mississippi, and Florida. However, in 2020, the initiative was suspended due to global pandemic restrictions.

Since relaunching the program earlier this year, and in collaboration with the global nonprofit, Greater Good Charities, the program has enabled vaccination clinics throughout tribal lands in Alaska, Arizona, Colorado, Montana, and Utah. Additional vaccines have been utilized in Hawaii as part of Greater Good Charities' Good Fix program which offers high-quality, high-volume spay/neuter to help control pet overpopulation in underserved communities.

"In observance of World Rabies Day, we recognize the positive impact of vaccination events to raise awareness about rabies and how to prevent this deadly disease," said Denise Bash, vice president at Greater Good Charities. "The generous vaccine donations from Boehringer Ingelheim Animal Health and the Shots for Good initiative helps to protect pets while making this important effort possible."

About World Rabies Day

World Rabies Day, held every year on September 28, is observed by the United Nations as an International Day. Coordinated by the Global Alliance for Rabies Control, it is a day to raise awareness about rabies and how to prevent this deadly disease. Hundreds of events are held by organizations and individuals around the world in recognition of this day.

About Boehringer Ingelheim

Boehringer Ingelheim Animal Health is working on first-in-class innovation for the prediction, prevention, and treatment of diseases in animals. For veterinarians, pet owners, farmers, and governments in more than 150 countries, we offer a large and innovative portfolio of products and services to improve the health and well-being of companion animals and livestock. As a global leader in the animal health industry and as part of family-owned Boehringer Ingelheim, we take a long-term perspective. The lives of animals and humans are interconnected in deep and complex ways. We know that when animals are healthy, humans are healthier too. By using the synergies between our Animal Health and Human Pharma businesses and by delivering value through innovation, we enhance the health and well-being of both.

Learn more about Boehringer Ingelheim Animal Health USA Inc. at  

About Greater Good Charities

Greater Good Charities is a 501(c)(3) global nonprofit organization that works to help people, pets, and the planet by mobilizing in response to need and amplifying the good. Greater Good Charities, with a 100/100 rating on Charity Navigator, has provided more than $475 million in impact, including cash grants, in-kind supplies, and programmatic support, to charitable partners in 121 countries since 2007. To learn more about how Greater Good Charities amplifies the good across the globe, please visit

Media Contact:
Chrissy Jones
Boehringer Ingelheim Animal Health
U.S. Communications
(516) 527-5456 


i World Health Organization: Rabies ( (downloaded: April 1, 2022)
ii World Health Organization: Oral rabies vaccine: a new strategy in the fight against rabies deaths ( (downloaded: April 1, 2022)
iii World Health Organization: Rabies ( (downloaded: April 1, 2022)
iv World Health Organization: Rabies ( (downloaded: April 1, 2022)

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Cambridge Bancorp Announces Receipt of Regulatory Approvals to Merge with Northmark Bank and Anticipated Closing Date

Cambridge Bancorp Announces Receipt of Regulatory Approvals to Merge with Northmark Bank and Anticipated Closing Date
PR Newswire
CAMBRIDGE, Mass., Sept. 28, 2022

CAMBRIDGE, Mass., Sept. 28, 2022 /PRNewswire/ — Cambridge Bancorp (NASDAQ: CATC), th…



Cambridge Bancorp Announces Receipt of Regulatory Approvals to Merge with Northmark Bank and Anticipated Closing Date

PR Newswire

CAMBRIDGE, Mass., Sept. 28, 2022 /PRNewswire/ -- Cambridge Bancorp (NASDAQ: CATC), the parent company for Cambridge Trust Company ("Cambridge Trust"), today announced all regulatory approvals relating to the proposed merger between Cambridge Trust and Northmark Bank have been received. The shareholders of Northmark Bank approved the merger at a special meeting held on August 31, 2022.  The anticipated closing date of the merger is October 1, 2022, subject to the satisfaction of other closing conditions.

About Cambridge Bancorp

Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 132-year-old Massachusetts chartered commercial bank with approximately $5.1 billion in assets at June 30, 2022, and a total of 19 Massachusetts and New Hampshire locations. Cambridge Trust Company is one of New England's leaders in private banking and wealth management with $4.0 billion in client assets under management and administration at June 30, 2022. The Wealth Management group maintains offices in Boston and Wellesley, Massachusetts and Concord, Manchester, and Portsmouth, New Hampshire.

Forward-looking Statements 

Certain statements herein may constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about the Company and its industry involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding the Company's future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, the impact of any laws or regulations applicable to the Company, and measures being taken in response to the COVID-19 pandemic and the impact of the COVID-19 pandemic on the Company's business are forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions are intended to identify these forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Such factors include, but are not limited to, the following: the businesses of Cambridge and Northmark may not be combined successfully, or such combination may take longer to accomplish than expected; the cost savings from the merger may not be fully realized or may take longer to realize than expected; operating costs, customer loss and business disruption following the merger, including adverse effects on relationships with employees, may be greater than expected; changes to interest rates; the ability to control costs and expenses; the current global economic uncertainty and economic conditions being less favorable than expected; disruptions to the credit and financial markets; changes in the Company's accounting policies or in accounting standards; weakness in the real estate market; legislative, regulatory, or accounting changes that adversely affect the Company's business and/or competitive position; the Dodd-Frank Act's consumer protection regulations; the duration and scope of the COVID-19 pandemic and its impact on levels of consumer confidence; actions that governments, businesses and individuals take in response to the COVID-19 pandemic; the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies and economic activity; a prolonged resurgence in the severity of the COVID-19 pandemic due to variants and mutations of the virus; the pace of recovery when the COVID-19 pandemic subsides; disruptions in the Company's ability to access the capital markets; and other factors that are described in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year end December 31, 2021, which the Company filed on March 14, 2022. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. You are cautioned not to place undue reliance on these forward-looking statements.

Cambridge Bancorp
Michael F. Carotenuto
Chief Financial Officer

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