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McAleese & Associates Assesses Defense Spending Trends

Jim McAleese

A report by consulting firm McAleese & Associates says investors should expect the defense budget for fiscal years 2020 and 2021 at a range of $700B to $716B per year.

Jim McAleese, founder and principal at McAleese & Associates, wrote in the report that the Pentagon’s overall budget in FY 2019 demonstrates a 13 percent rise from its FY 2017 defense funds.

The Defense Department’s research, development, test and evaluation account for FY 2019 is 30 percent higher than its FY 2017 RDT&E funding, according to the report.

DoD’s FY 2019 procurement funds climbed 20 percent, while its operations and maintenance account shows a $21B increase over its FY 2017 budget.

McAleese noted that defense stocks lost approximately at least 7 percent to 10 percent of value during the third quarter of 2018 due to several factors.

Those include possible defense budget cuts in a Democrat-controlled House; potential return to sequestration; the Trump administration’s proposed cuts to defense spending; and rising interest rates.

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