Aerospace and defense stocks are surging... U.S.-China trade talks continue in London... Two sides of government spending... Drones, air taxis, and price momentum... A likely sign of more gains to come...
The market had eyes on London again today...
A second day of trade talks between U.S. and Chinese officials went on across the pond. The negotiations had investors waiting to hear potential details on agreements. They're looking for progress beyond pausing exceedingly high reciprocal tariffs, as the sides agreed on last month in Geneva.
Items like export controls on semiconductors and rare-earth minerals are said to be among the biggest points up for discussion.
Commerce Secretary Howard Lutnick, one of three U.S. reps in the talks, said earlier today that meetings were going well. But the U.S. markets closed today without any new announcements coming from the talks.
Meantime, no news was taken as good news today.
The benchmark S&P 500 gained 0.6% and other top indexes were all up slightly and volatility continued to subside. The CBOE Volatility Index ("VIX") fell below 17 – around where it was in late March, before "Liberation Day" tariffs shook things up.
'Cautious, though not bearish'...
Of course, trade policy and its impact aren't the only ideas investors have been debating lately.
Thanks to President Donald Trump's "big, beautiful bill" and Elon Musk's criticism of it, one of our longtime biggest gripes – the size of the federal debt – has been in the mainstream spotlight.
As written, the bill is projected to balloon the U.S. debt by trillions of dollars. It's just like Congresses and administrations of the past decades have done. As Stansberry's Investment Advisory lead editor Whitney Tilson shared in his free daily newsletter yesterday...
The trend is worrisome, as this chart posted on social platform X (courtesy of Charlie Bilello) shows:
However, while a "high level of uncertainty" exists around the proposed tax and spending bill, plus tariffs and other issues, Whitney also noted his outlook remains "cautious, though not bearish."
He's not arguing with the market. The S&P 500 is only a few percentage points below its all-time high, following a "huge rebound" since flirting with a bear market just after Liberation Day.
To the moon (or the sky near you)...
One area of the market getting some buzz lately is aerospace and defense...
This is the other end of gripes over deficit spending...
In the tax and spending bill sitting in Congress right now, a proposed $175 billion is directed toward the "Golden Dome" air defense system.
Potential trade deals – particularly with China – have helped, too. In the tariff war, China has restricted exports of rare earths. It produces most of the world's supply, which has left semiconductor makers and aerospace and defense firms in limbo.
Then came a Trump executive order supporting investment in unmanned aircraft, or drones. The news flow has boosted sentiment in aerospace and defense stocks.
Just look at a company like Joby Aviation (JOBY), an "air taxi" company that Whitney has written about previously. He updated readers in his free daily yesterday...
The stock jumped as much as 15.6% this morning on news that President Donald Trump signed an executive order, Unleashing American Drone Dominance, which calls for the "Establishment of an Electric Vertical Takeoff and Landing Pilot Program" in Section 6.
If you want to get familiar with a new acronym, it might be the one for electric vertical takeoff and landing ("eVTOL") aircraft, which can be faster and quieter than traditional helicopters.
Whitney recently shared a few more links to his research on this technology, including his visit to Joby's facilities nearly two years ago.
A likely sign of some more gains to come...
Price momentum is behind this sector, too. And history suggests that it could lead to some more gains in the next year, as DailyWealth Trader editor Chris Igou wrote to subscribers yesterday...
The aerospace and defense sector has been on a tear since bottoming in April. It broke out to a multiyear high in May. And it has been rallying higher ever since.
We can see this through the iShares U.S. Aerospace & Defense Fund (ITA). Some of its top holdings include GE Aerospace (GE), Boeing (BA), and Lockheed Martin (LMT). With more than 30 holdings in the fund, it's a good representation of the space overall.
In short, we know that if momentum is building in ITA, the sector is thriving. And the fund is experiencing a near-record rally today...
It's natural to be skeptical of the risk-reward balance after a quick run-up in a buzzy part of the market like this. This sector rarely has seen 11 straight days of gains – indeed, that streak ended today with a small pullback.
But Chris got some clues from a similar, slightly more common situation... nine straight days of gains in this sector. As he wrote to DailyWealth Trader subscribers...
Since 2006, there have been eight historic nine-day rallies for aerospace and defense stocks. Three streaks happened in 2009. Then we saw them in 2010, 2012, 2013, 2014, and 2019.
That's not a huge sample size. But it's noteworthy that seven of those eight cases led to gains over the next year. And the average return beats a buy-and-hold strategy...
The aerospace and defense sector has been a great performer for nearly 20 years, returning 10.7% a year. Anybody who has held on for that long should be happy with their return. But you do even better buying after the hot streak...
Chris isn't recommending a formal position in DailyWealth Trader based on this finding. But he wrote that "if you're looking to add exposure to U.S. stocks, this is one to consider. More gains are likely as momentum picks up."
On tap...
Tomorrow, we'll be keeping an eye on the latest inflation data that comes out in the morning – the consumer price index ("CPI") for May.
In April, the CPI showed its lowest year-over-year growth since February 2021... But tariffs and related supply-chain costs have raised questions about the path of prices ahead.
As Nick Koziol wrote yesterday, tariff-related price increases could show up in May data. That would have implications for Federal Reserve policy moving ahead and whether it would be wise (or not) to expect lower interest rates sooner or later.
Diamond's Edge Live: Before the Opening Bell
Tomorrow morning before U.S. markets open, Ten Stock Trader editor Greg Diamond will go live with his latest free YouTube video session. He'll share updates on the technical indicators, sectors, and stocks he's tracking, and trading opportunities he's eyeing.
Check out Greg's free live show tomorrow at 8:45 a.m. Eastern time.
Here's a direct link where you can set up a notification reminder for when the video begins.
And don't forget to subscribe to our YouTube channel. That way, you can ask Greg questions directly during the show.
Even if you're not able to join Greg tomorrow, subscribing to our channel means you'll hear about all of our free videos... like Greg's, our Stansberry Investor Hour interviews, and Director of Research Matt Weinschenk's This Week on Wall Street.
Simply go to our Stansberry Research YouTube page and click the big "Subscribe" button.
New 52-week highs (as of 6/9/25): Valterra Platinum (ANGPY), Cameco (CCJ), Commvault Systems (CVLT), Cambria Foreign Shareholder Yield Fund (FYLD), iShares U.S. Aerospace & Defense Fund (ITA), Microsoft (MSFT), NetEase (NTES), Sprott Physical Silver Trust (PSLV), Sprott (SII), iShares Silver Trust (SLV), and Global X Uranium Fund (URA).
In today's mailbag, feedback on a part of our company founder Porter Stansberry's free presentation that debuted last week... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Porter is right again. Tariffs are nothing more than another tax on the average American. A tax and further inflationary pressure that ultimately spells disaster for millions of people..." – Subscriber Jim V.
Corey McLaughlin comment: Jim, thanks for the note.
For anyone who might not know what you're referring to, it's the take that Porter shares in his new presentation about the proposed Liberation Day tariffs. As Porter says during the presentation...
If the tariff rates originally outlined on Liberation Day ever happened, it would be the largest tax increase in history, ever. And if [Trump] hadn't paused these tariffs, it would have been truly catastrophic.
Suddenly announcing that supply chains that were built over the last 40 years are immediately subject to extremely high tariffs is a recipe for a financial disaster.
Be sure to check out the presentation for that... and a whole lot more.
Porter shares what most concerns him about the U.S. economy, warns about the American institution he predicts will go broke within just four years, and suggests how to navigate the market as the U.S. government continues down an unsustainable path.
You can watch a replay of the event or read a transcript here. If you're interested at all, don't delay. The presentation will be going offline in just a few days.
All the best,
Corey McLaughlin
Baltimore, Maryland
June 10, 2025
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