Bloomberg Businessweek Bloomberg Businessweek Weekend - March 27th, 2026
Mar 27, 2026
Max Chafkin, Bloomberg reporter who tracked the Epstein files, outlines the document dump and its hit to public trust. Wilbur Ross, former commerce secretary and longtime investor, discusses geopolitics, manufacturing and national-security-driven industrial policy. Sheila Kayalu, Jefferies aerospace and defense analyst, breaks down defense budgets, missile production, supply chains and winners beyond the big primes.
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Missiles Are Driving A New Trillion Dollar Defense Era
- US defense spending could surge to sustained trillion-dollar annual budgets driven by immediate wartime demand for missiles and munitions.
- Sheila Kayalu described DOD frameworks guaranteeing multi-year production hikes (e.g., PAC-3 from 600 to 2,000/year) and 4x factory builds at primes like Raytheon and Lockheed.
Play Defense Through Suppliers Not Just Prime Contractors
- Investors should look beyond primes to suppliers with high margins and lower CapEx exposure to benefit from defense builds.
- Kayalu suggested names like Howmet, Woodward, solid rocket motor providers and component makers such as Heico and Elbit as alternate plays.
Guaranteed Contracts Won't Automatically Boost Prime Earnings
- Big prime revenue guarantees may not raise EPS without margin improvements because primes must reinvest CapEx and cut buybacks.
- Kayalu noted seven-year frameworks help visibility but government guarantees top line not margins, keeping EPS pressure.