LIVE MARKETS-Keep snapping up weakness in EU defence stocks - JPM

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KEEP SNAPPING UP WEAKNESS IN EU DEFENCE STOCKS - JPM

A basket of European aerospace and defence .SXPARO names has been one of the few sectors flashing red this morning, and was last flat after falling 0.3% in earlier trading, as some of the heat comes out of U.S.-Europe tension over Greenland.

Over at JPM, analysts are sticking to their guns, recommending that investors buy any weakness in the space.

And they have been listening carefully to words uttered at Davos to back up this view.

One of the speeches they highlight is Canadian PM Mark Carney's from a couple days ago.

"Mr Carney's speech reinforced our view that we have entered a new world order and that we are in the very early stages of a global defence spending upturn that could last for another decade," analysts at the bank wrote in a Wednesday note.

They highlight his mention of a doubling in defence spending by the end of the decade.

JPM say European defence stocks fell when Trump ruled out using force in Greenland.

"However, he then said: "You [Europe/Denmark] can say yes, and we will be very appreciative. Or you can say no, and we will remember."

JPM openly admit they don't know what happens next but say if the U.S. seeks to annex Greenland it would put an enormous strain on US-European relations.

Finally, Trump's fourth attempt to broker a peace deal between Russia and Ukraine is on JPM's radar.

"As we have argued multiple times, we expect the war to continue until one or both sides is exhausted (financially; military personnel; military equipment). We also believe that the major European nations will block a "bad" peace deal being imposed on Ukraine," they write.

European defence stocks rose 57% in 2025 and are up 11.8% so far this year.

(Lucy Raitano)

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