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Height Securities: The Military Wins Big Following Another Brief Government Shutdown

Wayne Duggan

The U.S. federal government shut down for the second time in a month Friday, but it was back up and running before most Americans woke up. President Donald Trump signed a bipartisan budget deal in the early morning hours, ending the brief shutdown.

Military and defense investors may be the big winners from the new budget deal, according to Height Securities. 

“The U.S. economy is poised for a significant increase in federal dollars as the House and Senate passed both passed a two-year spending agreement early this morning,” Height said Friday. “The new two-year spending package will mean more money for the military, potentially boosting procurement contracts for defense contractors.”

The military will get a staggering $700 billion in funding in fiscal 2018, an $80-billion increase from its previous level under the sequestration. The Defense Department gets another $16 billion in fiscal 2019, bringing the total to $1.416 trillion over the next two years.

Trump took to Twitter Friday morning to praise the bill.

The new bill also suspends the debt ceiling restrictions until March 1, 2019.

Now that the voting process is out of the way, appropriators will now begin work on drafting an omnibus bill to allocate the budget to specific programs.

After a historically bad day on Thursday, the SPDR S&P 500 ETF Trust (NYSE: SPY) is back on track Friday following the bipartisan deal, gaining 1.3 percent in early trading. The iShares Dow Jones US Aerospace & Def. ETF (BATS: ITA) was up 1.9 percent.

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