MMN Editor

Bernstein Puts Timeline On When EU Rearmament Supercycle “Goes Boom”

Readers by now know how we’ve laid out the looming rearmament supercycle in the West colliding with the “own the bottlenecks” theme, as resource nationalism makes industrial metals and rare earths scarce because of Beijing’s export restrictions.

Adrien Rabier, Bernstein’s equity analyst covering European aerospace and defense, penned a note on Tuesday explaining why the European defense rearmament cycle remains a top investment theme and even outlined a timeline.

In a report titled “European Defense: Beyond the order boom,” Rabier said EU defense firms are set to enter a massive demand-driven cycle for new weapons.

Here’s the timeline in three phases:

Stage 1: New paradigm (2022-2026).

The first stage, following the invasion of Ukraine, was characterized by rapid order collection. It drove multiple expansion across the sector, in anticipation of faster growth. The stocks re-rated from 9x EV/EBIT (-30% discount vs. SX600) to 15x currently (+17%). Exposure to the best geographies (Germany) and the quickest growth segments (short-cycle) were the most important drivers of performance.

Stage 2: Re-Arming Europe (2026-2030). 

The second stage marked the transition from an order-driven performance to execution-driven, as backlogs became rich across the sector. Exposure to structurally attractive product categories will remain the most important factor, in our view. We expect the narrative against short cycles products, legacy weapons, and Ukraine-related demand to intensify. Our “new warfare” basket is up +14% YTD, vs. the “old warfare” basket down -34%. We expect this gap to keep widening. We see few positive catalysts for the sector, and therefore favor self-help stories. We expect investors to focus increasingly on the exit multiples, as we head toward Stage 3.

Stage 3: Normalization (2030+). 

After the re-arming phase, we believe European military budgets will normalize near 3% of GDP. European Defense should then return to a GDP+ growth and ~12% EBIT margins sector, close to the Index’s average.

Rabier’s key message is that investors will reward companies capable of converting backlogs into profitable deliveries: 

With all players now virtually benefiting from very large backlogs, the ability to convert backlog into profitable growth and scale capacity efficiently will matter more. We continue to view electronics exposure as the best, because these businesses grow through volume and content share, and are easier to scale (Thales, Leonardo, BAE Systems). Some companies will also benefit from turning around parts of their businesses (TKMS, Leonardo).

Top picks:

One major constraint on both Europe’s rearmament cycle and the looming US weapons buildup is access to reliable, conflict-free supplies of critical materials. Larger budgets and expanding order books can translate into weapons deliveries only if manufacturers secure the necessary copper, tungsten, and rare earths that are in scarce supply. 

 That makes “owning the bottlenecks” a complementary investment theme to the broader defense buildup. 

Tyler Durden
Wed, 09/30/2026 – 05:45

A Tel Aviv-bound flight with at least 150 passengers on board made an emergency landing in Saudi Arabia after a fight broke out in the cockpit.

A Flydubai flight headed for Israel made an emergency landing in Saudi Arabia Wednesday after a reported fight between the pilots triggered a distress alert, raising fears of a possible hijacking and prompting Israel to scramble fighter jets.The Dubai-to-Tel Aviv flight landed safely in Tabuk, Saudi Arabia, and everyone aboard was reported safe, according to officials.A regional official briefed on the incident said an altercation broke out in the cockpit and apparently involved the pilots, though it was not immediately clear what sparked the confrontation. Israeli media, citing security officials, also reported that a dispute between the two pilots was behind the emergency.The incident prompted an immediate security response in Israel, where authorities initially feared the plane — carrying dozens of Israeli citizens — could have been hijacked. A second official confirmed that Israel scrambled fighter jets as the situation unfolded.MIDAIR SCARE FORCES PACKED PASSENGER JET INTO EMERGENCY LANDING, TRAVELERS HOSPITALIZEDThe aircraft transmitted an emergency alert during the flight, according to publicly available flight-tracking information. Flight FZ1073 had departed Dubai and was headed for Ben Gurion Airport near Tel Aviv before diverting to Tabuk.Passengers described a tense scene aboard the aircraft as the emergency unfolded. Travelers told Israel’s Channel 12 by phone that they heard shouting from passengers near the front of the plane who had apparently heard the cockpit altercation. They also said the aircraft dipped steeply before landing in Saudi Arabia.AMERICANS WARNED AGAINST TRAVEL PLANS AS TERRORISM THREATENS POPULAR DESTINATIONAfter landing, passengers remained aboard the plane as a heavy Saudi security presence surrounded the aircraft, according to their accounts to the Israeli outlet.Israeli Prime Minister Benjamin Netanyahu’s office later said the situation was under control and that Israeli authorities were working to bring the passengers home. The scare came as Netanyahu has warned in recent days about unspecified heightened security threats facing Israel.Flydubai later confirmed that FZ1073 had experienced an incident while traveling to Ben Gurion Airport and landed safely in Tabuk.”Our teams are working closely with the relevant authorities,” the carrier said. “Further updates will be issued as additional confirmed details become available.”The exact circumstances surrounding the reported cockpit confrontation remained unclear Wednesday.While disputes between pilots serious enough to affect a flight are rare, similar incidents have occurred. Two Air France pilots were suspended in 2022 after fighting in the cockpit during a flight from Geneva to Paris. That aircraft did not divert and landed as scheduled.The initial hijacking fears carried particular weight in Israel, where aviation security has long been shaped by a history of attacks on Israeli travelers and aircraft. Palestinian militants carried out a series of hijackings and attacks involving Israelis during the 1960s and 1970s. Israel has not experienced an aircraft hijacking in decades and maintains stringent security procedures for Israel-bound flights.Flydubai is a lower-cost sister carrier of Emirates. Flights between Israel and the United Arab Emirates began after the two countries normalized relations in 2020, opening the UAE as a major destination for Israeli travelers.The Associated Press contributed to this report.

President Donald Trump has never suffered from an attention deficit.Ours, maybe. His, never.For more than a decade, Trump has demonstrated an almost supernatural ability to decide what America will talk about. A nickname. A Truth Social post. A feud. A rally. A tariff. A threat. A late-night broadside against somebody who had the gall to criticize him.TO WIN IN NOVEMBER, REPUBLICANS NEED TO TAKE A PAGE FROM OBAMA’S PLAYBOOKTrump throws the ball and Washington and the media chase it.But something interesting is happening as we head toward the midterms.REPUBLICANS FACE BRUTAL MIDTERM HEADWINDS. SIX FORCES COULD HELP THEM DEFY HISTORY.The country may be getting tired of chasing.The latest Fox News poll contains a number that should be flashing in giant red letters inside the White House: Asked, without being given a list, to name the most important issue facing the country, 34% of registered voters said the cost of living. Another 14% said the economy and jobs.FOX NEWS POWER RANKINGS: WHAT’S IN AN ECONOMY?Nothing else came close. Immigration was at 8%. The war with Iran, 4%. AI and data centers, despite consuming approximately 94% of the oxygen in corporate America, registered at 1%.Voters are not being subtle.IT’S NOT THE ECONOMY, STUPID. AMERICANS VOTE BASED ON THEIR PERSONAL ECONOMYThey are saying: It’s the prices. Stupid.And yet much of the political conversation seems to be happening somewhere else.REPUBLICANS JUST GOT A POWERFUL NEW PLAYBOOK FOR THE BATTLE FOR CONGRESS. HERE’S WHAT’S INSIDETrump is battling the media. He is talking about his predecessor. He is dealing with Iran, China, immigration and AI. Some of those issues are enormously consequential. Presidents do not get to spend their days staring at the price of eggs.But voters don’t experience the presidency as a policy seminar.RECORD GAS PRICES SQUEEZE AMERICANS AS SUMMER TRAVEL SEASON ENDS, MIDTERMS LOOM AND IRAN WAR WAGES ONThey experience it at the grocery store.At the gas pump.THE OVERLOOKED WAY THE IRAN WAR IS MAKING GROCERIES, AMAZON PACKAGES AND NEW HOMES MORE EXPENSIVEWhen the utility bill arrives.When they look at what it costs to buy a house, see a doctor or fill their grocery cart.BILLIONS SPENT BY KEY FEDERAL AGENCY HASN’T MADE AMERICAN DREAM OF HOMEOWNERSHIP ANY EASIER: REPORTAnd on those questions, the Fox numbers are difficult for the administration. Sixty-two percent say grocery prices are a major problem. Sixty-one percent say the same about gas prices. Fifty-four percent say it about housing. Fifty-two percent about health care. And 63% say the Trump administration has made the economy worse.The administration can point to its own economic strength data. Employment has remained resilient, and the stock market has performed strongly. Fox’s own analysis recently noted job growth and unemployment of 4.1%.But this is where presidents (and politicians writ large) discover one of the more irritating rules of politics:You don’t get to tell voters how they feel about the economy.They tell you.That was true for President Joe Biden. It is true for Donald Trump.Biden spent much of his presidency pointing to macroeconomic statistics that were considerably healthier than the public mood. Inflation was coming down. Jobs were being created. The economy had avoided the recession many economists predicted.And voters kept saying some version of: That’s lovely. Do you know how much a dozen eggs cost?Trump understood that disconnect better than almost anyone. He turned economic frustration into political fuel. Now he owns the podium. Which means he also owns the problem.A recent Reuters/Ipsos poll found only 17% of U.S. adults approved of Trump’s handling of the cost of living. His overall approval was 32% in that survey. Fox, polling registered voters with a different methodology, put his overall approval at 39% and his approval on inflation at 24%. Different polls, different populations, same warning light: affordability is a major vulnerability for the administration.This is where Trump’s greatest communications strength can become a weakness. He understands attention better than perhaps any political figure of the modern era. He knows how to interrupt. He knows how to provoke. He knows how to make himself the main character. But attention and persuasion are not the same thing.Attention is getting everyone to look at you.Persuasion is getting them to look at the problem differently.And right now, voters appear to have a problem they don’t particularly want changed. They want it solved.There is another revealing number buried in the Fox poll. Democrats currently hold a 15-point advantage over Republicans when voters are asked which party they trust more on inflation. But the same poll offers an important qualification: voters who trust Democrats on inflation are slightly more likely to say it is because Republicans have failed than because they believe Democratic policies will lower prices. That isn’t exactly a love letter to either party. It’s an eviction notice to whoever voters think isn’t listening. And that’s why the midterm communications challenge may be simpler than Washington is making it.Trump doesn’t need another subject. He has one. Affordability. Every other argument can run through it.China? What does competing with China mean for American jobs and prices?AI? What does it mean for my paycheck and electric bill?Iran? What does a prolonged conflict mean for gasoline and the cost of moving goods around the country?Taxes and tariffs? What will I pay?The communications opportunity isn’t necessarily to talk less about the world. It’s to translate the world into the lives people are actually living. Trump’s political genius has always been his instinct for finding the thing people are feeling before the political establishment figures out how to talk about it.In 2016, that was disruption.In 2024, it was frustration with prices, immigration and the direction of the country.CLICK HERE FOR MORE FOX NEWS OPINIONIn 2026, voters are once again telling Washington exactly what’s bothering them.The question is whether Washington is listening. Trump can still make America look. The harder task now is convincing Americans that he’s looking at what they’re looking at.CLICK HERE TO READ MORE FROM LEE CARTER 

Democrats are pitching themselves as the answer to the economic woes Americans are facing in their pursuit of power in Congress, but they have made a habit of blocking the GOP’s attempts to tackle cost of living issues.Affordability has become the centerpiece of the Democrats’ campaign messaging heading into Election Day in November, and they’ve wielded it like a political cudgel that left-wing candidates from Michigan to Texas are using to browbeat Republicans.But in the Senate, it requires cooperation and compromise to tackle those issues, and Republicans say that their colleagues across the aisle have bedeviled that process. They’ll have one last shot Wednesday to address a sliver of the issue with a bill targeting data centers and voters’ pocketbooks, but Senate Minority Leader Chuck Schumer, D-N.Y., and his caucus are poised to block it.FIRST DATA CENTER BILL CLEARS HOUSE AS BOTH PARTIES SCRAMBLE FOR ANSWERS ON AFFORDABILITY”I think right now, the whole thing is just, you know, play politics with all these issues and get to the election,” Senate Majority Leader John Thune, R-S.D., told Fox News Digital. “I think that, you know, what you’re seeing is that this is the party of no, can’t take yes for an answer, and is interested in just trying to politicize everything going into the election.”When asked if blocking the data center bill, and another that would ban members of Congress from trading stocks, could turn the table on Democrats’ messaging, Thune said “Well, it makes it pretty hard for Democrats to make that argument.”Democrats don’t believe that blocking the bill from Sen. Jon Husted, R-Ohio, would hurt their affordability message, particularly because the legislation lacks teeth — many of the requirements for large-load customers, like data centers, to repay their electricity usage are optional.Schumer trashed the data center bill as being purely politically motivated to bolster a vulnerable candidate staring down a tough race in November against former Sen. Sherrod Brown, even though only three House Democrats voted against it earlier this month.ANXIETY GROWS OVER EMERGING ELECTION ISSUE, BUT GOP SAYS WASHINGTON ISN’T THE ANSWER”Because we don’t vote for frauds,” Schumer said when asked why Senate Democrats wouldn’t vote for it. “It’s voluntary. Not a single company has to comply with it.”Sen. Chris Murphy, D-Conn., told Fox News Digital that if “you guys do your job and explain that the the bill does nothing,” the political ramifications would be low for Democrats.”It does nothing, and so people know that, but there’s more political risk for them than for us,” Murphy said.When asked if there was a concern that shutting the bill down could hamper their best weapon on the campaign trail, Sen. Andy Kim, D-N.J., told Fox News Digital, “Absolutely not.””The American people can see through just the politics of this. They know that this bill is good for Senator Husted, but not necessarily for them, because it’s not — it doesn’t have anything that would actually force change,” Kim said.REPUBLICANS FEAR THEY ‘HAVEN’T DONE A DAMN THING’ TO LOWER PRICES AHEAD OF MIDTERM RECKONINGNot all Democrats want to outright kill the GOP’s latest affordability push, however.Sen. Chris Van Hollen, D-Md., isn’t totally against allowing the legislation to proceed, but he wants a guarantee from Thune that his bill, the Power for the People Act, would get an amendment vote to add some regulatory heft to the measure.”You want to address the affordability issue, you need to do something real,” Van Hollen told Fox News Digital. “As soon as Senator Thune says he’ll have a vote on Power for the People Act, then for sure, we should go forward.”It’s not the only attempt at grappling with affordability issues that Democrats have sunk, or at least kneecapped, near the finish line before the midterms.Republican leaders wanted to get a deal on permitting reform, which would lower costs on energy projects and reform the regulatory process writ large, on the floor during this final sprint before the election, but Democrats walked away from the deal last week.”I would tell you, all the chemistry, I think, was perfect for getting this deal done,” Sen. Alan Armstrong, R-Okla., who has led the permitting reform push told Fox News Digital. “And that doesn’t happen very often on such a complex issue. So it’s very disappointing.”The deal is reportedly back on, but won’t be handled until after the election during Congress’ lame duck period, where several agenda items have been punted that may never see the light of day.Still, Republicans will need Democrats to get anything post-election, and the track record of bipartisanship over the near two years that they’ve controlled the chamber has ebbed and flowed.”I mean, we got 53 Republicans, you got to have 60. I’d have busted the filibuster a long time ago and we would’ve had a lot more done,” Sen. Tommy Tuberville, R-Ala., told Fox News Digital. “But we wasted a year and a half of President Trump.”