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In Move Against ISIS, Obama Taps Modern Warfare

25 September 2014 in Trading Ideas

Air strikes earlier this week by the US and Arab allies were what the Pentagon called the “beginnings of a sustained campaign” in areas of Syria and Iraq controlled by fighters from the Islamic State and the Levant, now commonly known as Isis.1

It’s also a mission that could last years, military officials said.

As the Financial Times put it, the strikes represent a dramatic about-face for President Obama, who has spent three years battling pressure in Washington to become more involved in Syria but was also elected on a promise to end the country’s wars in the Middle East.

Explaining the escalation of the role by the US, Obama highlighted the help of Arab partners in the strike. “The strength of this coalition makes it clear to the world that this is not America’s fight alone,” Obama said in announcing the strikes.

Be that as it may, the US certainly didn’t hold back from deploying what Time.com’s Mark Thompson called the “world’s most sophisticated military hardware.”2

 

The US opened its volley with the launch of 47 Tomahawk cruise missiles that Thompson noted have been the traditional curtain-raiser on US military attacks since the Gulf War in 1991.

Marketplace, by the way, noted that these are the same Raytheon-made missiles the Pentagon had wanted to phase out over the next several years.3

The strike’s second wave comprised some of the old and some of the new: the B-1 bomber, F-15 and F-16 fighter-bombers and Predator drones, which helped to destroy ISIS headquarters, training camps, and combat vehicles, according to the Pentagon.

However, as Thompson described it, the “star” of the attacks was the Air Force’s F-22 fighter-bomber, a $350 million-per copy plane built by Lockheed Martin that was making its combat debut, despite it being operational since 2005.

During the Pentagon’s press conference, video was shown of the F-22’s mission, which delivered GPS-guided targeting a control and command center.

Army Lieutenant General Bill Mayville, the operations director for the Joint Chiefs of Staff, noted that 96% of the weapons used in this initial attack were precision-guided, further suggesting the inseparable nexus of technology and military capability.

That premise is also behind our Modern Warfare motif, which has gained 1.2% in the past month. Over that same period, the S&P is down 0.71%. In 2014, the motif has gained 12.8%; the S&P 500 has increased 7.32%.

This motif, with more than one-third of which is weighted with shares of Lockheed and Raytheon, could be worth a deeper dive if you believe in the theory for an extended military intervention by the US, which could increase demand for resources from the military contractors focusing on high-tech weaponry.

1“US says attacks on Isis could last years,” ft.com, Sept. 23, 2014.
2Mark Thompson, “These are the Weapons the US is Using to Attack ISIS,” time.com, Sept. 23, 2014, http://time.com/3422702/isil-isis-syria-obama/#3422702/isil-isis-syria-obama/.
3Marktetplace.org, http://www.marketplace.org/shows/marketplace/marketplace-wednesday-september-24-2014.

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