Core Insights - L3Harris (LHX) shares are experiencing a rise, reaching new highs due to support from the U.S. government [1] - The U.S. government will invest $1 billion in L3Harris' missile solutions business, which will convert to equity upon its public market debut [2] - L3Harris plans to spin off its missile solutions division into a separate public company in the second half of this year [5] Financial Impact - Shares of L3Harris increased by approximately 3% to $350, positioning them to surpass the previous record close [1] - The investment from the U.S. government is seen as a positive signal for L3Harris' missile solutions division, which is a significant revenue source for the company [3] - L3Harris has invested significantly in enhancing the production capacity of its missile solutions division since acquiring Aerojet Rocketdyne [4] Market Context - The missile solutions segment includes the production of solid rocket boosters for weapons like the Tomahawk missile program [4] - L3Harris shares have surged nearly 20% in January, reflecting a broader rally in defense stocks following calls for increased military spending [5]

Geopolitics & Defense Industry - The report indicates discussions, potentially regarding defense matters, specifically Tomahawk missiles, between Zelensky and Trump following a White House meeting [1] - The report suggests a cautious or guarded stance from Zelensky regarding the Tomahawk missile talks [1]

Geopolitical Strategy & Risk Assessment - Brookings believes President Trump has the right framework for approaching the war, but the odds of a near-term ceasefire are long [1][3] - Threatening tomahawk missile transfers to Ukraine is a step in the right direction, but a more concerted economic strategy is needed to pressure Putin [2] - Public negotiation through press conferences aims to influence Vladimir Putin [4] - Escalation risks to NATO territory exist if tomahawk missiles are transferred to Ukraine, but the US is not willing to be cowed by implied Russian threats [5] Economic Pressure & Sanctions - Three categories of economic pressure include another US assistance package for Ukraine, coordinating listings of illicit ships evading the oil price cap, and a more concerted international sanctions campaign [6][7] - The industry should consider reducing economic interaction with Russia, with potential secondary sanctions if cooperation is lacking [7] - Coordinating international sanctions lists with European allies can prevent Russia from evading the oil price cap [11][12] - Targeting the "ghost fleet" of Russian ships by adding them to international sanctions lists can impact Russia economically by preventing them from obtaining insurance [9][11] - Europe lowered the Russia oil price cap recently to the mid $46 range trying to apply more pressure [9]

Core Points - China's new export regulations on rare earth elements could significantly impact major tech companies like Apple and Tesla, as well as US military contractors, serving as a strategic bargaining tool in trade negotiations with the US [1][4][10] - The requirement for foreign entities to obtain special licenses for exporting products with over 0.1% rare earth metals from China will take effect on December 1, creating uncertainty for US companies [2][5] - The announcement has led to a surge in stocks of US-based rare earth mining companies, with some experiencing increases of 20% or more [3] Industry Impact - China holds a near-monopoly on the global supply of rare earth metals, controlling approximately 70% of mining and 90% of processing capabilities, which gives it significant leverage in international trade [7][10] - The new licensing requirements are expected to complicate supply chains, potentially leading to higher prices for consumers in the US [5][14] - The US is facing challenges in ramping up domestic production of critical minerals due to China's restrictions on technology exports related to mining and processing [14][18] Military Implications - Licenses for products with military applications are likely to be denied, which raises concerns about the availability of rare earth elements for defense technologies [6][10] - The potential for a total embargo on rare earth exports from China remains a concern, especially in the context of rising geopolitical tensions, such as the situation regarding Taiwan [13]