The year's hottest trade has rocketed this ETF to a 50pc return
As the Albanese government faces mounting pressure from US President Donald Trump to increase Australia's defence budget, local investors have been busy riding this year's hottest trade: war stocks.
ASX-listed global defence exchange-traded funds have been among this year's best performing ETFs, boosted by Trump administration's push for its Western allies to shoulder more of the military bill. That has benefited global defence companies which have experienced a wave of new orders and government contracts from nations around the world.
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Sam Hawley: California's governor insisted protests in L.A. were being brought under control by local police. So why did Donald Trump overrule him and send in the National Guard and now the Marines? Today, senior reporter with Politico, Melanie Mason, who's in L.A. on Trump's intervention, fears it could escalate the tensions and what's in it for the US president. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Sam Hawley: Melanie, protests that started in L.A. have now, of course, widened across California and they are spreading elsewhere. Just tell me, what are we seeing on the ground at the moment? Melanie Mason: Sure. So what we saw a couple of days ago were these demonstrations that started in response to these immigration enforcement actions that had been happening across the city and region of Los Angeles. At Home Depot parking lots, in clothing factories, in places of business. And so what you saw were scattered protesters were coming and sort of confronting the federal officers, trying to stop this immigration enforcement. And that's where sort of things started to escalate. There were some clashes that we saw sporadically over the weekend. And then when things really took a turn is when President Trump said that he would be activating the National Guard without the sort of consultation or permission of Governor Gavin Newsom here in California. And that's when you saw a real increase in the demonstrations. I think it really was an escalation in terms of the intensity of these protests. News report: Well, it's been another chaotic day here in L.A. You can hear there's a firecrackers going off now. But earlier we heard the flashbang grenades that police have been using to disperse crowds. They've also been using these foam batons and rubber bullets. Donald Trump, US President: Some of the things you're reading about in Los Angeles, thank goodness we sent out some wonderful National Guard. They've really helped, cars burning all over the place, people rioting. And by the way, we stopped it. We were able to make it much better. And until we went in, if we didn't do the job, that place would be burning down just like the houses burned down. Sam Hawley: So the protests began on Friday, as you say, after these ICE officers began raids. Then by the Saturday, just after lunchtime, Donald Trump does order the National Guard into the city. So that was quite a step, wasn't it? It was quite unprecedented. That rarely ever happens. Melanie Mason: That's right. The last time that the National Guard has been activated by the president without the consent or without consultation from a sitting governor was 1965. So we are talking about decades of precedent that are being blown through right now by the president taking this action. Sam Hawley: And of course, California's governor, Gavin Newsom, who you've actually interviewed very recently, he was outraged by this, wasn't he? He even filed a lawsuit against it because he saw it as purely inflaming the situation and said the National Guard was not needed. Police were handling this situation. Melanie Mason: That's right. The rhetoric coming from the governor and quite frankly, from the president, too, has just gotten more and more intense over the last couple of days. So when I spoke to Governor Newsom as he was filing this lawsuit, he was also reacting to the fact that President Trump sort of casually said that maybe it would be a good idea if Governor Newsom was arrested for perhaps impeding or stopping federal officers from doing their immigration enforcement. Donald Trump, US President: I think his primary primary crime is running for governor because he's done such a bad job. What he's done to that state is like what Biden did to this country. Melanie Mason: And what Newsom told me was that that type of rhetoric had all the markings of authoritarianism. He said that this was targeting the political opponent of a sitting governor, that this is just unprecedented and really said that this is this is not just an issue about what's going on here in California, but could have some serious implications throughout the country. Because what President Trump is trying to do is basically use an executive order to say that he could activate this National Guard in any state, in any time. California just seems to be the staging ground where he is testing this boundary. Sam Hawley: And Gavin Newsom, he made similar comments that he made to you on MSNBC, saying this is all about power for Donald Trump. Gavin Newsom, California Governor: This is about authoritarian tendencies. This is about command and control. This is about power. This is about ego. My way or the highway. This is a consistent pattern of practice of recklessness. This guy has abandoned the core principles of this great democracy. Sam Hawley: L.A.'s mayor is also really concerned by all of this. Karen Bass said this is not about public safety. The chaos, she says, is provoked by the Trump administration. Karen Bass, LA Mayor: It makes me feel like our city is actually a test case, a test case for what happens when the federal government. Moves in and takes the authority away from the state or away from local government. I don't think that our city should be used for an experiment. Sam Hawley: And normally it's a governor that actually brings in the National Guard. Right. We saw that in 1992 during the riots in L.A. after police officers who'd beaten black man Rodney King were acquitted. But the protests then were at a much larger scale, weren't they, Melanie? Melanie Mason: Absolutely. I mean, 1992 is incomparable. There was citywide curfews. I mean, I was a very young child at the time, but I can even recall the feeling of what was going on during that civil unrest because it felt like it was sort of infecting all parts of the city. The sense that there was a lot of fear. You didn't know what could be happening. And, of course, very concentrated violence in certain parts of the city. What we're seeing here over this past weekend is that the demonstrations and protests have been pretty limited, mostly to the downtown area or in the suburbs where we had seen these immigration enforcement. And I think that's a very important thing to keep in mind is that we are seeing some pretty scary images on TV of self-driving cars being set on fire and protesters hurling rocks off of the freeway overpasses. And those are scary, challenging images, to be sure. But for the vast, vast majority of people living in Los Angeles right now, which is a sprawling city, things feel pretty normal. And so I think when the president is then saying he wants to send even more troops, whether it's the National Guard or even now talking about sending in the U.S. Marines, it really is in stark contrast to what I think is the reality on the ground, which is this is not a city that is out of control. When President Trump says that the city would have been obliterated, that's just not the reality for the vast majority of people living here. Sam Hawley: Yeah. And the city, of course, has a significant police force that could have dealt with this. Just for our audience, the National Guard, it's made up of citizen soldiers, right? Just explain that. Melanie Mason: That's correct. And as opposed to the Marines, who are sort of active duty servicemen. You're right. National Guard is more of a volunteer organisation where members can be activated in times of crisis. And I also think it's worth noting we think about times of crisis like civil unrest, but the National Guard was activated just a few months ago here in Los Angeles when we had these historic wildfires. So I think that the National Guard can be called up in lots of different circumstances. But you're right. There is a distinction between that and active military service members that are being called in. If you get the U.S. Marines, we're opening a whole new can of worms when it comes to what they can or cannot do on U.S. soil, particularly when it comes to engaging with U.S. citizens. That is kind of uncharted legal territory right now. Sam Hawley: That in itself, calling in the Marines is again, highly unusual, isn't it? Melanie Mason: Highly unusual. And in fact, we're just hearing from the Los Angeles chief of police who said that they got no advance notice that the president was even thinking of doing this. So I think that the question is, what is the intention here in activating these forces? I mean, if it is trying to have a comprehensive law enforcement response to these disturbances, then you would think that all of these agencies should be in communication to talk to each other, to coordinate how best to do crowd control, how best to arrest demonstrators who have crossed the line into violence or vandalism. But the fact that it seems like these lines of communication aren't open, I think, speaks to the concerns that some of the leaders here have in California, which is, is this really about maintaining law and order or is this about inflaming tensions and perhaps provoking more conflict? And I think that that is as we continue to see the escalations out of Washington, that is a major question that we have here in Los Angeles. Sam Hawley: Absolutely. All right. Well, Melanie, let's consider that question a bit further. Consider why it is that Donald Trump has done this, that he's called in the National Guard and he wants Marines on the ground, given the protests were really quite contained. This is, of course, one of his signature policies, isn't it? Deporting illegal immigrants. So in that sense, is this really that surprising that he would go so hard like this? Melanie Mason: No, it's not surprising at all. He talked about cracking down on illegal immigration in this country. And so I don't think any of us are particularly surprised that this has been a priority to do so. And whereas what we heard in the early months of this administration was a lot of emphasis on trying to crack down on gang activity. I think that the sense that they were trying to rid the country of dangerous criminals. What we're seeing now are more of these workplace raids. If you're going to places like Home Depot, these are folks that are working as day labourers, even trying to arrest people as they're doing check-ins with immigration officials. I think that that just shows that they're widening the net even further. And I think that Trump broadly thinks that the politics are on his side for this. That was an issue where he has consistently performed better in the polling than Democrats. And so I think he feels very comfortable making a big action when it comes to immigration because he feels like he has a mandate on that front. Sam Hawley: Sure. And it certainly diverts attention away from other things, doesn't it? His other failings, if you like, including this feud that he's been having with Elon Musk. Melanie Mason: That's true. It was a very newsy past couple of days. And all of that news seems to have been drowned out by this conflagration going on right now. Sam Hawley: I guess the concern is here, or the assertion from some people is, that Donald Trump actually wants this unrest. What's your view on that? Melanie Mason: Look, I think that politically, he does not hate the optics of Democrats loudly opposing his action and appearing to be on the side of illegal immigrants, people who are not in this country legally, because he thinks that this is a winning political issue for him. So do I think that he wants to see more destruction? No, not necessarily. And I'm not going to impute those motives to him. But I think that he does want to see a political escalation and just have somebody like Governor Newsom really sticking his neck out and lambasting him the way that he is. I think for Trump, he thinks that that's exactly the type of news cycle that he would like to set in motion. Sam Hawley: All right. Well, Melanie, of course, we're days into these protests now. What do you think? Will this naturally die down or is it just going to keep spreading? Melanie Mason: I think in terms of the size of these protests, I could be proven wrong. My instinct is that I would be surprised if we saw a gigantic demonstration. To me, I think that the more likely and quite frankly, perhaps the more dangerous possibility is that we instead see these flare ups that happen across the region, perhaps across the state, perhaps across the country, as we just see more of this immigration enforcement happen at these workplaces. And other sites. Where you have demonstrators that are confronting these agents. I think that these smaller conflicts could have the possibility of somebody overreacting or somebody escalating quicker than they expected. And so I don't think that this issue is going to go away because clearly the Trump administration is pressing ahead on enforcement. And every time you have any one of this public enforcement happen, that's another opportunity for the public to interact with federal agents. And that's where you can see more potential for conflict. Sam Hawley: But is this unrest what we should expect in Trump's America going forward, do you think? Melanie Mason: I think that we are five months into the second term. And I do think that that it is fair to assume that some sort of standoff, whether it is political, whether it is a nonviolent protest or whether it perhaps spirals into something else on the issue of immigration, we're going to continue to see because we know that this is an issue that the Trump administration wants to press forward as much as they possibly can. They've already stretched the boundaries much further than we've seen past presidents go. How much further are they willing to press ahead? And what does that mean for the citizens and residents on the ground? Sam Hawley: Melanie Mason is a senior reporter with Politico based in L.A. in California. This episode was produced by Sydney Pead. Audio production by Adair Sheppard. Our supervising producer is David Coady. I'm Sam Hawley. Thanks for listening.
