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Russian 'antique' falls to tricked-out F-16s

Sometimes it's just too easy and alluring to take advantage of an advantage.

That's what may have happened in the skies along the Turkish-Syrian border today as two Turkish F-16s shot down a Russian SU-24 bomber. The Turks say the Russian jet was flying into Turkish airspace. The Russians deny that. The political squabbling will go on perhaps for years.

But from a military and industrial standpoint, there are things we know now that are crystal clear and they should have an impact on the bottom lines for defense contractors all over the globe.

First, I'd like to put this nicely but why mince words? A Russian SU-24 going up against an F-16 is like a Pop Warner football team taking on the New England Patriots. No contest. The F-16 is a far superior machine and Lockheed Martin also completed and delivered a $635 million upgrade to Turkey's F-16 fleet just seven months ago. One SU-24 going up against even a non-upgraded F-16 is still a mismatch. But an SU-24 going up against two upgraded F-16's is a laugher, especially since bombers don't usually have a chance against supersonic jet fighters of any kind. Is it possible this incident was the product of Turkish pilots who were just unable to resist their huge advantage in the skies? Someone will have to ask them.

But the advantages and mismatches won't stop there. Because the established worldwide defense industry is already finding the continuing Syrian civil war and the war on ISIS to be a bonanza for its business. It was one thing when the worldwide war against terrorism was simply against the terrorists. As scary as they can be, ISIS, al Qaeda, Hamas, Boko Haram, Hezbollah etc. don't use the most sophisticated weapons and they certainly don't have fighter jets or bombers, and that includes outdated ones like the SU-24. The most frightening thing these groups do often use are ground-to-ground missiles like Hamas and its offshoots use against Israel. That created the need for the impressive "Iron Dome" missile defense system that the Israeli and American designers have already begun to successfully sell to some of their allies.

But with the Russians now getting into the mix in Syria with air and ground power, the weapons and deterrence wish list is growing for countries involved directly and indirectly in the Syrian fighting. The headlines have been hard to miss. It seems like every country from Britain to Japan is beefing up defense budgets and looking to acquire the best weapons and surveillance equipment available. No other Middle Eastern nation wants the Syrian war to bleed into its borders. That's one reason why Syria's neighbors have accepted so few Syrian refugees. Perhaps they're worried they will suffer the same fate Lebanon did in the 1970's after a massive amount of refugees flooded its border fleeing Jordan's "Black September" purge.

The other big market maker in this space is Iran. The nuclear deal with the mullahs pushed by President Obama and signed by the Western powers has Israel and Iran's Arab neighbors in a very acquisitive mood. The Israelis have recently forged an agreement with Lockheed to buy several F35 fighters the Israelis have re-designed to double their radar-defeating stealth range. The Saudis began a massive arms build up last year not only for their own defense, but they also are acting as lending bank to nations like Egypt, Jordan and the UAE so they can buy more weapons too. The funny thing is many of those Saudi-funded arms deals are for Russian weapons, which just goes to show how mixed up and maybe even desperate this situation is.

The bottom line is the stocks of the major defense contractors like Lockheed, Boeing, Northrop Grumman, and Raytheon are all outperforming the overall market for this year. And while we may not see a major upside move in the next few days, it's hard to believe this shoot down incident isn't a bullish sign for the defense sector for the coming year and beyond.

Commentary by Jake Novak, supervising producer of "Power Lunch." Follow him on Twitter @jakejakeny.