Car sales are off a cliff, financials are drowning in red ink, and retailers are facing the worst holiday-shopping season in recent memory. So what isn't a disaster? Howard Rubel of Jefferies & Co. points investors toward defense companies.
"The ground forces need to be re-equipped and reset; shipbuilding is a laggard and needs to be bolstered," he told CNBC. He expects substantial defense spending to continue under the administration of Barack Obama.
His first stock pick is General Dynamics.
"They're the leading producer of ground vehicles for the Army," he explained.
General Dynamics is also a major candidate for the badly-needed shipbuilding projects, as are Lockheed Martin and Northrop Grumman.
"Missile defense is probably the hardest call, and the one that's least likely to go forward, the way it's been constructed," he said.
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General Dynamics and Lockheed Martin are investment banking clients of Rubel's firm, which also makes a market in shares of the two companies.