Aside from the president's remarks, Sullivan said he was pleased with the strategy of the Trump administration on North Korea.
The bump seen on Wednesday was most certainly all about North Korea-related tension, but the defense stocks themselves look strong more broadly, said Erin Gibbs, portfolio manager at S&P Global. "We have a ballistic missile defense review underway, but right now I am confident that we have what it takes to secure us against the North Korean threat and buy us some time until we can get the review done and come to you with a defensible sustainable ballistic missile defense buildup". Even a conservative estimate of the weight of the other components of the warhead assembly places North Korea's nuclear warheads at a minimum of 1102-1322 lbs (500-600 kg).
At the time North Korea said it was launching a telecommunications satellite, but Washington, Seoul and Tokyo believed Pyongyang was testing an intercontinental ballistic missile. An IRBM has a range of 3,000 - 5,000 km (1,864 - 3,418 miles), while the ICMB is a minimum range of 5,000 km (3,400 miles).
"We are going to be increasing our budget by many billions of dollars because of North Korea and other reasons having to do with the anti-missile", Trump said while taking questions at his golf resort in Bedminster, New Jersey. "These small payloads allowed the rockets to be lofted to far higher altitudes than they would have if loaded with a much-heavier warhead, creating the impression that North Korea was on the cusp of achieving ICBM capability". To manage that, the nation would need a working ICBM-class missile. So far, the system has a flawless 14-out-of-14 record in tests since 2005. With a degree of theatrical sinisterness, North Korea gave the Hwasong 14 its maiden flight on 4 July 2017, coinciding with the US' Independence Day.
Local authorities have been reassuring residents and tourists that a "strategic defence umbrella" across the Western Pacific can counter any missile attacks, and the chance of a successful North Korean strike on Guam was minimal. The Hwasong-12's Circular Error Probability (CEP), which marks the radius of its expected precision, is unknown.
How could the U.S. and its allies stop North Korea's missiles? The assessment of the reentry vehicle is supported by analysis of data "gathered from ground, sea, and air-based sensors" by the U.S. National Air and Space Intelligence Center (NASIC), one source told The Diplomat. Several Japanese warships also have the Aegis system.
"Japan invaded us, the Spanish invaded us", Genereux says.
SM-3 systems are also capable of hitting missiles in midflight as they coast the edge of Earth's atmosphere. The THAAD systems stations in South Korea could track the launch of the missiles, but are unlikely to be able to shoot them down.
Investors likely flocked to buy up shares of the defense names with the thought that should the USA actually engage militarily with North Korea, defense contractors would benefit. If the United States or Japan successfully intercept the missile it could be taken as an act of war, prompting further military response.