The weekend’s operation in Venezuela and the capture of Maduro have further heightened geopolitical tensions. The development has led to sharp gains in the global defence sector on Monday (5th January 2026). The rise is a result of increased geopolitical tensions, a tough foreign policy tone and the market’s focus on the long-term implications.

The development of events had a direct effect on our portfolio holdings in Asia and later continued with strong gains in both Europe and North America, as shown below:

Source: TradingView 2026-01-05. Past performance should not be interpreted as a forecast of future returns.

American Foreign Policy Creates Consequences

Trump describes how the Monroe Doctrine is back and how the US has the right to act against more countries out of a security policy interest. He states that the US now controls Venezuela and that US oil companies will be responsible for increasing production. He talks a lot about oil and less about democracy and the people of Venezuela. Marco Rubio is clear that the US will not accept Venezuela’s energy sector being controlled by strategic rivals such as Russia, China and Iran. The US emphasises that the Western Hemisphere is considered a direct area of interest and that Venezuela should not serve as a platform for competing great powers.

China has made major investments in Latin America and sees it as a priority region going forward, both in terms of security policy and trade and economics. After US sanctions took full effect around 2019–2020, Venezuela’s oil production collapsed but has since stabilised and increased from low levels, partly with support from China. China’s increased energy involvement in Venezuela is contributing to the US now viewing the energy sector as a clear security policy issue. Venezuela also has large debt obligations to China and Russia for energy purchases and arms exports.

Europe’s Dilemma: Autonomy vs Alliance

European countries have cautiously criticised the action, and this is of course against the background of the vulnerable situation in Ukraine and the desire to avoid upsetting Trump. At the same time, there are new threatening statements about Greenland and the threat is being taken very seriously according to Danish Prime Minister Mette Frederiksen.

NATO researcher Magnus Christiansson is interviewed today in Dagens Nyheter, where he believes that an American takeover of Greenland would break up NATO. This further weakens the transatlantic link and it is difficult to understand the strategy behind the Trump administration prioritising relations with Europe, especially if it is in a long-term race against China.

Europe is not considered a priority for the US and the implications are of course that Europe needs to take responsibility for its conventional defence even more and more quickly. At the same time, the US continues to receive a large transnational payment indirectly for the nuclear umbrella that it represents in deterrence against Russia in particular. Major investments are needed and, as a result, European defence companies are rising sharply and the conditions for the companies are also increasing through sales outside Europe.

SAAB and more European defence companies in a strong position

Canada has today announced that they want Lockheed to match SAAB’s offer and, in addition to Gripen, GlobalEye may be interesting. We have previously discussed how SAAB, along with several European defence companies, are gaining an increasingly better position globally, partly as a result of the Trump administration’s actions.

The Surveillance business and the new orders for GlobalEye to France indicate strong interest in Europe together with the aforementioned Canadian interest. SAAB is already strong in Dynamics and continued development in the aerospace and marine segments can further strengthen the product offering. The submarine order from Poland also shows that SAAB clearly benefits from deeper collaborations in the Nordics, the Baltic Sea and Europe, but also from the long-term effects of Sweden now being a NATO country. SAAB may also have a role in European cooperation with countries in the Pacific region.

Investment Implications: Short and Medium Term

It is clear that the worrying development has had a positive impact on defence companies in Europe, North America and the Pacific region and will probably continue to do so in the future.

We now have a geostrategic context where we have a fully ongoing great power rivalry characterised by a bipolar competitive situation. China has for decades strengthened its position around natural resources, critical raw materials and energy security and the current situation is assessed as clearly threatening and existential for the US. Foreign policy is a direct reaction and strategy that we see at a high pace. The Trump administration is acting in a completely different way than the Biden administration. In addition to defence stocks, this will likely be positive over time for raw materials and especially critical earth metals, but potentially also for precious metals.

We may see trade economic consequences and actions, perhaps primarily from China, but also restrictions on, for example, grain production from Russia and supply from Ukraine.

The Bigger Picture: A Fractured World Order

The US clearly emphasises the Western Hemisphere and that they need to act there out of security policy interests. This is the rhetoric of China and Russia, albeit with different goals, but it likely creates conditions for China and Russia to carry out actions that they can refer to security policy interests and it is unclear how the US will then act.

Recent events have weakened the rules-based world order that has served us well for a long time. At the same time, that world order has always been criticised by the global South and totalitarian regimes for not applying the rules to the United States and its allies. The actions in Venezuela do not strengthen the prerequisites for maintaining this order.

In short, defence and security now have a very central role in the current global geostrategic development. The risks for financial markets and investment portfolios are also increasing, so risk diversification will likely also be important in the future—even for securities and commodities that are considered to be in a strong structural position in the long term.