Weekly Market Recap – Aug 28, 2026
U.S. equity markets were mixed this past week, with modest gains in the major benchmarks offset by weakness across several defensive and cyclical sectors. The S&P 500 ETF (SPYM) gained 0.49%, while the NASDAQ 100 ETF (QQQM) rose 0.42%, supported by strength in Technology (XLK), Communication Services (XLC), and Financials (XLF). However, Small Caps (VB), Health Care (XLV), Industrials (XLI), Energy (XLE), Real Estate (XLRE), Materials (XLB), Consumer Staples (XLP), and Consumer Discretionary (XLY) moved lower, showing that market breadth remained selective. Stock-specific momentum continued to stand out, led by Palantir (PLTR), AngloGold Ashanti (AU), Gold Fields (GFI), MongoDB (MDB), Recruit Holdings (RCRUY), and Newmont (NEM), highlighting strength across AI/software, precious metals, and selected global growth names.
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Strategy Note:
A relatively small Florida missile manufacturer, Powerus, made headlines this week when it announced they had secured a dedicated contract to manufacture “Guardian” counter-UAS drone interceptors. They recently entered a business combination with a microcap public company called Aureus Greenway Holdings Inc. The latter recently underwent a ticker change to PUSA in anticipation of changing its name to Powerus. The microcap stock is currently rated a 3 (Hold) in ValuEngine.
The startup effort by Powerus in the United Arab Emirates represents a radical shift in defense procurement. To spin up operations instantly, Powerus did not build a new American factory. Instead, they partnered with an existing, undisclosed regional defense contractor in the UAE. Powerus provides the proprietary 3D-printing schematics, drone software, and training, while the Emirati contractor supplies the actual factory floor and warehouse labor.
Instead of relying on slow, bureaucratic U.S. military exports, the company has decentralized its manufacturing to build weapons directly where the conflict is happening. The facility is currently building about 30 interceptors a day. Across their broader network, they manage roughly 3,000 units per month, with an aggressive blueprint to scale to 15,000 monthly by mid-2027 as automated 3D-printing farms expand. Because the physical hardware is printed and assembled within the borders of the Gulf Cooperation Council (GCC), the operation avoids the lengthy logistical delays of shipping weapons from Florida, while still operating cleanly under relevant U.S. export control laws and authorizations. The resulting weapon is a highly specialized kinetic interceptor optimized to hunt down Iranian-designed Shahed drones.
The paradigm shift demonstrated by startups like Powerus (PUSA)—combining 3D printing, commercial-off-the-shelf (COTS) components, and localized micro-factories—is fundamentally disrupting the global defense landscape. This model introduces severe cost-symmetry challenges for major players and rewrites the rules for how new companies enter the defense market. Historically, defense primes profited by selling highly sophisticated, exquisite systems (e.g., Lockheed’s PAC-3 Patriot missiles costing upwards of $4 million each). Militaries are realizing it is financially unsustainable to intercept a $40,000 Iranian Shahed drone with a multi-million dollar missile. Cheap, asymmetric interceptors like the $5,000 Guardian rob the primes of high-margin munition replenishment contracts.
The main takeaway by industry analysts has been that hardware is becoming commoditized. When a weapon body can be 3D printed for pennies by any local machine shop using digital blueprints, the true value shifts entirely to the autonomous tracking software and guidance algorithms. Primes have already started to pivot from heavy industrial manufacturing toward software development to remain competitive. How fast they can pivot given legacy processes still being used now remains to be seen. This new paradigm will probably take two-to-three years to influence top-line revenues and bottom-line earnings. However, since this industry is all about technology, a disruptive paradigm shift of this magnitude will be watched closely.
The flip side of the argument is that the potential cost and time savings hoped for from this contract is just that potential. It has yet to be proven and many things could go wrong. When the bugs are worked out and these methods and co-op arrangements appear to be the way of the future, the extremely profitable largest players are all but certain to find their own solutions whether through buy or build.
In this context, does it still make sense to invest in the major players in the defense industry? According to the ValuEngine rating system, for now, it still does as far as the industry giants go in the top Aerospace ETF in terms of assets under management. We refer to iShares US Aerospace ETF (ITA) with $14.2 billion in assets. Of the top five holdings in ITA, four are rated to outperform the market. This includes the industry’s s top two behemoths, GE Aerospace (GE) and RTX Corp. (RTX), the latter formed by the Raytheon merger with United Technologies. Both stocks are rated 4 (Buy). We find the 4th and 5th largest holdings even more attractive. Howmet Aerospace (HWM) and Rocket Labs (RKLB) both earn our highest rating of 5 (Strong Buy). 5-rated stocks of smaller cap stocks in the industry include: Astronics (ATRO); ATI, Inc. (ATI); FTAI Aviation (FTAI); Intuitive Machines (LUNR); and Moog Inc. Class A (MOOG). Only two of these stocks are not considered overvalued by our proprietary valuation mode: MOOG and FTAI. Overall, of the 42 stocks in ValuEngine’s ITA ETF report that were ranked by our valuation model, 26 (63%) were overvalued. In a sideways market, valuations can play an important role in price vulnerabilities. On the other end of the spectrum, two stocks that investors may wish to avoid have similar sounding names. Draganfly Inc. (DPRO) and Firefly Aerospace (FLY) are more than 200% overvalued and are rated 2 (Sell). Virgin Galactic (SPCE) is another stock that falls into this category.
In conclusion, the disruptive innovations in potentially saving billions of dollars and months of time promised in securing its government contracts may be just the tip of the iceberg in changing the dynamics of the defense industry. Whether one refers to the firm by its DBA name Powerus or the legacy, Aureus Greenway, PUSA is in fascinating position for a company represented by a microcap stock. What sparked this article and we found especially helpful after reading the article in Wall Street Journal online was being able to pull up a ValuEngine report on it immediately. One advantage of being a fully quantitative stock analysis and reporting system is that we can cover small cap exchange-traded stocks as easily as we cover Microsoft, as long as we have the data.
In the below tables we use major ETF’s as a proxy for some major indexes as well as each of the sector groups into which we divide the overall markets. Tracking these over time provides a more defined picture of the US markets than simply tracking major indexes. This is followed by notable individual stock movers over the past month, and finally our full strategy outlook.
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ETF Performance:
| Ticker | Name | VE Rating | Last Week’s Close Price | Weekly Change |
| QQQM | Invesco NASDAQ 100 ETF | 5 | 293.76 | 0.42% |
| SCHD | Schwab US Dividend Equity ETF | 2 | 35.11 | -0.60% |
| SPYM | State Street SPDR Portfolio S&P 500 ETF | 4 | 90.13 | 0.49% |
| VB | Vanguard Morningstar Small-Cap Index Fund ETF | 3 | 304.76 | -1.32% |
| XLB | State Street Materials Select Sector SPDR ETF | 2 | 53.54 | -0.67% |
| XLC | State Street Com Svc Sel Sec SPDR ETF | 2 | 111.4 | 1.43% |
| XLE | State Street Energy Select Sector SPDR ETF | 4 | 63.64 | -1.51% |
| XLF | State Street Financial Sel Sec SPDR ETF | 2 | 57.48 | 1.08% |
| XLI | State Street Industrial Select Sector SPDR ETF | 3 | 180.25 | -1.73% |
| XLK | State Street Technology Select Sector SPDR ETF | 5 | 183.31 | 1.30% |
| XLP | State Street Consumer Staples Sel Sect SPDR ETF | 1 | 85.99 | -0.63% |
| XLRE | State Street Real Estate Select Sector SPDR ETF | 1 | 45.08 | -1.33% |
| XLU | State Street Utilities Select Sector SPDR ETF | 1 | 42.77 | -0.09% |
| XLV | State Street Health Care Select Sector SPDR ETF | 3 | 174.62 | -1.98% |
| XLY | State Street Consumer Disc Sel Sect SPDR ETF | 1 | 118.02 | -0.69% |
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Top 3 Stock Performers (Global):
| Ticker | Name | VE Rating | Last Close Price | Price 30 Days Ago | Monthly Difference |
| AU | Anglogold Ashanti PLC | 5 | 113.19 | 82.33 | 37.48% |
| GFI | Gold Fields Ltd | 5 | 45.96 | 33.53 | 37.07% |
| RCRUY | Recruit Holdings 5 Unsponsored ADR | 5 | 22.05 | 16.11 | 36.87% |
Top3 Stock Performers (US):
| Ticker | Name | VE Rating | Last Close Price | Price 30 Days Ago | Monthly Difference |
| PLTR | Palantir Technologies Inc | 5 | 186.29 | 122.26 | 52.37% |
| MDB | Mongodb Inc | 4 | 446.62 | 325.88 | 37.05% |
| NEM | Newmont Corporation | 5 | 127.98 | 95.76 | 33.65% |
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