The tensions with the United States and the sentiment that it is no longer a reliable defense or trading partner have led to a few highly visible results:
* defense stocks have gone vertical
* Germany has effectively abandoned its spending limits
* European unity is at an all-time high
* a desire for European sovereignty is increasing
In the past I placed bets on the defense sector, and while those will likely continue to pay off I have been exploring other sectors where Europe has been reliant on the Americans. This includes:
* cloud computing platforms
* software services
* financial services
* medical technologies
FinTech jumps out not just for sovereignty reasons but also for the simple fact that all of this additional spending (trillions over the next decade) will need to be processed by someone, and that someone is preferably going to be European. For now I have made a small bet on the sector as a whole (ETF is [ESIF](https://www.ishares.com/de/privatanleger/de/produkte/315815/ishares-msci-europe-financials-sector-ucits-etf) in Europe, [EUFN](https://www.ishares.com/us/products/239645/) in USA) and am starting to dig into both the individual components and emerging FinTech companies. A shocking number of the firms in the index have seen close to 100% gains over the last year, so the question to answer is how much more revenue they can realize with the shift in spending from the USA and the increase in domestic spending.
As a black swan event, it is not inconceivable that the European Commission could ban MasterCard and Visa, using a mix of anticompetitive practices and European sovereignty as a justification [[1]](https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_19_2311/IP_19_2311_EN.pdf). It is not clear what would replace these networks if such an action were to be taken.
Thoughts on the hypothesis and on possible emerging players to consider? This is a fairly fresh hypothesis so any constructive feedback is welcome.
[1] https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_19_2311/IP_19_2311_EN.pdf