The US government spending could start to decline or at least slow down though. No big engagements at the moment, big budget issues for the whole government etc.. it's already happened really, the politicians and press are keeping a very close eye on military spending. I still think it's a great business sector though, I personally picked Raytheon but I'm sure LMT will do fine too.
Many banks and other financial institutions will also benefit from higher rates. Among other things, they'll be able to increase their spreads on loans when rates are higher.
I think most of it makes broad intuitive sense. For insurance companies it's something to do with the embedded value and the fact that their bond holdings increase in value - I can't remember the math behind it but that's broadly the narrative. "Entertainment" is a pretty broad space, but home entertainment generally speaking it's one of the last parts of discretionary spending that people cut back on. I may be less confident about external entertainment (e.g. companies that own movie theaters), as the theory is that people will more likely stay at home to entertain themselves rather than go out. As for defense companies, it's a difficult one. Structurally, the industry has been in a state of change for a while now to cater to the new norm of different asymmetric threats. So there's likely to be less investment in traditional standing armies and more investment in intelligence and terrorism-based resourcing. That said, the sector tends to be viewed as a more defensive one as government spending is less about the cycle and more about how they wish to position for the long term.
