Since the Democrats failed to take both chambers of Congress, it’s unlikely we’ll see any gun control legislation pass. The House will probably pass some measures, including a new Assault Weapon Ban, but little else will happen as the legislation will die in the Senate.
However, the midterm results did have some impact on the gun industry, apparently. It seems that stock prices dipped for gun manufacturers.
Gun stocks fell slightly on Wednesday after midterm elections divided power in Congress with Democrats winning back the House and Republicans strengthening their grip in the Senate.
The new dynamic means the risk of congressional gridlock is higher, which will help preserve the legislative status quo on gun control.
Shares of American Outdoor Brands Corporation, parent company of Smith & Wesson, were down slightly Wednesday morning. Sturm, Ruger & Co., which sells the Ruger rifles and handguns, was down 1.5 percent. Shares of Utah-based Vista Outdoor, which owns several gun-related brands, were flat.
Shares of both AOBC and Vista Outdoor had briefly rallied earlier Wednesday morning.
So what does this mean?
Well, damned if I know. My guess is that people sold stocks because they expected the midterms to bring about more threat to gun ownership. Higher threats typically mean more sales as people flock to gun stores to purchase firearms that might well be banned soon.
Once the midterms were over, that threat wasn’t on the table, so people liquidated some of their holdings, thus driving the stocks down.
After all, while House Democrats will clearly want to restrict the private ownership of firearms and will probably try to push for a ban on all semi-automatic rifles, it’ll be nothing more than a futile gesture. The fact that they’re completely unwilling to work with Republicans on much of anything means the GOP has no reason to work with them on guns.
Because of that, there’s not likely to be any new urgency among gun buyers.
However, this isn’t a threat to gun manufacturers in any way. Stock prices fluctuate significantly throughout the course of a given year, so it’s unlikely this will be even remembered in a couple of months.
Mind you, 1.5 percent isn’t anything to sneeze at. If this were to continue, Ruger’s stockholders would be alarmed and dump the stock, driving prices down even further. However, there’s no sign of that being a significant risk.
Then why is this major news? Why is CNBC reporting it like it is a big deal?
Probably because guns are a touchy subject and they know that people will look for any weakness in the firearm industry. By providing it, CNBC can bolster the narrative just a bit without having actually to fabricate anything at all. The stocks did take a dip, after all.
But stocks do that. They go up; they go down. Investors try to grab them down and sell them up, thus also causing those ups and downs. It’s just how this works.
Then again, for those begging for any sign of weakness for a constitutionally protected industry, I’m not altogether convinced they understand how stuff like that works.