Tomorrow’s set to be a big day for gun stocks. President Joe Biden is expected to make an announcement tomorrow on his planned executive actions aimed at curbing gun violence. Broadly speaking, Wall Street is not sure what he’ll announce. The White House has not elaborated on his plans, and Press Secretary Jen Psaki has remained tight-lipped about what’s coming.
That said, gun stocks are on the move today. Four such gun stocks that are on investors’ radars today are Vista Outdoor (NYSE:VSTO), Sturm, Ruger & Company (NYSE:RGR), Smith & Wesson (NASDAQ:SWBI) and AMMO (NASDAQ:POWW).
Interestingly, these stocks have moved asynchronously as investors speculate about what will be announced. Smith & Wesson and AMMO were both up on the day, 2% and 8%, respectively. However, Vista was down 1% and Sturm, Ruger & Co ended the day flat.
Indeed, these gun manufacturers vary in their product offerings, and investors seem to be assessing these stocks on their exposure to assault-style weapons which are expected to be part of Biden’s announcement.
Let’s take a look at what sort of speculation is floating around out there regarding Biden’s announcement tomorrow.
Biden Announcement Spurring Volatility in Gun Stocks
Again, there’s really no clear indication of exactly what will be announced tomorrow. That said, the market does what it does best — pricing in expectations. Speculation is part of the price discovery process, as we’re finding out in the various sporadic moves gun stocks have seen today.
The president has been clear he wants mandatory background checks on buyers of so-called ghost guns. Frustration around concealed assault-style weapons used in other shootings has also been cause for speculation further regulations on these weapons could be announced.
However, whether Biden’s executive actions go further than this remains unclear. There have been calls for a range of other initiatives including prohibiting gun sales to those with criminal records and other safety measure pertaining to how guns are stored.
The Biden administration may choose to do what it has done with its infrastructure plan. That is, phase in changes over time, starting with the changes that are easiest to push through. But for now, it appears investors will need to wait to see what materializes tomorrow.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.