By Joyce Yu
Philadelphia, PA–Shares in gun makers rose on Monday following a shooting at a church in Sutherland Springs, Texas that had killed at least 26 people. The act marked the deadliest shooting in Texas’ history.
Gun makers will typically see their stocks rise after mass shootings as investors bank on sales boosts provided by those fearing harsher regulations governing firearms, and those wishing to purchase guns as a means of protection. Shares of Sturm Ruger & Company Inc. were higher over 3.35% Monday morning, while shares of its counterpart American Outdoor Brand), the parent of Smith & Wesson, were also climbing over 3%.
Two deadliest shootings in U.S. history have now taken place in the last 35 days, sparking intense debates in the U.S. among those advocating for stricter laws governing firearms, and those who defend the sale of guns so that they can be used as a means of self-defense.
“This is a mental health problem at the highest level.” U.S. President Donald Trump while on trip to Asia told reporters in Tokyo, “This isn’t a guns situation. I mean we could go into it but it’s a little bit soon to go into it.” Republican Texas Governor Greg Abbott told CBS there was evidence that Kelley had mental health problems and that he had been denied a Texas gun permit.
Kicking off a nearly two-week Asia trip, President Trump arrived in Japan late Saturday for his first stop. He will also visit Korea, China, Vietnam and the Philippines. Investors will keep an eye on President Trump’s comments on North Korea’s nuclear missile program and trade issues with the region.
Today’s equity markets are filled with news of corporate mergers and acquisitions. Broadcom has announced a $103 billion offer to take over Qualcomm, a long-time LTE chip supplier for iPhones and Android phones. Broadcom also announced plans to switch its legal headquarters back to the United States from Singapore. However, Qualcomm is expected to reject Broadcom’s bid as the offer undervalues Qualcomm, people familiar with the matter told the Bloomberg. Both stocks declined after the announcement.
Hotly speculated potential merger of Sprint and T-Mobile was abandoned with Japan’s SoftBank which already has an 83% stake in Sprint saying on Monday that it will buy more of the stock following the collapse. Over in Asia, shares in Cathay Pacific dipped in Hong Kong after Qatar Airways announced a deal to buy about 9.6% of the airline. Air China already holds a 30% stake in Cathay.
On individual stocks, U.S. companies continue to report their quarterly earnings. With more than 400 of S&P 500 companies having reported, earnings for the third quarter are expected to have climbed 8%, compared to an expectation of a 5.9% rise at the start of October, according to Thomson Reuters I/B/E/S.
“The third-quarter earnings season has given investors plenty of reason for optimism and with the global economy as a whole looking more healthy than it has in years, there’s little reason to be pessimistic right now,” said Craig Erlam, senior market analyst at Oanda.