FBI background checks for the purchase of firearms continued their record streak of month/month (m/m) declines in October, falling from 2.626 million down to 2.593 million. Over the course of just seven months now, background checks have dropped by just over 2 million or 44.8%, but even after that historic decline, total background checks remain above the upward trend they maintained in the 10+ years preceding COVID. While not typically viewed as a gauge of sentiment, one could make the argument that the steep declines in the background searches required for gun purchases signal that levels of uncertainty or fear on the part of Americans have been easing. After all, you’re probably less likely to go out and buy a gun when you’re feeling safe and secure!

On a y/y basis, total background checks are down just over 20% and near their lowest levels since early 2014. Similar to the period leading up to the current decline, total background checks during that period followed what had been a record y/y surge after President Obama was elected to a second term.

As mentioned above, claims have now declined on a m/m basis for seven straight months. Over the last 20+ years, this streak now ranks as the longest string of back-to-back declines surpassing the prior record of six months from June 2013.

With the pace of background checks crashing back down to earth in the last several months, you would expect to see the stocks of gun manufacturers struggling, and to a degree, you’d be right. Both Sturm Ruger (RGR) and Smith and Wesson (SWCI) are well off their highs from the middle of the year, but they’re also not trading near 52-week lows either. RGR continues to trade above support despite looking like it’s starting to roll over at a lower high. SWBI briefly surged close to $40 in early July before quickly reversing, and while the stock hasn’t participated in the recent market rally, the pace of decline has certainly slowed.