Lawmakers Traded Defense Stocks As Middle East Crisis Escalated
Prior to recent events, defense stocks were experiencing a downturn in their returns. Presently, RTX Corp (RTX:US) is down by 26.61% YTD while Lockheed Martin Corp (LMT:US) and Northrop Grumman Corp (NOC:US) are down by 7.77% and 9.49% YTD, respectively. It’s evident that the latter two’s price drops were recovering amidst the ongoing war in the Middle East.
Amidst rising scrutiny of congressional stock trades, several U.S. lawmakers have recently made significant purchases in major defense companies.
On the 13th of September, 2023, Senator Markwayne Mullin bought Raytheon Technologies stock from a joint account. The Senator bought between $15,000 and $50,000 worth of RTX shares. Following his trade, the stock price of Raytheon Technologies Corp experienced a dip but showed signs of recovery towards late October.
On January 3rd, 2023, Mullin took the oath of office after serving Oklahoma in the U.S. House of Representatives for ten years. Mullin represents Oklahoma in the Senate Armed Services Committee, the Environment and Public Works Committee, and other Committees. Since October 6, the stock value for RTX has risen by 6.03%.
Another Congress member who was trading RTX recently was Kevin Hern. Also from a joint account, Hern acquired up to 178 shares at a price of $84.33 per share on September 7, 2023.
On September 26, 2023, Josh Gottheimer bought shares of Northrop Grumman Corp. The transaction's value ranged between $1,000 to $15,000. Examining the trade history for NOC, there's a visible uptrend in stock price following the date of Gottheimer's transaction, indicating a notable increase in value. NOC stock closed at $489.07 on Oct 16, after a surge of nearly 15.6% since Oct 7. Presently, Rep. Gottheimer serves on the House Intelligence as well as the Financial Services Committees.
While certain analysts predict that this rally in defense stocks might actually be short-lived, as was the case in February 2022, when Russia first invaded Ukraine. On the other hand, there are still Lawmakers who are holding stakes in multiple defense stocks, a reflection of their confidence in the industry's prospects.
