With Hurricane Florence barreling down on the US, investors are scrambling to get ahead of the inevitable market fallout.
As soon as it became clear that the storm was headed for the US mainland, traders started fleeing their holdings in companies and industries seen as particularly exposed to the storm.
That has certainly been true of insurance and construction-material stocks. Both are heavily exposed corners of the market that have absorbed deep losses over the past three trading days.
Here’s a breakdown of the pre-hurricane market damage:
Investors are most likely anticipating large payouts from the insurers to policyholders in areas affected by the hurricanes. A sudden glut of such payments can eat into an insurance company’s bottom line.
An index of insurers in the S&P 500 has slipped 1.3% over the past three days, with 19 of 23 companies declining during the period. Notable movers have included:
Cement and building materials
Traders are bracing for weakening sales from manufacturers of construction materials, specifically cement. If the hurricane causes widespread damage, new-home construction will take a hit, at least in the short-term before the rebuilding commences. Notable movers over the past three days have included:
Roofing stocks have rallied, and oil could be next
But it hasn’t been all bad for stocks. Companies closely linked to the business of roofing have climbed since news of the hurricane started gathering steam.
The wild card now will be oil, which should theoretically see its price increase as supply weakens. But while the resource spiked more than 2% on Tuesday, some experts have downplayed the effect of the hurricane, since no major oil refineries are in the path of the storm.