I’m writing today from Phoenix, where there’s not a cloud in the sky. The other difficulty about assessing the so-called Frankenstorm is that it is taking aim as the nation’s media capital, so the danger of hyperbole is great. Even so, the storm is headed to the most populated part of the country, as well as the financial capital. The risk of heavy damage is real.
If the storm lives up to expectations and fears, and it plays out like other hurricanes, it will bring immediate disruption and damage, followed by a stimulus for rebuilding. The damage estimates range from $2 billion to $100 billion. It shouldn’t affect the October unemployment report due out on Friday. The current population survey portion is done around mid-month, during the week of the 12th. The payroll survey is also done around the same time. So the unemployment rate that we see Friday should be accurate, unless one is wearing a tin-foil hat.
The New York Stock Exchange is closed today, the first shutdown caused by weather in 27 years. If they must remain closed Tuesday, even on electronic trading platforms, stresses could emerge as investors can’t trade dollar-denominated assets on U.S. markets. Unless the storm causes horrific damage in New York itself, look for financial markets to get back up as early as possible. Once again, the safe haven of Treasuries got lots of takers before futures trading closed at 9:15 EDT.
Winners will be led, of course, by the likes of Home Depot. Losers will include retailers, real-estate agents, movie theaters and anybody else whose business depends on people getting out of their houses or apartments. This won’t show up until the next retail-sales reports. Among the biggest losers could be insurance companies. For the moment, risk-aversion rules as we await landfall.
And Don’t Miss: A part-time life as hours shrink and shift for American workers || NY Times
Today’s Econ Haiku:
Sandy causes harm
Nothing new for NYC
First Weill, now the storm