Do Major Hurricanes Impact Stocks?

2019-09-04T08:55:02-04:00 September 4th, 2019|Weekly Market Commentary|

Many have asked us what stocks tend to do after a major hurricane hits the United States.

First and foremost, our thoughts are with all of those that were impacted by Hurricane Dorian over the Labor Day holiday and all those that are still in its path.

Many have asked us what stocks tend to do after a major hurricane hits the United States. Given we had category 4 and 5 hurricanes last year, this question unfortunately seems to come up more than anyone would like.

“Although the devastation a major hurricane causes can’t be denied, it is worth noting that equity markets have taken the storms in stride,” explained LPL Financial Senior Market Strategist Ryan Detrick. “In fact, a month after the 15 most costly hurricanes to ever hit the United States formed, the S&P 500 Index was higher nine of those times with a solid median return of 1.2%.”

As shown in the LPL Chart of the Day, Do Major Hurricanes Impact The S&P 500 Index?, the near-term stock market results after a costly hurricane have been quite healthy. It is worth noting, though, that the average returns are skewed due to the massive equity drop after Hurricane Ike during the midst of the financial crisis. Lastly, if you are in Dorian’s path, please stay safe!

 

IMPORTANT DISCLOSURES

Please see the Midyear Outlook 2019: FUNDAMENTAL: How to Focus on What Really Matters in the Markets for additional description and disclosure.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This Research material was prepared by LPL Financial, LLC.

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