After the disastrous storm left the markets closed for two days -- the longest weather-related disruption since 1888 -- stock markets are set to return to operation.
The storm hit the Eastern seaboard, including the densely populated New York metropolitan area, a vast section of the country that accounts for a disproportionate share of the nation's economy. New York's subways are still not operational, and sections of Manhattan are still without power. Up and down the East Coast, employees are expected to be kept from work. According to economists surveyed by Bloomberg
, the storm could subtract as much as 0.02 percentage points from the fourth quarter's GDP. In addition to the lost output, about $30 billion in damage -- not all insured -- will have to be repaired. This might lead to a bump in output later.
Stock are set to open higher this morning. Future contracts on the Dow
(INDEXDJX:.DJI) rose 0.47% to 13,115.00. S&P 500
(INDEXSP:.INX) futures climbed 0.55% to 1,415.30, and Nasdaq
(INDEXNASDAQ:.IXIC) futures gained 0.23% to 2,665.00. Today could see a lot of volume due to pent-up demand for trades. Many funds end their fiscal year in October, and today, they are likely to make a lot of last-minute changes to their positions.
The storm disrupted the releases of economic indicators. The conference board's consumer confidence survey for October, expected to show a rise to 74, from 70.3, was postponed until tomorrow. While trading was halted, a few indicators did come out. Personal income increased by 0.4% in September, in line with estimates. Consumer spending exceeded expectations with 0.8% monthly growth. The S&P Case-Shiller Home Price Index rose 0.5% in August, missing estimates of 0.7% growth. The Labor Department promises that it will have the monthly non-farm payroll and unemployment rate data ready for Friday morning.
Gasoline futures rose due to the possible effect that Hurricane Sandy could have on refinery output in places such as New Jersey. The supply disruption will be localized, and probably won't cause much of a change in the pump price of gasoline or crude oil prices.
Insurers might be punished in the markets. Last year, the much more subdued Hurricane Irene lead to losses at Chubb
(NYSE:ALL), and the Tower Group
(NASDAQ:TWGP) in the fourth quarter of last year. Home improvement stores such as Home Depot
(NYSE:HD) might get a bump as consumers repair and rebuild their damaged homes.
Over the weekend, the Greek government failed to reach an agreement with the troika on its 13.5 billion euro austerity package. One of the coalition parties refused new labor reforms and the European Central Bank, European Commission, and the International Monetary Fund are not budging on its demands. The snag? The Democratic Left party is refusing to abolish a 10% salary hike that Greek employees get when they marry. Yet again, Greece will have the deadlines for its reform plans kicked down the road to at least Nov. 5.
Unemployment in the eurozone hit a record high of 11.6% in September, up from 11.5% in August.
No positions in stocks mentioned.
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