With Hurricane Michael making landfall on the Florida coast Wednesday afternoon, the companies poised to benefit and those expected to take a hit from the impact of the category 4 storm are on the move.
Insurers once again bore the brunt, with Axis Capital shares down 1.4 per cent to $56.80, Everest Re shares 3.8 per cent lower at $220.81, AIG shares down 1.1 per cent to $53.21. Meanwhile, HCI shares declined 3 per cent to $43.85, Universal Insurance, shares fell 3.4 per cent to $46.80 and United Insurance shares were down 2.5 per cent to $20.33.
It is worth noting that estimates of the cost to insurance companies from Hurricane Florence, which battered the Carolinas last month, were downgraded after the storm made landfall. Air Worldwide, a modelling firm, forecast cost to insurance companies of between $1.7bn and $4.6bn on September 18, sharply lower than initial estimates, from some, that insurers could end up paying up to $20bn.
Wednesday’s declines were also exaggerated by a broader sell-off on Wall Street that saw the S&P 500 on its way to its longest losing streak of the Trump presidency.
Meanwhile, Sandra Knight, former deputy administrator of the Federal Emergency Management Agency, told CNBC she expects Hurricane Michael could result in $30bn of damage.
Post-hurricane rebuilding efforts and perceived demand for building products — like roofing materials and plywood — tend to boost shares of companies that supply such materials and home improvement retailers.
On Wednesday, Owens Corning shares climbed 3 per cent to $53.83, Beacon Roofing Supply shares rose 0.8 per cent to $33.60, Builders FirstSource shares climbed 1.5 per cent to $13.69. DIY retailer Home Depot, which had seen shares jump during Hurricane Florence, was up just 0.5 per cent to $196.85.
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