The Harvey Effect

I’m always hesitant to write about the effects of a disaster, natural or manmade, on the financial markets. While it seems improper, we’re in the business of investing, and what these devastated areas often need is more investment.

Obviously, Harvey has wrecked much of the Houston area and I hope people there are managing the best they can. We often forget how small we are, even in our largest cities, compared to the power of nature.

Fortunately, the overall market is holding up well. As I write this, the broad market indexes are mostly unchanged. Some home improvement stocks like Lowe’s and Home Depot had decent opens this morning. Many insurance stocks were among the biggest losers today. Still, those moves weren’t that bad (about 2% to 4%). Travelers, which is a Dow component, is currently down about 2.8%.

On our Buy List, shares of AFLAC (AFL) are actually up a little. If you remember, they handled the Fukushima disaster easily. Continental Building (CBPX) is up 4.5% today.

Several oil refineries have been shut down so there’s no place for the oil to go besides storage. Crude oil futures are currently down about 3.3% while the “crack spread” has widened to a two-year high. That’s the difference between crude and its refined products.

Posted by on August 28th, 2017 at 12:28 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.