Hurricane Michael Approaches: A Guide to Stock Market Exposure

(Bloomberg) — Investors are tracking Hurricane Michael as it heads toward Florida with 90-mile-per-hour winds, posing potential consequences for companies in the insurance and energy industries, among others. The storm, forecast to be the second hurricane to hit in the U.S. in a month, is expected to move across the eastern Gulf before making landfall on the Florida panhandle. Currently a Category 1, it could increase to a 2 or 3 by the time it reaches the U.S. on Wednesday.

Here’s a recap of what stocks Wall Street is watching:

Insurance

• Insured losses should be manageable and have minimal impact on property reinsurance pricing, KBW analyst Meyer Shields wrote in a note to clients Tuesday. Exposed insurers and reinsurers will probably face modest pressure
• If the storm strengthens, reinsurance stocks may face the most pressure since Florida is a heavily reinsured market, Wells Fargo’s Elyse Greenspan wrote in an Oct. 8 report. Losses could be in the double-digit billions if the hurricane hits Florida as a strong Category 3, and below $1 billion if it hits as a Category 1 or weak Category 2
  • Exposed reinsurers include Axis Capital, Everest Re, RenaissanceRe and AIG
  • Exposed homeowners insurers include Universal Insurance, FedNat, Heritage, Progressive and United Insurance
  • Exposed personal-auto insurers include Berkshire, Progressive, Allstate, Travelers and National General
  • Exposed commercial insurers include AIG, Assurant, Zurich, CNA, United Insurance, Chubb and Progressive
  • On a consolidated basis, the most exposed insurers include Berkshire, Progressive, Allstate, Universal Insurance and AIG

Energy/Utilities

• Operators evacuated 10 platforms, moved 5 rigs out of the storm’s path and shut in 19 percent of oil and 11 percent of natural gas output in the Gulf of Mexico, according to the Interior Department
• 324,190 barrels a day of oil production and 283.88 mmcf/day of gas is shut in
• See here for Michael’s path and oil assets in the Eastern Gulf Coast, including Chevron’s Pascagoula refinery
  • Exposed energy stocks include Anadarko Petroleum; the company said Monday night it is “carefully monitoring the weather conditions” in the region, and has removed all personnel and shut-in production at its operated Horn Mountain and Marlin platforms
    • All other Anadarko operated and producing platforms remain on production
  • Exposed utilities include Duke Energy; Duke expects damage to its infrastructure, which may result in extended power outages

Other Stocks to Watch

• During previous storms, investors have seen impacts to industries including home improvement, home building, materials, hotels, retail, trucking, railroads, and airlines
• Click here to see some of the most hurricane-exposed stocks by sector

To contact the reporters on this story: Lily Katz in New York at lkatz31@bloomberg.net;Michael Bellusci in Toronto at mbellusci2@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm

Source: BNN Bloomberg

https://www.bnnbloomberg.ca/hurricane-michael-approaches-a-guide-to-stock-market-exposure-1.1149487

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