As you walk to class wondering why you ever even got up in the first place, think of how the weather affects you on a macro level. Not only are you cold, wet and miserable, but oil prices are climbing due to this weather. In addition to the oil prices, the stock market is taking a hit as well.
Hurricane Sandy has been causing weather-related delays and other headaches to people across the country. U.S. stock trading and bond markets saw a second day of cancellations due to the stormy weather and high winds in the New York area.
In addition to cancelled trading, the gasoline prices for the country also rose. These futures climbed for a third day up 2.6 percent, as of Monday of this week. Oil refineries on the east coast were forced to limit or stop production due to the disruption by Hurricane Sandy.
When it seems that bad news about the eurozone continues to pile on, hurricane season hits. Investors are cautious of how inclement weather can affect trading on exchanges, as well as how the physical stock exchange in New York, are affected. The rains and winds have the potential to cause power outages and disrupt communication across the world, which would be a major issue during trading or any other business practices, such as travel.
The hurricane adds to the troubled fiscal climate of the world. According to Bloomberg, Dominick Chirichella, a senior partner at the Energy Management Institute in New York said, “For today, the downward pressure from the slowing global economy will move to the background as Sandy and the impact it could have to the most populated portion of the U.S. evolves over the next several days.”
This shows that people across the financial sector are noting the effect that this dangerous weather has across the globe. The United States may be seeing quite terrible rains and winds affect its retail industry, but it also affects capital markets. Logic would prove that people are less willing to leave their homes during hurricanes and, therefore, consumer spending could take a hit this month, while the storms wreak havoc across the eastern seaboard.
It will be interesting to see if the markets continue to be hindered by the storms. The process to close an exchange comes from the input of other exchanges as well as the market in question. Monday’s close saw the Securities Industry and Financial Markets Association call for a full market close tomorrow as well. This close is for the dollar-denominated fixed-income securities, according to Bloomberg.com.