4 Industrial Stocks To Buy As Harvey & Irma Wipe Out Wealth
Zacks Investment Research | Sep 15, 2017 04:23AM ET
The United States was recently devastated by two back-to-back hurricanes — Harvey and Irma — one being Category 4 and the other Category 5. These deadly storms wreaked havoc across Texas and Florida causing widespread damages to life and property, once again proving the vulnerability of human life.
To add to the woes, the hurricanes caused incessant rainfall, resulting in severe floods that crippled transportation facilities and inundated vast tracts of agricultural fields. All these events cumulatively eroded significant wealth from the economy and impacted near-term growth momentum of the country.
Possible Economic Impact
It is probably too early to quote the full extent of the collateral damages due to these hurricanes, as the economic costs associated with them are still rolling in and are expected to climb further. However, several experts and analysts have put forth certain estimates based on their individual calculation. According to the preliminary estimates by Moody’s Analytics, Harvey and Irma together caused between $150 billion and $200 billion in damages to homes and furnishings, vehicles, commercial real estate, and public infrastructure. This is comparable to the loss due to Hurricane Katrina — another deadly hurricane that ravaged the country in 2005.
Joel Meyers, the President of AccuWeather, however, believes that the hurricanes collectively cost the public exchequer to the tune of $290 billion, which equates to about 1.5% of the gross domestic product of the country. He further opined that the catastrophic storms were likely to contract the growth momentum of the country in the third quarter as subsequent rebuilding consumes further resources.
On the other hand, Goldman Sachs (NYSE:GS) pegs the individual losses at $30 billion and $85 billion for Irma and Harvey, respectively. According to Goldman, Hurricane Irma was the 10th most impactful natural disaster in the United States, affecting approximately 6.1% of the populace. With pervasive devastations, the firm currently anticipates third-quarter GDP to contract 0.8 percentage points to about 2%.
How to Profit During This Challenging Time
Despite the initial setbacks, the U.S. equity markets scaled near record highs in the aftermath of the hurricanes as investors regained their appetite for riskier bets like equities, courtesy of strengthening dollar and sell-off in global bond markets. As the country focuses on its rebuilding efforts, the Zacks Investment Research
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