U.S. stock futures edged higher as Hurricane Irma came ashore in Florida weaker than anticipated and the perceived threat of a North Korean missile test failed to materialize.
S&P 500 E-mini contracts expiring in December rose 0.4 percent at 6:01 p.m. in New York. The underlying index slipped 0.6 percent during the prior week as investors grappled with political uncertainty in Washington, tension on the Korean peninsula and the threat that Irma would hit Florida as a Category 5 hurricane. The dollar opened higher against major peers.
Irma weakened after coming ashore at the Florida Keys as a Category 4 hurricane. It headed up the western coast of the state Sunday and has knocked out power to 2.4 million customers, paralyzed tanker traffic and shut about 6,000 gasoline stations. As the storm progresses, it’ll also threaten more than $1 billion worth of crops just over two weeks after Hurricane Harvey struck the heart of U.S. energy production in Texas.
As Florida dealt with one of the worst storms in its history, the calculus for investors was, as always, separate and distinct from the potential human toll. History shows that the market is not usually fazed by natural disasters partly due to the subsequent pickups in spending.
JPMorgan Chase & Co. studied stocks during the 15 biggest hurricanes since 1965 and found that the S&P 500 fell an average 0.3 percent during the two weeks surrounding the events.
On the other hand, ignoring major storms is obviously a mistake at the level of individual stocks. In the five most destructive ones, logistics companies and producers of construction materials led the market with shares jumping more than 2.9 percent while insurance, media and airline stocks were among the worst performers.
Investors are also breathing a sigh of relief that North Korea did not ratchet up tensions over the weekend as the nation edges closer to being able to strike the U.S. with a nuclear weapon. Anxiety rose after South Korea had detected moves that indicated the North may soon launch another intercontinental ballistic missile. North Korea detonated its sixth and most powerful nuclear bomb last Sunday.
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