Hello,

Are you well and safe?

Have any of your loved ones been impacted by Helene or Milton?

It’s been a rough couple of weeks for the Southeast, and we wanted to check in.

Storms can take a massive toll on families and communities, with challenges that take months and years to resolve.

With an active hurricane season upon us, we'd like to take a moment to talk about how natural disasters can affect markets and the economy.

Natural disasters typically impact the economy in a few ways: 

• Regional, national, and even international supply chains can be disrupted as roads and ports close and goods struggle to move from place to place
• Economic growth can slow down as businesses shut down, jobs are lost, and consumer demand slows down
• Markets often experience short-term volatility as investors react to the news and rush to buy and sell
• Energy prices may spike due to scarcity and supply disruptions

While some companies (such as insurers) typically take a hit from anticipated disaster losses, other businesses (like generator manufacturers) may see a spike due to expected demand.¹

This chart shows the financial cost of some hurricanes in the last two decades. 

While natural disasters may have a severe short-term impact on local and regional economies, research suggests the long-term negative effects are limited.²

One note to consider: estimates of Helene and Milton damage may be low as it may take years to account for the full cost of property damage, business closures, and economic disruption.

Let's also keep in mind that billions of dollars in financial losses are massive, but they’re still a drop in the bucket of the overall economy, which is over $27 trillion in size.³

Of course, the plain numbers don't tell the full story of lives lost and lives disrupted.

Hard-hit areas may take a long time to recover, and some places may never fully return to normal.

In the weeks and months to come, we may see an impact from the hurricanes on inflation, unemployment, and growth data.

Storms are just one factor we're watching this fall.

Markets are also grappling with rising tensions in the Middle East as well as the politics of the upcoming election.

We're also monitoring inflation and labor market data for hints as to when the Federal Reserve might cut rates again.

Have questions or concerns? Please reply to this email and let us know. We'll set up a time to chat.

Be well, be safe, and hug your loved ones extra tight.

Warm regards,
 
Your Eagle Wealth Team

P.S. If you have any friends or family who are worried about how the storms may impact their financial situation, let us know. We always save a few appointments each month for clients' loved ones.

We can't promise we'll be able to help them, but we will give them our professional advice.

The Week on Wall Street

Stocks advanced last week despite mixed inflation data, lurching oil prices, and lingering anxiety about the Middle East.

The Standard & Poor’s 500 Index gained 1.11 percent, while the Nasdaq Composite rose 1.13 percent. The Dow Jones Industrial Average picked up 1.21 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.23 percent.^5,6

Up And Down Week

Stocks slipped on Monday as oil continued to rise but moved higher on Tuesday as the technology sector showed the way. Oil prices fell back as investors took a wait-and-see stance concerning Middle East tensions.⁷

The S&P 500 and Dow Industrials hit fresh record highs on Wednesday but dipped Thursday morning after the latest Consumer Price Index (CPI) data showed inflation was warmer than expected.^8,9

Earnings season kicked off Friday, and update reports from a few money center banks injected some enthusiasm into markets. Also, the Producer Price Index (PPI) report showed wholesale prices stayed flat last month, a welcomed update for investors. All three averages closed higher for the fifth consecutive week.¹⁰

Inflation Moves Markets

Despite news that showed retail inflation continued to decelerate in September, anxious investors focused on the fact that CPI came in slightly warmer than economists expected for September. Meanwhile, Friday’s PPI reading came in slightly better than economists expected, adding a layer of complexity for the Fed as it evaluates the inflation story.^11,12

^{Source: YCharts.com, October 12, 2024. Weekly performance is measured from Monday, October 7, to Friday, October 11. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.}
Past performance is not a guarantee of future results. Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance.

1. https://www.cnbc.com/2024/10/07/generator-maker-generac-soars-insurance-stocks-fall-on-hurricane-milton.html

2. https://www.frbsf.org/wp-content/uploads/wp2020-34.pdf

3. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2023&locations=US&start=1960&view=chart

Chart sources: https://www.investors.com/news/hurricane-helene-34-billion-price-tag-stock-market-impact/

https://www.cnbc.com/2024/10/08/hurricane-milton-could-cause-as-much-as-175-billion-in-damages-according-to-early-estimates.html

https://www.kiplinger.com/slideshow/business/t019-s001-most-expensive-natural-disasters-in-u-s-history/index.html

4. https://en.wikipedia.org/wiki/Orange_wine

5. The Wall Street Journal, October 11, 2024
6. Investing.com, October 11, 2024
7. CNBC.com, October 8, 2024
8. MarketWatch.com, October 9, 2024
9. The Wall Street Journal, October 10, 2024
10. The Wall Street Journal, October 10, 2024
11. The Wall Street Journal, October 11, 2024
12. MarketWatch.com, October 11, 2024

^{Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.}

^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.}

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^{International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.}

^{Please consult your financial professional for additional information.}

^{This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.  Copyright 2024 FMG Suite.}