A Special Note:
Today is the sixteenth anniversary of the September 11 terrorist attacks in New York, Washington, and the failed effort that crashed a jetliner in Pennsylvania. One of our strongest investment relationships is with a firm named Sandler, O’Neill, & Partners. Sandler’s offices were on the 104th floor of the South Tower, providing a breathtaking view of New York Harbor and the area.
Most of those we worked with escaped (the North Tower was struck first). Many did not. Today, our primary contacts are one of the firm’s original representatives, another is the brother of the gentleman who covered us but lost his life. A third is a broker who volunteered to work to rebuild the firm following the attacks.
Each year’s anniversary brings mixed emotions . Sadness for the loss of good people on one side, but admiration for the spirit and strength of those remaining on the other. While we were far removed from the events, like all Americans we were affected and remain so to this day.
- Mike Moreland
Hurricane season in the Atlantic Ocean starts June 1st and goes through the end of November. However, August through October tend to be the most active months for hurricanes forming. Two weeks ago Hurricane Harvey made landfall and caused havoc in Texas. Last week Hurricane Irma barreled through Puerto Rico, Anguilla, and Barbuda to name a few; it made landfall in Florida on Sunday.
Hurricane Irma was classified as a category 5, the strongest reading possible for a hurricane, until it weakened slightly to a category 4 heading into the weekend. According to the National Hurricane Center, Irma was one the strongest hurricanes ever recorded in the Atlantic. Our thoughts and prayers go out to everyone that has been or will be affected by this powerful hurricane.
The biggest impact Hurricane Irma has had thus far on the markets is in reinsurance firms and commodities, particularly a spike in orange juice futures. Florida is a major grower and supplier of the citrus fruit. However, the state grows other produce as well. In fact, Florida is the number two U.S. produce grower according to Bloomberg. Be prepared to pay a little bit more for orange juice (and other items) next time you go to the grocery store.
Only time will tell the impact Hurricane Harvey and Irma will have on the U.S. economy. Preliminary estimates will be released over the next few weeks of the potential magnitude of the damage, but there are great uncertainties in those figures. The biggest initial economic impact is that jobless claims will rise. We saw this in last week’s numbers; there was a spike in U.S. jobless claims due to Hurricane Harvey.
Economic data released over the next few months will be noisy. Historically, major hurricanes have had a near term impact on growth followed by a slow rebound as people start to rebuild and move forward. The net impact for the overall U.S. economy should be minimal.
In anticipation of Hurricane Irma making landfall in Florida, we reviewed our bond exposure to the state of Florida and its various municipalities. Currently, we have no individual Florida debt exposure in our managed accounts.
We have always considered diversification the first line of risk control. Our portfolios are broadly diversified so a natural disaster in a particular part of the country should not have an outsized impact on a client’s overall portfolio.
If you would like to talk about this topic in further detail, feel free to give Security National Bank Wealth Management a call today.Back to Articles