The stock market is pretty unpredictable, especially in the near-term.As the U.S. east coast gets hit by the storm of the century, should investors expect stocks to tank?
If history’s a guide, not necessarily.
“History says that hurricanes typically don’t trigger market declines,” notes S&P Capital IQ’s Sam Stovall via USA Today.
In a new research note, Stovall looked at how stocks performed in the wake of the last 13 most disastrous hurricanes as measured by cost since 1965.
He found that the S&P 500 climbed an average 3.9 per cent over the three months after the storm and 5.8 per cent over the next six months.
“Equities are more likely driven by wider-reaching global events than localised natural disasters,” he writes.
Indeed, after Hurricane Ike in August 2008, the S&P 500 tanked 30 per cent in three months and 43 in six. Those sell-offs were certainly attributed to the bursting of the U.S. housing market and credit bubbles.
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