Markets face important reports after Sandy

Exchanges won't reopen until Hurricane Sandy makes landfall. Look for a Wednesday reopen. Insurance companies could see $5 billion to $10 billion in losses. Important economic and earnings reports are due, including Friday's jobs report.

By Charley Blaine Oct 29, 2012 4:10PM
Charley BlaineUpdated: 6:20 p.m. ET

U.S. stock and bond markets will be closed again Tuesday because of the worry of the havoc Hurricane Sandy will cause around the New York metro area.

The move was expected because markets were closed today before Sandy even made landfall over New Jersey. Markets probably will reopen Wednesday as the storm moves inland. The eye of the storm is supposed to move into central Pennsylvania and then through New York state and New England and then into Ontario and Quebec.

Wednesday will not only be Halloween but the end of the month. Moreover, this week is one of the heaviest for earnings, and it ends with the October unemployment report, which could have a big impact on the election.

As of Friday, the Dow Jones industrials ($INDU) were down 2.5% for the month, with the Standard & Poor's 500 Index ($INX) down 2% and the Nasdaq Composite Index ($COMPX) down 4.1%.

The storm was expected to generate winds of 85 MPH or more, heavy rain and flooding. They markets haven't reduced hours for weather reasons since Jan. 8, 1996, when a blizzard dumped more than 20 inches of snow on the New York metropolitan area. Markets haven't had a multi-day shutdown that didn't include a holiday since the Sept. 11, 2001, terror attacks.

Article continues below.
What isn't known is how much damage will be done by the storm. Flooding and power outages are expected along with wind damage to homes and businesses. Corelogic, a real estate research firm, says some $87 billion in properties are exposed to the storm, including some of the most valuable residential real estate in the country.

The storm is likely to cause insured losses of $5 billion to $10 billion and economic losses of $10 billion to $20 billion, disaster modeling company Eqecat said today.

How much it affects the economy is complicated by a number of factors, including:
  • How long it takes the storm to pass: Longer is bad.
  • How fast recovery and reconstruction efforts begin. The faster the better. Look for strong sales for hardware stores, auto dealerships, paint dealers and furniture dealers over the next few months as claims are settled.
  • How fast power is restored. Not just to homes but especially to the oil refineries in Delaware, Pennsylvania and New Jersey. Long shut downs in refineries can create short-term shortages and boost fuel prices not just regionally but nationally as well.
  • How fast the local infrastructure is put back into shape, including water, sewers and streets and highways. Of special interest in the Northeast are suburban rail networks. Heavy rains can weaken rail beds and slow speeds at which trains can run.
The potential for serious damage was recognized by the stock market last week. Chubb (CB), which insures a lot of property, fell 3.3% from Monday through Friday, ahead of the storm. The KBW Insurance Index ($KIX) fell 1.56% over the same time.

Futures trading had suggested a weak open for U.S. stocks today, if the markets had operated normally. A weak open would have reflected worries from Europe that property-insurance companies may face big damage claims from the storm. In addition, worries about economic conditions weakened markets in France, Spain and Italy.

Meanwhile, gold (-GC) and crude oil (-CL) prices fell ahead of market closures. The national average price of gasoline was $3.575 a gallon, down from $3.579 on Sunday and $3.814 a gallon on Oct. 5, according to AAA's Daily Fuel Gauge report.

The market closures raise the potential for volatile swings once trading resumes.

There are important economic reports this week, including personal income for September today. The government said incomes rose 0.4%, the best increase since March. Spending rose 0.8% in September; however, spending adjusted for price increases was only up 0.4%. The saving rate fell to 3.3% in September, from 3.7% in August.

Other reports include:

Tuesday: The S&P/Case-Shiller home price index.

Wednesday: the ADP National Employment Report, a measure of employment trends and the Chicago Purchasing Managers Index.

Thursday: Initial jobless claims from the Labor Department, Layoffs from Challenger Gray & Christmas; the Institute for Supply Management's Manufacturing Index; and auto and truck sales; and the Conference Board's Consumer Confidence Index. This was rescheduled from Tuesday.

Friday: The jobs report and the September report on Factory Orders.

In addition, this is a heavy week for earnings. Some, like Pfizer (PFE), have postponed their reports.

Pfizer postponed its earnings release from Tuesday to Thursday. So did Martha Stewart Living Omnivision (MSO). Thomson Reuters (TRI) moved its report from Tuesday to Friday.

Burger King (BKW) and Red Robin Gourmet Burgers (RRGB) reported as scheduled today. Burger King reported an 83% earnings decline due to restructuring and currency effects on results.

Red Robin reported 24 cents a share in earnings, up from 14 cents a year ago. But compared with earnings after one-time restructuring charges, earnings were flat.
higher profit margins.

Also due to report this week:

Cummins (CMI), UBS (UBS), Ford Motor (F), General Motors (GM), Exxon Mobil (XOM), Kellogg (K), Starbucks (SBUX) and Chevron (CVX).
144Comments
Oct 29, 2012 8:24PM
Oct 29, 2012 8:04PM
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Friday big jobs report......WWHHOOOPPPIES Pooooh wonder who won't get counted this week?

 

It has become a joke.

Oct 29, 2012 8:14PM
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Mitt Romney says he won't let any of these damn hurricanes like Sandy occur if he's President.
Oct 29, 2012 7:43PM
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Tonight the rats will be flooded out of the NY subways and sewers... Next week, the rats (Demon-rats)will be voted out of the WHITE HOUSE... LOVE IT! LOL!
Oct 29, 2012 11:48PM
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Wondering if Obama is going to claim the storm was caused by an awful video that ticked off mother nature???
Oct 29, 2012 7:32PM
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Obama is already blaming Sandy on Bush and the Republicans... so if there's any economic fallout in the stock exchange... Obama will be blaming that on Bush and the Republicans too. EVEN AS HARD AS SANDY BLOWS... OBAMA SUCKS MORE! 
Oct 30, 2012 4:27AM
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Obama himself said while running if he didn't cut the defecit or unemployment it would be a one term deal......he didnt deliver people WAKE UP and check it out!!
Oct 30, 2012 7:31AM
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An interesting consequence to hurricane Sandy... a thousand miles in diameter is-- that it has reached the Great Lakes and our shorelines. Winds sustaining 50 mph are removing all our tree leaves and  sending them toward Wisconsin. Waves are as high as I've ever seen them and small boats still in marina slips are taking a beating. Many freighters working into Lake Huron for the winter are realizing a rare easterly push toward shallower and rockier shores. This would be the kind of weather that split the Edmund Fitzgerald in two... high wave crests that expose the hard bottoms as deep as 50 feet in the Straits. This is a full-blown storm about to move across land that rarely sees one of these.

 

One thing people should know... the President is in the White House today. He declared NYC a state of disaster late last night. Congress is STILL on vacation. Many members are in Texas and California nowhere near DC.

Oct 30, 2012 10:14AM
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We have lost life,....Today is a very sad day here in NYC and all around America...To be honest wish Wall Street would remain closed for a while, know that is not possible...Time to put all the other bs aside and pray for the victims and their families and all the people that are hurting throughout....We will rebuild and will be back strong. We are Americans. May God Bless the USA.
Oct 30, 2012 3:41AM
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Wonder if Michelle went out and bought a $1,000000.00 rain coat for the walk to & from AirForce !Since her & hubby have been in the white house, they've spent $12,000000.00 on trips & parties. Guess for them there's definately NO inflation. Hope & pray they go by by come Jan, 20th

Oct 30, 2012 9:34AM
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I find it incedibly dissappointing that so many here use this disaster where people have been killed and where so many people are having their lives turned upside down and belongings destroyed to make polical points and cheap shot ignorant jokes. Take the lead of your favorite presidential candidates, shut down the proaganda and pray for the people whose lives have been affected already and for days to come.
Oct 30, 2012 3:43AM
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There are more disasters to come. The worst is on its way.
Oct 29, 2012 9:51PM
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And now,  drum roll please, a matching R & R Sandy Stimulus Solution to the latest economic wet down.
Oct 30, 2012 10:49AM
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Well they got plenty of problems and water/flooding along with power outages are going to be a major problem for over a week, worst in some areas.

The fires they had in some places,were quite bad, couldn't get to them because of flooding...

How ironic..."Water,water everywhere and not...."

Thought it was admirable that Gov.Christie complimented Obama and FEMA for their reactions.

So far I think the actions of the Administration are "excellent" with a lot of work to get done.

Clearing/cleaning pathways and getting power back up...will be a chore.

The Gov. of Jersey and Mayor of Atlantic City....got a little pissing match going..Oh well.

All judgements should be reserved for a few weeks out...They have a mountain of work to get through, and they all need to do it together, including the citizens.

Oct 30, 2012 9:22AM
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RomRyan have convinced you that the very wealthy need more tax breaks and that you need to give up on traditional Social Security so wealthy investors can skim money off the top of YOUR investment.



Oct 30, 2012 1:30PM
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WALL STREET opens wednesday with a crazy up and down morning settling in with a serious sell off later in the day
Oct 30, 2012 9:37AM
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I guess it depends on your perspective.  I saw it as a wrath on Trump owned casinos in Atlantic City for his foolishness.  The people of the Northeastern United States are resilient.  President Obama will be re- elected President or he won't.  He will survive and so will his family.  I am honored to have had him as my President and I will remain a Democrat forever.  I suspect that neither storm, nor snow nor hail not anything else will keep the people of the Northeast from exercising their right to vote in this election once they have secured health and home.  I will do what I can to help those people whether they are Democrat, Republican or otherwise.  We never know what natural disasters will wreak havoc on our lives.  We do not control this earth of ours but we can extend help and respect to others.  The markets will come roaring back and jobs will be there for those who want to work.
Oct 30, 2012 2:10PM
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"Romney says he was wrong about eliminating FEMA?  Oops, he flipped it again."

Unbelievable!!!!

Come on, America... vote all Republicans out and don't let any new ones in.
Oct 30, 2012 11:43AM
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Pretty sure in our Constitution....It "states and is directed towards" the Central Government or the Federal G. as we address today.

 

"to insure domestic Tranquility," 

"to provide for the common defence,"

"promote the general Welfare,"

Oct 30, 2012 9:40AM
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Gotta love no win polictical attacks, and by that I mean no matter the situation there is an attack even when the attacks seem to conflict with each other.  Example:  Gas was a buck something when Obama took office, it's about 4 bucks now and it's his fault...... last 2 weeks with oil and gas declining........ it's a sign of economic weakness and the failed Obama economy.  So which is it?  Is it good or bad?  Do you spin doctors even know anymore?
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