Hurricane Irma and Stock “Snapbacks”

Fox News this morning says Hurricane Irma is taking “direct aim” at Florida. Current models have Irma hitting the Florida Keys around 2:00am Eastern on Sunday.

The market fallout shows a tough week for cruise lines like Norwegian (NASDAQ: NCLH) and Royal Caribbean (NYSE: RCL).

CNBC, Fortune, and CNN Money report spikes in orange juice futures contracts. Oranges in Florida are an $8 billion a year business. But Florida orange production is down 50% in the last five years and Florida orange juice concentrate makes up just 5% of global supply.

Fox News yesterday had a story in which Florida Attorney General Pam Bondi “called out” Chevron for “price gouging” as gasoline becomes a scarce resource in Florida ahead of Irma.

CBS12 News in West Palm Beach, Florida yesterday released video of gasoline tanker trucks being escorted by the Florida Highway Patrol.

The escorts aimed to get more fuel to highway gas stations to aid those fleeing Irma’s path.

Insurers who do big business in Florida, like Federated National (NASDAQ: FNHC) down 15.7%, Universal Insurance (NYSE: UVE) down 11.5%, and HCI Group (NYSE: UVE) down 8.4%, all took big hits yesterday too.

Our very own Ray Blanco was on Fox Business this morning at 5:30 a.m. Eastern discussing the market impact of Irma. A screen capture taken from our offices during Ray’s appearance:

Ray Blanco Discussing Irma on Fox Business This Morning

DIS chart

If you’re in the path of Irma, be safe.

Now back to the markets, and a look at what might come after Irma.

After Irma: Stock Snapbacks Ahead?

This is the “news you can act on” part. Greg Guenthner at The Rude Awakening wrote yesterday about “snapback” moves. A snapback is a beaten-down stock that rallies hard and fast.

Greg’s analysis yesterday focused on opportunities in much-maligned retail stocks. Amazon, after all, isn’t going to put every single retailer out of business. The best will survive.

The takeaway is, short of bankruptcy, every single stock mentioned above could provide snapback profits after Irma comes and goes.

To continue with Greg’s retail example, here’s a strong snapback underway right now for retailer Abercrombie & Fitch (NYSE: ANF):

Ray Blanco

The takeaway, again, is all disruptions are temporary. Every stock affected by Irma, or any market shock, has the potential to deliver a powerful snapback profit.

Market Rundown for Friday, September 8

S&P 500 futures are off 6.75 at writing this morning, down 0.27%. Oil’s at $48.93.

The Boston Globe says gas prices should be “back to normal by October.” We’ll see.

Gold up $6.60 at $1,356. The dollar’s wheezing to the finish line of its worst week in about three months.

Disney (NYSE: DIS) was down huge after CEO Bob Iger said yesterday 2017 earnings will fall in line with 2016 earnings. Analysts weren’t happy. Market response was swift. The proof:

DIS chart

But Disney’s a player. Strong legacy. A snapback seems likely.

Talk to you again on Monday, September 11.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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