Hurricane Sandy will roar ashore as a hybrid “super storm” this week, affecting a large swathe of the U.S. eastern seaboard with high winds and a life-threatening storm surge.
Expect the storm to inflict damage to both property and the economy, one expert says.
The system is very large and will join forces with a winter storm, bruising major population centers including New York City, Boston, Philadelphia and Washington D.C./Baltimore.
Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.
Nearby cities such as Buffalo, Harrisburg, Syracuse and Albany, as well as Canadian cities such as Toronto and Ottawa will also feel the sting, Evan Gold, senior vice president of client services at business weather intelligence company Planalytics, wrote in a CNBC guest column.
”When everything gets tallied up, Sandy is estimated to have an influence over one-third of the population of the U.S. For the hardest hit areas, the economic impact will be driven by insurance losses and lost productivity due to people staying home,” Gold wrote.
Retail sales will be hit particularly hard.
“Most major retailers have at least 10 percent of their store base in Sandy’s path, with impacts varying by type of business,” Gold pointed out.
“Shoppers generally avoid malls during hurricanes, and since consumers are purchasing ‘must have’ items, any ‘nice to have items’ fall off of shopping lists. This means Sandy will be a net-negative to apparel and mall based retailers such as department, toy, jewelry and sporting goods stores.”
Restaurants will see mixed results, as fast-food concerns will experience a surge before the storm makes landfall though more formal establishments will see less traffic as the country digs out.
Home-improvement stores such as The Home Depot, Lowe’s and ACE Hardware will benefit — they already have seen a surge in sales — as will gasoline stations and big-box retailers like Wal-Mart.
Meanwhile, the storm is making landfall close to the holiday season, which may hurt year-end sales.
“While the total economic impact from Sandy will play out over time, it has already begun, and is poised to leave a significant mark that will be referenced for years to come,” Gold wrote.
U.S. equities markets, meanwhile, will remain closed on Monday and possibly Tuesday.
“The decision (to close markets) was made by the markets and market participants after careful consideration in consultation” with the Securities and Exchange Commission, an SEC spokesperson told FOX Business.
“The SEC will continue to be in communication with the markets as the situation warrants.”
Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.
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