Markets Close Due To Hurricane Sandy, Is This Bullish Or Bearish For Stocks?
Stocks have been rebounding from recent down days but now Hurricane Sandy has taken the top spot in the minds of market participants. The stock market was closed today Monday October 29, 2012 and many trade floors will be closed tomorrow also. The storm is set to cause billions in damages to homes and property as well as lost economic business. How will stocks react on the first day the market opens?
If pent up demand occurs this could give equities a lift and many traders didn’t get to close their monthly positions which could keep stocks from going lower. Some traders like to start the month with a clean portfolio but the storm could prevent them from making trading excessively if volume is low and stocks continue to rise. The major exchanges need to find ways to continue trading electronically to keep the markets from being closed too long. Money managers are behind the market and still need to chase performance which has caused some hedge fund managers to shut operations due to being down a few basis points while the market was up in double digits for the year 2012.
We are looking carefully at markets overseas especially Europe and the FOREX markets to monitor sentiment. Long run, storms have a net benefit to the economy so we would still be bullish on stocks longer term until the end of the year.