Hurricane Recovery and Economic Impact
The one-two punch of Hurricanes Harvey and Irma has impacted so many in Texas, Florida and throughout the Southern part of the U.S. We keep all of those impacted in our thoughts and wish them a speedy recovery.
Markets will be looking at how these two storms will impact the economy both in the near term and farther down the line. In the short term, the potential is for the storms to put downward pressure on economic performance and distort statistics (like the rise in unemployment claims last week), but the rebuilding process will be a boost to the economy.
Last week saw a rather rare occurrence in Washington with a bipartisan compromise leading to a three-month extension in the debt ceiling and the approval of aid for Hurricane Harvey victims. If this bipartisanship holds, we may see some additional economic stimulus and possibly tax reform (albeit smaller than previously thought) prior to year-end. This stimulus would be positive for the economy and boost the post 2008 financial crisis healing process.
I continue to closely watch the bond market as bond yields fell to new lows last week. I would view any further flattening of the yield curve and fall in rates as a negative sign for economic growth and a warning sign for stocks.
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