Monday September 11th

11-09-2017

Dow futures jump more than 100 points after Irma not as bad as feared; insurers, airlines surge

U.S. stock index futures pointed to a sharply higher open on Monday, as the damage from Hurricane Irma was not as bad as feared. Dow Jones industrial average futures rose 119 points, while S&P 500 and Nasdaq 100 futures jumped 13 points and 43.75 points, respectively. Hurricane Irma, once a Category 5 hurricane, hit the coast of Florida over the weekend. On early Monday, Irma continued to thrash the state, after slamming the Keys, Miami and other areas nearby in recent days. The hurricane has gradually lost strength, however, and has been downgraded to Category 1 as it continues to move its way across land. Storm surges were also much smaller than the National Hurricane Center expected. Hurricanes have put markets on edge over recent weeks, as investors show signs of unease when it comes to assessing the impact of these natural disasters on certain markets, including insurance and airlines. Shares of Travelers Cos., Progressive and American International Group rose 2.6 percent, 1.3 percent and 1.2 percent in the premarket, respectively. Meanwhile, Delta Air Lines' stock climbed 3.9 percent while Southwest Airlines rose 1.3 percent. Carnival, a cruise line company, also saw its shares advance 2.2 percent. The anticipation of Irma making landfall in Florida initially raised concern over U.S. economic growth. In fact, economists at Goldman Sachs lowered their third-quarter GDP estimate to 2.0 percent from 2.8 percent on Saturday noting, "We find that major natural disasters are associated with a temporary slowdown in most major growth indicators." Gold and U.S. Treasurys sold off Monday as investors lowered their exposure to traditional safe haven assets. The benchmark 10-year note yield rose to trade at 2.1 percent while gold futures for December delivery dropped 0.8 percent to $1,340.10 per ounce. Geopolitical tensions are also set to be back on the menu Monday as the United Nations Security Council is expected to vote on Monday on a resolution regarding North Korea, according to Reuters. Tensions between the Asian country and the West have escalated as of late, after North Korea failed to back down on its continuation of missile launches. Investors were relieved, however, after North Korea's dictator, Kim Jong Un, chose to hold a party over the weekend, instead of opting for another missile launch. North Korea did say on Monday that the U.S. would pay a "due price" for spearheading a U.N. resolution against the country's recent nuclear test, according to Reuters. Overseas, European stocks were in the black during early market trading, while markets in Asia closed on a mostly positive note. The Nikkei 225 rallied 1.41 percent, or 270.95 points, to close at 19,545.77. South Korea's benchmark Kospi index tacked on 0.66 percent to end at 2,359.08 as geopolitical tensions eased on the Korean peninsula over the weekend. Greater China markets also gained. Hong Kong's Hang Seng Index jumped 1.02 percent by 3:05 p.m. HK/SIN. On the mainland, the Shanghai Composite gained 0.37 percent to end at 3,377.67 and the Shenzhen Composite added 0.803 percent to finish the session at 1,991.7321. Oil prices edged lower on Monday on concerns that Hurricane Irma's pounding of heavily populated areas of Florida could dent oil demand in the world's top oil consuming nation. Losses were capped by weekend talks between Saudi Arabia's oil minister and counterparts over a possible extension to a pact to cut global oil supplies beyond next March. Brent crude oil futures for November delivery were down 33 cents at $53.45 a barrel while benchmark U.S. West Texas Intermediate crude advanced by 22 cents to $47.70.