Hurricane Florence has wreaked havoc on the coast of the Carolinas where conditions are fast deteriorating. Florence, the first major hurricane to threaten the eastern United States this year, has now downgraded to a Category 1 storm. Still, it may lead to catastrophic flooding, life-threatening storm surge and destructive winds in Southeast U.S. over the weekend and into early next week.
 
The damage caused by Hurricane Florence is unlikely to be like last year’s Harvey and Irma but could impact U.S. data for months. AccuWeather estimates that Hurricane Florence will cause $30-$60 billion in economic impact and damage.

If we go by history, the stock market generally performs well in the aftermath of hurricanes. Considering the aftermath of the 15 costliest U.S. hurricanes, the data from CFRA, a Wall Street research firm, shows that the S&P 500 index posted a median drop of 0.2% a month after the hurricanes formed but rallied thereafter. The index climbed 3.9% three months later and then 7.8% six months later.

While most of the sectors like transport, insurers, and retailers took a beating from the hurricane, industries like building supplies, home improvement, car rentals, and gasoline benefit and drive the rally in the market. That said, home improvement retailers Home Depot (HD – Free Report) and Lowe’s (LOW – Free Report) jumped to an all-time high this week, gaining 1.2% and 2.9%, respectively. Building products company Masco (MAS – Free Report), which benefits from rebuilding, rose 1.3% while used vehicles retailer Carmax (KMX – Free Report) is up 3% this week.

Meanwhile, shares of roofing, insulation and generator companies also gained. Beacon Roofing Supply (BECN – Free Report) gained 2.4% this week while generator maker Generac Holdings (GNRC – Free Report) touched the highest since 2014 and is up 3.5% this week. Car rental companies like Hertz Global Holdings (HTZ – Free Report) and Avis Budget Group (CAR – Free Report) are up 0.3% and 6.2%, respectively.

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