WEEKEND WEB: Hurricanes set to cost USA dear
Scott Woods writes a weekly finance column for us
Global company shares (equities) initially moved lower on North Korea’s aggressive action last week over Japan, but recovered quickly, most ending the week slightly higher, as investors focused on favourable economic and corporate news. Government bonds, seen as a safe harbour, rose on the missile launch, but then lost some gains.
Currencies known for their perceived safety, such as the Japanese Yen and the Swiss Franc, rose. The Chinese renminbi continued a recent strong run after good manufacturing data and reached a 14-month high against a US dollar weakened by disappointment in President Trump’s slow delivery on campaign promises.
• The terrible human aspect aside, Hurricane Harvey could be one of the costliest superstorms in US history, perhaps surpassed only by Hurricane Katrina, which cost US$108bn (£84bn) in 2005.
Preliminary estimates from Moody’s Analytics put the damage from Harvey at between US$51bn (£39bn) and US$75bn (£58bn).
Shares in some leading property insurance companies weakened during August. Many victims in Houston lacked insurance cover for flooding. They will look to the US government for support.
• With the ink barely dry on its acquisition of the US food retailer Whole Foods, Amazon is primed to take the fight to its new food retailer competitors.
The company recently announced plans to slash prices on a number of key items; a move which prompted some US$11bn (£8.5bn) to be wiped off the market values of America’s leading supermarkets.
It also hurt the share prices of the UK’s major supermarkets, despite the current limited size of Whole Foods’ UK presence. Amazon’s US$13.7bn (£10.6bn) purchase of Whole Foods is its largest deal to date.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.