Beware: Hurricane Season Ain't Over Yet

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Includes: APC, BRK.A, CHK, COG, GLBL-OLD, PDCE
by: Evelyn Rubin

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Storms Remain 'a Threat Hanging Over Market'

  • Summary: For the first time since 2002, no hurricanes hit the U.S. by the season's midpoint last week. But the WSJ warns that "September has been the most active month of all, giving birth to 104 -- more than a third -- of all known storms in the past 155 years." While three of the five costliest storms in U.S. history hit in August, some of the top ten storms including last year's Rita hit later in year. This month's storm activity or inactivity will have a substantial impact on the financial markets, especially among reinsurers (Berkshire Hathaway (BRKA) is up 5% in the last month) and energy stocks, down 4% in August. But all investors are impacted by storms: the DJIA fell 1% on average in the days before 12 of the costliest storms since 1965, and rallied by a similar amount after the storms.
  • Comment on related stocks/ETFs: Yaser Anwar recommends five small cap hurricane plays, and Ant and Sons recommend natural gas plays for hurricane season including Cabot Oil & Gas Corp. (NYSE:COG), Petroleum Development Corp. (PETD) and Global Industries Ltd. (NASDAQ:GLBL-OLD). Chad Brand suggests taking a look at Chesapeake Energy (NYSE:CHK) and Anadarko Petroleum (NYSE:APC)