Hurricane Ian Likely to Hurt/Boost These ETF Areas

Hurricane Ian — extremely dangerous category 4 storm — could prove to be one of the most hazardous storms to hit Florida after making landfall. Maximum sustained winds were around 150 mph as it hit the southwest coast on the island of Cayo Costa near Fort Myers and Cape Coral, per nbcnews.com. Ian is likely to become one of the costliest storms in U.S. history.

Later on Wednesday, the storm weakened to a Category 1 hurricane, but the storm surge caution was in place. The catastrophic storm and its damaging winds will likely devastate Florida with the threat of lasting rains (which is likely to cause flood) and heavy winds.

Below, we highlight a few ETFs and stocks those are likely to win or lose from Ian.

Losers

Insurance

Severe destruction is likely in Florida. Insured losses could be more than $20 billion, according to BMS Senior Meteorologist Andrew Siffert, as quoted on Artemis. Property and casualty insurance companies may be hit hard as these are likely to shell out handsomely on claims following such catastrophic storms.

Insurance stocks normally fall more than 1% in the month following the disaster caused by a Category 3 storm, per Kensho, as quoted on CNBC. So, the impact of Hurricane Ian on insurance stocks is anybody’s guess.

Shares of property and casualty homeowners insurance companies like Universal Insurance Holdings Inc. (UVE) and HCI Group Inc. (HCI) may come under pressure. Naturally, insurance ETFs iShares Dow Jones US Insurance Fund IAK and SPDR S&P Insurance ETF KIE will likely feel the pressure.

Transportation

A severe impact from Ian could roil rail and container activity and crush infrastructure for transportation. Airlines are already suffering from rising energy prices. Now, hurricane Ian would hurt the segment further. Naturally, transportation ETFs like SPDR S&P Transportation ETF XTN and U.S. Global Jets ETF JETS may have to bear the brunt ahead.

Gainers

Home Retailers & Infrastructure

Rebuilding of homes and structures is necessary for the aftermath of a hurricane. Home Depot Inc. (HD) and Lowe's Companies Inc. (LOW) are thus in a bright spot. ETFs like Consumer Discretionary Select Sector SPDR Fund XLY and Invesco Dynamic Building & Construction PKB should also benefit.

Materials

Companies dealing in building materials are likely to see a surge. The Materials Select Sector SPDR Fund (XLB) has a high chance of outperforming.

Agriculture ETFs to Rule Ahead?

Ian may ruin Florida’s farmlands, ravaging farms of fresh tomatoes, oranges, green beans, squash and sugar cane. Ian is likely to shift to Georgia, South Carolina and North Carolina — states famous for cotton, grain and livestock.

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Invesco Dynamic Building & Construction ETF (PKB): ETF Research Reports
 
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
 
U.S. Global Jets ETF (JETS): ETF Research Reports
 
SPDR S&P Transportation ETF (XTN): ETF Research Reports
 
iShares U.S. Insurance ETF (IAK): ETF Research Reports
 
SPDR S&P Insurance ETF (KIE): ETF Research Reports
 
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