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Investors can prep for La Nina

Monday, October 03, 2016 - 01:28

As Haitians get set for Hurricane Matthew, U.S. investors can consider prepping their portfolios in case La Nina strikes and wreaks havoc with weather. Fred Katayama reports.

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As some Haitians refuse to evacuate their coastal town despite the approach of Hurricane Matthew, American investors might consider prepping their portfolios in case La Nina strikes. La Nina is the climate pattern that caused Superstorm Sandy four years ago and Tropical Storm Irene in 2011. It happens when sea surface temperatures in the Pacific fall below normal levels. The probability of La Nina developing in coming months has fallen, but forecasters still put the odds at roughly 50 percent. La Nina can drench the Pacific Northwest and help breed hurricanes in the Northern Atlantic, meaning more storms for the northern U.S. It can also produce hot dry weather in the Midwest, sometimes causing drought that hurts crops and drives up prices. Deutsche Bank strategist John Tierney says, watch reinsurance stocks and agricultural exchange-traded funds. SOUNDBITE: JOHN TIERNEY, STRATEGIST, DEUTSCHE BANK, (ENGLISH) SAYING: "At this point, the reinsurers are going through very soft pricing. The prices are kind of at record lows. If there were to be a couple of large storms this year, it could actually be bullish for reinsurers, allowing them to harden their prices. Again, this something that will develop over the next couple of months." So he says it could be a good time now for long-term investors to stock up on reinsurance stocks.

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Investors can prep for La Nina

Monday, October 03, 2016 - 01:28