Live Markets: Storm stocks to watch in Ian's aftermath

Pentair

29/09/2022 15:52

* 
      Main U.S. indexes slide: Nasdaq down more than 3%
    

        * 
      All S&P 500 sectors red: cons disc weakest group
    

        * 
      Euro STOXX 600 index falls ~2.1%
    

        * 
      Dollar, gold, crude, bitcoin all decline
    

        * 
      U.S. 10-Year Treasury yield rises ~3.79%
    

  
       Sept 29 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at 
    STORM STOCKS TO WATCH IN IAN'S AFTERMATH (1040 EDT/1440 GMT)
    Jefferies issued a research note late Wednesday summarizing
the impact of Hurricane Ian on its multi-industrials coverage.
    More than 2.4 million homes and businesses in Florida were
without power early on Thursday, and Ian is expected to produce
strong winds, heavy rains and storm surge, including in Georgia
and the Carolinas, the U.S. National Hurricane Center said.
 urn:newsml:reuters.com:*:nL1N3100AP
    Jefferies called Generac Holdings Inc  GNRC.N  a "storm
stock," saying it should see some increased demand as power
disruptions increase awareness of generators. The company
typically sees a demand bump 6-12 months following a major
event. This was illustrated in Texas following Winter Storm Uri
in 2021, when Generac saw an approximate 3x increase in the
number of in-home consultations, the analysts wrote.
    Evoqua Water Technologies Corp's  AQUA.N  mobile fleet will
see increased demand as extreme weather events disrupt the water
supply. "This is especially true for slower moving hurricanes,
which tend to deliver more water and thus require more clean-up
work associated with wastewater," Jefferies said.
    There will also be higher demand for water removal,
Jefferies said, highlighting that Xylem Inc's  XYL.N  dewatering
business accelerated over the course of two quarters following
Hurricane Sandy.
    With respect to HVAC (heating, ventilation, and air
conditioning), A.O. Smith  AOS.N  could see more demand for
water heaters damaged by flooding, Jefferies said, adding that
Watsco Inc  WSO.N  has a significant HVAC distribution footprint
in Florida.
    When it comes to pool repair, Hayward Holdings Inc  HAYW.N 
and Pentair PLC  PNR.N  could see more demand for equipment and
parts, while Pool Corp  POOL.O  cited 1-2 points of revenue
growth following the Texas storm, according to Jefferies.
    Ian's wrath will certainly be felt across a wide variety of
sectors in the coming weeks as the damages are assessed.
 urn:newsml:reuters.com:*:nL1N30Z1RN
    Lance Tupper 
    *****     
    U.S. STOCKS: THE RED TIDE COMES BACK IN (0946 EDT/1346 GMT)
    U.S. stocks are lower early on Thursday as worries of a
global economic downturn from aggressive central bank rate hikes
and risks of potential contagion from a turmoil in UK markets is
once again turning investors risk averse.  .N 
    With this, the main U.S. indexes are down 1.5% or more, with
the Nasdaq  .IXIC  taking the biggest hit. Small-caps  .RUT ,
FANGs  .NYFANG  and chips  .SOX  are even weaker.
    All S&P 500  .SPX  sectors are red with consumer
discretionary  .SPLRCD  off the most. Defensive groups are
seeing the smallest declines.
    Meanwhile, after taking a big hit on Wednesday, the U.S.
10-Year Treasury yield  US10YT=RR  is trying to find its
footing. It is up from a close of around 3.71% to around 3.80%.
    That said, after rising to around 3.87% earlier, it has so
far stalled well shy of Wednesday's 4.0190% high. Traders are
eying action vs last week's close at 3.6970% for signs weekly
momentum may finally be cracking - click here:  urn:newsml:reuters.com:*:nL1N30X1PF
    Here is a snapshot of where markets stood shortly after the
open:
    (Terence Gabriel)
    *****
    NASDAQ COMPOSITE: WHEEZING, BUT TRYING TO CATCH ITS
"BREADTH?" (0900 EDT/1300 GMT)
    In a testament to just how weak the Nasdaq  .IXIC  has been,
on Monday of this week, the Nasdaq McClellan Oscillator (McOsc),
a breadth/momentum measure based on the raw data for net
advancing issues, plunged to an all-time low.
    That said, the total number of issues traded over time has
not been constant, and with the advent of decimal pricing in
2001, the number of unchanged issues has fallen.  
    We can create a normalized, or ratio-adjusted (RA) McOsc, by
dividing net advancing issues by the total number of advances
plus declines. Therefore, it allows us to better compare
readings over a long period of time, and assess historically
overbought or oversold levels.
    On Monday, the RA-McOsc, plunged to -98.3, which was the
14th lowest reading in its history using Refinitiv data back to
mid-1995:
    There have now been a total of 6,841 trading days (tds) over
this time frame, so although not the lowest reading ever as
logged by the raw data version of the indicator, it still showed
an eye-popping degree of weakness, while potentially signaling a
market at, or near, washed-out levels.  urn:newsml:reuters.com:*:nL1N30Z0TA
    Monday's reading was the lowest since a -102.4 reading on
March 16, 2020, which was just five trading days ahead of the
Nasdaq's March 23, 2020 pandemic crash low. The all-time low
reading for this measure occurred at -123.8 on March 12, 2020,
seven trading days ahead of the low for that swoon.
    Additionally, of note, Monday's reading was essentially
equal to the Dec. 24, 2018, reading of -98.7, which marked the
day of the Nasdaq's low for that decline.
    The measure has improved by vaulting to -35.86 as of
Wednesday close. That said, ideally, bulls want to see a
"breadth-thrust" develop to add confidence in the sustainability
of a turn. 
    Looking back from 2009 to 2020, RA-McOsc thrusts back above
+80 developed in the wake of major lows in 2009, 2010, 2011,
2016, 2018 and 2020.
    In the event the Nasdaq does end below Monday's 10,802.922
close, traders will eye the RA-McOsc to see how it behaves. It
formed a bullish convergence into the March 2020 market trough,
as well as the more recent June low.  urn:newsml:reuters.com:*:nL1N30Y0PJ  urn:newsml:reuters.com:*:nL1N30X0SY
    (Terence Gabriel)
    *****
    FOR THURSDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300
GMT - CLICK HERE:  urn:newsml:reuters.com:*:nL8N31034R 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
IXICMcOsc09292022    https://tmsnrt.rs/3E09vd5
Earlytrade09292022    https://tmsnrt.rs/3LQbKSh
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Terence Gabriel and Lance Tupper are Reuters market analysts.
The views expressed are their own)