More than 30 tornadoes wreaked havoc on the American Midwest region over the weekend. Winds blowing at a speed of 210 miles per hour devastated eight states of America, with Kentucky receiving the maximum blow. At least 100 people lost their lives due to this tornado. Other affected states are Arkansas, Illinois, Indiana, Missouri, Mississippi, Ohio and Tennessee.
According to the information, most of the destruction has happened in Kentucky. Speaking in Wilmington, Delaware, President Biden said it was likely to be “
one of the largest tornado outbreaks” in the country’s history.
Needless to say, economic activity may be paralyzed over the coming few days. However, pros and cons are probably related to every event. Among all the sectors, there are a few that are likely to be badly hit from this natural calamity while some stand to gain. Below we highlight some sectors that are in focus after the Kentucky Tornados.
Home Retailers & Infrastructure in Sweet Spot
Tornado-hit ruins of Kentucky homes will call for rebuilding of structures. Home Depot Inc. (
HD Quick Quote HD - Free Report) and Lowe's Companies Inc. ( LOW Quick Quote LOW - Free Report) are thus in a bright spot. ETFs like Consumer Discretionary Select Sector SPDR Fund ( XLY Quick Quote XLY - Free Report) and Invesco Dynamic Building & Construction ( PKB Quick Quote PKB - Free Report) should also benefit.
Tornadoes should shower gains on infrastructure stocks as re-building will push up their demand. So, companies dealing in building materials are likely to see a surge
. The Materials Select Sector SPDR Fund ( XLB Quick Quote XLB - Free Report) has high chances of outperforming. A Boon for Auto Sales Too?
Repurchase of cars will gain traction now on higher replacing demand for the damaged vehicles.
First Trust NASDAQ Global Auto Index Fund ( CARZ Quick Quote CARZ - Free Report) can thus gain ahead. Agriculture ETFs to Rule Ahead?
Crops grown in Kentucky include corn, soybeans, hay, wheat and tobacco. In fact, there are over
127 million acres of agricultural land in the Midwest and 75% of that area is into corn and soybeans harvesting. The stormy weather must have done considerable damage in the area’s crops. Teucrium Corn Fund (and CORN Quick Quote CORN - Free Report) Teucrium Soybean ( should thus be in focus. SOYB Quick Quote SOYB - Free Report) Can Insurance Industry Survive the Blow from Tornadoes?
The year has already witnessed more than $20 billion in insurance industry losses from severe weather, according to some data providers, according to a new Aon report, as quoted
on insurancejournal.com. This tornado outbreak will raise the tally. Property and casualty insurance companies may be hit hard as these are likely to shell out handsomely on claims following such catastrophic storms.
Shares of property and casualty homeowners’ insurance companies like
Universal Insurance Holdings Inc. ( UVE Quick Quote UVE - Free Report) and HCI Group Inc. ( HCI Quick Quote HCI - Free Report) may be up for losses. Insurance companies like Chubb Limited (CB) and Allstate Corporation ( ALL Quick Quote ALL - Free Report) are also likely to be hit hard. Naturally, insurance ETFs iShares Dow Jones US Insurance Fund (IAK) and SPDR S&P Insurance ETF ( KIE Quick Quote KIE - Free Report) will likely feel the pressure.