Weekly Market Commentary 10/06/2017

Since the devastating Hurricanes buffeted the U.S., most of the discussion has been about how severely the storms have sapped strength from the economy. As noted in previous commentaries, we estimate that about 0.6% has been robbed from the third-quarter growth rate, knocking it down to slightly over 2.0%. That said, the upside has also been tangible even as the positive effects of the storms – like the negative ones – will be fleeting and reversed in subsequent months. Auto sales are a prime example. Hurricanes Harvey and Irma destroyed about 600,000 vehicles in Texas and Florida, according to industry estimates, which underpinned a huge replacement demand in those regions. Accordingly, sales of cars and light trucks soared in September to an estimated annual rate of 18.4 million, the highest monthly total since mid-2005 and about 1 ½ million above the average selling rate over the previous eight months of the year.