Weather And Business: Insights And Ideas For Weathering The Storms

“How about this weather we’re having?” “Can you believe how cold it is?” “The weather made my commute just brutal today!” Weather dominates small talk in the United States, and there has been a lot of research done on how weather influences behavior and emotions. But, weather also has strong financial impact; it is estimated that nearly 20% of the U.S. economy is directly affected by the weather, and it impacts the profitability and revenues of many industries, including agriculture, energy, events, construction, travel and others. In a 1998 testimony to Congress, former commerce secretary William Daley stated, “Weather is not just an environmental issue, it is a major economic factor. At least $1 trillion of our economy is weather-sensitive.”

This regular column will focus on business and its relationship with weather. Our economy is dependent on weather, and increased weather volatility has forced businesses to be more proactive in including weather insights into operational planning.  As weather-forecasting technology continues to improve, businesses are finding it easier to be more proactive in making decisions related to weather.

Of the more than 10,000 practicing meteorologists in the U.S., there is strong representation in the private sector. A meteorologist may be found in a variety of positions, ranging from weather forecasting duties, to non-forecasting roles like sales, marketing and business analytics. The job outlook for meteorologists is estimated to grow by 12%, which is almost 40 percent faster than the national average.

Public safety is a very visible example of weather forecasting for business. But there are many other ways weather plays a role in business. For some companies, it’s about risk management. For retailers, meteorologists help develop strategies that address how weather impacts purchasing trends. Meteorologists can help with business planning and developing strategies for expansion geographies. The impact of weather on business is real, and as forecasting and other technology continues to evolve, the weather-based decision making within business will also evolve.

Top of mind for so many folks right now is winter and safety, particularly as yet another storm rolls into the northeast. Severe weather will impact flights, road traffic, agriculture, the delivery of energy and the general safety of the public. When thinking about the current winter conditions and the impact on traffic and road conditions, it’s expected the plows will keep the roads clear, but there’s a lot of planning needed, not only to effectively keep the roads clear, but to also effectively manage budgets. In Minnesota for example, Anoka County is responsible for keeping 1,100 lane miles of roads clear with the work of 40 full-time, and 20 on-call, maintenance workers. These crews rely on the accuracy of each weather forecast and a big benefit of leveraging those forecasts is the effective use of budgets. Anoka County weather forecasts have specific pavement forecasts, which help the team schedule crews appropriately. The county is required to give night crews a 24-hour notice, and those crews are paid a premium rate for working after hours. Having an accurate forecast helps the department avoid scheduling workers for night shifts unless it’s necessary, ultimately protecting the bottom line.

Pavement forecasts also help the department use other resources efficiently. When freezing rain is predicted, it uses this information to help determine the optimal time to salt the roads, in turn, avoiding unnecessary applications. The department also knows the best time to pretreat roads, allowing it to avoid sending out a second shift which increases safety for everyone on the road. As this story from Anoka County, Minnesota, shows, there are real economic implications to everyday weather events.

[“source=forbes”]

World leaders head to Davos as uncertainty darkens the global outlook

A demonstrator holds a 'Stop The Shutdown' sign during a rally with union members and federal employees to end the partial government shutdown outside the White House in Washington, D.C.

Andrew Harrer | Bloomberg | Getty Images
A demonstrator holds a ‘Stop The Shutdown’ sign during a rally with union members and federal employees to end the partial government shutdown outside the White House in Washington, D.C.

As a legion of heads of state and business leaders head to Davos for the annual World Economic Forum (WEF) next week, world affairs are as unpredictable and unstable as ever.

In the 12 months since the last forum, global trade relations and diplomacy as well as domestic politics have been fractious, to say the least.

Since President Donald Trump first announced tariffs on a selection of Chinese imports last January, the U.S. and China have gone on to impose tariffs of $250 billion and $110 billion on each other’s goods, respectively. Washington is currently witnessing its longest ever shutdown because of an impasse over funding for a border wall and Brexit remains as chaotic and unclear as ever just weeks before the U.K.’s departure from the EU.

The forum released a “Global Risks” report Wednesday in which it noted that “global risks are intensifying but the collective will to tackle them appears to be lacking.”

In continental Europe over the last year, we’ve seen a populist government take charge in one of Europe’s major economies, Italy, and a demise of mainstream politicians that could lead to a power vacuum — and moral crisis — in the region.

Rise of populism and protectionism risking multilateral relations, analyst says

Rise of populism and protectionism risking multilateral relations: Marsh  53 Mins Ago | 02:33

German Chancellor Angela Merkel announced in October that she is to retire from politics and her party continues to cede voters to the left and right, meanwhile an increasingly unpopular French President Emmanuel Macron is dealing with ongoing and often violent protests on the streets of Paris.

John Drzik, president of Global Risk and Digital at risk management firm Marsh, told CNBC that cybercrime, critical infrastructure and environmental threats, as well as changes in geopolitics, are among the biggest risks facing the world right now.

“The rise of nationalist agendas around the world is creating friction among states as well as weakening multilateral institutions,” he told CNBC’s Joumanna Bercetche.

“It’s not just in the U.S., here in the U.K. you have Brexit, but in Brazil, Italy, Austria and Hungary there are lots of populist political figures who are getting elected and changing the agenda to be more protectionist and more nationalist and, as a result, weakening the multilateral bonds that were there and that’s expected to continue into 2019.”

The global economy is not looking too great either as trade concerns continue to concern business and rattle financial markets.

The International Monetary Fund (IMF) cited trade tensions when it downgraded its global growth forecast for 2019 last October. The IMF expects global growth of 3.7 percent in 2019, down 0.2 percentage points from an earlier forecast in its World Economic Outlook report.

The World Bank, meanwhile, sees global growth at 2.9 percent in 2019 amid tightening financial conditions. The European Commission is also downbeat about the region’s growth, forecasting a lackluster 2 percent growth in the EU in 2019.

Globalization 4.0

Against this backdrop, there’s plenty to talk about at this year’s Davos then when the heads and officials of over 100 governments meet, as well as top executives from over 1,000 global companies. Designed to foster private and public cooperation, the forum’s main objective is “to improve the state of the world.” This year’s theme is focused on “Globalization 4.0.”

WEF’s founder Klaus Schwab said in November that the world is experiencing “an economic and political upheaval that will not cease any time soon” adding in a WEF editorial that “the forces of the Fourth Industrial Revolution have ushered in a new economy and a new form of globalization.”

Schwab said that a slow and uneven recovery since the global financial crisis meant “a substantial part of society has become disaffected and embittered, not only with politics and politicians, but also with globalization and the entire economic system it underpins.”

We are underinvested in environmental infrastructure, analyst says

We are underinvested in environmental infrastructure, expert says  52 Mins Ago | 03:09

He said populist discourse had confused globalization, which has been seen to have negative connotations in some populist narratives, with globalism.

“Globalization is a phenomenon driven by technology and the movement of ideas, people, and goods. Globalism is an ideology that prioritizes the neoliberal global order over national interests. Nobody can deny that we are living in a globalized world. But whether all of our policies should be ‘globalist’ is highly debatable.”

Put simply, Schwab said the challenge for global leaders is “to restore sovereignty in a world that requires cooperation.” He advised that rather than closing off economies through protectionism and nationalist
politics, a new social compact is needed between citizens and their leaders, so that everyone feels secure enough at home to remain open to the world at large.”

“Failing that, the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy,” he said.

[“source=cnbc”]

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By the numbers: Stock market collapses on Christmas Eve, heads for worst December ever

Image result for By the numbers: Stock market collapses on Christmas Eve, heads for worst December everThe stock market is ending the year on quite the ugly note. Here is where we stand statistically:

MAJOR INDEXES:

  • S&P 500 closed down -2.71% Monday for its seventh negative day in 8 and its worst day since Dec. 4, when the S&P lost -3.24%
  • Until Monday, the Dow & S&P 500’s worst Christmas Eve ever was back in 1985, when they fell 0.63% and 0.69%, respectively
  • S&P hit a new 52-week low Friday of 2,351.10, its lowest level back to April 2017
  • MTD: S&P is down -14.82% on pace for its worst December ever back to back-tested inception in 1928, with the next worst December in 1931 when the S&P lost -14.53%, and its worst month since October 2008 when the S&P lost -16.94%
  • YTD: S&P is down -12.06% in 2018 on pace for its worst year since 2008 when the S&P lost -38.49%
  • Since Record: S&P is 20.06% below its intraday all-time high of 2,940.91 from Sept. 21 closing in bear market levels
  • The CBOE Volatility Index VIX hit a high so far today of 36.10, its highest level since Feb. 9, when the VIX hit a high of 41.06
  • Russell 2K small caps closed down -1.95% today for their 13th negative day in 14, hitting a new 52-week low today of 1,266.92
  • MTD: Small caps are down -17.37% MTD on pace for their worst month since October 2008, when small caps lost -20.90%
  • YTD: Small caps are down -17.49% YTD on pace for their worst year since 2008, when small caps lost -34.8%
  • Since Record: Small caps are 27.28% below their intraday all-time high of 1,742.09 from Aug. 31, closing in bear market levels
  • Dow closed down -2.91% today for its sixth negative day in 7 and its worst day since Dec. 4, when the Dow lost -3.1%
  • MTD: Dow is down -14.67% MTD, on pace for its worst month since Oct. 10, 2008, when the Dow lost -18.15% and on pace for its worst December performance since 1931, when the Dow lost -17.01%
  • YTD: Dow is down -11.84% in 2018, on pace for its worst year since 2008 when the Dow lost -33.84%
  • The Dow hit a new 52-week low today of 21,792.20, its lowest level since September 2017
  • Since Record: Dow is 19.14% below its intraday all-time high of 26,951.81 from Oct. 3, closing in correction levels
  • NASDAQ closed down -2.21% today for its seventh negative day in 8
  • MTD: NASDAQ is down -15.52% on pace for its worst month since October 2008, when the NASDAQ lost -17.73%
  • YTD: NASDAQ is down -10.29% YTD, on pace for its worst year since 2008, when the NASDAQ lost -40.54%
  • The NASDAQ hit a new 52-wk low today of 6,190.17, its lowest level back to August 2017
  • Since Record: NASDAQ is 23.9% below its intraday all-time high of 8,133.3 from Aug. 30, closing in bear market levels

SECTORS:

  • Sectors: 11 out of 11 sectors were negative today, led by Utilities down -4.27%, turning in their worst day since Aug. 8, 2011, when the sector lost -5.47%
  • 10 out of 11 sectors closed in correction levels or worse today:
  • Energy — 31.24% below their May 21 52-week high, closing in bear market levels
  • Materials — 26.15% below their Jan. 26 record close, closing in bear market levels
  • Financials — down 26.09% from their Jan. 26 52-week high, closing in bear market levels
  • Industrials — 25.23% below their Jan. 26 record close, closing in bear market levels
  • Tech — 24.13% below their Oct. 3 record close, closing in bear market levels
  • Consumer Discretionary — 22.99% below their Sept. 27 record close, closing in bear market levels
  • Communication Services — 22.61% below their Feb. 1 52-week high, closing in bear market levels
  • Consumer Staples — down 17.29% from their Jan. 26 52-week high close
  • Health Care — down 15.63% from its Oct. 1 record close
  • Real Estate — down -12.76% from its 52-week closing high
  • The least negative sector today was Communication Services — down -2.02% today
  • Sectors MTD: 11 out of 11 sectors are negative MTD, led by Energy down -18.1% on pace for its worst month ever through our history back to 1998, the next worst month is October 2008, when Energy lost -18.01%
  • The least negative sector MTD is Utilities, down -6.76%
  • Sectors YTD: 11 out of 11 sectors are negative YTD, led by Energy, down -25.31% YTD
  • Note all the S&P sectors have not closed in negative territory for the year since 200
  • The most positive sector YTD is Utilities, down -2.1%, closely followed by Health Care, down -2.31%

OTHER MARKETS:

  • Gold (FEB) has hit a high so far today of 1,273, its highest level since Jun. 25, when gold traded as high as 1,274.4
  • WTI (FEB) has hit a low so far today of 44.10, its lowest level since July 11, 2017, when WTI traded as low as 43.83
  • MTD: WTI is down -13.37%, on pace for its third straight negative month for the first time since June 2017 and its 4-month losing streak
  • QTD: WTI is down -39.82%, on pace for its worst quarter since Q4 2014, when WTI lost -41.56%
  • YTD: WTI is down -27.06% on pace for its worst year since 2015, when WTI lost -30.47%
  • Brent (FEB) has hit a low so far today of 51.83, its lowest level since Aug. 31, 2017, when Brent traded as low as 50.56
  • Dollar index is trading down -0.48%, on pace for its third negative day in 4
  • MTD: Dollar index is down -0.80%, on pace for its first negative month in 3
  • YTD: Dollar index is up 4.74%, on pace for its fifth positive year in 6
  • US 2-year note yielding 2.5927% vs last Friday’s close of 2.643%, hitting a low today of 2.589%, its lowest level since Aug, 22, when the 2-year yielded as low as 2.587%
  • US 5-yr note yielding 2.5927%, yielding about equal to the 2-year at 2.5927%

[“source-cnbc”]