Asian stocks rose sharply on Tuesday, following Wall Street’s record-breaking rally after Irma’s westward shift probably saved Florida $150 billion in damages.
Asia Markets Rise
Asian equity markets followed their U.S. counterparts higher on Tuesday, with Japanese stocks leading the rally. Japan’s Nikkei 225 Index is up 1% in the early afternoon. The Tokyo Topix Index is trading 0.8% higher.
The MSCI AC Asia Pacific Index was also up half a percent.
Mainland China saw mixed results on Tuesday, with the CSI 300 Index posting only modest gains. In Hong Kong, the Hang Seng Index hovered right around break-even.
In Australia, the S&P/ASX 200 Index climbed 0.7%.
A weaker-than-expected Hurricane Irma propelled U.S. stocks higher on Monday. The benchmark S&P 500 Index rose 1.1% to 2,488.11, its first record high in over a month.
A measure of 30-day volatility known as the CBOE VIX fell more than 11% to its lowest level since Sept. 1. The so-called “fear index” closed at 10.73, which is around half the historic mean.
Irma’s Westward Shift
Hurricane Irma made landfall in Florida on Sunday as a Category 4 storm, but a westward shift away from Macro Island averted ‘astronomical‘ damage. According to analysts, those 20 miles probably made a $150 billion difference.
Forecasters last week had pegged Irma’s damage at around $200 billion, easily tops among U.S. Atlantic hurricanes. By at least one estimate, the total cost of the damage fell to around $50 billion as the storm weakened considerably as it approached inland.
Having already been downgraded to a tropical storm, Irma is expected to continue through Alabama and Mississippi over the next 24 hours.
Irma could end up costing less than Hurricane Harvey, which wreaked havoc on southeastern Texas last month. The price tag of Harvey could reach $75 billion, according to one estimate.
Hurricane Katrina required the most expensive cleanup efforts in U.S. history at $160 billion.
Economic Data in Focus
The reporting schedule picks up briskly on Tuesday, with the United Kingdom scheduled to release a batch of consumer inflation data. Reports on consumer price inflation and factory-gate prices will make headlines in the European session.
On Wednesday, Germany will its final batch of August inflation figures. Later in the session, the U.K. will publish its latest employment figures.
Meanwhile, the U.S. Labor Department will release the producer price index (PPI) in mid-week trade. Reports on retail sales and consumer inflation will make headlines in the latter half of the week.