In the wake of the coldest US winter storm in two decades, one white-hot sector may cool off surprisingly fast…
You saw the images on TV. You marveled at the weather report. It was pretty shocking to say the least.
A couple weeks ago people living in Central US and the Eastern Seaboard braved up to -60 Fahrenheit temperatures while being pummeled with whiteout conditions in some cities.
Experts called the phenomenon a polar vortex (also known as Arctic oscillation), a freezing cold jet stream blasting south from a seasonably warm arctic.
Although it occurs quite regularly each winter, this particular cold snap blew farther south than it had in twenty years.
At the storm’s peak on January 7th, all 50 states recorded freezing temperatures at some point during the day, including Hawaii where it was 18 degrees atop Mauna Kea.
When the cold front finally retreated, 21 deaths were reported.
Thankfully, the worst of it is now behind us and the majority of the regions expect milder winter conditions from here on out.
The problem is, many investors think that now might be a good time to move in on an industry that has historically benefitted from colder temperatures: natural gas.
But buyer beware…
Normally as winter approaches, we often see natural gas demand begin to increase. This typically translates into seasonally elevated prices, which we saw in November.
The arrival of the polar vortex has dramatically increased demand this winter. Even though the EIA is report all-time gas supply drawdowns due to this month’s big chill.
Prices have responded accordingly, spiking more than $1.50 in the past three weeks — and that’s why I’m urge you to invest with caution. The storm is likely nearing an end. With warmer weather expected for most of the country, natural gas prices could fall the coming weeks, leaving you out in the cold.
So for those who are still on the hunt for winter stocks, forget the natural gas play for now. Instead, you may want to consider companies that are busy working overtime to repair all the damage caused by the storm, especially residential homes.
These would include roofing companies such as Beacon Roofing Supply (NASDAQ:BECN) and pipe-fitters like Mueller Water Products (NYSE:MWA) who are likely going to stay busy for the next little while because of all the white stuff.
- How This “Left For Dead” Industry Could Save Americans From Future Polar Vortexes
- How Global Warming Is Triggering A Matter Of National Security Worth Billions
- America’s Corn Belt Has Shifted North, So Here Are Two Top Stocks To Buy
- The Most Energy-Rich Nations and 6 Top Stocks to Watch For
- The Fall of Metals Triggers a Mining Shift