0915 AutumnOutlook
The 2015
Autumn outlook An Investor’s Guide
JEFF OPDYKE’S
Precision Profits
The 2015 Autumn Outlook: An Investor’s Guide By Chris Orr, Certified Consulting Meteorologist
F
OR many, fall tends to be a season of quiet transitions, when summer’s blistering heat yields to the subtle hints of winter. Families settle into the familiar routines of a new school year, and the green leaves on trees begin their gradual shift to red, yellow and orange.
Sometimes the most memorable aspect of autumn is how long it lasts until Old Man Winter comes knocking. Take last year for instance, when winter came so abruptly that fall barely registered. On the other hand, meteorologists view fall as the battleground between summer and winter — when storm systems get bigger and bolder and last for multiple days. This is the time of year when the heart of hurricane season arrives. And the wildly fluctuating temperatures — from high 80s during the day to low 50s at night — can have significant impacts on the country. Rivers kept warm during the day are hit with cool air at night, creating the perfect foggy conditions for your favorite scary story — just in time for Halloween. Then, the threats get worse: Freezes become an issue. Heavy snow even starts making an appearance, as it did last year. This autumn we can expect déjà vu. I’m already seeing the weather patterns falling into place in many parts of the country. Following a 2011 study that looked at the annual impact of weather on the economy, National Center for Atmospheric Research scientist and lead author of the research, Jeff Lazo, came to this conclusion: “The weather has a significant impact on every sector of the economy in every state of the U.S.” It is safe to assume, then, that myriad businesses will be affected by these climate conditions. Those that deal with anything from energy consumption to travel can expect fall weather to impact their bottom line. And with our Precision Profits strategy, we’ll find the profits waiting to be made from this seasonal trend. This autumn forecast is actually the key to most of our trades through November. In this report, I’m going to lay out my forecast for you, region by region. Then I’ll delve into the opportunities lying in wait for seasonal-trend spotters like us. Let’s start off with a quick recap of last year’s fall…
A Look Back at Autumn 2014 The autumn of 2014 was nearly an even split, with the western U.S. being exceptionally warm while the East felt the looming chill of a destructive winter. Each state west of the Rocky Mountains, particularly California and Oregon, ranked among the top 15 balmiest autumns since 1895. In addition, Georgia and Florida experienced significant warmth last fall. In contrast, afternoon temperatures across the Midwest were the 24th coldest in 120 years.
1
As for storms… Enough storm systems hit the West Coast to alleviate some of the drought — Washington, Oregon and California all recorded abovenormal rainfall. It was also wet across part of the southeastern U.S. and New England. In fact, only five states reported belownormal rainfall. Looking toward this year, we’ll likely see similar extremes. There is also the risk of heavy snow on the Corn Belt late in the harvest.
Patterns and Risks The big weather stories this fall will include the cool weather across the Northeast, warm and dry conditions over the Northwest, wetter weather across the Southwest and the lingering hurricane threat along the Southeast coast. There is also the risk of heavy snow on the Corn Belt late in the harvest.
Even though autumn doesn’t officially begin until September 23, cool weather is already shifting south across the Northeast. El Niño is irritating the atmosphere, aiding the development of typhoons over the western Pacific Ocean. Those storms will head toward North America as they get caught up in the jet stream. The West Coast overall won’t be nearly as hot as last year. That, along with a cool fall for the region from the Rocky Mountains to the Great Plains, will be the highlights this year. We’re not quite out of the woods as far as hurricanes are concerned, and the East Coast is still at risk until November. But before I get into the details, let’s look at why the weather is doing what it’s doing…
Global Weather Patterns This Year As I’ve mentioned before, the weather is like an enormous, intricate jigsaw puzzle. There are multiple patterns I watch, and each affects the next. To get an idea of what an upcoming season will bring, I have to see how each piece fits with the rest — and then I get my big picture. My biggest puzzle pieces are the global ocean temperatures. This year, there are three main ones that continue to grab my attention: El Niño, the Pacific Decadal Oscillation and the Atlantic Ocean. To see what I mean, take a look at the image below. You can see that El Niño — the band of warm ocean temperature that develops in the central and east central Pacific — is still in full swing. Although it is starting to weaken and will likely disappear by next spring, it will still play a significant role for the fall and winter.
2
Three Impacts on Fall Weather This fall, three factors will influence the weather: El Niño, the North Pacific Ocean and the Atlantic Ocean — all of which influence the path of the jet stream. The red and yellow colors indicate warmer sea-surface temperatures, while the blue shades indicate colder temperatures. As for the dashed line, that shows the average path of the jet stream this fall.
The second influence on our summer is the temperature pattern of the North Pacific Ocean. In the image above, the red and yellow areas indicate that much of the North Pacific is warmer than normal. And that will have a huge impact on the global weather pattern because the ocean temperature patterns influence the path of the jet stream, which flows about six miles above the Earth’s surface. Let me explain… It comes down to the jet stream — the ribbon of fast-moving air that steers storm systems (low pressure centers and their associated warm fronts and cold fronts). Ocean temperatures actually influence the path of the jet stream. So, by extension, they influence the route of storm systems as they migrate west to east around the Northern Hemisphere. The jet stream generally rides above the boundary between warmer-than-normal and colder-than-normal sea temperatures. As you can see in the image above, the jet stream currently runs from Asia to the International Date Line (the imaginary line drawn north and south through the Pacific Ocean) before reaching southern Alaska and British Columbia. From there, it arcs southeast toward the contiguous United States. The wind in the jet stream strengthens every autumn. As the Northern Hemisphere grows cooler, the jet stream sags southward and kinks begin to appear in its snaking path. The energy contained in each kink, or sharp bend, helps make the powerful storm systems we see September through May. The third influence is the temperature of the Atlantic Ocean, which influences the hurricane season (view the report here). As devastating as those storms can be, the Gulf Coast states and the Southeast rely on tropical storms and hurricanes for at least a quarter of the annual average rainfall. Just one storm can easily drop 10 inches of rain. So far, hurricane season in the U.S. has been mostly quiet, despite scares from Hurricane Danny and Tropical Storm Erika. The reason: Most of the North Atlantic is cooler than normal. But if another hurricane develops along the East Coast, moves north, and gets close to the strengthening jet stream — well, it could become very powerful.
3
Hurricanes also occur over the east Pacific Ocean, just west of the southern coast of Mexico and Central America. Some of these hurricanes head west and die out before reaching Hawaii. Others curve north toward the Baja of California. They are called typhoons west of the Date Line, and El Niño has been supercharging some of them into swirling monsters with winds stronger than 160 mph. I’m keeping an eye on pockets of energy left over from North Pacific storms because some can redevelop as storm systems across North America. And the damage from strong storms can reverberate across businesses and the economy. I’ll be sure to keep you updated on any developments. Now that we know what’s happening globally, let’s turn to the United States, and see how it will likely be affected. Here’s the breakdown of this fall’s weather by region…
My Fall 2015 Forecast • West Coast: California, Oregon and Washington are continuing to experience drought but you can expect wetter weather to move in. That’s what typically happens during an El Niño. Last fall, when the jet stream was weak, rainfall was above normal. This year, after a moderate El Niño, the rain will begin to fall in earnest, especially in November. Nature attempts to neutralize extreme weather patterns and that’s exactly what is going on now. Overall, it will be wetter than normal as the remnants of eastern Pacific hurricanes fling moisture toward California and the Pacific Northwest. Mountainous regions will likely see up to 15 inches of rain while valleys see 1 to 3 inches. Even more precipitation will fall this winter, putting a significant dent in the drought. I am frequently asked if the reservoirs will refill. My answer is that it all depends on government policy. If most of the water is allowed to flow from the reservoirs to the ocean to support endangered wildlife, it’s going to take an awfully long time to fill the reservoirs. There should be enough rain to significantly increase the amount of water held in reservoirs if the government chooses to conserve it — a policy change that will be a great benefit to farmers, ranchers and every other citizen living on the West Coast. As far as temperatures are concerned, it will be 3 to 5 degrees above normal, or a little cooler than last fall.
Extreme Conditions This fall will be warm and dry across the Northwest with temperatures averaging 2 to 4 degrees above normal. It will be cool across the southern and central Rockies where rain-bearing clouds will dim the warming rays of the sun. Meanwhile, chilly air will pour southeastward across the Northern Plains along and north of the jet stream.
4
• Rocky Mountains: Summer showers have virtually eliminated the drought across the southern and central Rockies. Those showers will give way to storm systems gliding in from the Pacific Ocean carrying an overabundance of rain. New Mexico, Colorado, Wyoming and Utah will experience twice as much rain as usual — and some areas will get much more than that. In fact, I think northern Colorado, Wyoming and northern Utah will get some deep early-season snow to blanket the ski slopes in November — a forecast that means good things for many of our winter trades. Montana and Idaho — where a severe drought continues — are a different story. The two states will be in no-man’s-land between the storms coming off the Pacific Ocean and the ones following the jet stream from Alaska and northern British Columbia to the southeast. Idaho and Montana will get bursts of rain — and, later, snow — but not in the abundance the rest of the West will experience. Temperatures across the Rocky Mountain states will be a few degrees cooler than normal — about 5 degrees cooler than last fall. • Great Plains: As I anticipated, the drought is over and everyone on the Plains is sighing with relief. Agriculture, including wheat and corn, is flourishing again — and there is plenty of green grass for cattle. What’s needed now is dry weather during the harvest. There will be enough dry spells to complete the harvest, although two or three October and November snows will make a few farmers — and commodity traders — jittery. Other than a close brush with early season winter storms across the Northern and Central Plains, fall weather across the Great Plains ought to be as close to normal as you can get. • The Southeast and MidAtlantic: The first of the crisp autumn air masses will push south in September. They usually shove as far as the northern parts of Mississippi, Alabama and Georgia. This year, as the jet stream sags a bit further south than usual, I think the cool fronts will make it to the Gulf Coast. Even so, temperatures will be average, just a degree or so cooler than last fall. The storm systems that survive the trip from the Pacific Ocean to the southern Rockies and southern Great Plains will continue east to the Carolinas, Georgia and Florida. The most important sources for rainfall across the Southeast are tropical storms and hurricanes, both of which have been few and far between this year. Cool
Cold Weather Expectations Chilly air will make it to the Southeast part of the country this fall. The jet stream will draw the air southward to northern Alabama and Georgia, and western South Carolina. Temperatures will average 1 to 3 degrees cooler than normal in the blue shaded areas.
5
waters across the North Atlantic pushed an area of fair weather called the “Bermuda High” south of its usual summer position, displacing wind fields. On top of that, dry winds off the Sahara Desert have been tossing large amounts of dust high into the atmosphere above the tropical Atlantic — and tropical storms can’t develop in the dry, dusty air. The southward-moving cold fronts will settle along the Gulf Coast, and along the coasts of Georgia and South Carolina. These areas will be prime breeding ground for tropical storms and hurricanes this fall. The worst-case scenario is for one to form and move up the Gulf Stream along the Atlantic coast. Then it could rapidly intensify as it approaches New Jersey.
Hurricane Threats Hurricanes and tropical storms will threaten the Gulf Coast and Atlantic Coast. The prime areas for storm development are the northeast Gulf of Mexico and the Bahama Islands region. The red arrows are the most likely storm tracks. The orange area indicates the highest threat of inland damage.
Temperatures will be 1 to 2 degrees warmer than normal for both regions, about the same as last autumn but cooler than previous years.
• The Northeast, Ohio Valley and Great Lakes: The jet stream will be traveling south of the Great Lakes states, which means the primary path for rain-producing storm systems will be south of the region. As a result, rainfall will be slightly below normal this fall. However, it will provide a pathway for cool, crisp Canadian air masses to flow in from the Northwest. Meanwhile, the Northeast will be subject to storm systems moving up the East Coast. The region from New York City to Bangor, Maine could wind up with above-normal precipitation — especially from mid-October through early December. Precipitation, combined with ever colder air sifting in from the Northwest, may produce a couple of significant snow storms from Michigan to northern Ohio and Upstate New York, north to Maine. The greatest threat for snow will start in mid-October. Temperatures will average about 3 degrees colder than normal. • The Northern Plains: The region from North Dakota and South Dakota to Minnesota and Iowa will be subject to the rapid, north-south undulations of the jet stream through October. Temperatures will bounce from several degrees above normal to several degrees below normal through October, eventually settling at 2 degrees colder than average from November to December 22, the first day of winter. Precipitation will be near normal for the time of year. But there will be a risk of snow all autumn as chilly air swoops in from the north. A stripe of heavy snow may fall across Iowa and Minnesota, on the
6
north side of a storm system, at the tail end of fall’s harvest. And early December promises to be cold and snowy. Now, let’s get to the trends that this fall’s weather may spark…
What It Means for Traders When a new season is around the corner, I like to research the trends that have historically appeared during that period. Then I match my findings to my forecast, and I get a general idea of the patterns that might come up. Throughout my research, I’ve found that autumn is typically the season for buying warm clothing, deicing chemicals, snowblowers and cruise tickets. This year, we’ll likely see the same trends. But here are some more specifics… The cool weather across a large swath of the country will inspire people to shop for new winter wardrobes, so that will play into retailers who make it a specialty. We’ll make sure that we’re focused on apparel in our retail trades.
Snowstorm Danger Chilly air will plunge across the Northeast, Great Lakes and Ohio Valley early and often. The Arctic didn’t warm up much this summer and it’s quickly cooling down. As the cold air builds across the Arctic, chunks of it will be sent southward by the jet stream. The blue areas will be 1 to 3 degrees cooler than normal. The purple areas indicate where temperatures will average at least 4 degrees colder than normal.
Cold weather and snow across the Northeast will drive the third winter of heavy deicer use. Supplies are tight and that drives up the price — and subsequently the profits of companies specializing in deicers. And, where there are slippery roads, there are accidents. So we’re looking at companies that profit from icy roads, such as deicing suppliers. Winter recreation is also a moneymaker as long as the snow is falling. The central Rockies will have enough snow to make ski and snowboard enthusiasts happy. On the flip side, the first signs of winter will get folks in the mood to get cruising on the high seas as January and February roll around. So keep an eye on your inbox in the coming weeks — our fall and winter trades are starting up. There’s a silver lining in every cloud,
Chris Orr Certified Consulting Meteorologist
7
The Sovereign Society 55 NE 5th Avenue, Suite 200 Delray Beach, FL 33483 USA USA Toll Free Tel.: (866) 584-4096 Email: http://sovereignsociety.com/contact-us Website: www.sovereignsociety.com Legal Notice: This work is based on what we’ve learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It’s your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don’t trade in these markets with money you can’t afford to lose. Sovereign Offshore Services LLC expressly forbids its writers from having a financial interest in their own securities or commodities recommendations to readers. Such recommendations may be traded, however, by other editors, Sovereign Offshore Services LLC, its affiliated entities, employees, and agents, but only after waiting 24 hours after an internet broadcast or 72 hours after a publication only circulated through the mail. Please note that due to our commercial relationship with EverBank, we may receive compensation if you choose to invest in any of their offerings. (c) 2015 Sovereign Offshore Services LLC. All Rights Reserved; protected by copyright laws of the United States and international treaties. This Report may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Sovereign Offshore Services, LLC. 55 NE 5th Avenue, Suite 200, Delray Beach FL 33483.
8
Autumn outlook An Investor’s Guide
JEFF OPDYKE’S
Precision Profits
The 2015 Autumn Outlook: An Investor’s Guide By Chris Orr, Certified Consulting Meteorologist
F
OR many, fall tends to be a season of quiet transitions, when summer’s blistering heat yields to the subtle hints of winter. Families settle into the familiar routines of a new school year, and the green leaves on trees begin their gradual shift to red, yellow and orange.
Sometimes the most memorable aspect of autumn is how long it lasts until Old Man Winter comes knocking. Take last year for instance, when winter came so abruptly that fall barely registered. On the other hand, meteorologists view fall as the battleground between summer and winter — when storm systems get bigger and bolder and last for multiple days. This is the time of year when the heart of hurricane season arrives. And the wildly fluctuating temperatures — from high 80s during the day to low 50s at night — can have significant impacts on the country. Rivers kept warm during the day are hit with cool air at night, creating the perfect foggy conditions for your favorite scary story — just in time for Halloween. Then, the threats get worse: Freezes become an issue. Heavy snow even starts making an appearance, as it did last year. This autumn we can expect déjà vu. I’m already seeing the weather patterns falling into place in many parts of the country. Following a 2011 study that looked at the annual impact of weather on the economy, National Center for Atmospheric Research scientist and lead author of the research, Jeff Lazo, came to this conclusion: “The weather has a significant impact on every sector of the economy in every state of the U.S.” It is safe to assume, then, that myriad businesses will be affected by these climate conditions. Those that deal with anything from energy consumption to travel can expect fall weather to impact their bottom line. And with our Precision Profits strategy, we’ll find the profits waiting to be made from this seasonal trend. This autumn forecast is actually the key to most of our trades through November. In this report, I’m going to lay out my forecast for you, region by region. Then I’ll delve into the opportunities lying in wait for seasonal-trend spotters like us. Let’s start off with a quick recap of last year’s fall…
A Look Back at Autumn 2014 The autumn of 2014 was nearly an even split, with the western U.S. being exceptionally warm while the East felt the looming chill of a destructive winter. Each state west of the Rocky Mountains, particularly California and Oregon, ranked among the top 15 balmiest autumns since 1895. In addition, Georgia and Florida experienced significant warmth last fall. In contrast, afternoon temperatures across the Midwest were the 24th coldest in 120 years.
1
As for storms… Enough storm systems hit the West Coast to alleviate some of the drought — Washington, Oregon and California all recorded abovenormal rainfall. It was also wet across part of the southeastern U.S. and New England. In fact, only five states reported belownormal rainfall. Looking toward this year, we’ll likely see similar extremes. There is also the risk of heavy snow on the Corn Belt late in the harvest.
Patterns and Risks The big weather stories this fall will include the cool weather across the Northeast, warm and dry conditions over the Northwest, wetter weather across the Southwest and the lingering hurricane threat along the Southeast coast. There is also the risk of heavy snow on the Corn Belt late in the harvest.
Even though autumn doesn’t officially begin until September 23, cool weather is already shifting south across the Northeast. El Niño is irritating the atmosphere, aiding the development of typhoons over the western Pacific Ocean. Those storms will head toward North America as they get caught up in the jet stream. The West Coast overall won’t be nearly as hot as last year. That, along with a cool fall for the region from the Rocky Mountains to the Great Plains, will be the highlights this year. We’re not quite out of the woods as far as hurricanes are concerned, and the East Coast is still at risk until November. But before I get into the details, let’s look at why the weather is doing what it’s doing…
Global Weather Patterns This Year As I’ve mentioned before, the weather is like an enormous, intricate jigsaw puzzle. There are multiple patterns I watch, and each affects the next. To get an idea of what an upcoming season will bring, I have to see how each piece fits with the rest — and then I get my big picture. My biggest puzzle pieces are the global ocean temperatures. This year, there are three main ones that continue to grab my attention: El Niño, the Pacific Decadal Oscillation and the Atlantic Ocean. To see what I mean, take a look at the image below. You can see that El Niño — the band of warm ocean temperature that develops in the central and east central Pacific — is still in full swing. Although it is starting to weaken and will likely disappear by next spring, it will still play a significant role for the fall and winter.
2
Three Impacts on Fall Weather This fall, three factors will influence the weather: El Niño, the North Pacific Ocean and the Atlantic Ocean — all of which influence the path of the jet stream. The red and yellow colors indicate warmer sea-surface temperatures, while the blue shades indicate colder temperatures. As for the dashed line, that shows the average path of the jet stream this fall.
The second influence on our summer is the temperature pattern of the North Pacific Ocean. In the image above, the red and yellow areas indicate that much of the North Pacific is warmer than normal. And that will have a huge impact on the global weather pattern because the ocean temperature patterns influence the path of the jet stream, which flows about six miles above the Earth’s surface. Let me explain… It comes down to the jet stream — the ribbon of fast-moving air that steers storm systems (low pressure centers and their associated warm fronts and cold fronts). Ocean temperatures actually influence the path of the jet stream. So, by extension, they influence the route of storm systems as they migrate west to east around the Northern Hemisphere. The jet stream generally rides above the boundary between warmer-than-normal and colder-than-normal sea temperatures. As you can see in the image above, the jet stream currently runs from Asia to the International Date Line (the imaginary line drawn north and south through the Pacific Ocean) before reaching southern Alaska and British Columbia. From there, it arcs southeast toward the contiguous United States. The wind in the jet stream strengthens every autumn. As the Northern Hemisphere grows cooler, the jet stream sags southward and kinks begin to appear in its snaking path. The energy contained in each kink, or sharp bend, helps make the powerful storm systems we see September through May. The third influence is the temperature of the Atlantic Ocean, which influences the hurricane season (view the report here). As devastating as those storms can be, the Gulf Coast states and the Southeast rely on tropical storms and hurricanes for at least a quarter of the annual average rainfall. Just one storm can easily drop 10 inches of rain. So far, hurricane season in the U.S. has been mostly quiet, despite scares from Hurricane Danny and Tropical Storm Erika. The reason: Most of the North Atlantic is cooler than normal. But if another hurricane develops along the East Coast, moves north, and gets close to the strengthening jet stream — well, it could become very powerful.
3
Hurricanes also occur over the east Pacific Ocean, just west of the southern coast of Mexico and Central America. Some of these hurricanes head west and die out before reaching Hawaii. Others curve north toward the Baja of California. They are called typhoons west of the Date Line, and El Niño has been supercharging some of them into swirling monsters with winds stronger than 160 mph. I’m keeping an eye on pockets of energy left over from North Pacific storms because some can redevelop as storm systems across North America. And the damage from strong storms can reverberate across businesses and the economy. I’ll be sure to keep you updated on any developments. Now that we know what’s happening globally, let’s turn to the United States, and see how it will likely be affected. Here’s the breakdown of this fall’s weather by region…
My Fall 2015 Forecast • West Coast: California, Oregon and Washington are continuing to experience drought but you can expect wetter weather to move in. That’s what typically happens during an El Niño. Last fall, when the jet stream was weak, rainfall was above normal. This year, after a moderate El Niño, the rain will begin to fall in earnest, especially in November. Nature attempts to neutralize extreme weather patterns and that’s exactly what is going on now. Overall, it will be wetter than normal as the remnants of eastern Pacific hurricanes fling moisture toward California and the Pacific Northwest. Mountainous regions will likely see up to 15 inches of rain while valleys see 1 to 3 inches. Even more precipitation will fall this winter, putting a significant dent in the drought. I am frequently asked if the reservoirs will refill. My answer is that it all depends on government policy. If most of the water is allowed to flow from the reservoirs to the ocean to support endangered wildlife, it’s going to take an awfully long time to fill the reservoirs. There should be enough rain to significantly increase the amount of water held in reservoirs if the government chooses to conserve it — a policy change that will be a great benefit to farmers, ranchers and every other citizen living on the West Coast. As far as temperatures are concerned, it will be 3 to 5 degrees above normal, or a little cooler than last fall.
Extreme Conditions This fall will be warm and dry across the Northwest with temperatures averaging 2 to 4 degrees above normal. It will be cool across the southern and central Rockies where rain-bearing clouds will dim the warming rays of the sun. Meanwhile, chilly air will pour southeastward across the Northern Plains along and north of the jet stream.
4
• Rocky Mountains: Summer showers have virtually eliminated the drought across the southern and central Rockies. Those showers will give way to storm systems gliding in from the Pacific Ocean carrying an overabundance of rain. New Mexico, Colorado, Wyoming and Utah will experience twice as much rain as usual — and some areas will get much more than that. In fact, I think northern Colorado, Wyoming and northern Utah will get some deep early-season snow to blanket the ski slopes in November — a forecast that means good things for many of our winter trades. Montana and Idaho — where a severe drought continues — are a different story. The two states will be in no-man’s-land between the storms coming off the Pacific Ocean and the ones following the jet stream from Alaska and northern British Columbia to the southeast. Idaho and Montana will get bursts of rain — and, later, snow — but not in the abundance the rest of the West will experience. Temperatures across the Rocky Mountain states will be a few degrees cooler than normal — about 5 degrees cooler than last fall. • Great Plains: As I anticipated, the drought is over and everyone on the Plains is sighing with relief. Agriculture, including wheat and corn, is flourishing again — and there is plenty of green grass for cattle. What’s needed now is dry weather during the harvest. There will be enough dry spells to complete the harvest, although two or three October and November snows will make a few farmers — and commodity traders — jittery. Other than a close brush with early season winter storms across the Northern and Central Plains, fall weather across the Great Plains ought to be as close to normal as you can get. • The Southeast and MidAtlantic: The first of the crisp autumn air masses will push south in September. They usually shove as far as the northern parts of Mississippi, Alabama and Georgia. This year, as the jet stream sags a bit further south than usual, I think the cool fronts will make it to the Gulf Coast. Even so, temperatures will be average, just a degree or so cooler than last fall. The storm systems that survive the trip from the Pacific Ocean to the southern Rockies and southern Great Plains will continue east to the Carolinas, Georgia and Florida. The most important sources for rainfall across the Southeast are tropical storms and hurricanes, both of which have been few and far between this year. Cool
Cold Weather Expectations Chilly air will make it to the Southeast part of the country this fall. The jet stream will draw the air southward to northern Alabama and Georgia, and western South Carolina. Temperatures will average 1 to 3 degrees cooler than normal in the blue shaded areas.
5
waters across the North Atlantic pushed an area of fair weather called the “Bermuda High” south of its usual summer position, displacing wind fields. On top of that, dry winds off the Sahara Desert have been tossing large amounts of dust high into the atmosphere above the tropical Atlantic — and tropical storms can’t develop in the dry, dusty air. The southward-moving cold fronts will settle along the Gulf Coast, and along the coasts of Georgia and South Carolina. These areas will be prime breeding ground for tropical storms and hurricanes this fall. The worst-case scenario is for one to form and move up the Gulf Stream along the Atlantic coast. Then it could rapidly intensify as it approaches New Jersey.
Hurricane Threats Hurricanes and tropical storms will threaten the Gulf Coast and Atlantic Coast. The prime areas for storm development are the northeast Gulf of Mexico and the Bahama Islands region. The red arrows are the most likely storm tracks. The orange area indicates the highest threat of inland damage.
Temperatures will be 1 to 2 degrees warmer than normal for both regions, about the same as last autumn but cooler than previous years.
• The Northeast, Ohio Valley and Great Lakes: The jet stream will be traveling south of the Great Lakes states, which means the primary path for rain-producing storm systems will be south of the region. As a result, rainfall will be slightly below normal this fall. However, it will provide a pathway for cool, crisp Canadian air masses to flow in from the Northwest. Meanwhile, the Northeast will be subject to storm systems moving up the East Coast. The region from New York City to Bangor, Maine could wind up with above-normal precipitation — especially from mid-October through early December. Precipitation, combined with ever colder air sifting in from the Northwest, may produce a couple of significant snow storms from Michigan to northern Ohio and Upstate New York, north to Maine. The greatest threat for snow will start in mid-October. Temperatures will average about 3 degrees colder than normal. • The Northern Plains: The region from North Dakota and South Dakota to Minnesota and Iowa will be subject to the rapid, north-south undulations of the jet stream through October. Temperatures will bounce from several degrees above normal to several degrees below normal through October, eventually settling at 2 degrees colder than average from November to December 22, the first day of winter. Precipitation will be near normal for the time of year. But there will be a risk of snow all autumn as chilly air swoops in from the north. A stripe of heavy snow may fall across Iowa and Minnesota, on the
6
north side of a storm system, at the tail end of fall’s harvest. And early December promises to be cold and snowy. Now, let’s get to the trends that this fall’s weather may spark…
What It Means for Traders When a new season is around the corner, I like to research the trends that have historically appeared during that period. Then I match my findings to my forecast, and I get a general idea of the patterns that might come up. Throughout my research, I’ve found that autumn is typically the season for buying warm clothing, deicing chemicals, snowblowers and cruise tickets. This year, we’ll likely see the same trends. But here are some more specifics… The cool weather across a large swath of the country will inspire people to shop for new winter wardrobes, so that will play into retailers who make it a specialty. We’ll make sure that we’re focused on apparel in our retail trades.
Snowstorm Danger Chilly air will plunge across the Northeast, Great Lakes and Ohio Valley early and often. The Arctic didn’t warm up much this summer and it’s quickly cooling down. As the cold air builds across the Arctic, chunks of it will be sent southward by the jet stream. The blue areas will be 1 to 3 degrees cooler than normal. The purple areas indicate where temperatures will average at least 4 degrees colder than normal.
Cold weather and snow across the Northeast will drive the third winter of heavy deicer use. Supplies are tight and that drives up the price — and subsequently the profits of companies specializing in deicers. And, where there are slippery roads, there are accidents. So we’re looking at companies that profit from icy roads, such as deicing suppliers. Winter recreation is also a moneymaker as long as the snow is falling. The central Rockies will have enough snow to make ski and snowboard enthusiasts happy. On the flip side, the first signs of winter will get folks in the mood to get cruising on the high seas as January and February roll around. So keep an eye on your inbox in the coming weeks — our fall and winter trades are starting up. There’s a silver lining in every cloud,
Chris Orr Certified Consulting Meteorologist
7
The Sovereign Society 55 NE 5th Avenue, Suite 200 Delray Beach, FL 33483 USA USA Toll Free Tel.: (866) 584-4096 Email: http://sovereignsociety.com/contact-us Website: www.sovereignsociety.com Legal Notice: This work is based on what we’ve learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It’s your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don’t trade in these markets with money you can’t afford to lose. Sovereign Offshore Services LLC expressly forbids its writers from having a financial interest in their own securities or commodities recommendations to readers. Such recommendations may be traded, however, by other editors, Sovereign Offshore Services LLC, its affiliated entities, employees, and agents, but only after waiting 24 hours after an internet broadcast or 72 hours after a publication only circulated through the mail. Please note that due to our commercial relationship with EverBank, we may receive compensation if you choose to invest in any of their offerings. (c) 2015 Sovereign Offshore Services LLC. All Rights Reserved; protected by copyright laws of the United States and international treaties. This Report may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Sovereign Offshore Services, LLC. 55 NE 5th Avenue, Suite 200, Delray Beach FL 33483.
8
