Twelve Capital Event Update – 24 August 2020

Hurricane situation
There are currently two active systems that are due to make landfall with the United States in the next 48-72 hours.

Hurricane Marco is currently situated in the Gulf of Mexico around 300km south-east of New Orleans, and travelling in a north-westerly direction. It is predicted to make landfall around 7pm local time on Monday, 24 August at Port Fourchon, Louisiana then continue travelling in a north-westerly direction along the coastline of Louisiana towards the Texas border and Houston. There is currently strong wind shear that is working to destabilise the eye of the storm, so while it is a category 1 hurricane it may be reduced in strength, although it cannot be said if this will be pre-, at-, or post-landfall.

Tropical Storm Laura is at present over Cuba and heading north-west into the Gulf of Mexico. Current predictions have Laura strengthening in a category 1 hurricane while in the Gulf, where at approximately 8pm local time on Wednesday, 26 August it will make landfall in Louisiana then continue moving inland and turn to move in a north-easterly direction.

Given both of these are live events, and due to impact a similar stretch of coastline within a 48 hour period Twelve will be closely monitoring their impact and any news/data coming out of the United States for the next week. With the current maximum strength and landfall location forecasts of these two tropical storm systems, Twelve Capital does not expect any material impact on its portfolios at this point.

Other events
There are also a number of wildfires in Northern California that have started to cause some damage and are beginning to threaten some centres of population. Currently 34 fires are being monitored and dealt with, the majority of these started from an extraordinarily high number of lightning storms over the previous 7-10days. The situation in California has been exacerbated with their current drought, and a recent period of hot and dry winds that make it harder to control the fires. While the current level of damage should not be a concern, Twelve will be monitoring the situation in case any of the fires expand and move into more populated areas.

As always, Twelve Capital continues to closely monitor any catastrophe events and will issue specific updates on any relevant new major events which occur.