All major U.S. markets are set to reopen this morning as New York comes to terms with the aftermath of Hurricane Sandy’s destruction.
The New York Stock Exchange, which accounts for around a quarter of U.S. trading volumes, has said it will open its doors at 9.30am as usual this morning after flooding in Manhattan’s financial district caused it to remain closed on Monday and Tuesday. The exchange last closed its trading floor for the September 11, 2001, terror attacks. Other major exchanges are to follow suit.
“We are pleased to be able to return to normal trading tomorrow,” said Duncan Niederauer, chief executive of NYSE Euronext in a statement. “Our building and systems were not damaged and our people have been working diligently to ensure that we have a smooth opening tomorrow.”
Nasdaq, too, was preparing to open for business this morning. “The decision to open for business on Wednesday was made in consultation with regulators, including the Securities and Exchange Commission, other U.S. exchanges and government officials,” it said in a statement. “Safety, market continuity and a variety of other factors related to Hurricane Sandy were carefully considered.”
With subways shut and Manhattan difficult to access by road, it is expected that, for whoever can manage to work, trading may well be frenetic due to it being the final day of the month. Month-end adjustments will be needed to some portfolios while options also expire on the last day of every month.
The hurricane has also caused dozens of companies to postpone publishing financial results, and put back the release of some economic data.
Trading volumes across Europe this week have been almost a third down on levels from the previous week as Hurricane Sandy caused the two-day shutdown of U.S. stock exchanges. Although European markets tend to be quieter when the U.S. is closed as NYSE Euronext and Nasdaq OMX, the two main New York exchanges which are also the world’s largest stock markets, act as crucial reference points for global equity trading.
Many of Wall Street’s largest banks have put in place emergency plans, many of which were put in place after the 9/11 attacks.
“We are prepared for the re-opening of the markets, and will utilize our back-up locations to ensure continuity of operations until our staff can return to our Lower Manhattan offices,” said Citi in a statement.
Other firms with their headquarters in New York have been frantically reassigning assignments to their European offices in a bid to ease the build-up of work.
“We will be catching up some of their overflow and acting as a back-up,” one London-based trader told Markets Media, whose firm is based is in New York. “The office in NYC got 15 feet of water.”
While the Securities Industry and Financial Markets Association (Sifma), the trade body for banks and asset managers, yesterday issued a statement saying that fixed income trading should also resume in the U.S. this morning.
“This recommendation applies to trading of US dollar-denominated government securities, mortgage- and asset-backed securities, over-the-counter investment-grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers’ acceptances, commercial paper and Yankee and Euro certificates of deposit,” Sifma said.
