Rain, wind & low temps: How does Australia's winter period impact the stock market?
Winter is here, and we're definitely feeling the cold more than ever these last two weeks in Aus. While the chilly winters make it harder to get up in the morning, Australia's cold and wet season also has an impact on the stock market!
Energy, coal & gas sectors
Temperatures down means heaters up, with winter being a peak power consumption period. Basic supply and demand comes into play for these sectors, with expectations that more Aussies heating their home or office will create a larger need for fossil fuels and electricity.
Whether you use electricity or natural gas to indirectly warm your home, companies like $Origin Energy Ltd(ORG.AU$ and $AGL Energy Ltd(AGL.AU$ will benefit greatly from something as small as turning on your trusty heater (and spiking your bills).
Wheat and chicken (what?)
Wheat, chicken, and winter don't sound like a common trio, but as @Jessica Amir often reports, wheat accounts for 70% of the cost for growing a chicken. This relationship comes into tough times with the Bureau of Meteorology now predicting that 70% of Australian grain crops could be impacted by El Nino this year.
Intense rain and wind is not ideal conditions to grow crops like wheat, corn, and soy - which are not only important for our food shops, but also companies who produce chicken products. Reduced crop output will most likely drive prices higher, which have already begun to emerge.
Jess shares that the food companies to watch include:
Wine prices
Along the same line as wheat, rain and non-ideal weather conditions have impacted wine production in Aus, which @Jessica Amir has been discussing for a while. Currently downy mildew is hitting Australian vineyards due to the seasonably wet weather. This phenomenon happens every 9-10 years and further restricts grape supply. Wine companies like $Treasury Wine Estates Ltd(TWE.AU$ are then forced to jack up wine prices due to the lack grapes.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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