By Joyce Yu
Philadelphia, PA–Shares in wine makers fell as deadly wildfires in Northern California swept through major vineyards in the region.
More than a dozen wildfires raged across Northern California as of Tuesday morning, killing at least 11 people and burning more than 1,500 homes and businesses, authorities said. The fires hit during the grape harvest season, potentially reducing years-long supply of wine grapes.
Accounting for 85% of U.S. wine production, California’s wine sales were valued at $34.1 billion in 2016. Napa and Sonoma counties produce much of the country’s premium wines. The Santa Rosa Press Democrat reported that while 75% of the region’s grapes have already been picked, most of the cabernet sauvignon and merlot crop was still on the vines.
Shares of Constellation Brands Inc., which owns a number of Sonoma and Napa wine brands, fell nearly 1% Monday. Treasury Wine Estates Ltd., an Australian listed wine giant with California holdings, fell more than 1% Tuesday.
But people matter the most in fighting against the devastating wildfires. “We’re working to ensure all local employees are accounted for and safe, and to assess any potential impacts to our facilities,” said Amy Federman, spokeswoman of Constellation Brands Inc., in a statement.
The Wall Street, however, was rather muted yesterday. The Dow Jones industrial average shed 0.1%, while the S&P 500 and the Nasdaq fell 0.2% respectively. U.S. stocks opened higher on Tuesday as investors turn their attention to the third-quarter earnings season.
Earnings of S&P 500 companies are expected to have increased 4.8 percent last quarter, according to Thomson Reuters data. This is far below the double-digit growth recorded in the first two quarters of this year, but is set to be a booster for the market.
“I think it will be a good earnings season,” said Peter Cardillo, chief market economist at First Standard Financial. “It will be focused on individual stocks as opposed to earnings season as a whole.”
The International Monetary Fund, who lowered its U.S. growth forecast to 2.1% for 2017 and 2018 in July, will publish its Global Economic Outlook today. Its July forecast is well below the 3% target rate President Trump has set.
Over in Europe, Spain’s independence crisis continues to simmer in the background. Catalan lawmakers will meet today to consider a declaration of independence. Spanish police are ready to arrest Catalan President Carles Puigdemont immediately if he declares independence in the regional parliament, the CNN quoted “people familiar with the matter”.
“Signs of disagreement are starting to emerge within the regional government, with more moderate members fearing the consequences of a further step towards independence, given the lack of support from the EU, and moves by some banks and firms to leave Catalonia,” said Fabio Balboni, an economist at HSBC Bank Plc.