What a natural disaster influences the financial market?

Summer and winter are the two periods with the highest likelihood of natural disasters. This summer, the US has been suffering serious storms and had significantly serious effects not only on ordinary people's life but also on the US economy as well as the US financial market too.

Natural disasters do not only bring direct losses to ordinary people, but also natural disasters have incredulous high social costs as well. Its impacts on the financial market partially come from the social costs and damage it brings to our society and economy. Moreover, one of its most significant damage or social cost is that it destroys a large amount of resources in a particular geographical area, and creates a vacuum in this area. To fill this vacuum, governments and individuals have to quickly relocate resources from other areas to this particular area. When there is a very rush redistribution of resources, such redistribution is more likely to be more inefficient and insufficient, this could easily lead to waste of resources. Any ineffective use of resources will lead to a drop in the financial market.

Moreover, natural disasters will lead to a drop in the potential production of the economy, though such drop may seem insignificant when the size of the economy is massive. In addition, recently we could see a rise in oil price, it does not lead to an increase in the share prices of any petrol companies or solar companies as the market normally does. This is because the price of oil or petrol is increased by the rush redistribution that I discussed in the previous text, this increases does not provide a sustainable increase and fails to locate oil effectively. And these companies may also suffer losses due to the natural disasters. Therefore, natural disasters are certainly something that mutually costly for everyone in the society. Even some people tend to earn massive profits from the sharp changes in the market prices, they may survive and earn some profits, their public images are damaged and in some societies with large governments, they are likely to be punished by the governments as well.