A high probability for an El Niño event in the second half of 2023 brings concerns of extreme weather, persistent inflation, supply chain disruptions, and market volatility, economists at Charles Schwab report.
Extreme weather heightened by El Niño could bring market volatility, should history repeat.
El Niño may result in disruptions to food production, impact the movement of goods and price of energy, cause hurricane losses for insurance companies, create geopolitical unrest, and keep rates higher for longer in some countries – particularly in emerging markets.
Weather of course is difficult to forecast – as are markets – but the potential impacts are worth considering by investors.
See: The return of El Niño likely to cause issues for commodity markets – ANZ