From the vantage point John Manley had in his office some 40 floors up, it actually looked like the snow was blowing up from the ground rather than falling from the sky as the first dose of winter storm Juno said hello to Manhattan. “I’m going to make a break for it around 3:30 today then see what happens,” Manley, the 60-year-old chief equity strategist for Wells Fargo Funds Management, said in a phone interview, contemplating his plans to get home to Westchester before the worst of a snowstorm that may be measured by the foot.
Severe weather on the US East Coast was presenting its biggest test to the resiliency of the financial industry since Hurricane Sandy in 2012 as workers booked hotel rooms, tested backup generators and dusted off business-continuity plans.
Financial markets prepared to remain open even as public transportation planned to shut down, with New Jersey Transit saying its trains would stop running for two days. Nasdaq OMX Group Inc.’s data center in Carteret, New Jersey, was prepared for a power failure with backup generators containing fuel to run for at least 72 hours and “redundant backup fuel supply contracts” ready to bring more if needed, Tom Wittman, executive vice president for global equities at the exchange operator, wrote in an e-mail to customers.
The last time the New York Stock Exchange cut trading hours for snow was on January 8th, 1996, when a blizzard dropped more than 20 inches on New York City.
In 2012, Hurricane Sandy caused the longest weather-related shutdown for American equities since 1888 as exchanges closed for two days.
‘Affect liquidity’
Exchanges stayed open during a severe snowstorm in 2010, and volume held up. Although nationwide trading slowed 19 per cent from the five-day average, more than 8 billion shares changed hands on Feb. 10, 2010, according to data compiled by Bloomberg. This storm’s wind-driven snow may fall as fast as four inches per hour and is poised to bring travel and commerce to a standstill from New York to Boston.
“If you make the case that the East Coast houses the majority of firms, this event could definitely affect liquidity,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said by phone. “It looks like it’s going to be an extreme event. No matter what, I’m coming in on foot or hitch-hiking a ride from somebody’s snow mobile tomorrow.”
For many Wall Street employees, the storm will mean spending the night in a hotel paid for by their firm rather than taking a train or car home to the suburbs.
Miami
For others, it can even mean being stranded in different cities. Mayra Rodriguez Valladares, a consultant and trainer at MRV Associates, will be late coming home from a foreign-exchange conference at the Trump International Beach Resort in Miami.
“I have been stuck in Sudan and Kazakhstan, so Miami’s pretty good,” she said. “We’re so used to being Type A in finance, but you can’t control everything. You cannot defeat Mother Nature. It’s just a reminder there are things you can do nothing about. I just had to take a step back and say, ‘Is my husband safe? Are my children safe? Yes.’”
Michael McDougall, a senior director at Societe Generale’s Newedge unit in New York who lives in Pennsylvania, said he will catch the movie “Taken 3” after work before retiring to a hotel room booked by his firm.
“The only other time I stayed in the city was during Hurricane Sandy,” said McDougall, who leads a team of four people tracking sugar and grain markets.
‘Same predicament’
Just like in today’s electronic markets, the blizzard means traders need to react quickly to take advantage of opportunities. While some of his co-workers secured hotel rooms across from Interactive Brokers Group Inc.’s office in Greenwich, Connecticut, Steve Sosnick could not. Sosnick, equity risk manager at Timber Hill LLC, the firm’s market-making unit, may not be able to get to work tomorrow. “I have no idea when I’ll get my street snow-plowed,” Sosnick said by phone. Graham Leighton, a trader at Marex Spectron Group in New York, said colleagues were telling clients whom to contact in the London and Hong Kong offices if they were unavailable. “And I suspect our clients will be in the same predicament that we’re in,” Leighton said.
Business continuity plans were being invoked at home, too. Manley said he’s got plenty of firewood and Remy Martin in the house in case the power goes out. His two four-wheel drive cars are pointing out of the driveway. “You just have to be ready to roll with the punches,” he said. “The same skills that people use so well in their everyday lives, they don’t apply them well to the market.
Bloomberg
