If you were born and raised in Northeast Ohio, golfing is not exactly an activity one does in the winter months.
While not exactly a heatwave, the warm temperature compared to most Novembers and Decembers has everyone walking around without coats and even in a slightly better mood (no thanks to the Cleveland Browns).
In Buffalo, our Snowbelt cousins have not seen any snow yet in November or December this year, the first time this has happened since 1899!
There is hope for a continuation of a mild winter thanks to el Niño. Warm water in the Pacific Ocean combined with trade winds release atmospheric pressure that affects weather around the world. In the U.S., it means warmer temperatures across most of the country. In addition, many areas have had mild precipitation, though historically some Western ski areas and parts of the Midwest received above average snowfall.
According to Live Science, “El Niño was originally named El Niño de Navidad by Peruvian fishermen in the 1600s. This name was used for the tendency of the phenomenon to arrive around Christmas. Climate records of El Niño go back millions of years, with evidence of the cycle found in ice cores, deep sea muds, coral, caves and tree rings.”
Are you dreaming of a white Christmas?
Watching the 1954 classic, White Christmas, is an annual holiday tradition in my family, even though we all know the scenes and songs by heart. According to The Weather Channel’s forecast for snow across the nation, Cleveland has a 45% chance to see snow each Christmas. Nonetheless, the last five el Niño patterns from 1957, 1965, 1972, 1982, and 1997 never brought snow on December 25th, and is a sign that the mildness from November should continue throughout December.
The last two winters were unseasonably cold and huge snow storms resulted in below average economic data and the worst two quarters of growth in the last three years. If this winter stays true to the past and ends up being warmer with only average precipitation, the comparisons to last year are a low hurdle and could result in economic data surprising on the upside in the first quarter of 2016.
Indeed, this happened in 1997/98 with surprising growth across data. Looking further back at the el Niño years, it was difficult to find a pattern, though the warmth contributed to above average performance in 1957 and 1965. So there’s a small sample size, but the low comparisons from ’14 and ’15 should be easy to outpace.
The el Niño weather pattern is only one piece of the puzzle for forecasting changes to growth which many may be underestimating in the near term. Still, the economy must contend with the Federal Reserve poised to raise interest rates on December 16th for the first time since 2006. In addition, the strength of the U.S. dollar weighs on export growth while loan conditions are showing signs of tightening, which could cause issues in the second half of ’16.
This material is based on public information as of the specified date, and may be stale thereafter. Aurum Wealth Management Group and/or Aurum Advisory Services has no obligation to provide updated information on the securities or information mentioned herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates.
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This material is for informational purposes and is based on public information as of the specified date. Aurum Wealth Management Group and/or Aurum Advisory Services has no obligation to provide updated information on the securities or information mentioned herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates.