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Hurricane Ian caused about $56 billion in insured losses in 2022, but the damage from Milton could be even worse since more people have moved to coastal Florida in recent years, according to new research.

Piper Sandler in a recent report didn't have a dollar estimate, but “it is clear that there will be substantial personal, economic and insured damages,” analyst Paul Newsome wrote. Analysts at Jefferies have projected that the storm could cause tens of billions of dollars of economic losses. Much of the state is bracing for the possibility of serious disaster relief efforts.

The storm could weigh on the shares of insurance companies with heavy exposure in Florida, which Piper Sandler's note pegged as Allstate (ALL), American International Group (AIG), and Progressive (PG). Historically, shares of insurers have fallen as a hurricane approaches and recovered when the companies announce their official losses, Piper Sandler said.

Allstate stock, for example, is down 3% since Friday.

Insurers will often reduce the availability of insurance and raise policy prices after a storm to make the impact a net positive for the industry, the Piper Sandler report said. Demand for insurance is also higher in the aftermath of a bad storm, which could be particularly acute if Milton is a historically devastating hurricane, the analyst said.

Not all hurricane damage is created equal, however. Wind damage is typically covered by private insurers, Piper Sandler noted, while flood damage is largely covered by the federal government.

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It turns out that Federal Reserve policymakers were more divided about the decision to make a super-sized cut to borrowing costs in September than the committee’s final vote indicated. 

A few members of the Federal Open Market Committee would have preferred to cut the central bank’s benchmark interest rate by 0.25 percentage points rather than the 0.5 percentage-point cut the central bank went with, according to minutes of the committee’s deliberations released Wednesday. In the end, only one of the committee’s 12 members voted for the smaller cut.“Some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision,” the minutes said. “Several participants noted that a 25 basis point reduction would be in line with a gradual path of policy normalization that would allow policymakers time to assess the degree of policy restrictiveness as the economy evolved.”

The minutes shed light on what policymakers were thinking last month during a pivotal meeting during which they decided to cut the central bank’s benchmark interest rate to a range of 4.75% to 5%. The Fed had kept its rate at a two-decade high for more than a year, pushing up borrowing costs on all kinds of loans to slow the economy and subdue inflation.With inflation cooling back down toward the Fed’s goal of a 2% annual rate, Fed officials had grown less worried about high inflation, the minutes showed. They were more concerned about the job market's health, which had seen a slow but steady increase in the unemployment rate over the last year. By law, the central bank is supposed to use monetary policy to keep inflation low and employment high.

Since then, economic data has complicated the interest rate outlook. 

The labor market staged a surprising comeback in September, as employers hired more workers than expected, pushing the unemployment rate down, while inflation is expected to continue to ease.

Financial markets are uncertain whether the Fed will cut rates again when the FOMC next meets in November. On Wednesday afternoon, traders were pricing in an 81.4% chance of a 0.25 percentage-point cut in November, down from 85.2% the day before, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

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Hewlett Packard Enterprise (HPE) will kick off its AI Day event at 1:45 p.m. Eastern Time Thursday, with a webcast featuring CEO Antonio Neri, CTO Fidelma Russo, and others.

Bank of America analysts expect the artificial intelligence (AI) server maker to focus on its liquid cooling technology and the manufacturing and deployment of large-scale AI systems at the event. Larger, more dense data centers require liquid cooling to maintain their temperature and the demand for powerful AI server racks is growing noted the analysts.

“As computing moves to larger scale clusters, we expect HPE to benefit from their unique history to deploy large scale systems at scale,” the analysts said in a note Tuesday, adding that with “the projected power demands of Nvidia's (NVDA) next gen AI chips, liquid cooling will become a definite need within the industry." 

Bank of America maintained its "buy" rating and a price target of $24, about a 15% premium over Wednesday’s intraday price of $20.78. Shares of HP Enterprise have gained more than 22% since the start of the year.

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