Climate Scenario
What happens to my portfolio if a Category 5 hurricane makes direct landfall on New York City?
This scenario looks at how a direct Category 5 hurricane strike on New York City could ripple through markets, valuations, and portfolio holdings over the next 12 months. The main transmission is not just physical damage, but a broader risk-off shock driven by market disruption, higher risk premia, logistics friction, and temporary hits to activity in one of the world's key financial centers.
This is a hypothetical scenario analysis for educational purposes. It is not a prediction, forecast, or investment recommendation.
Portfolio stress test
Current value
$135,257.22
Scenario value
$100,580.01
Key risks
Affected holdings
Portfolio stress test
Current value
$135,257.22
Scenario value
$100,580.01
Key risks
Affected holdings
Visual analysis
How a sample portfolio could behave
Illustrative projections showing how a sample portfolio might respond under a what happens to my portfolio if a category 5 hurricane makes direct landfall on new york city? scenario across different time horizons.
All charts show illustrative data for educational purposes only. Actual portfolio results will vary.
Key takeaways
Key Takeaways
The portfolio outcome is driven mainly by valuation compression and a broad rise in required returns rather than permanent impairment to most businesses. High-multiple tech and speculative assets appear most exposed, while defensive balance sheets and less directly affected sectors tend to hold up relatively better.
Risk-Off Repricing
A severe disaster centered on New York City raises the equity risk premium and pushes investors away from long-duration and high-beta assets.
Market-Structure Disruption
Temporary disruption across trading, finance, insurance, and regional operations can amplify volatility and widen funding or liquidity spreads.
Earnings Resilience Matters
Companies with strong balance sheets, sticky revenue, and diversified operations may still fall, but often less than richly valued peers.
Recovery Is Uneven
Some assets may benefit later from reconstruction demand or normalization, but the first phase is typically dominated by derating and liquidity stress.
See how this scenario could affect your holdings
Portfolio exposure
Portfolio Impact Analysis
How this scenario flows through to portfolio positions
Under Pressure
High-multiple technology
HighLong-duration growth stocks are vulnerable when discount rates and risk premia rise, even if core earnings remain relatively intact.
Crypto assets
HighBitcoin, Ethereum, and XRP are hit by deleveraging, lower speculative activity, and weaker institutional risk appetite during a market shock.
Consumer hardware and premium discretionary demand
MedTemporary retail disruption, delayed upgrades, and weaker sentiment can weigh on companies exposed to premium spending.
Global cyclicals tied to sentiment
HighEven with possible rebuild demand later, commodities and cyclical equities can sell off first on growth concerns and cross-asset risk reduction.
More Resilient
Cash-generative mega-cap platforms
StrongBusinesses with diversified revenue streams and strong free cash flow may still derate, but they often retain more earnings support than speculative names.
High-quality banks with limited direct exposure
StrongBanks outside the core disaster zone may face spread and sentiment pressure rather than severe direct credit damage.
Reconstruction-linked materials over time
ModDemand for metals and inputs can improve later in the cycle as rebuilding activity gains traction.
Sticky software platforms
ModSubscription models and strong retention can cushion fundamentals even if valuation multiples compress.
This analysis is based on the specific portfolio run. Individual holdings may vary.
Example portfolio
Holding-by-holding scenario impact
See how each holding in a sample portfolio could be affected, with portfolio weight and estimated scenario impact.
| Holding | Weight | Scenario impact | Contribution | Key exposure |
|---|---|---|---|---|
BTC Bitcoin | 24% | -10% | -2.4% | The scenario primarily hits BTC through a higher equity risk premium, temporary NYC market-structure disruption, and forced deleveraging rather than any direct earnings effect, taking the 6-month target to $58,177 and the 12-month target to $63,853 versus $70,948 today before a 24-month rebound to $76,624. The scenario WACC rises to 10.8% from 10.3%, and the setup is most comparable to the March 2020 cross-asset liquidity shock, when BTC sold off sharply in the initial risk-off phase before recovering as liquidity normalized and the macro narrative improved. With no cash-flow anchor and heavy dependence on marginal institutional flows, the near-term move is about multiple/risk-premium compression in a speculative asset rather than fundamental impairment. |
ETH Ethereum | 8% | -14% | -1.1% | ETH is likely to underperform BTC in this shock because the transmission is not just risk-off, but also lower expected on-chain activity, weaker DeFi/token issuance, and compression of long-duration network-asset valuations; that drives targets of $1,710 at 6 months and $1,886 at 12 months versus $2,193 currently, with only a modest 24-month recovery to $2,302. Scenario WACC increases to 10.9% from 10.3%, and the historical analogue is the 2022 crypto tightening/risk-off period when ETH lagged as liquidity and ecosystem activity softened. The key differentiator versus BTC is that ETH's usage-sensitive fee and burn narrative is more exposed to a pullback in speculative participation. |
XRP XRP | 9% | -12% | -1.1% | XRP should weaken mainly through a risk-off hit to higher-beta utility-narrative crypto and a delay in institutional adoption workflows, not through direct network impairment, pulling the 6-month target to $1.06 and the 12-month target to $1.17 from $1.33 today before a 24-month recovery to $1.41. Scenario WACC rises to 10.9% from 10.3%, and the best analogue is the 2022 altcoin drawdown pattern, though improved legal clarity and regulated access should cushion downside relative to prior cycles. The market is unlikely to reward the payments-use-case narrative during an acute financial continuity shock centered on NYC. |
NVDA NVIDIA Corporation | 17% | -25% | -4.3% | The most important takeaway is valuation compression: scenario fair value falls to $105.19 from a base $113.32, 44.2% below the current $188.63, as WACC rises to 9.6% from 9.0% and the stock's 38.5x P/E and 2.1% FCF yield leave it exposed to even a modest ERP shock. The 12-month scenario target of $140.58 and 24-month target of $137.33 imply that most of the damage comes from a multiple reset rather than a major earnings cut, consistent with the 2022 high-multiple tech derating and 2025 tariff-fear selloff analogue. Temporary NYC customer disruption may delay some deployments, but net cash, 65.5% operating margin, and strong AI demand visibility limit fundamental damage. |
BHP BHP Group | 0% | -29% | 0.0% | BHP is unusual here because the scenario fair value rises to $22.74 from $21.37 even as the stock remains deeply above both, with current price $54.12 still 58.0% above scenario fair value; that reflects a medium-term reconstruction tailwind for copper and steel inputs partly offsetting the initial global growth scare. The path is still weak in listed markets, with price targets of $40.93 at 6 months and $38.32 at 12 months before $34.56 at 24 months, because BHP trades more on iron ore and China-linked commodity sentiment than on direct U.S. rebuild exposure. The historical analogue is post-disaster materials demand periods when metals improved after the initial risk-off phase, but not immediately. |
 AAPL Apple | 29% | -43% | -12.5% | Apple's scenario fair value slips to $53.07 from $54.96, leaving it 79.6% below the current $260.48, as a localized demand disruption and higher ERP hit a stock already on 34.4x P/E and a 2.6% FCF yield. The 12-month target falls to $148.33, with $182.69 at 6 months and $116.46 at 24 months, indicating the transmission is mainly multiple compression plus some delayed upgrades and retail traffic rather than major franchise damage; Hurricane Sandy-style retail disruption combined with premium-tech derating is the relevant analogue. Services resilience and ecosystem stickiness should buffer earnings versus more cyclical hardware names, but not enough to defend the current premium multiple. |
 AMZN Amazon | 5% | -28% | -1.4% | AMZN shows one of the larger scenario resets: fair value drops to $114.58 from $144.29, or 51.9% below the current $238.38, as WACC rises to 11.0% from 10.5% and reverse expectations embedded in the DCF come down materially. The scenario cuts the implied growth requirement to 9.4% from 14.0%, while 6-month and 12-month targets of $188.33 and $172.19 reflect a mix of Northeast logistics friction, higher fulfillment costs, and premium-multiple compression, partially offset by AWS and emergency-demand resilience. The relevant analogue is a blend of severe weather retail/logistics disruption and large-cap tech derating, where the stock rerates faster than normalized earnings power. |
 CBA Commonwealth Bank of Australia | 8% | -35% | -2.8% | CBA has limited direct NYC exposure, so the move is mostly a valuation/funding-spread spillover: scenario fair value edges down to $60.89 from $61.53, still 66.9% below the current $183.83. The 6-month and 12-month targets of $140.93 and $119.29 suggest some derating from a rich 30.0x P/E, but the damage should be milder than for global cyclicals because the transmission channel is mainly wholesale funding spreads and risk sentiment, not credit losses; the historical analogue is offshore high-quality banks in global risk-off periods. Strong capital, deposit franchise, and limited catastrophe linkage should support relative performance even if absolute valuation remains stretched. |
FIG Figma, Inc. | 0% | -10% | 0.0% | FIG is primarily an equity-duration story here: scenario fair value falls to $15.43 from $16.40, 15.0% below the current $18.16, as WACC rises to 9.3% from 8.8% and investors compress high-growth software multiples in a risk-off tape. The 12-month target of $16.27, near the 6-month $16.24, suggests limited fundamental damage but a lower exit multiple, consistent with the 2022 software de-rating and post-IPO air-pocket analogue; NYC customer concentration in media, finance, and agencies adds some seat-expansion and deal-timing risk. Positive 23.3% FCF margin and 136% net dollar retention cushion the downside, but negative GAAP margins and post-IPO sentiment amplify valuation sensitivity. |
| Portfolio total | 100% | -25.5% | Weighted scenario impact |
BTC
Bitcoin
The scenario primarily hits BTC through a higher equity risk premium, temporary NYC market-structure disruption, and forced deleveraging rather than any direct earnings effect, taking the 6-month target to $58,177 and the 12-month target to $63,853 versus $70,948 today before a 24-month rebound to $76,624. The scenario WACC rises to 10.8% from 10.3%, and the setup is most comparable to the March 2020 cross-asset liquidity shock, when BTC sold off sharply in the initial risk-off phase before recovering as liquidity normalized and the macro narrative improved. With no cash-flow anchor and heavy dependence on marginal institutional flows, the near-term move is about multiple/risk-premium compression in a speculative asset rather than fundamental impairment.
ETH
Ethereum
ETH is likely to underperform BTC in this shock because the transmission is not just risk-off, but also lower expected on-chain activity, weaker DeFi/token issuance, and compression of long-duration network-asset valuations; that drives targets of $1,710 at 6 months and $1,886 at 12 months versus $2,193 currently, with only a modest 24-month recovery to $2,302. Scenario WACC increases to 10.9% from 10.3%, and the historical analogue is the 2022 crypto tightening/risk-off period when ETH lagged as liquidity and ecosystem activity softened. The key differentiator versus BTC is that ETH's usage-sensitive fee and burn narrative is more exposed to a pullback in speculative participation.
XRP
XRP
XRP should weaken mainly through a risk-off hit to higher-beta utility-narrative crypto and a delay in institutional adoption workflows, not through direct network impairment, pulling the 6-month target to $1.06 and the 12-month target to $1.17 from $1.33 today before a 24-month recovery to $1.41. Scenario WACC rises to 10.9% from 10.3%, and the best analogue is the 2022 altcoin drawdown pattern, though improved legal clarity and regulated access should cushion downside relative to prior cycles. The market is unlikely to reward the payments-use-case narrative during an acute financial continuity shock centered on NYC.
NVDA
NVIDIA Corporation
The most important takeaway is valuation compression: scenario fair value falls to $105.19 from a base $113.32, 44.2% below the current $188.63, as WACC rises to 9.6% from 9.0% and the stock's 38.5x P/E and 2.1% FCF yield leave it exposed to even a modest ERP shock. The 12-month scenario target of $140.58 and 24-month target of $137.33 imply that most of the damage comes from a multiple reset rather than a major earnings cut, consistent with the 2022 high-multiple tech derating and 2025 tariff-fear selloff analogue. Temporary NYC customer disruption may delay some deployments, but net cash, 65.5% operating margin, and strong AI demand visibility limit fundamental damage.
BHP
BHP Group
BHP is unusual here because the scenario fair value rises to $22.74 from $21.37 even as the stock remains deeply above both, with current price $54.12 still 58.0% above scenario fair value; that reflects a medium-term reconstruction tailwind for copper and steel inputs partly offsetting the initial global growth scare. The path is still weak in listed markets, with price targets of $40.93 at 6 months and $38.32 at 12 months before $34.56 at 24 months, because BHP trades more on iron ore and China-linked commodity sentiment than on direct U.S. rebuild exposure. The historical analogue is post-disaster materials demand periods when metals improved after the initial risk-off phase, but not immediately.
AAPL
Apple
Apple's scenario fair value slips to $53.07 from $54.96, leaving it 79.6% below the current $260.48, as a localized demand disruption and higher ERP hit a stock already on 34.4x P/E and a 2.6% FCF yield. The 12-month target falls to $148.33, with $182.69 at 6 months and $116.46 at 24 months, indicating the transmission is mainly multiple compression plus some delayed upgrades and retail traffic rather than major franchise damage; Hurricane Sandy-style retail disruption combined with premium-tech derating is the relevant analogue. Services resilience and ecosystem stickiness should buffer earnings versus more cyclical hardware names, but not enough to defend the current premium multiple.
AMZN
Amazon
AMZN shows one of the larger scenario resets: fair value drops to $114.58 from $144.29, or 51.9% below the current $238.38, as WACC rises to 11.0% from 10.5% and reverse expectations embedded in the DCF come down materially. The scenario cuts the implied growth requirement to 9.4% from 14.0%, while 6-month and 12-month targets of $188.33 and $172.19 reflect a mix of Northeast logistics friction, higher fulfillment costs, and premium-multiple compression, partially offset by AWS and emergency-demand resilience. The relevant analogue is a blend of severe weather retail/logistics disruption and large-cap tech derating, where the stock rerates faster than normalized earnings power.
CBA
Commonwealth Bank of Australia
CBA has limited direct NYC exposure, so the move is mostly a valuation/funding-spread spillover: scenario fair value edges down to $60.89 from $61.53, still 66.9% below the current $183.83. The 6-month and 12-month targets of $140.93 and $119.29 suggest some derating from a rich 30.0x P/E, but the damage should be milder than for global cyclicals because the transmission channel is mainly wholesale funding spreads and risk sentiment, not credit losses; the historical analogue is offshore high-quality banks in global risk-off periods. Strong capital, deposit franchise, and limited catastrophe linkage should support relative performance even if absolute valuation remains stretched.
FIG
Figma, Inc.
FIG is primarily an equity-duration story here: scenario fair value falls to $15.43 from $16.40, 15.0% below the current $18.16, as WACC rises to 9.3% from 8.8% and investors compress high-growth software multiples in a risk-off tape. The 12-month target of $16.27, near the 6-month $16.24, suggests limited fundamental damage but a lower exit multiple, consistent with the 2022 software de-rating and post-IPO air-pocket analogue; NYC customer concentration in media, finance, and agencies adds some seat-expansion and deal-timing risk. Positive 23.3% FCF margin and 136% net dollar retention cushion the downside, but negative GAAP margins and post-IPO sentiment amplify valuation sensitivity.
Weighted portfolio impact
-25.5%
Illustrative example only. Actual portfolio impacts depend on specific holdings, timing, and scenario severity.
Example analysis
How Key Holdings Are Affected
Asset-level scenario impact for holdings in this analysis
AAPL
Apple Inc.
Apple is pressured mostly by multiple compression and softer near-term upgrade demand rather than deep franchise impairment. Retail disruption and premium consumer hesitation matter, but services and ecosystem stickiness provide some offset.
Key drivers
- •premium valuation
- •delayed device upgrades
- •retail and regional demand disruption
What investors would watch
NVDA
NVIDIA Corporation
NVIDIA is highly sensitive to a rise in discount rates because much of the scenario damage comes through valuation reset rather than a collapse in AI demand. Strong margins and net cash help, but a rich multiple leaves the stock exposed.
Key drivers
- •multiple compression
- •higher cost of capital
- •temporary customer deployment delays
What investors would watch
AMZN
Amazon.com, Inc.
Amazon faces a mix of logistics friction, fulfillment cost pressure, and large-cap tech derating. AWS and essential-demand categories offer resilience, but the stock remains vulnerable to a reset in growth expectations.
Key drivers
- •Northeast logistics disruption
- •higher fulfillment costs
- •DCF multiple reset
What investors would watch
CBA
Commonwealth Bank of Australia
CBA has limited direct exposure to New York City, so most of the downside comes from funding-spread spillover and global risk sentiment. Its quality profile may help relative performance, even if valuation still compresses.
Key drivers
- •wholesale funding spreads
- •global risk-off sentiment
- •rich starting valuation
What investors would watch
BTC
Bitcoin
Bitcoin is affected primarily as a speculative risk asset, with forced deleveraging and a higher equity risk premium outweighing any direct economic linkage to the storm. The near-term move is driven more by liquidity and positioning than fundamentals.
Key drivers
- •deleveraging
- •institutional risk aversion
- •cross-asset liquidity shock
What investors would watch
BHP
BHP Group
BHP may eventually benefit from reconstruction-related demand for industrial materials, but listed-market performance can still weaken first as investors focus on global growth risks and commodity sentiment. The timing mismatch is important.
Key drivers
- •commodity sentiment
- •China and iron ore sensitivity
- •longer-term rebuild demand
What investors would watch
Assets to watch
Winners & Losers
Which asset types and sectors tend to benefit or suffer
Potentially more exposed
High-multiple technology
These stocks are especially sensitive to rising discount rates and equity risk premia, making valuation compression the main source of downside.
High sensitivityCrypto and speculative growth assets
Liquidity stress, deleveraging, and weaker risk appetite typically hit non-cash-flow assets hard in the initial phase of a shock.
High sensitivityConsumer discretionary and logistics-sensitive names
Regional disruption, weaker foot traffic, and higher fulfillment or operating costs can pressure near-term earnings and sentiment.
Medium sensitivityPotentially more resilient
Strong balance-sheet franchises
Companies with net cash, sticky demand, and durable margins may still fall, but often better withstand temporary disruption.
Low sensitivityEssential platforms and recurring-revenue software
Subscription and utility-like usage can soften the fundamental hit compared with more cyclical or speculative exposures.
Low sensitivityReconstruction-linked materials over time
Materials and industrial inputs can see support later as rebuild spending emerges, though the immediate market reaction may still be negative.
Medium sensitivityRun the full analysis on your own portfolio
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“A Category 5 hurricane makes direct landfall on New York City”
FAQ
Frequently asked questions
Common questions about portfolio scenario analysis and what this stress test reveals.
Because New York City is a major financial, commercial, and market infrastructure hub, a severe disruption can raise risk premia globally. In many cases, the first effect is not direct earnings damage but a repricing of valuation multiples, liquidity, and investor sentiment across markets.
Many large technology names trade on high valuations that assume durable growth and low discount rates. When a shock pushes up the cost of capital, those future cash flows are worth less today, leading to a disproportionate multiple reset even if long-term business quality remains intact.
Crypto often trades as a liquidity- and sentiment-sensitive asset class. In a broad market shock, forced deleveraging, lower speculative participation, and reduced institutional risk appetite can drive sharp downside regardless of direct operational impact.
Yes, but timing matters. Reconstruction-related demand can eventually help materials, infrastructure-linked suppliers, and selected industrial exposures, though these assets may still decline in the initial risk-off phase before fundamentals improve.
Not necessarily. This analysis focuses on a 12-month market impact under specific assumptions, and much of the downside comes from temporary repricing rather than permanent impairment. Actual outcomes depend on recovery speed, policy response, and how individual holdings are positioned.
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Disclaimer: This page is for educational and informational purposes only. All scenario analyses are hypothetical and do not constitute investment advice, financial recommendations, or predictions of future market performance. The content presented represents one possible interpretation of how markets and portfolios might respond to the described scenario. Actual outcomes would depend on numerous factors not fully captured in any model. Always consult a qualified financial advisor before making investment decisions.