Global Heatwaves Stoke Demand for Cooling Systems: Rising Temperatures Create Urgent Need for Hydration and Power Supply -

Global Heatwaves Stoke Demand for Cooling Systems: Rising Temperatures Create Urgent Need for Hydration and Power Supply

July 19, 2023

As the world experiences an onslaught of intense heatwaves and temperature domes, extreme heat records are being set globally. Phoenix recently observed its 19th consecutive day of temperatures reaching 110 degrees Fahrenheit, while Rome experienced its highest ever recorded temperature. Weather extremes are also being reported across parts of Asia, the Middle East, and North Africa. Authorities have issued weather alerts and health warnings, advising people to stay in cool, indoor locations and to hydrate frequently even if they’re not thirsty.

America’s Sizzling Situation

About 58 million individuals in the United States are forecasted to endure triple-digit temperatures this week, with approximately 100 million people under heat advisories. Despite daily temperature records being shattered in parts of Northern states, the Southwest and Deep South regions are faring significantly worse. A bulletin from the National Weather Service emphasized the gravity of the situation, urging individuals to take the heat seriously, minimize time outdoors, and stay properly hydrated. The Service reminded the public that “heat is the top weather-related killer in the U.S.”

Economic and Agricultural Impact

With power grid demand near record peaks, industry leaders are exploring the energy market and potential incentives for increased power generation. The extreme weather has also raised concerns over agriculture and farming, with an increase in water consumption necessary to cool livestock and hydrate parched land and crops. Some regions are experiencing negative impacts on tourism, with businesses forced to adjust operating hours. Additionally, these scorching temperatures could lead to an early start and an extended duration of the wildfire season.

The Impact on Stocks

In the business world, air conditioning companies such as Carrier Global (NYSE:CARR) have seen a notable rise in their stock prices. Over the past month, Carrier Global’s shares have soared by 17%, considerably higher than the 4% gain of the benchmark S&P 500. Other stocks in the sector that are heating up include AAON (AAON), Comfort Systems USA (FIX), Lennox International (LII), and Watsco (WSO). The threat of potential blackouts has spurred demand for backup power, resulting in a 15% increase in Generac (NYSE:GNRC) shares in just a month. Looking at the bigger picture, generator suppliers like Caterpillar (CAT) and Cummins (CMI) have seen their stock prices rise by 30% and 50%, respectively, since last summer.

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