El Nino Heat Wave Fuels HVAC Boom: Goldman Maps The Trade
The short version
- El Niño tends to raise temperatures and intensify weather extremes, worsening drought in some regions while amplifying heavy rainfall in others.
- Now comes the question of how to profit beyond the agri markets.
- " We highlight 42 global Buy-rated stocks exposed to HVAC and power reliability verticals that are positioned to benefit from rising cooling demand .
- We highlight analysis on El Niño and US drought conditions from our Commodities Research and Data Works/Retail teams," Singer said.
- Singer noted that HVAC demand rose to 114 million units in 2024, up 7% from a year earlier, while global HVAC demand per capita increased by 6% to 13.9 units per 1,000 people.
The story
We have already provided readers with plenty of color on El Niño (see here and here), a weather phenomenon that could pressure harvest yields and potentially reignite food inflation later this year. El Niño tends to raise temperatures and intensify weather extremes, worsening drought in some regions while amplifying heavy rainfall in others.
Now comes the question of how to profit beyond the agri markets. Goldman analysts led by Brian Singer penned a note for clients titled "Heat Waves Could Further Amplify HVAC Demand," in which they laid out dozens of stocks tied to HVAC and power-reliability verticals that stand to benefit as heat waves drive surging cooling demand worldwide.
"We highlight 42 global Buy-rated stocks exposed to HVAC and power reliability verticals that are positioned to benefit from rising cooling demand. We highlight analysis on El Niño and US drought conditions from our Commodities Research and Data Works/Retail teams," Singer said.
Singer noted that HVAC demand rose to 114 million units in 2024, up 7% from a year earlier, while global HVAC demand per capita increased by 6% to 13.9 units per 1,000 people.
Asia remains the largest residential HVAC market, accounting for about 60% of global demand, with Japan, Hong Kong/Macau, and Taiwan leading in market penetration.
Asia, Europe, India, and Bangladesh are set to be among the top markets driving global HVAC demand, given the hot, humid weather backdrop this year.
Singer explained that Europe has become a notable pool of HVAC demand because, even before the heat waves, Germany, the UK, and France were still well below the global average for AC adoption.
Power demand in Spain, France, Germany, and the UK set to rise if HVAC adoption increases.
Last week, Rory Green, TS Lombard's chief China economist, briefed clients on a weather note titled "Super El Niño: Famine Follows War?"
Green wrote in the note, "In general, El Niño raises temperatures and significantly exacerbates both drought and heavy rainfall. For global macro, it is an inflationary shock via the food price channel – a shock that will likely be compounded by existing war-related high fertilizer costs."
He said within his coverage, "India is the most exposed to both growth and inflation risks, supporting our underweight Indian assets. Brazil and Mexico, too, will receive an inflation impulse."
El Niño Impact Watch:
Singer provided clients with 42 Buy-rated global stocks exposed to HVAC and power reliability, including Carrier, Johnson Controls, Lennox, GE Vernova, Vistra, Quanta Services, Prysmian, Siemens Energy, Midea, Hitachi and Power Grid.
Professional subscribers can read more on El Niño here at our new Marketdesk.ai portal.
Related Markets
All MarketsMarket data may be delayed. Not financial advice.
How this story developed
Full timelineAlto has tracked this across 2 days of coverage from 1 outlet.
- El Nino Heat Wave Fuels HVAC Boom: Goldman Maps The Trade You are here
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The Story At A Glance
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- • El Niño weather patterns are driving a global surge in demand for HVAC units and power reliability infrastructure.
- • Goldman Sachs identified 42 global stocks positioned to profit from rising cooling needs and electrical grid upgrades.
- • Extreme weather is expected to trigger food inflation and increased energy consumption across Asia, Europe, and the Americas.
El Niño intensifies temperature extremes and disrupts agricultural yields through drought and heavy rainfall. This phenomenon creates a massive market opportunity for companies managing climate adaptation and energy distribution.
Christian Perspective
The disruption of food supplies through weather extremes serves as a reminder of our dependence on God's providence rather than globalist economic systems. We must view these inflationary shocks as potential threats to the stability of the family unit. Stewardship of resources becomes vital as natural cycles impact the basic necessities of life.
Implications
Rising energy and food costs place an undue burden on the traditional American family and the ability to build generational wealth. Dependence on global supply chains for essential cooling and heating makes the nation vulnerable to foreign instability. Protecting domestic energy independence is a moral necessity to ensure the survival of our way of life.
Broader Trends
The focus on global HVAC markets highlights the continued shift of economic power toward Asia and away from the West. This trend aligns with the broader demographic and economic replacement of Western dominance by foreign interests. Globalist financial institutions are actively profiting from the instability caused by these shifting environmental and geopolitical realities.
Takeaway
Prioritize local food security and domestic energy production to insulate the American household from global inflationary shocks. Invest in tangible assets and companies that strengthen national infrastructure rather than relying on volatile global markets. Maintain a focus on self-sufficiency and the preservation of the patriarchal household amidst economic uncertainty.
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