New Energy Weekly – It’s Hot
News Flash, It’s Hot
It was a busy week, with the global heat wave dominating the news. Fires in Canada continue to create beautiful sunsets and dirty skies in the Northeast. Wildfires in Greece sent tourists fleeing to boats on Rhodes. And according to Reuters, the temperature in a town in northwestern China hit 126 degrees. That set a new record for the country.
In fact, scientists say we will set an all-time global record for the hottest month ever recorded.
It’s not just a hot summer. Bonds are also on fire. The yields on U.S. Treasuries and Canadian government bonds continue to run higher. That put pressure on commodity prices. Miners fell 1.8% on Thursday July 27th.
Real estate stocks fell 2.3% as well. These are companies that are sensitive to changes in currencies. Weaker dollar, these stocks rise. Stronger dollar, they fall.
And as interest rates rise, it attracts investors to buy, which creates stronger dollars (both Canadian and U.S.).
This occurred even though Wednesday’s interest rate hike by the Federal Reserve was well known and priced in. It will be interesting to see if there is another hike this year. While inflation isn’t down to its target rate of 2%, changes to the economy happen slowly. It moves like a tanker, not a jet ski. So, changes (like rate hikes) should slow down now.
That’s good because I want to focus on keeping cool right now. Stay hydrated and have a great weekend.