Caterpillar (NYSE:CAT) stock has spiked 6.33% over the past week as of close on April 2. Shares have climbed 10.3% in 2019 so far.
The stock price received a boost from some positive manufacturing data in China, and it sounds like more good news is on the way.
The Chinese manufacturing sector returned to growth in March for the first time in four months. U.S. manufacturing numbers also blew past estimates in March, which sparked a rally for North American indexes to start the week.
Investor sentiment has largely hinged on the ongoing negotiations between the two largest economies on the planet. Recent reports indicate that a U.S.-China deal is close, with U.S. Chamber of Commerce Executive Myron Brilliant stating that the deal is "90% done".
Caterpillar will continue to rely on Chinese business as we move into the next decade. China’s ambitious Belt and Road Initiative (BRI) will rack up a bill in the hundreds of billions, and companies like Caterpillar are well-positioned to capitalize as its equipment is in high demand.
The company’s fourth-quarter results for 2018 missed estimates, but Caterpillar reiterated its confidence in growth back in February. It said that the pace of equipment sales in China had grown back to normal levels.
Caterpillar is set to release its first-quarter results for 2019 in late April.
There are still concerns for Caterpillar’s growth heading into the next decade, but a U.S.-China deal would be good news for the stock in the near term.
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