Caterpillar (NYSE:CAT) stock was up 1.26% in early afternoon trading on March 11. Shares have climbed 2.1% over the past month. The stock was boosted by comments the company made back in late February that eased investor anxiety.
Caterpillar said in February that trade issues between the United States and China would not have an impact on its business in the latter going forward. The company said that the current spat was not having a meaningful impact on sales in the country. It also said that the pace of equipment replacement was back at normal levels in China.
Caterpillar took a hit later that month after the Swiss-based UBS group downgraded its stock to a "sell" and warned about the impacts slowing global growth would have on the company. The investment bank is forecasting an 8% decline in earnings per share in 2020 largely due to headwinds in construction and the oil and gas sector.
China’s growth has slowed, which comes as no surprise as it has looked to clamp down on credit after the 2015 stock market scare. Some economists and analysts are dismissing this as a transition into a "mature" economy, but there is justifiable concern over how this will impact companies that rely on rapid Chinese growth.
Caterpillar stock boated an RSI of 46 as of this writing, which puts it in neutral territory as we approach the midway point in March. The stock offers some interest for those looking to buy the rumour of a forthcoming US-China trade deal, but in the medium-to-long term Caterpillar does not offer enough of a discount to buy today.
