Key Takeaways
Caterpillar shares hit a record high on Thursday and are up more than 30% this year, led by reports of new stimulus measures from China, which has led to a broader market rally. Caterpillar is positioned to benefit from a recovery in China’s housing market, which has struggled in recent years.
Shares of Caterpillar (CAT) rose more than 3% to a record high on Thursday, as reports of new stimulus measures from China led the broader market higher.
The Chinese government said on Thursday it would carry out “necessary fiscal spending” to stabilize the struggling real estate sector, state-run Xinhua News Agency reported. Bloomberg also reported that the Chinese government plans to inject about $140 billion into the country’s largest state-owned financial institutions to support the economy.
Caterpillar stock rose 4% on Tuesday as China rolled out a massive financial stimulus package to boost its economy.
Caterpillar likely to benefit from recovery in China’s housing market
Caterpillar is positioned to benefit from China’s expanding housing market, and the construction-machinery company is seen as a bellwether stock for indicators of domestic and global economic expansion or contraction.
Caterpillar shares recently rose 3.2% to $390.49 after hitting an all-time high of $397.22. The stock is up about 32% this year.
The company said last month that its second-quarter revenue was two times lower than analysts had expected, but that profits were slightly better than expected.
