A couple of weeks ago we noted how earth mover Caterpillar (CAT) had reported good earnings, but that it was almost entirely due to good sales overseas.
Asia is hot. North America is not.
Of course, a big exporter like Caterpillar loves a cheap dollar, but that’s quickly becoming a relic of the past. The euro continues to be a falling knife. And remember all the talk about China revaluing the yuan (upwards) from a month ago that was consuming the pundits? Yeah, where did that go? Gone. If anything, China seems to be devaluing the yuan, via purchases of eur.
So, keep a big eye on Caterpillar’s chart, which is still near its highs of the year. If trends continue, it’s hard to see it not feeling some pain.