Key Takeaways
- Caterpillar shares hit a record high Thursday and are up more than 30% this year.
- Reports of fresh Chinese stimulus measures drove a broad market rally.
- Caterpillar stands to benefit from a rebound in China’s housing market, which has struggled in recent years.
Caterpillar (CAT) shares rose more than 3% to a record high Thursday as reports of fresh Chinese stimulus efforts drove a wider market rally.
The Chinese government said Thursday that it would institute “necessary fiscal expenditures” and stabilize the country’s struggling real estate sector, according to the state-run Xinhua News Agency. Bloomberg also reported that Beijing is planning to inject around $140 billion into its largest state lenders to prop up the economy.
Caterpillar shares had advanced 4% Tuesday as China laid out a massive monetary stimulus package to boost the economy.
Caterpillar Likely Would Benefit From Rebound in Chinese Housing Market
Caterpillar stands to benefit from expansion in China’s housing market. The construction equipment company is considered a bellwether stock as a proxy for domestic and global economic expansion or contraction.
Shares of Caterpillar recently were 3.2% higher at $390.49 after earlier hitting record $397.22. The stock is up about 32% year-to-date.
Last month, the company reported second lower second-quarter revenue than analysts had anticipated but slightly better-than-expected profit.