DE - Why Caterpillar and Deere Outpaced the Market on Tuesday
2023-06-13 16:01:26 ET
Shares of heavy machinery makers Caterpillar (NYSE: CAT) and Deere & Company (NYSE: DE) were up 3.2% and 3.0%, respectively, as of 3:44 p.m. ET Tuesday versus the S&P 500 's (SNPINDEX: ^GSPC) more modest gain of only 0.65%. While no company-specific news surfaced for either name, the economic backdrop increasingly favors both stocks.
It's complicated, sort of.
While farming equipment outfit Deere and mining/construction equipment company Caterpillar are both sensitive to economic strength or weakness, both are also subject to other factors. Chief among these factors is the price of the materials needed to build their wares -- steel, namely. High steel prices can undermine results that would otherwise be robust due to economic strength. Conversely, low steel prices can salvage weak results stemming from a tepid economy.
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Why Caterpillar and Deere Outpaced the Market on Tuesday