STLD - Why Industrial Stocks Caterpillar Johnson Controls and Steel Dynamics Got Smoked Today
2023-04-04 14:16:42 ET
Shares of industrial and materials stocks were getting hammered on Tuesday, with sector leaders Caterpillar (NYSE: CAT) , Johnson Controls (NYSE: JCI) , and Steel Dynamics (NASDAQ: STLD) all falling hard, down 5%, 4.5%, and 7.8%, respectively, as of 1:30 p.m. ET.
The across-the-board sell-off portends some sort of macroeconomic or market-based fear, and likely one that would increase the odds of a recession. All three companies are economically sensitive, with Caterpillar and Johnson Controls highly exposed to the level of construction spending, while Steel Dynamics also exposed to both construction and auto sales. So, all three would likely suffer in a recession brought about by the Federal Reserve's rapid interest rate increases.
Today, two data points indicated potentially difficult times ahead in the sector: a lower-than-expected Job Openings and Labor Turnover Survey (JOLTS) for February, as well as a massive decline in apartment building sales, as reported by CoStar Group .
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Why Industrial Stocks Caterpillar, Johnson Controls, and Steel Dynamics Got Smoked Today