China, according to CAT, has continued to be weak…FXI. CAT went on to say that their finished inventory could have been lower if China was not slowing so fast. In the communist Chinese 5yr plan, they propose to accelerate some infrastructure spending and this has been compounded by monetary policy easing, anf for these reasons CAT expects a little bit of a pick-up here in the fourth quarter. “The sentiment on the ground from the dealers is a bit better, but in terms of translating it into sales, I’d say it hasn’t happened yet, so the selling season is sort of mid-February on, so probably not going to see much till then.” Mike DeWalt –Director of CAT IR
CAT CEO Douglas R. Oberhelman commented, “Well, we’ve had the easing expected to open almost all year. We are seeing increased levels of building permitting this year over last year. We’ve also seen in the last six weeks or so have major infrastructure effort announced. I suspect all of that is aimed after Presidential – leadership transition and most of that’s aimed towards spring of next year which is kind of a confluence of when is it around Chinese New Year, but if it happens it is going to happen then if it doesn’t we are in for another kind of slow year in 2013. But right now the cards in the hand are looking better than they have for a while. But I would emphasize nothing concrete from (water’s edge) yet.”
The muddling along thesis seems to be playing out, for CAT and XLI have been flat to lower. Oberhelman said, “We’re not expecting rapid growth, and we’re not predicting a global recession.” However, there is also the fiscal cliff and Europe to worry about
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