US industrials tracked by Global PMI and copper prices. Caterpillar and Deere are the world's best PMI proxies — their earnings move almost directly with global manufacturing activity.
Caterpillar's earnings correlate so strongly with Global PMI that many investors use CAT as a liquid proxy for global industrial activity. When PMI rises above 54, CAT typically delivers exceptional returns — the 2020-2022 cycle saw a +234% return from the March 2020 trough. At PMI 51.4, CAT is in neutral territory.
John Deere is driven by two cycles simultaneously: agricultural commodity prices (which drive farm income and equipment purchases) and infrastructure spending (which drives construction equipment demand). The company's transition to precision agriculture technology adds a structural growth element beyond the pure cycle.
Nucor is the largest US steel producer and is driven by domestic steel demand — particularly from construction and automotive. The US CHIPS Act and infrastructure spending provide a multi-year demand tailwind for domestic steel beyond the pure PMI cycle.
For informational purposes only. Not financial advice. See disclaimer.