Here Are the Two Biggest Headwinds Hitting Stocks, as Global Stocks Fall

Credit: The Street
Published on October 23, 2019 - Duration: 01:29s

Here Are the Two Biggest Headwinds Hitting Stocks, as Global Stocks Fall

The global stock market was handed two big blows Wednesday.

Of course, when stocks around the globe sell-off in tandem, it's because investors perceive a high degree of macroeconomic risk.

But there are specific factors causing that fear Wednesday.

The S&P 500 fell as much as 0.36%, with the other two major U.S. indexes falling as well.

The Euro Stoxx 600 also fell 0.3%.

Here's what the big factors are: Caterpillar Missed Estimates Caterpillar , the machinery and equipment behemoth often seen as a global economic bellwether, missed revenue and earnings per share estimates by a wide margin.

Revenue for the quarter came in at $12.75 billion, against Wall Street's estimates of $13.57 billion.

EPS was $2.66, missing analysts forecast of $2.88.

Looking forward, things don't get better.

Management lowered its full year EPS guidance to a range between $10.59 and $11.09 from a previous range of $12.06 to $13.06.

Management cited lower sales volumes as equipment dealers scale back inventories ahead of what they see as weakening demand.

Recently, industrial output globally has seen periodic hits to demand, as the trade war between the U.S. and China has begun to leak into the broader economic picture, not just companies directly impacted.

The broader market now fears falling demand across the board.

Brexit Is Delayed A Brexit agreement, which investors thought they were getting just a few days ago, has been delayed.

British lawmakers have rejected Boris Johnson's speedy timetable for necessary laws for the U.K. to exit the European Union.

The EU will now rule on a Brexit extension.

This is undoubtedly bad news for EU investors, but U.S. investors have said for years now that Brexit does pose some risk to U.S. stocks.

Caterpillar is a holding in Jim Cramer's Action Alerts PLUS member club.

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