Today, the major stock indexes are selling off after President Trump stated that he is in no rush to sign a China trade deal. This puts the December tariffs back in play and this is likely what the market is panicking about. Higher tariffs at this stage of the game would probably hurt the global economy and this is one reason why the market are declining.

One stock that has been a barometer for any type of trade deal between the U.S. and China has been Caterpillar Inc (NYSE:CAT). This stock actually rallied on the back of terrible earnings on October 24th, 2019 after announcing that revenue fell 5.6% yr/yr to $12.76 billion. When a stock rallies on the back of bad news it is usually it is because the market expects things to get better for the company. This afternoon, CAT stock is declining lower by 2.46% to $139.46 a share. This decline comes as the odds of a ‘Phase One’ trade deal decline after President Trump’s comments. CAT stock is still trading above its’ important 50-day moving average which is around the $136.00 area. A break below that key level could signal more trouble on the horizon for the stock and ultimately the major market indexes. There is also more daily chart support around the $132.00 level which is where the 200-day moving average is currently. This key support level would really signal that a bigger decline is in the cards for the markets and CAT stock.

The bottom line, CAT stock is really a good stock to follow for a possible trade deal with China. This company is global and has been a very good tell when things are going good and bad between China and the United States. Keep it on the radar and watch what it tells you in the future.