Bulldozing the competition
A trillion-dollar opportunity
Good morning, tin knockers and mud slingers. This is your Stock Market Rundown for August 11th, 2023. Thanks for being here with me. Let’s dive in:
TODAY’S TOP STORY: CRAWLING TO THE TOP 🚜
If your job involves loading, hauling, digging, or dozing, you know the Caterpillar brand. Personally, I’m terrified of power tools, but for guys who actually know how to swing a hammer, machinery bearing Caterpillar’s trademark “highway yellow” paint is industry standard.
Because it’s so pivotal to infrastructure, Caterpillar is a bellwether for the global economy. So it was “all systems go” when the company’s recent Q2 report produced a big earnings beat amid resilient demand, sending the stock to record highs.
And the spending wasn’t just from the hard hat set—the consumer segment grew too, as suburban dads snapped up riding lawnmowers. Gotta keep that grass looking greener than the neighbours’.
Caterpillar was born in 1904 when Benjamin Holt replaced the rear wheels of a steam tractor with a pair of tracks. A company employee exclaimed that the machine crawled “like a monster caterpillar,” and the name stuck. Cute.
Why are investors so keen on Caterpillar today? Headlines about collapsing bridges are a clue. The US urgently needs to fix its crumbling roads, railways, and bridges, and some of the federal government’s $1 trillion bipartisan infrastructure bill is sure to flow into yellow iron. “Trillion” has such a nice ring to it, doesn’t it?
SO WHAT ELSE IS GOING ON?
Meta (formerly known as Facebook) is blocking news for Canadian users in response to extortionate legislation. Sounds like residents of America’s Hat are going to have to go without the latest mainstream-media puff piece on how Justin Trudeau gets his hair so shiny.
Thanks to federal backing of student loans, US colleges have been on a multi-decade spending spree, jacking up tuition so fat-cat administrators can build empires. There’s no bandaid for this; the entire higher education system needs to be bombed to a glassy sheen.
Not fun: Hyundai and Kia are recalling electric vehicles because some technology they added to improve fuel economy occasionally makes the cars burst into flames. I guess you’re not burning much fossil fuels if your car is a smoldering wreck in a ditch.
Twitter’s CEO Linda Yaccarino is lobbying big brands like Coca Cola and Visa, begging them to advertise on the beleaguered platform. Wow, blue-chip corporations don’t want their ads to be served in between videos of teen fistfights and Elon Musk tweeting fart jokes? Inexplicable.
And that’s it for another week. Put your feet up this weekend—you’ve earned it—and I’ll see you Monday. Yours in capitalism, The Axe