Last week Caterpillar upgraded its 2018 profit outlook as it now expects its full-year profit to range between $9.75 USD to $10.75 USD per share.
The 2018 outlook did not come with any risk from the potential impact of a trade war with China. This risk was earlier highlighted by the company in its annual report where it said that if national interests (i.e. domestic business) were put above everything else then its sales could suffer, especially because more than half of its sales come from outside the U.S.
Despite the strong outlook, when the average U.S. interest rate on a savings account is now touching 1.5%, it does not make sense for investors to take on so much additional risk of equities and earn a yield that will only be slightly higher at 2%, which Caterpillar currently offers. The S&P 500 dividend yield and the 2-year Treasury yield has also converged recently, giving investors less motivation to continue hunting for a good yield in equities.
Other stocks that moved in the list were Air Products & Chemicals and Enbridge. The former debuted on the list at the 100th position, while the latter stumbled down 5 spots and now sits at the 75th position. Phillips 66 moved up a spot on the back of a strong rally that oil saw last week.
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