CROSS-SECTORSECTOR COMMENT 5 AUGUST 2015ANALYST CONTACTSBenjamin S. Garber 212-553-4732 Asst Dir-Economist benjamin.garber@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Market CommentOne Company Mirrors the Worldwide Economic Slowdown Diminished global growth prospects stem from the fading dynamism of major emerging market countries, a trend that is manifest in the collapse of commodity prices. One major industrial firm sits amid the epicenter of this malaise Caterpillar, Inc. (CAT), the Peoria, Illinois based manufacturer of engines and equipment for construction and mining. With sales declining for three consecutive years, CAT is rooted in the industries facing the highest risk of credit default. Such weaknesses in the mining and energy sectors also inhibit inflation, which in turn keeps the lid on interest rates.MOODY'S ANALYTICS CROSS-SECTOR2 5 AUGUST 2015 MARKET COMMENT : ONE COMPANY MIRRORS THE WORLDWIDE ECONOMIC SLOWDOWNSlumping global growth has sapped industrial output The ongoing slowdown in Chinese economic activity is a leading cause of restrained global output growth, following the initial burst of activity after the financial crisis. Actual and projected figures from the IMF see Chinese real growth slowing from 10.4% in 2010 to the 25-year low of 6.8% in 2015. That tracks with a decline in global growth of 5.4% in 2010 to 3.3% in 2015, marking the fourth consecutive year of growth under 3.5%. With Chinas construction boom leveling off and demand for natural resources falling, the negative effects on global industrial business results are substantial.Slowing manufacturing and construction activity in China and the world in general in recent years lines right up with the challenges facing CAT. In 2013, the company saw revenue declines in its mining, construction, and energy segments from which it has yet...
