Here Are the Two Biggest Headwinds Stocks Are Facing, as Global Stocks Rebound

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The global stock market was handed two big blows early Wednesday. 

Of course, when several markets 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. Even still, investors ultimately shook off those fears

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%. By early afternoon, all three major U.S. indexes were up slightly, with the S&P 500 up 0.16%. The Euro Stoxx 600 then rose 0.15%.

Here's what the big factors are:

Caterpillar Missed Estimates

Caterpillar (CAT) - Get Report , 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 continues to fear falling demand across the board. While the the broader market rebounded, Caterpillar shares remained in the red, down 0.36% to $133.21 apiece. 

Marginally aiding the market's rebound was Boeing's (BA) - Get Report  up move. The stock rose 1.28% to $341 a share. Boeing, another highly cyclical mega-cap industrial, missed earnings estimates, but said it thinks one regulator will approve of the 737 Max aircraft before 2020. 

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. Want to be alerted before Jim Cramer buys or sells CAT? Learn more now.

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