CNBC's Jim Cramer said Tuesday that a recent downgrade in Cummins Inc.'s stock could signal a recession in trucks.
"Take a look at the stock from where it's coming and where it's going,"
Cramer said on "Squawk on the Street."
Cummins' stock
(CMI) was downgraded to "underperform" by Bank of America Merrill Lynch on Tuesday, citing lackluster earnings moving forward and a slowdown in the Chinese economy, CNBC reported.
"If you own Cummins, what they're saying is this is a recession in trucks," Cramer said.
"These guys are the best there is and, if the best there is is having trouble, you can only imagine what's going on."
Shares of the engine maker have declined about 35 percent this year and were down more than 7 percent near midday Tuesday.
To be sure, others have voiced concerns about an economic slowdown in trucking.
U.S. shipments as measured by the latest Cass Freight Index dropped 5.3 percent last month from a year ago, making it the worst October since 2011,
Bloomberg reported.
The year-over-year decline was the eighth straight and the biggest since November 2009. Trucks transport almost 70 percent of the nation's freight by weight, according to American Trucking Associations.
Railroads are also having a rough go of it, with combined carload and intermodal originations down 4.3 percent in October from the same period last year, Association of American Railroads data show. Shipments of products by road, rail and water are considered barometers of the economy's current progress, and the latest data indicate a chill has set in.
"Expect freight to continue to trail off through year's end," Rosalyn Wilson, an analyst at Parsons Corp., wrote in the latest Cass Freight release. "Retailers and wholesalers have ample supply for the holiday season, so imports and freight shipments should not strengthen considerably."
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