Companies Have Record Amounts of Cash and They Are Finally Ready to Spend it
By Vincent Fernando, CFA
FROM BUSINESS INSIDER.COM
U.S. companies are holding record amounts of cash right now…and more interestingly their spending plans have changed dramatically since the beginning of the year.
Wall Street Journal:
The Federal Reserve reported Thursday, June 10, that nonfinancial companies had socked away
$1.84 trillion in cash and other liquid assets as of the end of March, up 26% from a year earlier
and the largest-ever increase in records going back to 1952. Cash made up about 7% of all company assets, including factories and financial investments, the highest level since 1963.
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In a recent survey of company chief financial officers that Dukes’s Mr. Fraham conducted with CFO Magazine, he found that companies expect capital spending to increase 9% over the next year, compared with 1.5% when he asked the question in December. They expect employment to grow by 0.07%, compared with the 1.4% drop they expected six months ago.
This statistic is surprising. The recovery isn’t simply going as planned for these companies, its proceeding ahead of expectations, despite all the negativity we’ve been hit with over the last two months.
