Companies are sitting on a record volume of hard cash amid lingering uncertainty about disruptions from Covid-19, defying anticipations previously this calendar year that a waning pandemic would unleash a expending spree.
Cash and limited-expression investments on company harmony sheets globally are at an all-time substantial of $6.84 trillion, according to facts from S&P Global, extrapolated from second-quarter earnings stories. That is 45% greater than the average in the five a long time previous the pandemic and a 2.6% increase from the former quarter.
In April, analysts at Goldman Sachs had lifted their 2021 forecast for investing development by S&P 500 firms to 19% from 10%, “as uncertainty proceeds to tumble and international economies continue on to reopen.”
But worldwide funds expenditures are anticipated to slow in the third quarter soon after a robust begin to the calendar year, in accordance to an Aug. 6 report by JPMorgan Chase & Co. Corporate investing advancement is forecast to decline to 5.8% this quarter at a seasonally altered yearly price, down from 12.9% in the preceding a person.
Firms have loved one of the strongest financial rebounds in historical past, pushed by a highly effective mix of fiscal and monetary stimulus. But now some indicators are flashing warning symptoms and prompting finance chiefs to create up their funds buffers once again.