In July, cash as a percentage of total assets for S&P 500 companies fell to 8.8%, the lowest level since 2009. This represents a 4-point decline over the past 4 years from near multi-decade highs and is approaching the 8.0% low seen during the 2008 Financial Crisis. đ
đč Implications:
- Limited Future Returns: With most excess cash spent, future dividends and share buybacks might be constrained. đ”
- Shift in Strategy: Companies could focus on rebuilding cash reserves, potentially reducing capital returned to shareholders. đ
Will record stock buybacks face a slowdown? Stay tuned as we monitor this critical development.