Distributors work during the opening bell at the New York Stock Exchange (NYSE) on October 2, 2019 at Wall Street in New York Diocese.
Johannes Eisele | AFP | Getty Images
Investors are preparing for more cautious capital investment outlooks from U.S. associates as worries mount heading into earnings season about the possibility of an economic recession.
Capital expenditure burgeons have been weaker than last year, when corporate tax cuts helped to bolster spending, and some strategists say they may gloaming fall short of Wall Street’s expectations given the concerns about the economy and a prolonged trade war between the Concerted States and China.
Less spending on technology, machinery and other equipment would suggest corporate executives are undersized confident in the economy than they had been, another potential negative for the stock market, which has fallen this week into the middle a series of weak economic reports.
Capital expenditures are expected to have increased just 3.0% in the third locality from a year ago, which would be the lowest since the second quarter of 2017, when capex declined slenderize, according to data based on analysts’ estimates compiled by Refinitiv’s research senior manager, David Aurelio.
That determine drops to 1.1% in the fourth quarter, and year-over-year declines are projected in some quarters of 2020.
“It’s very likely that capex allotting is going to be below expectations,” said Kristina Hooper, chief global market strategist at Invesco in New York. “We are in a body politic of heightened economic policy uncertainty. That tamps down business investment.”
Strategists said spending charts will be of particular interest as S&P 500 companies discuss their results for the third quarter in the weeks ahead.
The reporting term begins with big banks including J.P. Morgan Chase and others reporting on Oct. 15.