Six months into 2023, S&P 500 companies are operating differently than they did a year prior.
As companies adjust their business plans to keep up with the economy, they spend more in some places while cutting drastically in others. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
The use of cash by S&P 500 companies will fall in 2023 after growing by 8% in 2022. The recent slowdown in earnings growth and the decline in cash balances will likely lead to a 2% drop in cash spending this year. S&P 500 companies are also unlikely to raise cash, as the cost of capital has risen sharply. Despite overall declines, firms are likely to up their spending of cash on research and development projects and shareholder dividends. Buybacks are expected to fall by as much as 15% this year before rebounding in 2024. Buybacks increased in the first quarter but at a slower pace than in 2022. A handful of firms were the biggest buyers of their own shares, including Apple (AAPL). Energy companies will lead the S&P 500 in share buybacks, followed closely by telecom firms.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
By contrast, companies in the financial, health care, utilities and real estate sectors will pull back spending on buybacks to increase capital buffers. Buybacks could face headwinds from a new excise tax and new regulations. The Inflation Reduction Act included a 1% excise tax on buybacks. Meanwhile, the Securities and Exchange Commission (SEC) has OK’d a rule requiring publicly traded firms to disclose more information on their buybacks, including the average share price paid.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Read more
-
Stocks Bounce But End With Big Weekly Losses: Stock Market TodayThe stock market rout continued on Friday, but a late-day burst of buying power brought the main indexes off their session lows.
-
More Than 1 Million Toyota, Lexus and Subaru Vehicles Recalled for Camera Issue. Is Your Vehicle Affected?A software glitch in the Panoramic View Monitor system causes blank or frozen rear-camera images, triggering a massive recall of 2022-26 models.
-
Worried About an AI Bubble? Here’s What You Need to KnowThe Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
Will AI Videos Disrupt Social Media?The Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Apple Readies for AI Upgrade with New iPhonesThe Kiplinger Letter The tech giant has stumbled when it comes to artificial intelligence, but a new batch of iPhones will help it make headway.
-
Japan Enters a New Era of Risk and ReformThe Kiplinger Letter Japan has entered a pivotal moment in its economic history, undertaking ambitious policy and structural reforms to escape from decades of stagnation.
-
How Consumers Are Tinkering with Cutting-Edge AIThe Kiplinger Letter Companies launching artificial intelligence tools are jostling for consumer attention. Some products are already building a deep connection with users.
