AFP's Corp Cash Indicators Up
The Association For Finance Professionals' latest "AFP Corporate Cash Indicators for October 2017" says, "During the third quarter, U.S. businesses accumulated cash and short‐term investment holdings at a significant pace. The quarter‐over‐quarter index increased 9 points to plus 25, and the year‐over‐year indicator increased by two points to plus 20. These readings signal deep skepticism about the economy and significant caution among treasury and finance professionals. Entering the third quarter, organizations indicated they would accumulate cash, which they did, but once again did so at a much higher rate than anticipated. This is the highest reading for this index observed since the first time the data was collected in January 2011. This group anticipates cash accumulation will continue to accelerate through fourth quarter; the forward looking indicator measuring expectations for changes in cash holdings in the current quarter increased five points from a reading of plus 8 to plus 13. 42 percent of organizations held larger cash and short‐term investment balances at the end of Q3 2017 than they did at the end of Q2 2017, while 17 percent reduced cash holdings in the past three months.... 31 percent of organizations anticipate expanding cash and short‐term investment balances over the next three months, while 18 percent plan to reduce these balances." See also, the Federal Reserve's latest FOMC Statement.
