Published
9 months agoon
Good morning, Bull Sheeters. Stocks and equities futures are jumping this morning as investors cheer the Fed’s latest move to shore up the financial markets.
From Hong Kong to Frankfurt to downtown Manhattan, Jerome Powell is quickly becoming the most beloved central banker of all time. Have you at least sent him a thank you card?
Ok, let’s see where investors are putting their spare cash.
I’m going back to the well this morning to look at C-Suite sentiment. We know investors are bullish (as long as central bankers have our back). The outlook among consumers and corporates though is far less certain. We see this regularly in consumer confidence polls and in corporate outlooks—well, for those who haven’t scrapped theirs.
A month ago in this space I looked at PwC’s COVID-19 CFO survey. It was encouraging then to see that Corporate America largely felt the worst was behind us. And what about today, when fears of a second wave and doubts about stimulus measures linger?
There’s slightly more optimism than there was a month ago, I can happily report. Compared to the May outlook, the future is even less likely to feature the scrapping of financial plans, deferred investments, and the dialing back of guidance. That’s the consensus among the 330 finance chiefs PwC polled, as the following chart shows:
Let’s take the ‘good’ in the above chart first. M&A appears back on the table for more than three-quarter of respondents, and more than 60% will leave their corporate financing plans intact. Now for the less good—cost-containment is still the measure du jour to keep the balance sheet healthy. But there is modest improvement there, too.
Now let’s look to see what’s top of mind, and how that’s shifted over the past two months. Finance chiefs are now most concerned with a second wave of COVID-19 and the impact of the global economic downturn wrought by the pandemic. Two months ago, they were looking inwards at the impact on their business and employees. Today, they’re looking outward, at the impact on their customers and the wider market.
There are still storm clouds on the horizon. “Supply chain disruption” doesn’t make the list, but “cybersecurity risks” does.
I’ll come back to this topic periodically as I believe it gives us an important insight into overall business sentiment and the eventual shape of the recovery.
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Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack
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