- S&P 500 firms will spend $2.6T next year, say David Kostin and team, with 52% of that going towards investment (capex, R&D, M&A), and the rest to buybacks and dividends.
- Cash balances currently stand at $1.6T (ex-financials), or 12% of assets vs. the long-term average of 7%.
- Buybacks will rise 30% to $780B next year, with much of that growth triggered by corporate tax reform, including easing levies on repatriated overseas cash. Excluding that boost, buybacks will rise just 5%. Dividends are expected to grow 6%.
- Capex will rise 6% as energy capital spending stabilizes, says Goldman, noting energy accounts for 19% of S&P 500 capex after a 45% plunge since 2014.
- Buyback ETFs: PKW, SYLD, TTFS, SPYB