Plans for the biggest corporate spending boom in more than a decade could be the next driver for stock markets trading at record highs.
Last year’s prudence among companies is giving way to jubilant investment across a swath of industries, driven by economic reopenings, low interest rates and government support. Such a signal of confidence in the future is making the likes of JPMorgan Chase & Co., State Street Global Markets and Invesco Ltd. optimistic that equity investors can reap even greater rewards than they’re currently enjoying.
Evercore ISI’s latest survey of chief financial officers in the U.S. showed that capex plans for this year were the highest since 2002. In Europe, companies excluding financials and real estate investment trusts, are set to shell out 467 billion euros ($568 billion) in 2021, the most since 2007 and a jump of 26% from last year, according to Bloomberg Intelligence. Industries from autos to utilities and tech are set to benefit, depending on who you talk to.
“You can think about these increased capex plans as a little bit of a signal of corporate health, as a signal of management optimism about the future, which is positive for the market,”
