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Goldman: CEO Confidence Has ‘Plunged’, Buybacks And M&A Spending Have ‘Collapsed’

You can thank record levels of uncertainty.

Oh, what a difference a year makes. Thanks in no small part to tax cuts and deficit-funded, supply-side fiscal stimulus, 2018 was a record year for S&P 500 cash spending. In fact, as Goldman writes in an expansive new note, "aggregate spending on capex, R&D, cash acquisitions, dividends, and share repurchases rose by 25% to $2.8 trillion [last year]". For those keeping score at home, that's nearly the briskest YoY growth in three decades. (Goldman) If you're wondering about the breakdown (i.e., the granulars, as it were), buybacks surged 54% to $833 billion and as Goldman goes on to remind you, "for the first time in the post-crisis period net buybacks and dividends totaled more than 100% of free cash flow". And yet, contrary to what you might be inclined to believe if all you did was scan headlines, investment growth was no slouch either. In fact, capex and R&D grew by 14% to a combined $1.1 trillion or nearly 10% of sales last year. "[That's] the highest share since at least 1990", Goldman notes. But, as you can see in the chart, 2019 has been an entirely different story. Cash spending dropped by 4% YoY during H1, and in Q2, it plunged double digits. (Goldm
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