Goldman Sachs anticipates a significant increase in corporate cash spending for the S&P 500 in 2024. The research firm predicts a 9% year-over-year growth to $3.7 trillion. This projection is driven by expectations of a 15% surge in cash mergers and acquisitions, as well as a 13% increase in buybacks.
Goldman Sachs attributes this shift to rising CEO confidence, indicating a greater willingness to deploy capital. However, the firm notes that high valuations and rising interest rates may lead companies to prioritize share consideration over cash in mergers and acquisitions.
Despite elevated interest rates, Goldman Sachs believes that companies have been rebuilding their cash balances, with typical S&P 500 stocks experiencing a 7% increase over the past 12 months. The firm also forecasts healthy earnings growth of 8% in 2024 and 6% in 2025, further bolstering corporate cash availability.
