CFOs not optimistic on economy
by ilene - September 16th, 2010 12:22 am
CFOs not optimistic on economy
Courtesy of Edward Harrison of Credit Writedowns
The Duke University/CFO Magazine Global Business Outlook Survey which concluded last week showed a high level of concern amongst top financial officers in major organizations worldwide. Of note are the CFOs ideas regarding employment and credit where they are less upbeat than I expected. Their views that credit markets remain tight and that employment growth will remain subdued dovetail with some of the comments we have heard from small businesses in the U.S.
Here is what the press release said.
Optimism about the U.S. economy has fallen back to recession levels among chief financial officers (CFOs), who foresee minimal increases in expected hiring, weak consumer demand and heightened economic uncertainty.
Credit is still tight for small firms and many firms continue to hoard cash. Without improvement in the economy, CFOs say earnings growth and capital spending will falter within six to 12 months.
These are some of the findings of the most recent Duke University/CFO Magazine Global Business Outlook Survey. The survey, which concluded Sept. 10, asked 937 CFOs from a broad range of global public and private companies about their expectations for the economy. (See end of release for survey methodology.) The research has been conducted for 58 consecutive quarters. Presented results are for U.S. firms unless otherwise noted.
SUMMARY OF FINDINGS
– CFO optimism about the U.S. economy has fallen to 49 on a zero-to-100 scale, well below the rating of 58 from the last quarter. Pessimists outnumber optimists four-to-one. European CFOs’ optimism rate is 58; Asian CFOs’ rate is 70.
– Half of CFOs say they will cling tightly to cash due to economic uncertainty and as a liquidity buffer. The other half will spend some cash reserves in the next year, primarily for investment, to pay down debt and to make acquisitions.
– Earnings are expected to rise 12 percent and capital spending almost 7 percent in the next 12 months. However, nearly half of CFOs say unless the overall economy improves, there is only a six-month window during which they can maintain this level of growth.
– U.S. CFOs expect to increase domestic full-time employment by 0.7 percent in the next year. Nearly one-fourth of all recent hires have been contract and temporary employees.
– Credit markets remain tight, especially for small companies. Most CFOs believe financial reform will add costs and restrictions that will dampen lending.
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Today’s Guilty Pleasure – The David Brooks Sunshine Lollipop Hour
by ilene - April 7th, 2010 6:08 pm
Today’s Guilty Pleasure – The David Brooks Sunshine Lollipop Hour
Courtesy of Joshua M Brown, The Reformed Broker
I don’t care that it’s just happy talk, I like it.
From the New York Times:
This column is a great luscious orgy of optimism. Because the fact is, despite all the problems, America’s future is exceedingly bright.
Reading David Brooks’ NYT op-ed about what’s going right gives me the exact same feeling I get when I hop in the car on a sunny day, golf clubs in the trunk, and as soon as I switch on the radioSweet Home Alabama is just beginning. You know the feeling.
Even if you don’t believe that any of this stuff matters in light of the still-wretched economy, its worth a read.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site