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Aug 03, 2022

Companies Are Boosting Capital Spending

VerityData GOOGL PEP

According to a recent article on WSJ.com, companies from Google parent Alphabet Inc to General Motors Co. to PepsiCo Inc. are among those that have increased spending on big-ticket items, such as real estate, equipment or technology, to fuel growth.

The spending boom has offered a leg of support to a stock market that has been buffeted by worries about soaring inflation and the pace of the Federal Reserve’s campaign to raise interest rates. The S&P 500 has slumped 13% this year but has rebounded 13% from its low in mid-June.

“One reason that stocks haven’t absolutely fallen off a cliff right now is because of that increased capex,” said Ben Silverman, director of research at investment research firm VerityData. “There’s signaling from the executive suite that they’re comfortable spending money instead of hoarding cash.”

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