Now, as much as this Gorilla likes steak – this article is obviously not about meat…
It’s about cash. Moolah. Dinero.
Right now, American companies are FLUSH with money…
Which is a little weird and unusual – seeing as there seems to be companies going out of business left and right.
How is this possible?
Well, just because some companies are cash rich at the moment – doesn’t mean things are going well for everybody.
Obviously, that seems counterintuitive – but if you’ve been around the markets for any length of time – then you’ve seen that this story has been told before.
Regardless, a lot of companies have a LOT of money right now…
So, what are they going to do with it?
Let’s see what we can find out…
Yes, it’s true…
Last quarter – US companies decided to bulk up their cash reserves – amassing a record-breaking $4.1 trillion is cash reserves.
Yes, you read that right – a trillion… with a “T.”
Apparently, companies are now sitting on 12.6% more cash than last year.
That’s a whopping $1.3 trillion more than what they had before the pandemic hit.
So… why the sudden love for cash hoarding?
Well, with high interest rates – it’s become way cooler to save rather than borrow money – and with all this cash lying around, companies are feeling brave enough to dabble in short-term investments.
Most of this treasure is parked in cash and cash-like instruments – think deposits, loans, and securities – which are currently pulling in sweet returns of around 5%.
But wait, there’s more!
Some über savvy companies are channeling their stash into longer-term investments like corporate and US government bonds – which actually require a bit more patience – but they promise to be more profitable and less risky over time.
Imagine that? Being patient and it actually paying off.
Now is a great time to go cash heavy…
Lining those pockets really pays off, seeing as interest rates are at decade highs – nearly one in ten non-financial companies in the S&P 500 earned more from interest on their cash than they paid on their debts last quarter.
Yes, you read that correctly.
This solid income isn’t just a safety net – it also lets companies pounce on money-making opportunities at the drop of a hat.
But of course, there’s always a twist…
Companies have another trick up their sleeves for all that cash: share buybacks.
By buying back more shares and reducing the supply in the market, they can – theoretically – push up the price of the remaining shares. It’s a neat little trick that investors seem to love.
Goldman Sachs expects US share buybacks to jump 16% next year…
And potentially surpassing $1 trillion for the first time ever. If this prediction holds – it could keep the US market rally going strong.
So, while companies are busy hoarding cash and making it rain in the short-term investments department – they’re also setting the stage for some serious market moves.
But right now, US companies are basically the Scrooge McDucks of the modern world – diving into their vaults of cash and hoping to turn it into even more gold…
And while this might sound like a smart move – only time will tell if all that hoarding and investing will pay off in the long run.
The question is…
Where do you put your money now?
Well, if you were a member of GorillaTrades – you’d know EXACTLY where to put your money.
Our trading matrix system was designed to only find recommendations based on data. Not rumor… not conjecture… but actual numbers.
That way, when you get a GorillaTrades email – you know that it’s been vetted and sifted to separate the profit opportunities form the losers.
It’s this system that has given our members a chance to make a lot of money…
And we’d love to have you along for the next round of picks.
We’d love for you to become a member – but totally understand if you’re not ready…
Just know where here to help when you are.
Until that time comes – keep your eye on the prize…
All that money American companies are holding right now is going to go somewhere – might as well be your pocket.
Stay tuned…
“Money is like an arm or leg – use it or lose it.” – Henry Ford