$300 Billion Cash Repatriated in Q1, GS Expects Eventual $1Trillion in Buybacks

In response to the Trump tax cuts, corporations are repatriating record levels of cash.

The Tax Cuts and Jobs Act encouraged the repatriation of profits, which had been subject to additional U.S. levies after it was brought home.

In response to the Trump tax cuts, there was a Dramatic Rise in Corporate Cash Brought Home in 2018.

>In the first quarter alone, multinational enterprises brought home about $300 billion of the $1 trillion held abroad, according to a recent Federal Reserve study. A good chunk of that repatriated money went to share repurchases for the top 15 cash holders, some $55 billion was used on buybacks, more than double the $23 billion in the fourth quarter of 2017.

Tax Cuts and Jobs Act

The repatriated cash is highly unlikely to create many jobs. Most of it will eventually go to buybacks and dividends.

Goldman Sachs expects that the total buybacks from all companies in 2018 could exceed $1 trillion.

There's Nothing like throwing $1 trillion into an already insanely overvalued market.

Corporations apparently have nothing better to do with the cash. Executive stock options, not shareholder interests, are in play.

Mike "Mish" Shedlock

Comments (28)
No. 1-10
Bam_Man
Bam_Man

The "Last Hurrah" for this bull market.

shamrock
shamrock

All else being equal, that level of buybacks would raise earnings/share by 4%.

Blacklisted
Blacklisted

It's the best place for cash, and you criticize them for making the best decision. Why?

thimk
thimk

W. Buffet has a contrarian viewpoint on repatriation . It incentivizes companies to continue producing oversees.

Knight
Knight

What do the Eliott Wave guys say about this stage of the Market? Its been awhile, Mish, since youve done a piece on this.