If Cash Is King

Business and consumer optimism is high, institutional investor optimism is high and individual investor optimism is rising. Almost seems as good as it can get from a sentiment perspective. We know corporations are sitting on a lot of cash with large amounts trapped overseas. The tax bill working its way through Congress is addressing this issue via a change on the taxation of cash held outside the U.S. This increase in corporate cash seems to be an issue that has developed over many years as can be seen in the two charts below.