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CNBC
26-06-2025
- Business
- CNBC
Corporate America confident Trump's 'One Big Beautiful Bill' will be passed: CFO survey
One thing has been true about both the Republican and Democratic parties on Capitol Hill in recent decades — even as the partisan divide has widened. No matter how much they may talk about the deficit and reining in spending, that's never stopped either party in power from passing bills that don't exactly add up when it comes to balancing the books of the federal government. Will this time be different? Chief financial officers are betting it won't when it comes to President Trump's "One Big Beautiful Bill." A majority (86%) of CFOs at companies across the economy surveyed by CNBC say there will be significant changes made to the bill, but it will become law. And they expect the corporate tax breaks temporarily made law by Trump's 2017 tax act to still be on the books as they face expiration at year-end. The quarterly CNBC CFO Council Survey is a sampling of views from its members who represent organizations across the economy. The Q2 2025 survey fielded responses from 30 CFOs. President Trump has demanded lawmakers pass the bill by July 4, and this week, he said no lawmaker could go on vacation until they did so. Meanwhile, House members are pushing back on the already significant changes the Senate has made to their version of the bill, such as extending some clean energy tax breaks on a temporary basis, and there are divisions in both chambers over cuts to social safety net programs and treatment of the SALT taxes. And some Republican senators, led by Wisconsin's Ron Johnson, who called the bill "immoral," are balking at the price rag. Nevertheless, Senate Majority Leader John Thune said he was pushing for a vote this week, and Treasury Secretary Scott Bessent said he expected the Senate to be able to vote by Friday. In end end, there may be more time for lawmakers to iron out their differences beyond July 4 if needed, according to tax experts, and it would be no surprise if they take every opportunity to maximize their leverage. It was not long ago that headlines proclaimed the since-passed House version of the bill as being on the ropes and similar headlines have emerged about the Senate effort. Words like "revolt" and "mutiny" are still in the headlines about the bill's fate in a fractious Capitol Hill environment. Congress, as the old saying goes, has never been good about getting its homework in on time. In this case, even as deficit concerns and an estimated trillions that the bill would add to it are more widespread — within the GOP, in the C-suite, and on Wall Street, where bond traders have pushed their weight around this year in the form of higher interest rates — it's possible the real deadline for the legislation would not arrive until what is known as "X date." That's the date on which the U.S. would not be able to pay its debt to bondholders without raising the debt ceiling. Congress has tied the legislation's fate to the debt ceiling issue — though some lawmakers including Sen. Rand Paul have called for stripping it out. If it remains part of the legislative package, it is a plus in giving lawmakers motivation to pass the bill, and giving them wiggle room to work out differences and continue to be vocal in pushing for their preferred legislative projects past the July 4 deadline. Bessent warned this week that the X date could arrive sooner than expected (the estimated date is in early August, though no more specific date is given) but he said potential court decisions requiring the government to refund tariff payments made under emergency acts could move that date up. There is also the issue of the budget math, with fiscal 2025 set to end in September, meaning if Congress didn't make this law before then, it would have to start over with fiscal 2026 numbers. So there is still room for Congress to kick the can down the road, keep negotiating, and use whatever leverage they have, especially in a narrowly divided Congress, and as a result gives each member more leverage over their vote. The big risk for corporations isn't that business tax rates go up — it's the difference between making the corporate tax cuts enacted in 2017 permanent rather than extending them on a temporary basis again. The Senate is pushing for permanent cuts. In addition, the legislation aims to bring back a trio of preferred business tax items on bonus depreciation, interest expense, and full expensing treatment for research and development costs, which has been a political football in recent years and subject to multiple failed attempts by Congress to revive it, even with bipartisan support. Corporations have said all year that despite President Trump's comments about bringing down business tax rates as low as 15%, their idea of a "win" is not seeing rates go up at the end of the year if the current 2017 tax cuts were to expire — any loss of a permanent extension in the legislation would still be a win, if arguably less than a game-changing one. What corporations say they need right now is for the tax cut certainty to help de-risk the environment for business, especially as tariffs are expected to serve as headwind for the economy in the months ahead. The CFO survey found the majority of CFOs (64%) saying tariffs will hurt the economy. Meanwhile, 100% of CFOs taking the survey said current policy uncertainty is affecting their ability to make business decisions, with about one-third saying it is having a "significant impact." The threat of automatic tax increases set to kick in next year would be what the corporate world sees as a self-inflicted injury in beginning of 2026 on the part of the GOP, and according to the survey, businesses expect the GOP to avoid that. In other survey findings of note: Bond yields: As Congress battles over tax cuts and the deficit, and some Fed officials say they are open to rate cuts as soon as July, CFOs expect yields on the 10-year Treasury to remain elevated, with 86% of the CFOs surveyed saying rates will remain between 4% and 5% at year-end. It is currently near 4.3%, and a third of CFOs expect it to be even higher by December even as the Fed is expected to enact at least a few rate cuts later this year. Inflation: CFOs are more optimistic about the inflation outlook, even as they say tariffs will weigh on the economy. Only a few CFOs cited inflation as the biggest current risk to their business, with consumer demand and trade policy the more feared factors. But nearly 60% of CFOs surveyed say the Fed will not be able to get inflation back down to the target rate of 2% before the second half of 2026, at earliest. The stock market: As stocks have rallied back from the April lows, CFOs have like investors gone back into a more bullish mode consistent with recent years. Each quarter, we ask CFOS which sector will perform the best over the next six months. In recent quarters, there was rare division among CFOs, and a relatively high percentage of respondents not citing technology as the best sector for growth. That's now back to what has been the norm in recent history, with close to 60% of CFOS saying tech is the sector best positioned for growth. But the recent volatility is still weighing on overall market confidence, with almost half of CFOs surveyed saying they think it is more likely the S&P 500 falls back below 5,500 than reach above 6,500 for the first time. The index has been flirting with an all-time high in recent trading. The economy: A recession is still in the cards, according to the CFOs, with over half (55%) saying they expect a downturn either in the second half of this year, or in 2026. Most of that pessimism is geared to the second half of this year, and is likely tied to tariffs and CFO concerns about consumers who they believe are not fully prepared for price hikes, as well as concerns about the labor market softening. And when it comes to a gut check on the overall direction in the economy, the CFOs are close to evenly split, with a little under half saying they are "somewhat optimistic" about the economy, but still a slight tilt to the "pessimistic" camp. On a recent call of CFO Council members regularly scheduled to discuss the economic outlook on weeks when the Federal Reserve's FOMC meets to set rate policy, one retail CFO told their peers, "my main concern is that the consumer feels like the pricing that they're seeing today, it's already impacted by tariffs … and so they're breathing a sigh of relief that they've already seen the impact of tariffs, what it's going to cost them. ... it's August and beyond where we're really going to see those issues. … My big concern is the consumer thinks that they're in great shape … that they've seen the impact, and they haven't seen it yet." Another CFO added, "I feel like the Fed has an especially difficult job right now, given that we are starting to see some cracks in the economic data, but the impacts of tariffs in reality may not come until a much, much later point in time." Seventy-two percent of CFOs said tariffs will cause resurgent inflation.
Yahoo
05-04-2025
- Business
- Yahoo
Corporate CFOs Think a Recession Is Coming. Here Are 3 Stocks to Own If They're Right.
Which group of individuals is in the best position to spot early warning signs of economic trouble? There's a good case to be made for corporate chief financial officers (CFOs). These executives know how their companies are performing financially before anyone else. And if American businesses begin to stumble, the U.S. economy is likely headed for a rough patch. Many CFOs are decidedly pessimistic these days. The latest CNBC CFO Council Survey found that 60% of CFOs expect a U.S. recession later in 2025. Another 15% predict a recession next year. Ninety percent of the CFOs surveyed believe President Trump's tariffs will cause inflation to rise. What should investors do if these CFOs are right? Here are three stocks to own if a recession is coming. Utility stocks typically hold up better than most during an economic downturn. Dominion Energy (NYSE: D) ranks as one of the best utility stocks, in my opinion. Dominion provides electricity to 3.6 million customers in Virginia, North Carolina, and South Carolina, It also provides natural gas to around 500,000 customers in South Carolina. Individuals and businesses will need electricity and natural gas regardless of what's happening with the economy. The company shouldn't be impacted much by tariffs. If its prices do rise, Dominion Energy would likely be able to pass any increases along to customers, although it would need to secure regulatory approval first. Unsurprisingly, Dominion Energy's shares are up so far in 2025 while the major market indexes have fallen. This performance reflects the resiliency of the stock. Investors don't have to worry about an absurdly high valuation with Dominion, though: Its forward price-to-earnings ratio is a reasonable 16.5. What if a recession doesn't materialize? Dominion should still be a good stock to own over the long run. The construction of new data centers should provide a strong tailwind for the company, especially considering Virginia is home to the world's largest data center market. A physician looks at the GDP numbers before deciding whether to prescribe a medication that could save the life of a patient with cystic fibrosis (CF). A doctor opts to hold off on giving a patient experiencing acute pain a non-opioid drug that could relieve the pain because the economy is in recession. Do these scenarios seem implausible to you? If so, you might want to own Vertex Pharmaceuticals (NASDAQ: VRTX) if you believe corporate CFOs are right about a recession coming. Vertex's fortunes were built on the back of its CF franchise. The company markets the only approved therapies that treat the underlying cause of CF. Its newest CF drug, Alyftrek, seems likely to become the most successful CF therapy for Vertex yet. The company also recently won U.S. regulatory approval for Journavx, a non-opioid drug that's the first new type of pain therapy in more than 20 years. Journavx should have tremendous commercial potential because it's effective at alleviating pain but isn't addictive. I think the momentum for Alyftrek and Journavx could buoy Vertex if a recession hits. The biotech stock could be an even bigger winner, though, if it reports good news from its late-stage clinical studies. Vertex's pipeline features four phase 3 programs, including a potential cure for severe type 1 diabetes. No list of recession-resistant stocks would be complete without mentioning Walmart (NYSE: WMT). The company isn't completely immune to the effects of economic malaise, but is well-positioned to fare better than most. Walmart, of course, is the world's largest retailer. More importantly (at least if a recession is coming), the company is the largest discount retailer. Customers should continue shopping at Walmart even during a recession because of its "everyday low prices." Like Dominion Energy (but not Vertex), Walmart pays a quarterly dividend. While the retail giant's dividend yield isn't very high, its dividend track record is impeccable. Walmart is a Dividend King with 52 consecutive years of dividend increases. The main knock against Walmart is its valuation. Walmart's shares trade at roughly 33.6 times forward earnings. The stock has been even more expensive in the past, though, without hurting its momentum. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $286,347!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,448!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $504,518!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 1, 2025 Keith Speights has positions in Dominion Energy and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Vertex Pharmaceuticals and Walmart. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy. Corporate CFOs Think a Recession Is Coming. Here Are 3 Stocks to Own If They're Right. was originally published by The Motley Fool
Globe and Mail
04-04-2025
- Business
- Globe and Mail
Corporate CFOs Think a Recession Is Coming. Here Are 3 Stocks to Own If They're Right.
Which group of individuals is in the best position to spot early warning signs of economic trouble? There's a good case to be made for corporate chief financial officers (CFOs). These executives know how their companies are performing financially before anyone else. And if American businesses begin to stumble, the U.S. economy is likely headed for a rough patch. Many CFOs are decidedly pessimistic these days. The latest CNBC CFO Council Survey found that 60% of CFOs expect a U.S. recession later in 2025. Another 15% predict a recession next year. Ninety percent of the CFOs surveyed believe President Trump's tariffs will cause inflation to rise. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » What should investors do if these CFOs are right? Here are three stocks to own if a recession is coming. 1. Dominion Energy Utility stocks typically hold up better than most during an economic downturn. Dominion Energy (NYSE: D) ranks as one of the best utility stocks, in my opinion. Dominion provides electricity to 3.6 million customers in Virginia, North Carolina, and South Carolina, It also provides natural gas to around 500,000 customers in South Carolina. Individuals and businesses will need electricity and natural gas regardless of what's happening with the economy. The company shouldn't be impacted much by tariffs. If its prices do rise, Dominion Energy would likely be able to pass any increases along to customers, although it would need to secure regulatory approval first. Unsurprisingly, Dominion Energy's shares are up so far in 2025 while the major market indexes have fallen. This performance reflects the resiliency of the stock. Investors don't have to worry about an absurdly high valuation with Dominion, though: Its forward price-to-earnings ratio is a reasonable 16.5. What if a recession doesn't materialize? Dominion should still be a good stock to own over the long run. The construction of new data centers should provide a strong tailwind for the company, especially considering Virginia is home to the world's largest data center market. 2. Vertex Pharmaceuticals A physician looks at the GDP numbers before deciding whether to prescribe a medication that could save the life of a patient with cystic fibrosis (CF). A doctor opts to hold off on giving a patient experiencing acute pain a non-opioid drug that could relieve the pain because the economy is in recession. Do these scenarios seem implausible to you? If so, you might want to own Vertex Pharmaceuticals (NASDAQ: VRTX) if you believe corporate CFOs are right about a recession coming. Vertex's fortunes were built on the back of its CF franchise. The company markets the only approved therapies that treat the underlying cause of CF. Its newest CF drug, Alyftrek, seems likely to become the most successful CF therapy for Vertex yet. The company also recently won U.S. regulatory approval for Journavx, a non-opioid drug that's the first new type of pain therapy in more than 20 years. Journavx should have tremendous commercial potential because it's effective at alleviating pain but isn't addictive. I think the momentum for Alyftrek and Journavx could buoy Vertex if a recession hits. The biotech stock could be an even bigger winner, though, if it reports good news from its late-stage clinical studies. Vertex's pipeline features four phase 3 programs, including a potential cure for severe type 1 diabetes. 3. Walmart No list of recession-resistant stocks would be complete without mentioning Walmart (NYSE: WMT). The company isn't completely immune to the effects of economic malaise, but is well-positioned to fare better than most. Walmart, of course, is the world's largest retailer. More importantly (at least if a recession is coming), the company is the largest discount retailer. Customers should continue shopping at Walmart even during a recession because of its "everyday low prices." Like Dominion Energy (but not Vertex), Walmart pays a quarterly dividend. While the retail giant's dividend yield isn't very high, its dividend track record is impeccable. Walmart is a Dividend King with 52 consecutive years of dividend increases. The main knock against Walmart is its valuation. Walmart's shares trade at roughly 33.6 times forward earnings. The stock has been even more expensive in the past, though, without hurting its momentum. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $286,347!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,448!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $504,518!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon. Continue » *Stock Advisor returns as of April 1, 2025
Yahoo
01-04-2025
- Business
- Yahoo
‘We're looking at a slowdown': As economists call odds on a recession, Americans need to prepare
The U.S. is not in a recession — yet. But with threats of high tariffs on U.S. imports, policy uncertainty, mass deportations and Department of Government Efficiency (DOGE) cuts, some economic observers believe the odds are rising. 'We've got a real uncertainty problem, it's going to be hard to fix that,' former Treasury Secretary Lawrence Summers said in an interview on Bloomberg Television's Wall Street Week with David Westin. 'We're looking at a slowdown relative to what was forecast, almost for sure, and a serious, near 50% prospect of recession.' J.P Morgan's chief economist Bruce Kasman predicts a 40% chance of a U.S. recession this year. 'If we would continue down this road of what would be more disruptive, business-unfriendly policies, I think the risks on that recession front would go up,' he told reporters. Of CFOs polled in the latest CNBC CFO Council Survey, the majority (95%) said government policy is impacting their ability to make business decisions. Three-quarters expected the economy to enter a recession in the latter half of this year or in 2026. In the U.S., recessions are officially declared and dated — often retroactively — by the National Bureau of Economic Research (NBER) Business Cycle Dating Committee. The committee defines a recession as 'a significant decline in economic activity that is spread across the economy and lasts more than a few months.' In wider practice, two consecutive quarters of negative gross domestic product (GDP) growth point to a recession. Though there hasn't been an official declaration, there are three warning signs all pointing to a potential recession: I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Americans with upside-down car loans owe more money than ever before — and drivers can't keep up. Here are 3 ways to cut your monthly costs ASAP The yield curve is signaling a recession. One predictor of a recession is when the yield on 10-year Treasury bonds falls below that of the three-month Treasury bill. This occurred in late 2022 and lasted until late 2024, and occurred again in late February — and the yield spread between the two remains negative. The time from when this situation occurs until the onset of a recession can vary, but it's a strong indicator of a recession in the coming 16 to 20 months. Leading economic indicators are pointing to a slowdown. Another predictor is the Conference Board Leading Economic Index (LEI). This index fell%20in%20January.) in February for the third consecutive month. The Conference Board is forecasting that GDP growth will slow. Data and sentiment are turning negative. Consumer confidence is dropping, recent data for retail sales has been weak and the Federal Reserve Bank's Economic Policy Uncertainty Index is high. CEOs are more pessimistic, consumers are pulling back and 'workers are getting nervous,' according to The Wall Street Journal. And the Federal Reserve Bank of Atlanta's GDPNow forecasting model is predicting that GDP growth will retract by 1.8% in the first quarter of 2025. All this talk of a recession may have you concerned. The best approach is to be proactive — but not panicked. Build up an emergency fund. Prepare for potentially difficult times by setting aside an emergency fund that covers at least three months to a year of expenses, depending on how long you think it might take to get a job if you're laid off. To boost your savings, investigate a high-interest savings account (HISA) or a high-yield savings account. Pay down debt and avoid unnecessary expenditures. Servicing a large amount of debt could be a problem if your income declines or everyday costs go up (like egg prices). Avoid extra financial stress by creating a budget, paring down spending where you can and weighing large purchases carefully. Protect or increase your income. You may want to look into a side hustle or second job to bring in some extra cash. Talk to a financial adviser about how to maximize your investment performance. Make sure your portfolio is suitably diversified, including geographically, with exposure to sectors that perform better in a recession. Most financial professionals advise against trying to time the market. Multiple studies show that staying in the market during downturns leads to better long-term returns, especially when you employ dollar-cost averaging — investing the same amount of money in the same securities at regular intervals regardless of their prices. If you've been laid off, talk to your adviser about strategies that may make sense in low-tax years, such as a Roth conversion. You may not have much control over whether there's a recession, but you can take steps to weather the storm. Read more: Are you rich enough to join the top 1%? Here's the net worth you need to rank among America's wealthiest — plus 2 ways to build that first-class portfolio This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
