[dageshi]

Perhaps this is what you get when when everyone learns the lessons of a truly severe recession/financial crisis?

People anticipate a recession because timing wise one should be due, they actually plan for it and reduce capital investment and just do buy backs instead?

So instead of a blowoff followed by recession, we sort of get a leveling off while everyone waits for the next shoe to drop?

[fauigerzigerk]

I agree that this could explain modest capex. It also explains a lot of other things that are going on right now, such as the Fed planning interest rate cuts purely based on fear without any supporting data.

But if corporations expect a recession, why would they increase debt and weaken their balance sheets? Aren't they supposed to do the exact opposite?

Perhaps management compensation and shareholder activism explains some of it.

[dageshi]

I think "expecting a recession" is maybe too strong, I think it's more a case that they just don't know what's going on. Same with me honestly, history suggests we should have a recession but it's not obvious at all what would cause it, at least to me.

In financial markets it's easy to see behaviour driven by fear and by greed, but this might simply be behaviour driven by confusion.

[betterunix2]

"timing wise one should be due"

Recessions do not have a schedule. Moreover, the much bemoaned "slow recovery" during the Obama administration would totally change any hypothetical boom-bust cycle with its unprecedented policy moves.