[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.