Executives are increasingly risk averse
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Executives' optimism about the future took a step down in the second quarter, according to a survey of chief financial officers out Thursday morning from Deloitte.
Why it matters: The survey shows a wariness among execs, after having lived through the many gyrations of the past few years and as the future for financial conditions still looks fairly uncertain.
- To wit: The Fed's decision on Wednesday to take a wait-and-see approach to further rate hikes means there's a certain fogginess to the rest of the year.
By the numbers: Deloitte surveyed 122 CFOs in North America; 70% from public companies and the vast majority with more than $1 billion in revenue. 88% of those surveyed were in the U.S.
- Just 34% of chief financial officers rated current economic conditions as good or very good, down from 40% in the first quarter.
- Only 33% of CFOs said it's a good time to take risks, a drop from the previous quarter — though slightly above the lows hit last year when the stock market was in worse shape.
- 81% of CFOs put economic/financial market risks at the top of their list of external risks, followed by geopolitics at 57%.
"The decrease in some CFOs’ risk appetite could reflect their reluctance to take on new risks amid continued high inflation, rising interest rates, uncertainty in the markets, and geopolitical instability," Steve Gallucci, national managing partner, U.S. CFO program at Deloitte, writes in the report.
