Illustration: Aïda Amer/Axios

Despite historically low interest rates, U.S. companies are being unusually frugal, holding back on issuing new debt and pumping up their balance sheets with cash.

Why it matters: Historically, when interest rates are low and the economy is strong, companies have levered up to increase capital expenditures and buy assets in order to expand. The opposite is happening now.

  • In the short term, that means the country is less at risk for economic collapse, but it also shows that American businesses are investing less in the future.

What they're saying: "That is highly unusual, as being late cycle this is precisely when companies are supposed to lever up," credit strategists at Bank of America Global Research said in a recent note.

By the numbers: Net debt declined on a year-over-year basis in the fourth quarter of 2019 for the first time in nearly a decade, Bank of America's data show, meaning companies are issuing less new debt and reducing current obligations at an uncommon rate.

  • 25% of companies reduced their debt levels in 2019 by at least 7.8%.
  • Those numbers are rarely seen during economic booms, BofA strategists note, and are much more akin to "what we see on a more forced basis during and in the aftermath of recessions."

What's happening: Despite increased profits from the Tax Cuts and Jobs Act, CEOs and company leaders have told Axios the uncertainty of the U.S.-China trade war and fears of an imminent recession discouraged big-ticket spending during 2019.

  • Rather than use their tax savings for investment or expansion, they largely socked it away.
  • Data from accounting firm PwC shows company cash holdings rose to $2.4 trillion, the highest amount in decades, a company spokesperson said.

The intrigue: It's not just net debt: Companies have added very little gross debt, dating back to the second quarter of 2017, BofA's data show, the continuation of a "remarkable development."

  • "As we have argued, it is indeed different this time."

Between the lines: Investment grade companies that would be in the best position to issue very cheap debt to finance investment projects or mergers are pulling back in part because they spent so much between 2014-2017 pursuing large-scale M&A.

  • The data show that most companies are improving their fundamentals, but most are BBB-rated, the lowest end of the IG scale.

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Coronavirus cases rise in 25 states

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Data: The COVID Tracking Project, state health departments; Map: Andrew Witherspoon, Sara Wise/Axios

New coronavirus infections rose over the past week in half the country.

Why it matters: The U.S. remains largely unable or unwilling to control the spread of the virus.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 33,976,447 — Total deaths: 1,014,266 — Total recoveries: 23,644,023Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 7,233,945 — Total deaths: 206,959 — Total recoveries: 2,840,688 — Total tests: 103,939,667Map.
  3. Education: School-aged children now make up 10% of all U.S COVID-19 cases.
  4. Health: Moderna says its coronavirus vaccine won't be ready until 2021
  5. Travel: CDC: 3,689 COVID-19 or coronavirus-like cases found on cruise ships in U.S. waters — Airlines begin mass layoffs while clinging to hope for federal aid
  6. Business: Real-time data show economy's rebound slowing but still going.
  7. Sports: Steelers-Titans NFL game delayed after coronavirus outbreak.
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Trump signs stopgap bill to prevent government shutdown

Senate Majority Leader Mitch McConnel and President Trump arrives at the U.S. Capitol in March. Photo: Samuel Corum/Getty Images

President Trump signed a bill to extend current levels of government funding after funding expired briefly, White House spokesperson Judd Deere confirmed early Thursday.

Why it matters: The move averts a government shutdown before the Nov. 3 election. The Senate on Wednesday passed the legislation to fund the federal government through Dec. 11, by a vote of 84-10.