Building Beats Buying for U.S. Companies in BofA’s Views
Boom times lie ahead for U.S. capital spending, according to Bank of America Corp.’s research investment committee. The panel first drew the conclusion in a report last June and reaffirmed its view in an April 13 follow-up. Last week’s report cited Tobin’s Q, a gauge of companies’ market value relative to the cost of replacing their assets, as evidence. The indicator set records in last year’s third and fourth quarters and finished the year at a record 264%, according to data compiled by Bloomberg. “Conditions are conspicuously favorable right now for building rather than buying more capacity,” the committee wrote.