Deloitte is part of the “Big Four” accounting organizations. Moreover, it has the largest professional services network in the world in terms of revenue and number of professionals. Currently, it employs more than 310,000 professionals across the globe. Recently, Deloitte released the CFO Signals Survey. This survey is helpful as corporate leaders shared their opinions regarding the stocks.
As a reminder, Deloitte surveyed 147 Chief Financial Officer’s (CFO) from U.S. Canada and Mexico. Most of the companies that have more than $3 billion in annual revenue.
One of the major concerns for the corporate leaders from North America is the high risk of an economic slowdown. One of the primary reasons why the economy may experience problems according to leaders is the overvalued stock market.
It is worth mentioning that, 82% of the participants anticipate taking more defensive actions. For example, to improve the situation, it is possible to cut discretionary spending and to reduce the number of employees.
Another exciting information relates to major economies. For instance, only 18% of respondents described the conditions as good when it comes to China’s economy. This result comes at a time when China’s results fell to a three-year low as the country’s economy became more consumer-oriented. Also, the trade war with the U.S. harmed economic growth.
Furthermore, participants are even more skeptical regarding economic activities in Europe.
There is good news for the North American countries as 69% of respondents are confident that the conditions in North America are good.
Stocks and CFO survey
The expectations for an outright recession fell to 3% in the fourth-quarter survey. This is, without a doubt, a sign of progress for the stocks.
In the first-quarter 2019 survey, 15% of respondents identified the risk of recession as a serious problem.
However, most corporate leaders, 97% of them said a slowdown already started or will start in 2020.
Let’s have a look at the financial markets. Respondents are skeptical regarding the future of markets, as 77% said stocks are overvalued. This is the worst result in nearly two years. Hopefully, only 4% of participants identified equities as undervalued.
The leaders of the world’s largest economies should create a road plan on how to boost the economy. This way it will be easier to strengthen the confidence in the stock market.