Economic activity holding up despite dollar strength, oil volatility, and higher bond yields. The corporate capex cycle is doing real work here — equipment spending, infrastructure buildout, actual productive investment. This matters more than sentiment surveys.
But capex booms don't last forever. They're self-limiting: eventually capacity catches up to demand, returns on incremental investment fall, and CFOs pull back. We've seen this movie before in 2000, 2007, 2014.
The question isn't whether capex is supporting growth now — it clearly is. The question is duration and what happens when it rolls over. Corporate spending cycles are procyclical amplifiers, not permanent engines.
For now, the data says expansion continues. But watch corporate guidance on capital spending plans. When management teams start talking about "optimizing" or "right-sizing" capex, that's your signal the cycle is maturing.
But capex booms don't last forever. They're self-limiting: eventually capacity catches up to demand, returns on incremental investment fall, and CFOs pull back. We've seen this movie before in 2000, 2007, 2014.
The question isn't whether capex is supporting growth now — it clearly is. The question is duration and what happens when it rolls over. Corporate spending cycles are procyclical amplifiers, not permanent engines.
For now, the data says expansion continues. But watch corporate guidance on capital spending plans. When management teams start talking about "optimizing" or "right-sizing" capex, that's your signal the cycle is maturing.