What's the Big Idea? Companies Are on a Debt Diet

The video discusses the significant drop in corporate tax revenues to the U.S. Treasury, which was larger than expected. Barclays introduces the 'debt diet' concept, where companies use tax savings to reduce debt. This has led to increased earnings per share and a shift in investor preferences towards companies reducing debt. The video explores how markets reward these companies and the concerns over corporate leverage. It questions whether the debt diet can address criticisms of U.S. tax reform being a handout to corporations.

What was the percentage drop in corporate tax revenues paid to the U.S. Treasury last year?

According to Barclays, what is the term used to describe the trend of U.S. companies using extra tax-related cash to pay down their debt?

What was the estimated increase in earnings per share for U.S. companies between 2017 and 2018?

What percentage of large issuers in the U.S. corporate bond market reduced their debt by more than 5% last year?

What concern do investors across asset classes have regarding corporate leverage?