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Companies with active cash management strategies have earned roughly 2% more than those with less active strategies, according to a new report from Clearwater Analytics. Clearwater research head Matthew Vegari says even a 50-basis-point difference could mean added flexibility and a buffer against tariff-induced inflation. Does your firm use a dynamic cash allocation strategy? 

Also in this edition:

• US credit markets show caution amid AI, growth concerns ⚠️
• Record reverse splits show small cap challenges ⛰️
• CFOs take conservative budget approach amid uncertainty 💲
• Finance AI adoption plateaus as growth slows in 2025 📊

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US corporations adopting dynamic cash allocation strategies have seen higher average annual returns -- 5.5% since 2023 -- compared to 3.5% for those with less active approaches, according to Clearwater Analytics. The report highlights that strategic movement of corporate funds, particularly in response to market conditions and central bank actions, can result in millions of dollars in additional returns and greater financial flexibility, especially during periods of economic uncertainty.

US credit markets are showing signs of caution as risk premiums on corporate bonds and junk bonds near recent highs, driven by concerns over the sustainability of artificial intelligence growth and broader economic issues. Investors have withdrawn significant bond orders after final pricing, and some bond sales have been pulled, reflecting a more cautious approach.

Reverse stock splits have surged to a record 288 globally through October, far outpacing the 53 traditional splits this year. Nearly 80% of these reverse splits were executed by companies with a market capitalization of less than $250 million. This trend reflects the growing financial pressure on small-cap firms, which are using reverse splits as a strategy to boost their share prices and maintain exchange listings amid slower earnings growth and higher funding costs.

President Donald Trump has said that interviews are underway for the next Federal Reserve chair, with "surprising" and "standard" candidates under consideration. Trump has reiterated his desire to replace Jerome Powell, whose term ends in May, and said Treasury Secretary Scott Bessent does not want the job. "I think I already know my choice," Trump said, without naming anyone.

Investors are anticipating Nvidia's earnings report and a delayed jobs report, which are expected to provide crucial insights into the economy and the sustainability of the artificial intelligence boom. The market has recently experienced volatility, with the S&P 500 and Nasdaq dipping below their 50-day moving averages. Investors are particularly interested in Nvidia's demand for AI chips and the impact of US trade policies on its business.

CFOs are taking a conservative approach to budgeting for 2026 amid geopolitical and economic uncertainty, actively embedding downside budget projections into spending and revenue plans, says Kevin Carmody, a senior partner at McKinsey. With risks such as rising costs and unpredictable customer demand, finance leaders are prioritizing cash preservation and scrutinizing every investment decision. This shift means distinguishing between essential and discretionary spending with increased analytical rigor, aiming to ensure organizations are better shielded from potential financial setbacks.

Small and midsize businesses are optimistic about 2026, with 74% of owners projecting revenue increases and 60% expecting growth in operations, according to a Bank of America survey. Meanwhile, about half of respondents said economies at all levels likely will see positive effects from lower inflation and more stable tariff policies, the survey found. However, most business owners report supply chain challenges and labor shortages, with just 1% of business owners planning layoffs and over 40% looking to hire.

Tax and finance leaders are urged to embrace continuous transformation to navigate geopolitical tensions, regulatory changes and technological advancements, according to a survey by EY. The survey highlights the need for agility, with 81% of respondents planning significant business changes in the next two years. Key priorities include leveraging data and AI, meeting tax compliance obligations and aligning tax strategy with overall business goals. However, challenges such as data readiness and talent shortages persist, making partnerships with third-party providers essential for success.

Fifty-nine percent of finance leaders report using AI in their finance functions, a figure almost unchanged from 58% in 2024, according to a Gartner survey. This follows a rapid increase from 37% in 2023, suggesting that the momentum of AI adoption in finance has slowed. Factors such as organizational skepticism, uncertainty in moving from planning to implementation and ongoing challenges with data quality and technical skills are contributing to this stabilization in adoption rates.

Middle-market companies are facing significant data-quality challenges, with over half of surveyed CFOs citing data accuracy and consistency as major hurdles. These issues hinder financial planning, forecasting and operational monitoring, as current tools often fall short in reporting and analysis. The reliance on outdated or poorly integrated platforms further exacerbates these problems, limiting the agility and confidence of finance teams.

OpenAI and Intuit have entered a multiyear strategic partnership aimed at deepening Intuit's use of OpenAI's AI models and making Intuit's applications, including TurboTax, QuickBooks, Credit Karma and Mailchimp, available to a wider audience through ChatGPT. The agreement involves both companies in an end-to-end collaboration, giving Intuit extensive access to OpenAI's APIs and enabling the use of OpenAI's frontier models for new business applications.

More than two-thirds of C-suite executives have used unapproved AI tools at work in the past three months, often multiple times, despite company policies, according to a Nitro report. Employees are also sidestepping established guidelines, with one in three using AI to process confidential company data. This widespread use of unauthorized tools highlights a disconnect between official policies and actual workplace behavior. Security and compliance are major challenges, with 20% of organizations tracing data breaches to shadow AI.

Federal prosecutors have charged Samy Fadi Khouadja, a former Merrill Lynch banker, with co-leading a global insider-trading ring that operated from 2016 to 2024. The group, which included seven others named in a Boston indictment, allegedly recruited insiders from public companies, paying them for confidential information about financial results and mergers. The ring concealed its activities using burner phones, coded language and encrypted messaging, and is said to have generated tens of millions of dollars in illicit profits through a complex international network.