"There has been little progress toward corporate tax reform that would incentivise US companies to permanently repatriate funds held overseas," said Richard Lane of Moody's. Economists with Goldman Sachs said they saw such reform as "unlikely" to happen this year or next.
Cheap borrowing costs have kept companies from dipping into foreign cash, as executives seek to avoid a tax bill on profits earned abroad. Instead, Oracle, AT&T, AbbVie and Microsoft have completed multibillion-dollar debt issuances ahead of a recent sell-off in Treasury markets, as investors prepare for the Federal Reserve to lift rates.
That could change if borrowing costs rise. Activist shareholders continue to press companies to return cash — in the form of buybacks and dividends — on which S&P 500 constituents are set to spend $1tn this year.
More from the Financial Times:
Policy makers eye corporate cash piles
Tax burden rebounds to pre-crisis levels
US companies on course to return $1tn to shareholders in 2015
Executives' desire to buy into faster growing business areas has unleashed a wave of M&A activity, with total announced deals up 26 per cent to $1.4tn since the start of 2015, according to Dealogic.
Capital spending has also climbed, up nearly 8 per cent to $937bn last year at non-financial companies rated by Moody's. However, strategists say that growth will probably reverse, as energy companies slash spending after a rout in oil prices to protect shareholder returns and financial liquidity.
Dubravko Lakos-Bujas, US equity strategist with JPMorgan, noted that the technology and healthcare sectors had the highest cash balances abroad, adding that the status quo was "likely to prevail" as the odds of a deal being reached in Washington were quite low.
"We believe US corporates continue to grow earnings at a high-single-digit rate with increasing corporate actions including higher buyback and M&A activity with or without repatriated cash," he said.