Good morning. U.S. corporate balance sheets are continuing to feel the impact of the 2017 U.S. tax overhaul, as companies pivot their capital allocation strategies in response to the new law, Maria Armental reports for CFO Journal.

Companies funnelled record amounts of cash to stock buybacks, dividends, capital spending and acquisitions last year. As a result, U.S. corporate cash holdings plunged to a three-year low of $1.685 trillion in 2018, according to a report from Moody’s Investors Service Inc. The drop in corporate cash hoards, the first since 2015, came as companies rushed to take advantage of lower taxes on foreign income.

[Continued below…]

Apple Inc., again the top cash holder, saw its cash pile drop 14% to $245 billion. Rounding out the top five were Microsoft Corp., Alphabet Inc., and newcomers Amazon.com Inc. and Facebook Inc., which replaced Cisco Systems Inc. and Oracle Corp.

Many U.S. companies, particularly in the fast-growing technology sector, built up massive hoards of cash offshore as they opted to keep profits earned in foreign countries outside of the U.S. But since the 2017 tax-law overhaul, which imposed a one-time tax on accumulated foreign profits, some companies have shifted tactics, bringing some or all of that money home. Companies sent $664.91 billion of their foreign earnings back to the U.S. in the form of dividend payments in 2018, up from $155.08 billion the year before, according to data from the U.S. Commerce Department.

Corporate executives will gather this week for The Wall Street Journal’s CFO Network Annual Meeting in Washington, D.C. Journal reporters and editors will interview government officials and various executives and industry experts. Scheduled guests Tuesday include Treasury Secretary Steven Mnuchin and Education Secretary Betsy DeVos, as well as National Security Adviser John Bolton and acting White House Chief of Staff Mick Mulvaney. 

We’ll include a roundup of the news that comes out of the event in The Morning Ledger. 

Limoneira Co. and Ascena Retail Group Inc. are among the companies scheduled to report earnings today.

The U.S. Commerce Department is scheduled to publish May inflation figures on Wednesday. Underlying U.S. consumer prices were soft in April, reinforcing expectations the Federal Reserve will maintain its wait-and-see posture on interest rates. Economists expect overall price growth cooled in May on the month, while so-called core prices, which control for more volatile categories like food and energy prices, ticked up.

On Thursday, the European Union’s statistics agency is expected to release industrial sector output figures for April. Economists expect to record a third straight month of declining output, led by Germany. As European Central Bank President Mario Draghi made clear last week, the key question facing policy makers is how long that weak streak can last without dragging the rest of the economy down with it.

The U.S. Commerce Department is scheduled to publish retail sales data for May on Friday. Economists predict sales picked up solidly in May.

After deciding to exit escalators and air conditioners, United Technologies Corp. is doubling down on the aerospace market with an all-stock deal to merge with defense contractor Raytheon Co.

The unexpected breakdown of merger talks with Renault SA leaves Mike Manley to soldier on at the top of Fiat Chrysler Automobiles NV, even as questions remain about whether the company will seek another merger partner.

Nissan Motor Co. Chief Executive Hiroto Saikawa, in an unusual criticism of his French partners, said it was “most regrettable” that Renault SA was refusing to support his proposed governance changes at Nissan.

Uber Technologies Inc. Chief Executive Dara Khosrowshahi is taking direct oversight of the ride-sharing company’s operations in a management shakeout that comes less than a month after a disappointing initial public offering.

Kraft Heinz Co. said it had concluded an internal investigation into accounting errors and changed financial practices that triggered a regulatory probe and steep decline in the food maker’s stock price this year.

Insys Therapeutics Inc. has agreed to pay $225 million to settle federal charges over its opioid sales, but that money could be tough to collect if the drugmaker files for bankruptcy, which it has said is a possibility.

FedEx Corp. is ending its air shipping contract with Amazon.com Inc. in the U.S., signaling the delivery company no longer wants to fly packages for an online retailer that is developing its own delivery network.

Walmart Inc. is opening a new front in home-delivery services: carting milk, eggs and other groceries and leaving them in the fridge.

Three decades of blistering growth in China’s auto sales came to a stop last year. But for the big foreign competitors that dominate the market, the country still represents the industry’s future.

• State attorneys general are preparing for their own investigations into big tech platforms including Alphabet Inc. and Facebook Inc., based on concerns that largely mirror those driving probes by the U.S. Justice Department, the Federal Trade Commission and Congress.

• Trump-appointed regulators came into office saying they would pare back Wall Street’s postcrisis rulebook. More than two years into the administration’s tenure, most of the work remains unfinished, particularly for the biggest banks.

• The White House’s acting budget chief is pushing for a delay in implementing key provisions of a law that restricts U.S. government’s business with Huawei Technologies Co., citing the burdens on U.S. companies that use its technology.

• A federal appeals court upheld tax regulations on certain cross-border cost-sharing agreements within corporations, delivering a victory for the Internal Revenue Service over Intel Corp. in a case closely watched by tech companies.

• The U.S. sanctioned one of Iran’s biggest petrochemical companies on Friday, hitting a top revenue earner as the Trump administration attempts to strong-arm Tehran into a new nuclear and security pact.

• U.S. employers tapped the brakes on hiring in May, adding just 75,000 jobs last month in a signal companies are taking a more cautious approach at a time of slowing global growth and trade tensions and adding to other signs of slowing U.S. economic growth this spring.

• President Trump’s threat to impose tariffs on Mexico was averted by an immigration deal late Friday, but scrambles anew the already-delicate relationship between two neighbors struggling to resolve the trade and border issues that are top priorities for the White House.

• China’s imports dropped sharply last month, in a fresh sign of anemic demand in the domestic economy, adding to the pressure on Beijing as it struggles to manage trade tensions with the U.S.

• Muted inflation and slowing job growth has continued to push yields on U.S. Treasurys lower, leading to the possibility that the 10-year rate will dip below 2% for the first time in more than two years.

• U.S. factories have shifted into low gear after a year of record output and big job gains, putting additional pressure on a U.S. economy that already is expected to grow more slowly this year.

• The European Central Bank has pushed interest rates into negative territory and bought trillions of euros in bonds to sustain the eurozone’s economy. Now, with the economic expansion flagging, a critical question is emerging: How much does it have left in the tank?

Write to Tatyana Shumsky at tatyana.shumsky@wsj.com.

Follow the WSJ CFO Journal Team on Twitter: @CFOJournal, @MissShumsky, @Nina_Trentmann, @zekeminaya.

The editor, Jack Hagel, can be reached at jack.hagel@wsj.com.

Nina Trentmann contributed to today's Ledger.