Corporate America's share buybacks, which hit a record of over $1 trillion in 2018 on the back of a tax overhaul, have begun to slow down in recent months, posing a threat to the record-long bull market, according to Jefferies.
"Total S&P 500 buyback amounts seem to have peaked while the share of R&D spending has remained constant since the Great Financial Crisis,"Sean Darby, Jefferies' global equity strategist, said in a note on Wednesday. In the second quarter, the S&P 500 share buybacks totaled $160 million, about 20% less than the first quarter and also year over year, according to Jefferies. Utilities and health care sectors saw the biggest decline in buyback activities in the second quarter, the bank noted.
Share repurchases have long been a pillar of support for the broad market. By reducing the number of outstanding shares in the market, companies are able to boost stock prices and earnings per share figures. A slowdown in buybacks could be an ominous sign for the market which has already been threatened by an escalating trade war and slowing growth.
The S&P 500 endured a volatile third quarter, returning 1.7% amid tit-for-tat tariffs and impeachment fears. The fourth quarter was off to a tough start with the S&P 500 losing 1.2% on Tuesday, hit by a slump in the U.S. manufacturing sector. Stocks were down big again on Wednesday.
PPT?
Well Trump only needs to tweet
the market is rigged
The rigged market is bsing imo
Buy bitcoin, stocks are so 1995
I want the bull market not to losing another powerful backer in the future, I want that bull market and the stock market turn around to avoid a real recession and a real economy disaster, and stock market crashes, to avoid of going into bear market zone.
Democrats playing politics is messing with gains in the market...vote GOP
Rick Santelli is a political hack. His political views seem to creep out every segment he does. He doesn't hide it well.
alwayschoice chiefs $ms paint picture askfbi ABCPolitics lien into Harvard grids Chronicle vary smart people appropriate attn RecordExecutive letTSALK civilrights issue exchanges therich powerful actual value not pathetic whiney childish undisciplined underdeveloped