‘How is this possible?’ Analysts puzzle over stock market’s rally amid equity-fund exodus

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U.S. stocks at the end of March posted their best quarter in nearly a decade, but they did so without help from investors in U.S. stock mutual funds and exchange-traded funds

, which have seen sizable outflows since the start of the year, according to data from Lipper and EPFR global.

Woodward and his colleagues theorized in a Thursday research report that the divergence between outflows and outsize gains, perhaps, can be explained by corporate buybacks, as S&P 500 firms have repurchased $227 billion of their own stock in the first quarter of 2019, according to FactSet data, up from $143 billion in the first quarter of 2018.

So-called call option buying and put selling can push up stock prices as brokers hedge their bets by buying the underlying stocks in which they’ve sold call options or futures, or bought put options. Call options provide the owner the right but not the obligation to buy an asset at a given price and time, while put options grant the holder the right to sell the underlying asset.

Indeed, 6.158 billion shares changed hands on the Nasdaq and the New York Stock Exchange and its affiliates on Friday, marking the second-lowest volume thus far in 2019, according to Dow Jones Market Data.

 

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that picture about sums up the uber bears - who after all these years whine about the Central Banks inflating asset prices, and yet think the outcome of those actions are negative for the stock market..

thanks for updates marketwatch

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