“In the yrs before the VirusCasedemic, a big source of buying power in the stock market were the companies themselves“– Paul Ebeling
At the pre-chaos buyback peak in March 2018, members of the S&P 500 had spent a collective $823.2-B repurchasing shares of their own company over the prior 12 months. During Q-2 of last yr S&P 500 members spent only $88.7-B repurchasing their shares.
As the economy improved, the stock market rallied and management teams now reward shareholders as corporate buyers return as a major force in the stock market.
Data published Tuesday showed that last wk corporations spent the most repurchasing their own shares in more than 5 months.
Wkly buying from financials was the most last wk since Y 2010 the data shows. And so far this yr, companies in this sector have spent the 2nd-most buying back their own stock with only Y 2019’s level of repurchases exceeding today’s pace.
History tells us this is good news for the sector in the months ahead.
Based on our flows data from 2010 to today, we have found that the S&P 500 sector buying back the largest dollar amount in a given wk have outperformed over the next several months.
Have a prosperous day, Keep the Faith!