When financial historians look back at the current bull market, they’ll likely call it the “era of the stock buybacks.” As I’ve written several times in the past, companies have been regularly spending $400-to-$500 billion (in aggregate), on a rolling 12-month basis. In fact, buyback programs appear to have been the greatest source of demand for stocks, which means it has a major responsibility for the extended and robust bull market. #-ad_banner-#Yet the ardor for buybacks may be cooling. As Factset Research noted, after a deep review of share buyback activity in the second quarter, “quarterly… Read More
When financial historians look back at the current bull market, they’ll likely call it the “era of the stock buybacks.” As I’ve written several times in the past, companies have been regularly spending $400-to-$500 billion (in aggregate), on a rolling 12-month basis. In fact, buyback programs appear to have been the greatest source of demand for stocks, which means it has a major responsibility for the extended and robust bull market. #-ad_banner-#Yet the ardor for buybacks may be cooling. As Factset Research noted, after a deep review of share buyback activity in the second quarter, “quarterly buybacks declined year-over-year (-1.1%) for the first time since Q3 2012.” On an anecdotal basis, it appears as if buyback activity in the current quarter is also a bit less pronounced than in the recent past, which is odd, considering how many stocks now trade well below their 52-week highs. Indeed the buyback frenzy has started to generate a bit of a backlash, as The New York Times recently scoffed at Carl Icahn’s efforts to compel Apple, Inc. (Nasdaq: AAPL) to pursue a massive buyback. The Economist went so far as to… Read More