Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
When All Other Plunge Protection Fails…
Listen, if Scott Bessent can't find anyone to buy America's debt, he can just cajole the Fed into gi
” When all other forms of “plunge protection” fail, there’s always buybacks. 2025’s no exception. The figure on the left, below from Nomura’s Charlie McElligott, shows YTD authorizations. They’re running at a breakneck pace.”
One can interpret this in two ways. The happy one is that is an indication of strong corporate profits and cash flows. The other grouchy one is that it indicates that CEOs can find NO other potentially profitable expansion and capex opportunities to spend their “excess” cash flows on.
For short or medium horizon investors the second matters little. Share counts are falling which naturally supports share prices. Longer-term investors might focus more on number two.
Also grouchy, (3) Buybacks benefit the major shareholders and C-suite’s compensation the most.
BOJ owns about 7% of Japanese equities via ETFs that were purchased between 2012 and 2021. This ETF asset now appears to be a “permanent” holding for BOJ, as any discussion by BOJ that even hints at selling any portion of the ETFs sends the Japanese stock market into an immediate decline.
I am never saying never on this one.