$250 Billion Is Coming ‘Home’! But There’s A Catch If You’re Hoping For A Buyback Bonanza
The “bad” news is, companies will be less inclined to buy back shares with the money they bring home because… well…
The “bad” news is, companies will be less inclined to buy back shares with the money they bring home because… well…
U.S. markets got off to a status quo start on Monday and as you’re acutely aware, “status quo” means “record highs across the board.”
See, that’s how this works. “Record high” is the new “mean.”
That’s ok, maybe we can just send a nice letter to the SNB and/or Norway’s sovereign wealth fund and politely ask them to fill the void.
“That nonfinancial debt is near all-time highs as the capex share of GDP approaches 45- year lows suggests that the “Bubbles” music is playing, even if the Fed and other central banks cannot hear it.”
Seemingly unwilling to risk any further damage to his already low approval ratings, Trump ultimately
“Buybacks may boost the market, but they do not obviously benefit those companies doing it.”
I sincerely hope everyone who’s still plowing money into corporate credit has a good handle on what it is they’re doing because investment grade corporate debt issuance is running at a record pace, and just topped $1 trillion faster than any year in history.
“Perhaps over-leveraged US companies have finally reached a limit.”
“Buybacks for the largest banks will soar by 45% this year.”
“Rather, as we ponder the notion of a global regime change in monetary policy, and rates more broadly, it’s a big mistake not to consider that at some point issuers will be fighting to tap into a far more selectively inclined investor base.”
Look, here’s the thing: Goldman has got some shit on their chest they need to get off with regard to upcoming earnings results.
“Record levels for several widely followed country indexes occurred in the context of notably muted volatility, adding to the sense of investor comfort and accomplishment.”
“All the king’s soldiers”…
“If CEOs are more likely to be Republican, then partisanship could explain the weirdly high CEO confidence numbers.”
“ETFs own almost 6% of the equity market, the highest ETF share on record. In contrast, mutual fund ownership fell to its lowest level since 2004 (24%).”
“Such tight trading ranges for the S&P 500 that extended for 3 months or longer have been very unusual historically, with only 8 such comparable prior episodes (since 1928).”
“Equities investors are acting like the last honest man in town. Couldn’t care less about politics, geo or domestic. And aren’t ashamed to admit it. Give ’em tax cuts and deregulation and they’re happy. Throw in repatriation holidays to fund buybacks and they’re ecstatic. Add the sovereign wealth funds and they won’t even give you a dip to buy. Earnings per share is as outdated a concept as value investing. It is what it is, until it ain’t.”
Gandalf is back. A couple of weeks after retracting (at least partially) his “buy every
“Following years of prioritizing repurchases as a use of cash, corporations actually cut annual spending on buybacks by 11% in 2016 and executions YTD have plunged by 20% vs. last year. Meanwhile, authorizations YTD for new programs are proceeding at the slowest pace in five years.”
“US equity underperformance has been rare in recent years, but year-to-date, US equities have underperformed global equities by around 0.7% in USD terms. We reiterate our underweight stance, and view the challenges for US equities in a global context as the following”…
“In this report, following the reaching of our mid-year S&P 500 target, we raise both our mid-year and year-end S&P targets to 2,400 and 2,500, respectively (from 2,350 and 2,300). “
Castles in the sky?
In case you needed a reminder of just how long it’s been since this market
It’s been no secret that the bid for equities in 2017 has been largely attributable
“Over the last 3 weeks, US equities have rallied as fund positioning rose, the buyback bid resumed as companies exited blackout periods and US equity inflows returned over the last week. Overall US equity fund positioning getting elevated. Elevated overall positioning reflects that of long-short hedge funds and asset allocation funds.”
Earlier this week, Bloomberg reported that Binky had summited Mount Siegel. That’s right, Deutsche Bank’s Binky Chadha is now officially the most bullish Wall Street strategist when it comes to the S&P, which he figures will hit 2600 by the end of the year.
For anyone still holding out hope that there’s upside for our standard valuation metrics beyond the 100th percentile, there’s always the old corporate buyback bailout…
You must be logged in to post a comment.