Since 2009, S&P 500 firms have spent more than $2trn buying back their own stock, driving up earnings per share and stock prices. Repurchases look set to reach $165bn this quarter, says Lu Wang on Bloomberg.com.
The 12-month total would then eclipse $590bn, compared to the record $589bn seen in 2007. There’s plenty of scope for more. S&P 500 firms are cash-rich and interest rates are low, encouraging borrowing to fund buybacks.
The contrast between the artificial jolt from buybacks and a lack of natural momentum is especially stark at present: fund outflows are on track for a near-record quarter.