Companies in the S&P 500 repurchased a record $234.5 billion in shares during the third quarter, and more buybacks are planned
Buybacks are just one of the forces behind the stock market’s rally. Asset prices have continued to benefit from the monetary and fiscal support that policy makers put in place to help the economy get through the pandemic. And analysts have consistently underestimated corporate earnings, which are expected to grow 45% in 2021 for companies in the S&P 500.
of winding down a bond-buying stimulus program. Central-bank officials could also shed more light on their expectations for interest-rate increases next year.Photo:S&P 500 buybacks plunged from nearly $199 billion in the first quarter of 2020 to just under $89 billion in the second, as companies reeling from the onset of the pandemic. Share repurchases increased in each following quarter, approaching $199 billion again in the second quarter of 2021.
“It’s always comforting to have a management team come in and tell you how undervalued they think their shares are,” said Anne Wickland, a portfolio manager at Easterly Investment Partners. “It’s a vote of confidence in the longer-term outlook.”in the summer, in part because of the defense company’s share-buyback program and dividend yield. Lockheed shares fell 12% on Oct. 26 after the company reported lower-than-expected quarterly sales and revised its full-year sales forecast lower. Ms.
that passed the House in November would create a 1% tax on the net value of a company’s stock buybacks.What is your reaction to this latest streak of stock buybacks? Join the conversation below.
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