ON TRACK FOR $1 TRILLION IN STOCK BUYBACKS IN 2018 - CORRELATION INTACT
- According to TrimTabs, $827 billion in stock buybacks have been announced so far this year.
- Furthermore, if stock buyback activity continues to rise in the fourth quarter, it is likely that we will reach $1 trillion in stock buybacks in 2018.
- The fact that the S&P 500 has not risen as much as its record earnings has caused P/E ratios to plummet, which encourages even more corporate stock buybacks.
- By reducing share totals, this aggressive stock buyback activity is significantly boosting earnings per share.
The chart illustrates that the record stock buyback pace has picked up in second quarter.