BLOG

One month after Goldman announced its buyback desk had its "busiest week ever", when corporate stock repurchases saved the market from crashing in the aftermath of the February 5 VIXplosion which sent the market into a 10%  correction in just days, companies remain one of, if not the biggest buyer of stock.

UBS explained this rather simply with two charts: US equity outflows and implicit outflows from derivatives net selling drove the selloff...

while corporations were the primary buyer, offsetting fund/futures selling.

UBS described this simply as "Record selling offset by corporate bid"

Fast forward to today, when according to Bank of America's flow desk, last week the bank's clients were big net buyers of US equities, purchasing $3.6bn in stock, following a week of selling. In terms of products, net buying was mostly via ETFs as single stocks saw net sales for the third week.  Broken down by investors type, hedge funds were the sole net buyers, while Institutional clients and private clients were net sellers. But nobody was a bigger buyer of stock than the original sellers of stocks themselves, as it was the amount of corporate buybacks that was once again truly remarkable.

As BofA notes, stock repurchases by corporate clients (i.e. corporations), not only remained elevated, above $1.5Bn for the third week, but also one of the "largest weekly buyback In our data history", led by Banks and Financials buying back their stock last week (just in case there is still confusion why Jamie Dimon was so confident to buy JPM stock at the "Dimon Bottom").

In total, YTD buybacks purchased via BofA's desk totaled nearly $11 billion (up +53% YoY), and the strongest start to a year since 2014.

And, if JPM is right in its forecast that a record $842 billion in stock will be repurchased this year, $842BN will be repurchased this year, or just shy of $3 billion every single trading day...

.... this is just the beginning as companies do everything in their power, and issue as much debt as they can (using the proceeds to fund buybacks) to prevent their stock from dropping.