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(Bloomberg) — Companies including Walmart and Alphabet are flashing a bullish sign on US equities by buying their own stocks.
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Now that earnings season is over, it’s clear that a majority of S&P 500 companies were buyers of their own stock, and most of those that bought back shares spent more this year than in 2021. That suggests companies had confidence stocks were trading at attractive levels and they had no pressing need to hoard cash.
Walmart Inc. and Alphabet Inc. were among firms announcing giant share repurchase plans. Nearly 70% of S&P 500 firms (excluding financial companies) repurchased shares in the most recent quarter, my colleague Tom Contiliano tells me. Of those, 74% spent more than the year-earlier quarter. Plus, roughly a quarter had spent nothing on share repurchases in the quarter last year. Banks were a notable exception, with Citigroup Inc. and JPMorgan Chase & Co. suspending stock buybacks to meet higher capital requirements in Fed stress tests. That wasn’t entirely unexpected and was viewed as prudent.
NOTE: Felice Maranz writes for Bloomberg’s Markets Live blog. The observations she makes are her own and not intended as investment advice. For more markets commentary, see the MLIV blog
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