Latest news with #JeffreyYaleRubin
Business Insider
12-08-2025
- Business
- Business Insider
Apple and Google Drive Stock Buybacks to Record-Breaking Trillion Dollar Highs
U.S. tech titans and banks are on course to drive a record-breaking amount of share buybacks in 2025. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. According to new figures from Birinyi Associates, U.S. firms have announced $983.6 billion worth of stock buybacks so far this year. That is the best start to a year in over 40 years and is on course to hit more than $1.1 trillion worth of buybacks by the end of 2025. Best Ever That would mark an all-time high in the U.S. In May, Apple announced a $100 billion buyback, while in April Alphabet announced a $70 billion stock buyback program continuing a rising pattern since the Covid pandemic. JPMorgan said in July that the company will buy back $50 billion worth of stock. Bank of America announced a share-repurchase program of $40 billion, and Morgan Stanley reauthorized up to $20 billion in buybacks. U.S. companies announced $165.6 billion worth of buying last month, above the previous July record of $87.7 billion in 2006, according to Birinyi. Main Drivers It is being driven by strong earnings growth and tax cuts, which are bolstering corporate balance sheets. In addition, the uncertainty of President Trump's tariff trade strategies is freezing investment plans and making buybacks a more appealing use of incoming cash. It has also fueled the post-April resurgence in American stock markets such as the S&P 500 and Nasdaq Composite. This growth can be seen in the SPY ETF (SPY), which tracks the S&P 500 index, below. 'Things are better than everyone makes them seem,' said Jeffrey Yale Rubin, president of Birinyi Associates. 'Companies are flush with cash. They were in healthy shape even before the better earnings.' However, while buybacks can bring cheer to both businesses and investors as prices are boosted because there are fewer shares around to trade, it could spell bad news for the overall health of the U.S. economy. Some analysts believe that companies preferring buybacks over investing in factories or offering dividends could weigh on growth over the long-term.
Yahoo
09-08-2025
- Business
- Yahoo
Stock buybacks are surging. Here's why it matters to your portfolio.
Corporate buybacks are surging, with both the July and year-to-date totals setting records. But that's no reason for bullish stock investors to celebrate. According to data compiled by Jeffrey Yale Rubin, president of Birinyi Associates, S&P 500 SPX companies in July announced buybacks that were 88% higher than the record for any previous July, which occurred in 2007. Furthermore, the total for the first seven months of 2025 is 13% higher than the previous year-to-date record through July — which occurred in 2022. I plan to work until 80. Can I contribute to my IRA while taking RMDs? Trade Desk's stock sees its worst drop ever, and analysts wonder if Amazon is to blame SoundHound earnings show a growing embrace of voice AI, and the stock is surging 'I have a great mortgage rate': I need $80K to buy my husband out of our home. Do I raid my $180K Roth IRA? A surge in share repurchases represents tentativeness about the future. That might seem counterintuitive, but researchers have found that when corporate executives feel confident about what's coming down the pike, they tend to use excess cash to increase dividends. When, like today, they are less confident, they instead tend to repurchase shares. This contrast helps us to make sense of what happened in the second quarter of this year, when dividend growth was anemic. As Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, puts it: 'Dividend growth declined in Q2 2025, as concern over forward cash commitment was inhabited by the uncertainty over tariffs and its impact on sales, costs and the general economy.' The combination of surging buyback activity and anemic dividend growth tells us that we're coming off very good times for corporate America — but there is significant uncertainty about whether those good times can continue. This interpretation is reinforced by the recent record level of insider selling, as I wrote in July. The upshot is that the dividend yield tells us a lot more about the U.S. market's prospects than the buyback yield. (The market's buyback yield is calculated by dividing the total dollars that S&P 500 companies have spent on repurchases over the trailing 12 months by the combined market cap of all 500 companies.) Analyzing the past four decades' data, I found no statistically significant relationship between the S&P 500's buyback yield and the index's performance over the subsequent 12 months, at least at the 95% confidence level that statisticians often use when assessing whether a pattern is genuine. With dividends, in contrast, the relationship was very significant — at the 99% confidence level. The S&P 500's current dividend yield is a low 1.23%. To translate that into a forecast, I constructed a simple econometric model from the monthly correlations since the 1980s between dividend yields and the S&P 500's subsequent returns. That model suggests that the S&P 500 will produce a real total return of 3.3% over the next 12 months. That's not bad, but far short of the 20%-plus return the market has produced over the past year. Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at Plus: Trump and the dollar are doing something we saw just before the October 1987 stock market crash More: These stock pickers just had their worst month of 2025 at trying to beat benchmarks Trade Desk's stock tumbles after earnings. Are investors being too harsh? Is the economy as good as Wall Street says it is? Financial markets and the data are telling different stories. 'She lives alone': My mother-in-law, 86, gets $1,300 in Social Security. Is that enough to live on?
