Authorized stock repurchases hit new highs!

In my previous analysis on TradingView, I explained that sustaining a long-term uptrend depends on the following factors:

• 12-month earnings expectations for S&P 500 companies are very high
• These expectations focus on technology areas supported by the AI ​​revolution
• Within the technology sector, the semiconductor sector continues to perform upward
• Finally, while AI stocks hit new highs, market valuations are still considered relatively low

The combination of these factors represents a major source of stock market resilience in the face of current geopolitical shocks.

Today, I’d like to highlight another factor supporting the long-term uptrend: the number of stock buybacks approved by S&P 500 companies.

It’s important to remember that stock buybacks are approved by a company’s board of directors and can provide insight into the potential number of shares that will be repurchased in the coming months.

The latest data shows that these approvals are accelerating, with the annual cumulative number hitting a new high. The signal is unusual, but instead reflects the company’s management’s strong confidence in its ability to generate future cash flow and its stock’s current valuation, which is still considered attractive.

The table below shows the repurchase data.

Mechanistically, share buybacks directly support the market. By reducing the number of shares outstanding, earnings per share (EPS) rise, supporting a higher price. As such, it represents a powerful self-reinforcing mechanism, especially in an environment of strong earnings growth.

Furthermore, this factor acts as an implicit safety net for the market. During a correction, previously approved buyback programs can be activated more intensively, providing structural demand for the stock.

Finally, the current record levels demonstrate that companies have strong balance sheets and ample liquidity despite the relatively high interest rate environment. This reinforces the view that regardless of macroeconomic and geopolitical uncertainties, the long-term upward trend remains entrenched on the back of strong internal catalysts.

Disclaimer:

This content is intended for individuals familiar with financial markets and instruments and is for informational purposes only. The ideas presented (including market commentary, market data and observations) are not the work of any research department of Swissquote or its affiliates. This material is intended to highlight market trends and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is recommended that you seek professional advice from a licensed advisor before making any financial decisions.

The content is not intended to manipulate markets or encourage any specific financial behavior.
Swissquote makes no representations or warranties regarding the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The opinions expressed are those of the advisor and are for educational purposes only. Any product or market-related information provided should not be construed as advice on investment strategies or trading. Past performance is no guarantee of future results.
In no event shall Swissquote, its employees and representatives be liable for any damages or losses arising directly or indirectly from decisions based on this content.
The use of any trademark or third-party trademark is for reference only and does not imply endorsement by Swissquote Bank or that the trademark owner authorizes Swissquote Bank to promote its products or services.
Swissquote is a subsidiary of Swissquote Bank Ltd (Switzerland) regulated by the Swiss Securities Regulatory Authority (FINMA), Swissquote Capital Markets Limited regulated by the Cyprus Securities and Exchange Commission (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the Cyprus Financial Supervisory Authority, Swissquote Ltd (UK) regulated by the Cyprus Financial Supervisory Authority, Swissquote Financial Services (Malta) Limited Event Marketing Brands of the Malta Financial Services Authority, Swissquote MEA Ltd. (United Arab Emirates) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) regulated by the Hong Kong Securities and Futures Authority and Swissquote South Africa Limited (Pty) regulated by the Securities and Exchange Commission.
Swissquote products and services are available only to persons permitted to receive them by local law.
All investing involves some degree of risk. The risk of loss from trading or holding financial instruments can be substantial. The value of financial instruments (including, but not limited to, stocks, bonds, cryptocurrencies and other assets) may fluctuate up and down. There is a significant risk of financial loss when buying, selling, holding, betting or investing in these financial instruments. SQBE does not make any recommendation regarding any specific investment or transaction or the use of any specific investment strategy.
CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. The vast majority of retail client accounts will suffer capital losses when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital assets are unregulated in most countries, and consumer protection rules may not apply to them. As a speculative investment with high volatility, digital assets are not suitable for investors who cannot bear high risks. Make sure you understand each digital asset before trading.

Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainty.

The use of Internet-based systems may involve high risks, including but not limited to fraud, cyberattacks, network and communications failures, and identity theft and phishing attacks related to digital assets.