U.S. Stock buybacks prove that the U.S. economy is still booming!
Big companies such as Apple, Morgan Stanley, Nike, Cisco Systems and Home Depot continue to do their stock buyback, with more doing so in 2022 to avoid the 1% excise tax which will kick in in 2023.
These profitable companies often use its excess cash to buy back its own stock as a way of returning cash to its shareholders.
With more cash on hand, shareholders may continue to buy up these companies, making their stock price go even higher, and probably to the moon.
These positive actions will create more buyback in the near future and also prove that the U.S. economy is booming despite the high inflation hovering around 8% to 9% and the low interest rate of 2.25% to 2.5% in Aug 2022.
Do you think that these companies should increase their buybacks in H2 2022, given that 70%* of S&P 500 companies have reported positive revenue for Q2 2022?
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* Based on FactSet Earnings Insight dated 5 Aug 2022.
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