The Biggest Threat To The S&P In The Next Month: “Only Buyer Keeping This Market Alive” Stops Buying
by Tyler Durden
ZeroHedge.com
03/15/2016
Even Bloomberg gets it.
In a note issued yesterday, the news behemoth reported what our readers had known for years: that “There’s Only One Buyer Keeping S&P 500’s Bull Market Alive”, namely corporate buybacks, the same “buyer” of stocks that the smart money has been selling to for the past 7 weeks.
Dispelling any confusion about who the relentless buyer into the “wall of worry” is, this is what Bloomberg wrote:
Demand for U.S. shares among companies and individuals is diverging at a rate that may be without precedent, another sign of how crucial buybacks are in propping up the bull market as it enters its eighth year. Standard & Poor’s 500 Index constituents are poised to repurchase as much as $165 billion of stock this quarter, approaching a record reached in 2007. The buying contrasts with rampant selling by clients of mutual and exchange-traded funds, who after pulling $40 billion since January are on pace for one of the biggest quarterly withdrawals ever.
We got the latest confirmation of this earlier today when Bank of America said that “clients don’t believe the rally, continue to sell US stocks” to the only buyer left in town: “buybacks by corporate clients accelerated for the third consecutive week to their highest level in six months, which is also above levels at this time last year. This suggests that overall S&P 500 completed buybacks—which are reported with a lag—have likely picked up significantly as well.”
The Rest…HERE
