Stock buybacks will hit $1 trillion in 2018


No money for wages, schools, health care, but…

Stock buybacks will hit $1 trillion in 2018

Barry Grey

8 August 2018

US corporations will buy back their own stock at a record clip of $1 trillion this year, according to an analysis issued by Goldman Sachs on Monday. The Wall Street giant attributed the surge in share repurchases to booming corporate profits and Trump’s $1.5 trillion tax cut for corporations and the wealthy, which was passed by Congress and signed into law last December.

In a note to investors, David Kostin, chief equity strategist at Goldman, gushed that investors were likely to see the impact of the buybacks in higher share prices and fatter stock portfolios very quickly.

The scale of the buyback spree is massive. Second-quarter 2018 stock repurchases are up 57 percent from the same period a year earlier. In the tech sector, the year-over-year increase is 130 percent.

The surge in stock buybacks comes in the midst of record or near-record sales and profits. Among Standard & Poor’s 500 firms, second-quarter sales rose by 12 percent and earnings per share increased by 24 percent as compared to the same period of 2017. Fifty-six percent of companies surpassed the financial projections of market experts and economists.

Buyback authorizations have surged in 2018

Trillions of dollars are being squandered on inflating stock prices and the fortunes of the CEOs and big investors who overwhelmingly control the assets, by means of financial manipulations such as buybacks, dividend increases, and mergers and acquisitions.

Meanwhile, the real wages of US workers, whose mostly low-paid and back-breaking labor, along with that of millions of their class brothers and sisters around the world, is the source of all wealth and the profits extracted by the…

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