Englund

  USA-börserna nedåt – oljepriset rusar Oljepriset har successivt klättrat uppåt under kvällen sedan ett avtal mellan Iran och Oman för att öppna Hormuzsundet, uteblivit. Iran hade tidigare uppgett att ett avtal var på gång och skulle kunna bli klart under dagen. Brentoljan lyfter 6,6 procent till 87,60 dollar,  USA:s oljereserver lägsta nivån sedan 1983.  https://www.di.se/live/usa-borserna-stanger-nedat-oljepriset-rusar/ Mohsen Rezaee the new leader of the Supreme National Security Council. He replaces Mohammad Bagher Zolghadr, a fellow hard-liner who accepted a new position as political adviser to the supreme leader. Iran has demanded the US lift its naval blockade, withdraw forces, remove sanctions, release frozen assets and pay compensation for war damage as conditions for fully reopening the Strait of Hormuz. Bloomberg 9 August 2026 https://www.bloomberg.com/news/articles/2026-08-09/wait-for-hormuz-deal-stretches-on-as-iran-says-terms-must-be-met Like all transforma...

Corporate America announced plans to buy back $665 billion worth of shares in S&P 500 Index companies in the four months through April, the most ever to start a year. Authorized repurchases are estimated to reach $1.55 trillion in 2026, a figure that would eclipse last year’s record, indicating confidence in corporate fundamentals. Corporate buybacks provide a steady source of demand regardless of price, helping to cushion any potential market pullbacks, and may contribute to lessening the impact of the war in Iran on earnings. “The unprecedented level of commitments from Corporate America to continue buying their own stock indicates the confidence they have in their earnings, revenue, and cash flow.” Stock buybacks have been a dominant source of demand for US equities since the aftermath of the financial crisis. They reduce the supply of outstanding stock, boosting profits for each remaining share as a result. The practice isn’t without its critics, who argue that a share buyback ...

The chip maker announced a $60 billion stock buyback this week — and sparked a debate about whether the move makes sense Aside from strong cash flow, Nvidia has “obscene” operating margins, Navellier said. Even though its margins are shrinking, “they’re shrinking from 70%,” he added. Apple,” Meeks noted, hasn’t seen strong revenue growth in four years. But the tech giant can still show double-digit growth in earnings per share “because it gets 5% or 6% of growth just by lowering its share count through stock repurchases.” Britney Nguyen MarketWatch Aug. 30, 2025  https://www.marketwatch.com/story/nvidia-has-57-billion-in-cash-wall-street-has-ideas-about-what-to-do-with-it-e25254b5

  At more than $800 billion JPMorgan is now worth more than three of its largest competitors — Bank of America, Citigroup and Wells Fargo — combined. For example, in breaking down possible losses from various risks in 2006, he wrote:  “It’s important to share these numbers with you, not to worry you, but to be as transparent as possible about the potential impacts … We do not know exactly what will occur or when, but we do know that bad things happen.” JPMorgan has roughly $60 billion of equity capital more than it needs to meet regulatory requirements. It is expected to spend about one-quarter of that on share buybacks   Sounds great, but there’s a problem: Its shares are so highly valued that this is a bad trade for the bank.  The current price is 2.4 times the book value per share – buying those shares for investors means paying them more than double the current net asset value of the company they own.  “No one's going to convince me that's a brilliant t...

  DI 16 juli 2025 https://www.di.se/live/seb-slar-forvantningarna-pa-de-flesta-punkter/

  Fed stumbled badly in its attempt to update US capital rules and bring them into line with the international Basel standards, which led to a humiliating climbdown by American regulators last year. https://englundmacro.blogspot.com/2025/06/how-to-avoid-bank-safetys-death.html  “Since 2008, $200 billion has gone into stock repurchases. If that had gone into plants and equipment, think what that would have done for the country.” https://englundmacro.blogspot.com/2025/06/big-business-and-trumps-populists-are.html Worried About Stocks? $1 Trillion in Buybacks Will Help https://englundmacro.blogspot.com/2024/12/worried-about-stocks-1-trillion-in.html The real, less respectable reason why companies engage in buybacks, namely to boost earnings per share by shrinking the equity. Plender https://englundmacro.blogspot.com/2016/03/the-real-less-respectable-reason-why.html

  The stock market is on the brink of an all-time high, so Corporate USA is worth more than ever  After-tax profits account for an unprecedented 10.7% of gross domestic product, when in the last 50 years of the 20th century, they never exceeded 8%.   The only time approaching their current share of the economy was in 1929 on the eve of the Great Crash.  If the nation is to deal with inequality, money must be redistributed from somewhere; corporate profits are an obvious source of funds. Steve Bannon, Trump’s campaign chief in 2016, complained to Semafor that only $500 billion of the US government’s $4.5 trillion came from corporate taxes. “Since 2008, $200 billion has gone into stock repurchases. If that had gone into plants and equipment, think what that would have done for the country.” Modern executive pay has changed and allowed CEOs to become billionaires by meeting unchallenging targets for their share price.  Andrew Smithers, a veteran London-based fund m...

 Shares fell 6 per cent in early trading on Thursday. The bank has announced a new share buyback programme of €750mn and proposed a dividend of €0.68 a share, up from €0.45 and  lifting total payouts to shareholders for 2024 to €2.1bn Financial Times 30 January 2025 https://www.ft.com/content/ef25b018-c2d5-470c-a7af-1d5e2bea5407 Tillbaka till Rolfs länktips 30 januari 2025 https://englundmacro.blogspot.com/2025/01/rolfs-lanktips-30-januari-2025.html

Stora skillnader mellan den ekonomiska utvecklingen i Sverige och i en annan av bankens huvudmarknader – Baltikum. Där lånar både företag och hushåll mer pengar. SEB:s rörelsevinstn på drygt 46 miljarder kronor en historiskt hög nivå. Räntabilitet, eg kap: 13,2 procent (15,2) SvD 29 januari 2025 https://www.svd.se/a/QMKnn4/bankchef-riksbanken-och-regeringen-behover-gora-mer-for-svensk-ekonomi Bankernas bostadsutlåning har vuxit från 800 mrd 2002 till runt 4.000 miljarder kronor. https://englundmacro.blogspot.com/2025/01/bankernas-bostadsutlaning-har-vuxit.html De nordiska bankerna har tillsammans en utlåning på 450 miljarder kronor i Baltikum. Störst utlåning har Swedbank och SEB med 182 miljarder kronor respektive 139 miljarder kronor DN 2008-07-03 https://www.internetional.se/baltikum.htm European banks to reward investors with bumper €123bn in payouts Dividends have exceeded pre-crisis levels while lenders have topped up returns with buybacks However, valuations trail US peers and m...

 Buybacks have been called everything from market manipulation and wage killers to a tax loophole and an executive compensation scheme.  With US stocks widely expected to deliver lackluster gains in the years ahead, investors should call buybacks indispensable. That’s because share repurchases have become a key component of total stock returns, although you might not know it based on recent buyback yields. Bloomberg 10 December 2024 https://www.bloomberg.com/opinion/articles/2024-12-10/buybacks-1-trillion-milestone-will-come-just-in-time-for-stock-investors Tillbaka till Rolfs länktips 10 december 2024 https://englundmacro.blogspot.com/2024/12/rolfs-lanktips-10-december-2024.html

With its shares down over 10% this year, and iPhone sales down as well, Apple Inc.’s big plan to restore investor confidence is a $110 billion stock buyback and a 4% dividend increase. MarketWatch 2 May 2024 https://www.marketwatch.com/story/forget-ai-apples-plan-to-restore-confidence-is-a-110-billion-stock-buyback-3c8543f4

Bank of America’s big spending on stock buybacks over the past five years has been a waste for its shareholders, with the bank’s stock price declining slightly during that period. The idea behind repurchasing shares on the open market is that they reduce a company’s share count and therefore boost earnings per share and support higher share prices over time. This doesn’t seem to be a bad idea But for banks, for which capital is the main ingredient of earnings power, a more careful approach might be in order. The data below show how buybacks haven’t helped the largest banks outperform the broad stock market over the past five years. And now, banks face the prospect of regulators raising their capital requirements by 20%, MarketWatch 12 June 2023 https://www.marketwatch.com/story/bank-of-america-execs-blew-93-6-billion-heres-how-they-did-it-822c5df5

 Company repurchases of their own stock hit a global record last year of $1.3tn Historically, companies with leftover cash returned it to their shareholders as dividends. But in recent years, more and more of them, particularly in growth sectors such as technology, have opted instead to buy back shares, sometimes even taking out debt to do so. I don’t share the hate. It’s much better for companies to return cash than engage in headline-grabbing acquisitions that ultimately destroy value, or throw away money on pet projects such as Facebook’s enormous bet on the metaverse. Brooke Masters FT 17 May 2023 https://www.ft.com/content/c3b104af-d31e-4fdf-a15f-a86711bde2c2 Brooke Masters is the FT's US Financial editor, and an associate editor. She leads the team of reporters covering financial services in the world's financial capital and writes a business column.

Expectation that risky assets will mostly go up seems to have been broken. Ultra-speculative assets are leading the way down, but robust corporate balance sheets could put a floor under prices. Cathie Wood’s ARK Innovation ETF Cryptocurrencies Comparisons to the bursting of the dot-com bubble, which knocked almost 83% off the Nasdaq 100, are inevitable. The Fed is poised to end its purchases of Treasury and mortgage bonds quickly and raise interest rates as soon as March Fed put is in doubt now. Or maybe what’s being questioned is just how bad the market selloff has to get before the central bank changes course.  S&P 500 companies had about $2.4 trillion in cash and short-term securities  The giant companies in the market have plenty to spend on buybacks of their own shares if they fall too much Michael P. Regan Bloomberg 26 January 2022 https://www.bloomberg.com/news/articles/2022-01-26/is-the-stock-market-crashing-2022-stress-test-has-companies-crypto-scrambling

Apple is the “poster child” for share buybacks, spending over $467 billion in the past 10 years. Investors are beginning to see Apple as a “flight to safety” or quality trade thanks to the combination of its large cash flow and willingness to return that money to investors. CNBC 3 January 2022 https://www.cnbc.com/2022/01/03/apples-3-trillion-market-cap-shows-value-of-share-buybacks-dividend.html

 MarketWatch 4 November 2021 https://www.marketwatch.com/story/roche-novartis-aggregate-transaction-value-is-approx-chf19b-271636007596

(and beyond that, buying stock that is overvalued is a questionable way to spend shareholders’ money).  Cash may be high in relation to profits, but it is low in relation to market capitalization, except in Japan. In the U.S. buybacks are almost as expensive for companies on this measure as they were 20 years ago. All the previous extremes, when debt was particularly low as a share of equity valuation, came at a point when both the equity and credit markets were about to run into trouble (Nice chart) John Authers Bloomberg 14 september 2021  https://www.bloomberg.com/opinion/articles/2021-09-14/a-debt-fueled-stock-buyback-wave-may-not-be-what-investors-need

in a severe economic downturn, according to European stress tests that also delivered relatively weak results for Deutsche Bank and Société Générale. FT 30 July 2021 https://www.ft.com/content/c4207dc7-578f-428e-bb72-6aabbaf31f57 Mario Draghi Has to Explain One Last Thing. So what happened, exactly, at Monte Paschi? https://englundmacro.blogspot.com/2019/07/mario-draghi-has-to-explain-one-last.html  European Banking Authority https://www.eba.europa.eu/eba-publishes-results-its-2021-eu-wide-stress-test Twenty-three banks, including JPMorgan Chase and Goldman Sachs, underwent “stress tests” by the Fed that modelled the financial damage from a series of doomsday scenarios.  These included a US stock market crash, a steep drop in economic output and substantial distress in commercial real estate. The results, released on Thursday, pave the way for billions of dollars in stock buybacks and dividends, which bank investors have been eagerly anticipating. FT 25 June 2021 https://www.f...

Companies’ eagerness to buy their own shares has been credited with helping drive the 11-year bull market that ended last year.  Between 2010 and the end of 2019, S&P 500 companies poured nearly $5.3 trillion into the stock market through share repurchases WSJ 16 May 2021 https://www.wsj.com/articles/companies-are-flush-with-cashand-ready-to-pad-shareholder-pockets-11621157406 Companies already announced  $800 billion planned stock buybacks  After last year’s record of almost $1.2 trillion MarketWatch 12 August 2022 https://www.marketwatch.com/story/stock-buybacks-near-800-billion-this-year-after-hitting-all-time-record-11660333956 In 2016, total corporate debt increased by $717 billion, n et investment in plant and equipment fell by $21 billion.  Where did the money go? Buybacks and dividend payouts https://internetional.se/shares2016.htm#1801bb Profits GONE as Debt Used For Record High Stock Buybacks The Money GPS 19 May 2021 https://www.youtube.com/watch?v=bql...

US companies announced $484bn in share buybacks in the first four months of this year, the highest such total in at least two decades FT 12 May 2021 https://www.ft.com/content/d7adb226-e9a6-4cd8-9049-35d55c211ca4 The agency problem, originally identified by Adam Smith, whereby agents (executives) managed companies in their own interest rather than that of their principals (shareholders). https://englundmacro.blogspot.com/2020/04/wave-of-corporate-defaults-owes-much-to.html