Trading in the U.S. stock market has been quiet of late, but the calm may not last for long.
Major U.S. companies are about to enter their “blackout” period, which will remove a steady—and perhaps underappreciated—factor that has been buttressing equity values.
A “blackout” period refers to how most companies and corporate insiders are prohibited from repurchasing their own shares in the month before the release of their quarterly results. Companies buying back their own stock have been providing a major floor to equity prices. According to Goldman Sachs, companies spent $384 billion on buybacks in the first half of the growth, an amount that represents growth of 48% from the prior year.
