November 14, 2021

‘Nice underpinning to the market’: Buybacks may prop stock market rattled after Fed meeting

Stock buybacks are on a tear, with potential to help prop up a U.S. stock market startled by the Federal Reserve’s policy meeting this past week.

“Buybacks can be a nice underpinning to the market if we do see a pullback in the summer,” said Jack Caffrey, an equity portfolio manager at J.P. Morgan Asset Management, in an interview. “It’s very reasonable to think there will be more activity.”

Companies are resuming share repurchase programs after mostly shutting them down during the COVID-19 crisis last year, according to Howard Silverblatt, senior index analyst with S&P Dow Jones Indices. While buybacks are still dominated by a small group of companies in the S&P 500 index
he said they have broadened out this year amid record earnings in the economic recovery.

Earnings of companies in the S&P 500 index rose to an “easy…

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