FactSet Insight - 2023 Tracks As The Weakest Buyback Announcement Year Since Before 2016
Read the full article on Seeking Alpha.
Wall Street Horizon has closely monitored the trend in corporate buybacks throughout 2023. It has been a bit like watching paint dry given the lack of activity, and the Q3 earnings season didn’t bring about a whole lot of confidence for an immediate turnaround. Investors continue to prefer that company executives shore up balance sheets, and the costs of equity and debt capital are much higher compared to year-ago levels.
Is there hope on the horizon? Will next year mark a buyback bounceback? Maybe it all depends on how the macro picture unfolds. Strategists on Wall Street are publishing their 2024 outlooks, and the big question is whether a U.S. recession strikes. Thus far, the jobs market is hanging in there while solid, though slowing, retail spending is a healthy sign. Meanwhile, the rate of inflation is clearly coming closer to the Fed’s target. Some certainty that central banks are through with interest rate hikes would be music to the ears of those in the C-suite, and that could allow for more aggressive capital allocation plans in the coming quarters.