Traders are expecting a modest, roughly $4.5 billion buy program near the close. Why?
Anheuser-Busch is coming out of the S&P 500 (bye-bye old friend! It will no longer be traded at the NYSE; InBev trades in Brussels). The market cap of Anheuser-Busch is about $50 billion. Therefore, $50 billion will be disbursed to the shareholders.
Of that, about 11 percent is indexed to the S&P 500. Some of that money will go into medical waste management company Stericycle , which is replacing Anheuser-Busch in the S&P 500, but the remainder—roughly $4.5 billion—will be distributed to the other 499 stocks in the S&P 500, the exact amount depending on the market capitalization of each company (the S&P 500 is a market cap weighted index; the higher the market cap, the more the weighting in the index).
That was easy. Here's the hard part: does a buy program necessarily mean the stock market will rise going into the close?
The answer: in calmer markets, it greatly increases the chances that will happen. But in this market, it's quite possible traders will see the extra buyside supply as another good excuse to Sell Into the Rally.
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