Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Buyback fuel for the bull market is losing steam

Beware of buybacks?
The market’s yield mystery
Is the Fed trying to confuse investors?
How to play a pullback in gold: Technician

Stock buybacks, which have helped power the 7-year-old bull market, are showing their first signs of retreat in at least three years.

Share repurchases decreased 3.4 percent in the fourth quarter from the previous three-month period and are tracking at a 21-month low in March, according to respective data from S&P Dow Jones Indices and TrimTabs.

If the trend continues, that would mark a major trend shift. Companies have been using reductions in share count as a way to boost earnings profiles, raise stock prices and reward corporate executives. The programs have been seen as a major driver of the market rally, though the extent of the effect has come under scrutiny in recent months.

The most recent trend shows that buybacks have dwindled to $23.5 billion in March, just a month after hitting a 10-month high of $94.6 billion in February, TrimTabs reported in its weekly market summary. companies have committed more than $2.7 trillion to buybacks since the market bottomed back in March 2009.

For all of 2015, share repurchases totaled $572.2 billion, an increase of 3.4 percent from 2014.