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During #zirp, companies around the world, but particularly in the US, used low interet rates to issue long term debt and secure those low yields for years. The proceeds of those bonds where used for different purposes, but one prominent one was #buybacks. In turn, companies stocks were pushed higher or supported on corrections. With higher rates, the amount of money dedicated to buybacks has decreased, perhaps less than anticipated, but enough to wonder if buybacks will be sustainable in the form we’ve seen them over the last 5 years, going forward. The annual average has been $1Tn, or 2% of total current value of the US equity market, but it’s been concentrated on the handful of stocks that have been pulling the market upwards. The #fed is no longer there to support the bond market through #qe, and buybacks are going down. #liquidity is going down.

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