When it comes to returning cash to shareholders, US corporations have been performing at a high level over the past 18 months. In 2022, S&P 500 listed companies paid out over $550 billion in dividends. This year, buybacks are on pace to top $1 trillion for the third consecutive year. This is a stark contrast to 2020 when the pandemic hit and announced buybacks were cut by roughly half, dropping below $500 billion for the first time since 2012.
This appetite for their own shares has, however, been accompanied by a significant reduction in new offerings. US companies are issuing fewer shares than they have in 30 years, meaning less free float available in the open market. Although more money chasing fewer shares has pushed equity markets higher this year, that equation was complicated by a rising interest rate environment.
During this 20-minute Market Insights, Director of Research, Cameron Brandt, and Senior Liquidity Analyst, Winston Chua, will analyze how the above events, as well as other corporate actions such as insider buying and selling, are playing out; we will also look into the trends that have emerged as US interest rates climbed towards their current level.
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