Twitter not a surprise with all the drama going on and if you think this is a sign of a safe economy keep blowing your horn while profits are lower or loses have increased on more then 50 percent of the companies on the exchanges. Media focuses on fewer positive stories and less on what is really happening to the economy. I already even said as much Bones a number of times with there will be more upside then downside for at least 3 to 6 months last month. Thanks to big piles of cash from the tax break companies have bought back over 880 billion dollars of their own stock that's larger then the largest value of all but 4 companies traded on the stock market. Fang stocks are driving the market higher because it gets headlines but hides what is truly going on with the market. We're not addressing the overall problem with the trade wars and slowing worldwide economies as car and truck sales are seeing large drops and fuel prices are climbing up as well as material prices climbing up. You think Twitter is creating thousands of jobs and new economic opportunity seriously? Fang stocks will get exposed soon as stocks like Amazon, Apple, Google and Facebook and other large technology stock companies see slow downs.
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Share buybacks hit their highest level in history last year, according to new data.
The total value of share repurchases by companies surged to a record $806.4 billion in 2018, up 55 percent from a year earlier, according to new data from S&P Dow Jones Indices. The record was more than 36 percent higher than the previous high watermark hit in 2007.
The buyback total is bigger than the market capitalization of all but four companies in the
S&P 500, eclipsing the size of top constituents like Facebook, Exxon Mobil and Berkshire Hathaway.
It’s a common practice by publicly traded companies. Buying their own stock decreases the amount of outstanding shares in the market. Fewer shares out there means the remaining ones are worth more. It boosts earnings per share and is often used as an alternative to dividends. Critics say the move enriches stock-owning executives and increases income inequality.
The practice has come under scrutiny from some Washington lawmakers who say U.S. companies aren’t spending the windfall from 2017 tax cuts to create jobs. These latest numbers will likely add to that debate. Earlier this year, Sens. Chuck Schumer, D-N.Y., and Bernie Sanders, I-Vt., said they would introduce a bill that seeks to put preconditions on companies that want to buy their own stock, including that they pay workers at least $15 an hour and provide other benefits. The senators
wrote that the practice fuels a “pervasive corporate ethos” and adds to the worst level of income inequality in decades.
In a tweet, former Goldman Sachs CEO Lloyd Blankfein challenged that premise and said “the money doesn’t vanish.”
“It gets reinvested in higher growth businesses that boost the economy and jobs,” he added. “Is that bad?”
Sanders, who is seeking the Democratic presidential nomination, responded that it doesn’t vanish — “it increases the wealth of billionaires like him,” referring to Blankfein."
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Corporate America is flush with so much cash from President Trump's tax cuts that companies are rewarding shareholders with massive stock buybacks.
US companies have plowed more than $246 billion into stock buybacks this year, according to research firm Birinyi Associates. That's up 31% from the same point last year. Cisco (
CSCO) and Wells Fargo (
WFC) alone have announced plans to repurchase more than $20 billion of stock each.
Wall Street normally loves buybacks because they provide persistent demand for stocks while simultaneously inflating earnings per share.
But Goldman Sachs is voicing skepticism about companies focused on returning vast amounts of cash through buybacks and dividends instead of investing in the future through new factories and equipment.
"We expect cash return strategies will lag going forward," David Kostin, chief US equity strategist at Goldman Sachs, wrote in a recent report.
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"Apple is set to announce its quarterly earnings for the second fiscal quarter of 2019 on
April 30, and analysts are speculating on what could be announced in the filing and the following conference call with company executives. In the view of Wells Fargo, Apple will be providing more cash to investors from the significant sum it
repatriated to the United States.
In a note to investors seen by
AppleInsider, Wells Fargo analyst Aaron Rakers believes Apple will provide an update to its capital return program, as it has done for the last seven years. After repurchasing $48.68 billion in stock and paying out $10.75 billion in dividends, Apple's net cash is thought to be around $129.6 billion at the end of the quarter. "