Corporate America is curbing its appetite for its own stock, a potentially foreboding sign for the stock market, according to TrimTabs Investment Research on Monday. US companies have announced $291.7 billion worth of buybacks so far this year, about one third lower than the $432 billion announced for the same period last year, TrimTabs said.
June was on pace to be the slowest month of the year, with only $11.8 billion worth of buyback announcements through Friday, including a $2 billion share repurchase announcement by Applied Materials on June 9. "Corporate America announced $2.8 trillion in stock buybacks in the past five years, and these buybacks have provided a key source of fuel for the bull market," said David Santschi, chief executive officer of TrimTabs. "Corporate actions this year suggest this support is going to diminish."