Morning Report Tuesday 15th March 2016
Do you trust Fund Managers or company directors with your money?
Good morning everyone Overview Market Matters believes today's report covers some big issues that will determine both the short and long term direction of US equities. The US stock market is experiencing amazing divergence between corporate buybacks and fund outflows. It’s very simple - this current bull market in the US is being propped up by corporate buybacks! This quarter, companies in the S&P500 are looking to buyback over $150bn of their own shares, close to the record of 2007.....just before the GFC. Juxtaposing this is that investors are withdrawing funds from the market at an increasing rate e.g. ~$40bn in January. This can be interpreted in a number of ways: 1. Fund Managers are cashing up, missing the rally, but will add significant support to any major correction in stocks.
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