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The stock market has a $1 trillion secret weapon to fight further declines


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Published in Stocks and Investing on Monday, March 10th 2025 at 10:41 GMT by Insider   Print publication without navigation

  • Buybacks have historically been an ace in the hole for companies looking to generate stock gains during lean times.

The article from Business Insider discusses the significant role of stock buybacks in supporting the U.S. stock market, particularly in light of potential economic downturns. It highlights that despite economic uncertainties, companies are expected to continue with share repurchasing programs, potentially reaching a trillion-dollar level in buybacks. This activity is seen as a critical support mechanism for the market, especially as other traditional supports like low interest rates and quantitative easing might wane. The article notes that in 2024, S&P 500 companies announced $825 billion in buybacks, with expectations for this trend to continue into 2025. This corporate strategy not only boosts earnings per share by reducing the number of outstanding shares but also signals to investors that companies believe their stock is undervalued, thereby potentially preventing or mitigating market crashes. However, the reliance on buybacks also raises concerns about market stability if corporate earnings or economic conditions deteriorate significantly.

Read the Full Insider Article at:
[ https://www.businessinsider.com/stock-market-buyback-outlook-trillion-dollar-support-fight-further-crash-2025-3 ]

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