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What Buyback Slowdown: "Our Buyback Desk Is Very Busy" Admits Credit Suisse

"Do not worry," investors are told day after day, this is just a swoon because companies are blacked out from buying back their own shares and supporting the irrational valuations in stock markets. Well, Credit Suisse just smashed another leg on the 2-legged stool of equity market perma-bullishness as they explain in their daily note that "talk of seasonal oscillation in buyback activity is over-exaggerated."

Lot of talk around buyback blackout periods

 

We'd note that a large percentage of companies have 10b5-1 plans in place that allow them to continue the buyback process during blackout periods. 

 

Our corp buyback desk has remained very busy thru the market downdraft.

Though they do offer a modest silver lining for stocks...

Watch for Pension rebalances into equities thru month end

 

Close to an 11% dispersion between stock and bond returns for January.  Our model estimated around $11bn into US equities (as of Friday) based on MTD returns (subject to change of course with the moves in the market and assuming funds rebalance at month end)

However, we can't help but expect an overall slowdown in buyback activity as the cost of funding this shareholder-friendliness explodes...