By Nell Mackenzie
LONDON (Reuters) – Investors have been hoping Donald Trump’s return to the White House next week will boost the U.S. stock market, while Goldman Sachs sees stocks benefiting from the biggest expected company buybacks in at least five years.
A corporate repurchase window, when companies can buy their own stock, begins Jan 24. Goldman strategist Scott Rubner told clients in a note sent on Wednesday and seen by Reuters on Thursday that companies that make up 45% of the value of the entire S&P 500 could be allowed to buy back their shares.
BY THE NUMBERS
Goldman estimates that companies could spend some $1.07 trillion on buying back their own stock this year. On the other side of the equation, global investors have poured about $143 billion into money market funds in the week ending Jan 10, the largest since March 25, 2020, Goldman said.
CONTEXT
A large flow of cash into money markets usually coincides with market turbulence, when investors seek shelter in what they perceive to be the safest assets. Rubner says this time may be more about savvy investors keeping their powder dry before jumping back into equities.
KEY QUOTE
“This is straight up cash, homie,” Rubner said, adding that “money is moving and ready to buy equities once the headlines (and prices) start to settle down.”
GRAPHIC
Below is a table detailing Goldman’s calculations of company cash use since 2020:
Cash Use ($ 2020 2021 2022 2023 2024E 2025E
bln)
Capital $667 $739 $892 $958 $1,063 $1,148
expenditures
Share buybacks 538 919 950 824 931 $1,070
Dividends 520 548 598 621 664 711
R&D 401 453 516 584 642 700
Cash 224 349 288 318 271 325
acquisitions
Total Cash Use $2,351 $3,007 $3,244 $3,304 $3,571 $3,954
(Reporting by Nell Mackenzie; Editing by Amanda Cooper and Jane Merriman)