Wall Street ‘Feverishly’ Averages $4.8 Billion A Day In Stock Buybacks In Wake of Renacci Tax Bill

Regardless of how Congressman Jim Renacci tries to spin it, it gets clearer by the day that his GOP tax bill is not aimed at helping Ohio’s working families. A new CNBC report shows that Wall Street investors have averaged a whopping $4.8 billion a day in stock buybacks in 2018, and JP Morgan projects there will be a record $800 billion by the year’s end. Instead of investing in economic development, job creation, or wage increases, Renacci’s tax bill is funneling money to the wealthy and well-connected while Ohio’s middle class is left behind.

CNBC: Companies are putting tax savings in the pockets of shareholders

Jeff Cox – March 12, 2018

Key Points:

  • Companies have been feverishly putting the savings they reaped from the tax breaks passed in December into their investors’ pockets this year.
  • Share buybacks in 2018 have averaged $4.8 billion a day, double the pace for the same period last year, according to market data firm TrimTabs. That comes following Congress’s move to slash the corporate tax rate from the highest-in-the-world 35 percent to 21 percent.
  • “The feverish buyback activity suggests companies plan to use a hefty chunk of the money they expect to save on taxes to buy back stock,” David Santschi, director of liquidity research at TrimTabs, said in his weekly report.
  • JP Morgan recently estimated that by year’s end, buybacks would reach a record $800 billion, a 51 percent increase over last year and in keeping with the trends TrimTabs has recorded for the year to date.

Read the full story here.

Wall Street Journal: Boom in Share Buybacks Renews Question of Who Wins From Tax Cuts

Reuters: U.S. corporate share buybacks ‘explode’ in February: research firm

New York Times: Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages

Axios: Companies announced $173 billion in stock buybacks so far this year

CNN Money: Tax cut scoreboard: Workers $6 billion; Shareholders $171 billion

CNBC: Companies buying back stock at record pace since Trump tax bill may aid market’s comeback

New York Times: Banks Are Big Winners From Tax Cut

CNBC: Few large companies say they’ll use tax savings to boost wages, CNBC survey finds

Wall Street Journal: Private Equity Expected to Benefit From Tax Overhaul

CNBC: US firms will now focus on stock buybacks after tax cuts, David Rubenstein says

New York Times: Bonuses Aside, Tax Law’s Trickle-Down Impact Not Yet Clear

International Business Times: Koch Brothers Could Be $1 Billion Richer Each Year From GOP Tax Bill

CNBC: Most of the tax cut windfall will boost buybacks and dividends, not workers’ pockets, survey predicts

Fox Business: Private equity firms lobbied tax reform bill as carried interest survives