US corporate buybacks have totaled close to $2 trillion since 2013
which has provided significant support to US equities. Now it appears
the pace of buybacks is beginning to slow. According to JP Morgan Quant
Marko Kolanovic, announced buybacks have dropped 40% ($250 billion) on a
12-month trailing basis. Share buybacks take approximately 6 quarters
to execute so the recent drop will translate into roughly $40 billion
less equity demand per quarter.
The market has not experience the buyback slowdown yet, however going
forward the divergence between buybacks and the S&P500 is an
increasing area of risk, see the chart below.