S&P 500 ATH
Here we are again, no, the USA companies aren't this strong, in fact they are again indulging in practices that led to many bankrupcies in the past. Instead of using the lent money to invest on new infrascructure, new products, new markets they are using the lent money to buyback stocks.
They are buying back stocks as makeup to hide the ugliness that some already saw... they aren't growing.
A fools errand. While this might fool some people that all is well and they should keep investing on the company since it's value is always rising, and yes there are always people that do that, what happens is that the stock price gets artificially so high that the company is actually making it less appealing to investors, to the point that the only people buying the company stocks is the company itself with lent money. The fact that the USD ($DXY) is this high won't help either as it won't have investments from abroad either and make domestic investors look into other markets.
Instead of investing to make the company better for the future years, to actually grow and use the extra to pay the investments made, currently most big companies are only sacrificing their future gains.
After so many billions of USDs have been used to buyback stocks we managed to brush of the last correction that started on October 2018. Instead of trying to hold the ground and let the time adjust valuations as market fixes itself, corporate greed fueled by the FED, made this magnificent recovery to a new all time high.
The cost of it will come... the sooner the more manageable it will be.
PS: This information is not a recommendation to buy or sell. It is to be used for educational purposes only.
Here we are again, no, the USA companies aren't this strong, in fact they are again indulging in practices that led to many bankrupcies in the past. Instead of using the lent money to invest on new infrascructure, new products, new markets they are using the lent money to buyback stocks.
They are buying back stocks as makeup to hide the ugliness that some already saw... they aren't growing.
A fools errand. While this might fool some people that all is well and they should keep investing on the company since it's value is always rising, and yes there are always people that do that, what happens is that the stock price gets artificially so high that the company is actually making it less appealing to investors, to the point that the only people buying the company stocks is the company itself with lent money. The fact that the USD ($DXY) is this high won't help either as it won't have investments from abroad either and make domestic investors look into other markets.
Instead of investing to make the company better for the future years, to actually grow and use the extra to pay the investments made, currently most big companies are only sacrificing their future gains.
After so many billions of USDs have been used to buyback stocks we managed to brush of the last correction that started on October 2018. Instead of trying to hold the ground and let the time adjust valuations as market fixes itself, corporate greed fueled by the FED, made this magnificent recovery to a new all time high.
The cost of it will come... the sooner the more manageable it will be.
PS: This information is not a recommendation to buy or sell. It is to be used for educational purposes only.