Ok, so one of the great debates among market participants these days revolves around the extent to which bottom line beats are attributable to corporate buybacks.
Those of a skeptical persuasion are keen on emphasizing the apparent correlation between ZIRP, corporate issuance, share repurchases and the long-running equity rally.
To be sure, it's difficult to ignore the trend. Here's IG issuance (note that supply hasn't slowed down at all this year):
(Chart: Goldman)
And here're buybacks plotted with the number of companies repurchasing shares along with the S&P:
(click to enlarge)
(Chart: FactSet)
Say what you will about margin expansion, you'd be fooling yourself if you didn't acknowledge the role buybacks have played it propping up the bottom line and thus, the stock market.
Of course, it's all made possible by ZIRP. The reason capital markets are as wide open as they are is because the Fed has kept a… Read More …