How Stock Buybacks Came to Drive the Stock Market: QuickTake

The biggest buyers of stocks on US exchanges aren’t pension funds or retail investors. The dominant force in the equities market is companies buying their own shares. Stock buybacks, as the practice is known, please shareholders by boosting the worth of their holdings — and benefit managers whose bonuses are tied to stock prices. Buybacks have drawn criticism from President Joe Biden and his predecessor, Donald Trump, who both said they’d rather see companies use profits to create new jobs. Buybacks set a record in 2022 even as Congress voted to impose a 1% tax on them. Many analysts ...