The longest bull market in US history has been running on Apple fumes

The longest bull market in US history has been running on Apple fumes
Apple has bought $226 billion of its own shares back in the span of a decade, fueling the longest bull run of US stocks in its history. Needless to say, it's not alone in not knowing what to do with its cash but return it to shareholders, but it's at the top of eight such buyback-ers which have cumulatively poured $690 billion in stock re-purchases since the financial crisis.

These share buybacks have contributed immensely to the longest winning streak in US stocks for... well... ever, and there is no end in sight. According to an index analyst at S&P Dow Jones Indices: "Given the record earnings, strong cash-flow, investor demand and corporate statements, the indications are that the high level will continue for the rest of the year."

Now, companies buying their own stocks to boost up prices is certainly great news for fund managers and Wall Street in general, as well as bragging rights for whoever happens to preside over the USA during the teardown streak. It also means, however, that there is a lot of money sloshing in the system that companies don't know what to do with, and don't see better investment alternatives than simply gobbling up loose shares on the market. 

In the long run, this could lead to diminished returns but for now those who have money to invest can't easily lose them, it seems. Apple's $226 billion in share re-purchasing is just the most visible culprit in a trend that's been running ever since the Federal Reserve decided to print money and lend them at near-zero interest rates to whoever lined up, in order to tame the effects of the 2008's financial crisis.

source: BI

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5 Comments

1. Finalflash

Posts: 4062; Member since: Jul 23, 2013

It's not just on the back of Apple but Amazon, Google and MS. The insane rise in their stock prices means investors can leverage gains to buy more stock at margin and therefore, further raise the prices of these stocks. Thing is, the cycle eventually slows down and then reverses. That should trigger the greatest depression yet because they really inflated the bubble this time. On a separate note, I'm impressed with iPA for once, finally picking up authors who are looking at news with more critical insight. The last few hires have been great compared to the garbage authors from a few months ago who only rehashed 9to5Mac and AppleInsider.

2. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

Apple’s marketing are the best in the world. No wonder why its the best company in the world. Haters gonna hate it but 2 billions loving it.

3. cmdacos

Posts: 3819; Member since: Nov 01, 2016

Amazon is growing faster than Apple since inception so must be on the back of many companies I would think...

4. ibap

Posts: 865; Member since: Sep 09, 2009

How about turning it around - the performance of the market has allowed people to spend a lot of money on Apple devices, so they could buy back stock. Talk about an egocentric view.

5. cheetah2k

Posts: 2159; Member since: Jan 16, 2011

Bull market, or Bullsh1t market? hahaha

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