Scott Rubner, Head of Equity and Equity Derivatives Strategy at Citadel Securities, stated that they expect US companies to repurchase $1 trillion worth of their own shares by 2025, thus remaining the largest buyers of US stocks.
The period during which companies can repurchase shares reopens after the reporting period. The most recent company reporting period ended in August. Share purchases by both investors and companies generally boost asset prices.
Why is it Important?
August is generally considered a positive month for the stock market, and given the uncertainties surrounding US tariffs, there is ongoing debate about whether the scale of the rally is justified. While large investors are currently staying away from the markets, corporate share buybacks could support higher asset valuations. Rubner also notes that earnings expectations for this period are low.
“To put it in baseball terms – we’re in the 7th inning of a 9-inning game,” he said.
Key Notes
“July is an exceptional month for U.S. stocks. Since 1928, July has been the best-performing month of the year for the S&P 500, while September is the worst-performing month because investors ‘go back to school’,” Rubner stated in a note released Wednesday.
Market Reaction
Citadel Securities’ retail trading flows show that retail investors have been making cash stock purchases in the last 14 trading sessions. This is the longest daily retail buying streak since December 2024, when it lasted 16 days. Rubner says there is a race to buy the dip in the markets.
Future Predictions: “I think stocks can rally further here. This will be supported by positive seasonal factors, strong fund flows, continued retail support, corporate turnaround, and recent confirmation from fundamental investors,” said Rubner.
Future Predictions: “I think stocks can rally further here. This will be supported by positive seasonal factors, strong fund flows, continued retail support, corporate turnaround, and recent confirmation from fundamental investors.”
