"It’s the narcissist rally. Sure, there are plenty of forces pushing stocks higher - record corporate earnings, small investors finally buying again, signs the U.S. economy may be strengthening, central banks flooding the financial system with money.
But you may want to spare a thought, and a healthy dose of worry, for what is one of the biggest, and least appreciated, reasons for the rally: buybacks.
Companies are one of the few big stock purchasers nowadays. Nearly every other big player in the stock market has been selling more than they’ve been buying. Pension funds have been selling. Local and state governments have been selling. Investment brokerages have been selling. And, yes, until recently, even Main Street investors."
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