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 TECHNICALS
Buyback Shares Index:  Underperforming SP500 ?
 December 1 ​( From Tradingview, Bloomberg  )
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The Situation

One of the most unintended consequence that the FED kept rates so low
​so long ​was that US corporations did borrow tons of money by issuing
​corporate bonds to buyback their own shares.

That did help tremendously the US Stocks Market​​ in terms of performance
since the last Financial Crisis on both ways:
1) The buybacks was a short term bull support for the market
2) Retrieving so many shares improved EPS going forward
​​​​
Getting High on Their Own Supply : Corporate stock buybacks put a floor under earnings

So one of the most releveraging process from US corporations since the financial crisis have been to sell bonds to buy back their own shares.​​ And it is getting into non sense as Spending on Buybacks Exceeds Free Cash Flow for first time since October 2009 for SP500 corporations according to FACSET.

From BCA Research: One casualty from declining free cash flow in the US could be stock buybacks.

​​We will have a look a the PKW ETF ( PowerShares BuyBack Achievers Portfolio )  performance based on the
NASDAQ US BuyBack Achievers™ Index compare to US Stocks Indices.

Let s look at the Relative Performance of PKW ETF to the SPY ETF ( Ratio of ​​PowerShares BuyBack Achievers Portfolio over the Mighty SP500 ETF SPY SPDR ). As we may see on the chart below, PKW ETF Relative Performance peaked in April 2015 and is underperforming tremendously since then and reached level last seen in November 2014.

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Buyback Shares Index: Underperforming SP500 ? $SPY, $SPX, $ES_F  #Trading #Nasdaq #SP500
Daily RATIO
PKW ETF ( ​PowerShares BuyBack Achievers Portfolio )
over
​​SPY ETF ( SPDR® S&P 500® ETF )
20 DMA ( Yellow Line )
50 DMA ( Red Line )
​200 DMA ( Green Line )
Financialiceberg.Com
Financialiceberg.Com
As the PKW is based on the NASDAQ US BuyBack Achievers™ Index, let s look also on a Relative Performance of PKW ETF to the QQQ ETF ( Ratio of ​​PowerShares BuyBack Achievers Portfolio over the NASDAQ 100 Index ETF ). As we may see on the chart below, PKW ETF Relative Performance peaked in July 2013 and is underperforming tremendously since then and reached the lowest level since 2007.
Daily RATIO
PKW ETF ( ​PowerShares BuyBack Achievers Portfolio )
over
​​QQQ ETF ( NASDAQ 100 Index ETF )
20 DMA ( Yellow Line )
50 DMA ( Red Line )
​200 DMA ( Green Line )
So in fact Buybacks having less and less impact on the overall maket trend even if Goldman thinks it will be enough to save the market. In fact, Corporations that Buybacks their shares started to underperform the whole market since April 2015.

And Citi reserach tells us to look for​​ Seek consistent share-shrinkers, not big buybacks.
​Citi: The Buyback Bonanza Might Not Be Having as Big of an Impact as You Think

​But the most interesting technical factor is that on a Relative Performance of PKW ETF to the SPY ETF, it is the first time it is breaking the Major Support Trendline that started back in 2008 as shown by the chart below.
Daily RATIO
PKW ETF ( ​PowerShares BuyBack Achievers Portfolio )
over
​​SPY ETF ( SPDR® S&P 500® ETF )
Financialiceberg.Com