What's going on?

Data out over the weekend showed US companies have announced a record amount of share buybacks this year, and they didn�t exactly have to break the bank�

What does this mean?

From supply bottlenecks to inflation, American companies are facing more than a few risks to their bottom lines. So they�re resorting to a well-worn trick to keep investors sweet: they�re buying back their own shares, limiting the supply available and pushing up the price of those left over. In fact, Goldman Sachs has shown that US companies have approved a record $319 billion worth of share buybacks this year � a far cry from the $267 billion of this time last year (tweet this). And now�s the perfect time for them to do just that: the average stock�s price in the US Russell 3000 index is down over 30% this year, which suggests companies can nab their shares for a bargain.

Why should I care?

The bigger picture: Bad luck, big banks.
America�s investment banks earn fees on facilitating major share buybacks, so this record-breaker might�ve come as a relief. Not least because they�ve seen a serious drop-off in one of their biggest money-spinners: advising companies on how to sell shares, usually through initial public offerings (IPO). Case in point: five of the biggest US investment banks have made nearly 90% less from that segment of their business this year than they had done this time in 2021.

Zooming out: The Middle East is thriving.
IPOs might be out of favor in the US, but they�re very much in vogue elsewhere: data out last week showed that Middle Eastern companies have raised more cash from IPOs than those in Europe this year. That�s probably because the region�s energy-heavy stock markets are having a particularly strong year, as the surging price of oil and natural gas sends local producers� shares sky high.