Stock Market Outlook: Global Equity-Supply Shortage Long-Term Positive
- There’s a global supply shortage of stocks as fewer companies go public and buyback programs surge.
- Net issuance of new stock by global companies has turned the most negative since 1999, according to JPMorgan.
- “Every year, due to buybacks, globally we remove $1.2 trillion worth of stocks from the markets that can be bought by investors,” Josh Brown of Ritholtz Wealth said.
A deluge of buybacks, fewer secondary equity offerings, and a tepid IPO market are contributing to a global supply shortage of stocks, according to a recent note from JPMorgan.
The analysis, conducted by JPMorgan’s Nikolaos Panigirtzoglou, shows that more than $1 trillion worth of stocks are being removed from global markets every…
