Pre-market stocks: Wall Street needs a reason to buy stocks. Is this?

Yet Goldman Sachs has a reminder for Wall Street: Hundreds of billions of dollars of support that could help ease the angst is on the way.

What’s happening: Ahead of the earnings season, companies faced restrictions on buying back their own shares, which weighed on the biggest source of demand for US equities. Now, with many companies reporting profits, they can once again enter full buy mode.

This could trigger a flood of money in the market. US companies have authorized more than $400 billion in share buybacks so far this year, according to Goldman Sachs. This is 22% more than the record level recorded at the same time last year.

Although the economic environment has become more difficult, companies are still growing their profits at a healthy pace and amassing large reserves that can be tapped to reward shareholders.

“Solid earnings growth (+5%) and strong cash balances among S&P 500 companies will support continued growth in buyouts,” Goldman Sachs analysts said.

The company expects S&P 500 redemptions to rise 12% this year.

When it comes to earnings calls so far this quarter, buyouts have been a hot topic, especially from tech companies. Apple (AAPL) authorized an additional $90 billion in share buybacks “given the continued confidence we have in our business now and in the future.” from google Alphabet (GOOGL) approved an additional $70 billion in buyouts.
The oil sector, flushed by soaring energy prices, is also multiplying share buyback plans. ExxonMobil (XOM) tripled the size of its buyback program last week. It now plans to repurchase $30 billion worth of shares through 2023. BP announced an additional $2.5 billion in buybacks on Tuesday. (More on BP and oil industry profits below.)
This does not mean that all such redemptions will be executed. JPMorgan Chase (JPM)which announced a new $30 billion share buyback program last month, stressed that it was not locked in.

“It’s just a signal that we want to have that capability and that flexibility,” said Jeremy Barnum, the company’s chief financial officer. “But that doesn’t say much about what we actually plan to do in the near term.”

Takeovers are politically controversial. US President Joe Biden wants to limit them and encourage companies to share their wealth with other stakeholders, such as employees.

But for investors, the ongoing wave of buyouts could provide a boost, supporting stock prices and indicating that companies are generally happy with the economic outlook, despite a long list of unknowns.

BP profit more than doubled on ‘exceptional’ oil trading

Closing its operations in Russia was a costly decision for BP. But the company does not sweat because it reaps huge profits thanks to exorbitant energy prices.

The last: BP (BP) said on Tuesday it had taken a hit of more than $24 billion following its decision in February to offload its nearly 20% stake in state oil giant Rosneft and abandon three joint ventures with the biggest Russian oil producer.
BP's profit more than doubled on

Even so, first-quarter underlying earnings climbed to $6.2 billion from $2.6 billion in the same period last year, boosted by “exceptional oil and gas trading conditions.” “, reports my CNN Business colleague, Mark Thompson.

Remember: Oil prices are up nearly 40% since the start of 2022, with benchmark Brent crude trading well above $100 a barrel. Natural gas prices have also increased. Gains were driven by fears of a global supply shock following Russia’s invasion of Ukraine.

Shareholders are in line for a bargain. In addition to committing to buy back shares, BP has increased its dividend. But opposition politicians in the UK used the results to renew their calls for a single tax on excess profits generated by companies producing oil and gas in the North Sea.

They want the proceeds to help fund additional relief for households struggling to cover rising fuel and heating costs in the worst cost of living crisis in decades.

“With so many people struggling to pay their energy bills, we should have a windfall tax on North Sea oil and gas companies, which have made more profit than they expected,” said Keir Starmer, leader of the Labor party. BBC.

Prime Minister Boris Johnson’s government has so far resisted those calls.

Not just BP: Last week, Exxon said its quarterly profit doubled despite a $3.4 billion charge for exiting its Russia business. Chevron’s profit more than tripled from a year earlier.

Citi Trader’s Mistake Triggers Flash Crash

We’ve all had a case of Monday at work. Still, making a mistake that triggers a damaging flash crash in financial markets is likely to make for an exceptionally bad day.

When European stocks suddenly fell on Monday – at one point sending Sweden’s main stock index down 8% – investors raced to figure out what was behind the brief but sharp move.

The answer: A trader at Citigroup (VS).

“On Monday, one of our merchants made an error while entering a transaction,” the bank said in a statement. “Within minutes, we identified the error and fixed it.”

A Nasdaq Stockholm spokesperson told Bloomberg that the problem was not caused by a technical glitch or an outside attack. No transactions will be canceled as a result of the incident, they added.

“It is very clear to us that the cause of this movement in the market is a very large transaction made by a market participant,” they said.

Take a step back: exchanges try to guard against accidental transactions, but sometimes their efforts can still fail. The rapid sell-off in Europe on Monday was likely compounded by low trading volume as it was a UK public holiday.

Following

Hilton, Marathon Oil (MPC) and Pfizer (DFP) publish the results before the opening of the American markets. Airbnb, Lyft and Starbucks (SBUX) follow after the close.

Also today: Are labor shortages easing? US job postings for March, which arrive at 10 a.m. ET, will provide some clues.

Coming tomorrow: All eyes are on the Federal Reserve’s May meeting.

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