Share buybacks signal confidence in a shaky market
The Sandbox Daily (5.8.2025)
Welcome, Sandbox friends.
Today’s Daily discusses:
share buybacks signal confidence
Let’s dig in.
Blake
Markets in review
EQUITIES: Russell 2000 +1.85% | Nasdaq 100 +0.98% | Dow +0.62% | S&P 500 +0.58%
FIXED INCOME: Barclays Agg Bond -0.52% | High Yield -0.03% | 2yr UST 3.884% | 10yr UST 4.382%
COMMODITIES: Brent Crude +3.30% to $63.14/barrel. Gold -2.32% to $3,313.9/oz.
BITCOIN: +6.16% to $101,915
US DOLLAR INDEX: +1.01% to 100.625
CBOE TOTAL PUT/CALL RATIO: 0.80
VIX: -4.54% to 22.48
Quote of the day
“Faith is taking the first step even when you don't see the whole staircase.”
- Martin Luther King, Jr.
Share buybacks signal confidence in markets
According to data from Birinyi Associates, U.S. companies are planning to buy back their own shares at a historic rate, with announced buybacks reaching $233.8 billion in April – the second highest monthly tally on record going back to 1984.
Corporate buybacks – when a company repurchases its own shares from the open market – have been quite strong in 2025, suggesting that beyond retail investors and equity focused hedge funds, corporate buying provided another significant support to equity markets last month.
The strength of buybacks demonstrates once again the rather contrarian nature of corporate buying which tends to increase after correctives phases, thus acting as a backstop underneath the market.
Most recently, corporate America stepped up their purchases as seen in Q1 of 2023 during the Silicon Valley Bank crisis and in the first half of 2022 during the Ukraine war and inflation scare.
Why are corporate buybacks significant to this market?
Despite the V-shaped recovery in risk assets over the past month, U.S. growth concerns continue to linger over the downstream impact from tariffs. And yet, corporate America continues to buy back its own stock.
Share repurchases send important signals to the market:
Buybacks return capital to shareholders in a tax-efficient way and thus increase shareholder yield
It suggests management’s confidence in their firm’s current financial health and long-term growth prospects
Buybacks could also indicate the market is mispricing a company’s stock, encouraging management to buying shares based on a perceived valuation discount
Despite incredible uncertainty looming over markets and the economy, companies are electing to invest in themselves as opposed to hold on to cash.
This is an encouraging feather in the cap of the bulls.
Sources: Bloomberg, JP Morgan
That’s all for today.
Blake
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Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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More importantly than that, it also says that the company can’t find any better way to invest their money than to buy their own shares back to prop the price. Typically that’s not a good sign in a company that might be affected by a coming recession. That is something else to think about.