revenues are expected to be $ 69 billion, less than $ 71 billion in 2018.investors exercise shares. In October, there was an example of this, with the volatility created by the Federal Reserve’s rate of interest rate hikes coinciding with the cessation of Buybacks for the publication of the quarterly reports. The S & P 500 index fell nearly 7% in the same month, before falling further in December.Buybacks are the critical element in the stock market rally, “said Torsten Slock, chief economist at Deutsche Bank Securities.” But the economy is slowing, and we’re all trying to guess how much. It simply means that companies will have fewer funds available to make buybacks. “On the way to a decline in profitsAs of Monday night, the S & P 500 index has risen 18% since the beginning of the year, but much of this increase, 13.1%, was recorded in the first quarter of the year. Stocks have been creeping upward since investors confronted concerns about trade tensions that have resurfaced in May, and with lukewarm economic data, from the slowdown in manufacturing activity to a massive drawdown in hiring. The impression was that growth recorded a record in the US last year as a result of the massive tax reform that benefited corporate funds.
In addition, corporate profits are expected to continue to weaken, leading companies to curb their expenses, analysts estimate. The S & P 500 companies are expected to report an average 2.6% decline in earnings in the second quarter ending this week compared to the same period last year, and a 0.5% decrease in the third quarter, according to FactSet Research. If these predictions are confirmed, S & P’s earnings will fall for three straight quarters, the longest streak since 2016Initial spending data from the first quarter have already indicated that the companies are tightening their belts. Measurement of business expenditure – fixed capital formation excluding housing – rose by only 4.4%, less than half the rate last year and below 5.4% in the fourth quarter, according to the Ministry of Trade. Dividends, another method of returning capital to shareholders, fell 2.1 percent from the fourth quarter to $ 117.3 billion, according to S & P. Industrial companies and companies focusing on non-essential (optional) consumer goods were among those who reduced their investment in share buybacks in January-March this year, possibly against the background of trade tensions and possible disruptions in their supply chains.