Cash in Circulation in Various Countries

Cash in Circulation in Various Countries The use of cash has decreased significantly in Sweden. The first cashless society? Picture source: Nordea and Macrobond

S&P 500 Use of Cash and Buybacks

S&P 500 Use of Cash and Buybacks This chart shows that buybacks account for the largest share of cash spending by companies in the S&P 500. Picture source: Goldman Sachs Global Investment Research

Allocation to Cash and Recession Probability

Allocation to Cash and Recession Probability This chart shows the correlation between allocation to cash and the NY Fed 12-month ahead recession probability indicator. Picture source: Barclays Research

S&P 500 Cash Return Yield by Sector and Region

S&P 500 Cash Return Yield by Sector and Region Currently, the S&P 500 cash return yield (buybacks + dividends) is 5.2%, the highest since 2011. That’s much more than Europe, Japan and emerging markets. Picture source: Fundstrat Global Advisors, LLC

Flows into Money Market Funds

Flows into Money Market Funds Just like 2007/2008, investors move to safe assets by raising their cash holdings, despite falling rates. Picture source: BofA Merrill Lynch

U.S. and European Buybacks

U.S. and European Buybacks U.S. and European buybacks as percentage of cash are not at their pre-global financial crisis levels. Picture source: Goldman Sachs Global Investment Research

S&P 500 Payout Ratio

S&P 500 Payout Ratio Stock buybacks and dividends as a percentage of free cash flow are reaching dangerous levels. Picture source: MarketWatch

Why Lower Bond Yields Influence the S&P 500?

Why Lower Bond Yields Influence the S&P 500? Because lower interest rates push stock market multiples higher.  If interest rates are lower, then the value of future cash flows increases, because future cash flows are discounted back at a lower interest rate. So, lower U.S. 10-year yields influence the stock market equity risk premium. On the other…

Aswath Damodaran – Laws of Valuation: Revealing the Myths and Misconceptions

Aswath Damodaran – Laws of Valuation: Revealing the Myths and Misconceptions Aswath Damodaran is professor of corporate finance at the Stern School of Business at New York University, with his unique perspective about equity valuation. Here, he talks about the corporate life cycle, corporate finance, cash flow and the laws of valuation. https://www.youtube.com/watch?v=c20_S-QgvsA