A flurry of buyback activity should give the equity market a boost in the coming weeks, and some stocks stand to benefit more than others, according to Goldman Sachs. The Wall Street firm estimated that 95% of S & P 500 companies have exited their blackout windows as the second-quarter earnings season nears the end. August has seen strong repurchase volume from large-cap companies with executions standing at about 40% above the average 2023 level, Goldman said. “The re-opening of the buyback blackout window will provide a boost to equity demand in coming weeks although a flurry of expected equity issuance this fall may provide a partial offset,” David Kostin, Goldman’s head of U.S. equity strategy, said in a note. Goldman’s buyback basket of 50 sector-neutral companies with above-average repurchase activity has historically performed particularly well following the second-quarter earnings season, Goldman said. The basket has outperformed the equal-weight S & P 500 by 4 percentage points this year. The stocks in Goldman’s basket included Tapestry , Lockheed Martin, HP , Dollar General , Applied Materials and Bath & Body Works . Still, higher interest rates could cause a slowdown in buybacks this year as many companies tend to issue debt to repurchase stocks. Additionally, elevated share prices could also dent appetite for corporate buybacks.
