Critics of the GOP tax overhaul argue that businesses will use their tax cut windfall not for domestic investment but to boost buybacks and enrich shareholders. On Wednesday, CNBC provided some evidence for that claim.
According to data from Birinyi Associates shared with the business news network, U.S. companies announced $88.6 billion worth of corporate buybacks between the first of the year and February 6, more than twice the amount announced during the same period last year.
However, the spike in buyouts falls short of the bull market high set in 2016, when $104.8 billion in buybacks was announced between January 1 and February 6. Jeff Rubin, Birinyi’s research director, said that elevated level of buybacks in 2016 was driven by a market pullback that opened a window for companies to buy back their stocks at lower prices.