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Bulls Brace For Another Miserable Week: Bye Buy-Backs, Pension And CTA Selling, And More...

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by Tyler Durden
Monday, Sep 19, 2022 - 10:44 AM

After last week's furious selloff in stocks, which was sparked by the one-two knock-out punch of an overheating CPI and FedEx's "shocking" global recession warning, it''s not like stocks needed  more reasons to be bearish now that even the CTAs have turned decidedly short again. Alas, as even Goldman's trading desk warned on Friday after the worst week for stocks in months in which global markets lost a massive $4 trillion in market value, anyone hoping for another bear market rally, or even a quick dead-cat bounce, will likely be disappointed for one main reason: that other giant, price indiscriminate buyer of stocks, corporate stock buybacks orders - the first one being CTAs - is about to go on a month-long hiatus courtesy of the start of the buyback blackout window.

As Goldman' Michael Nocerino writes, it's buy bye-backs, because the Buyback Blackout window began on Friday with 50% of the S&P 500 in their closed window. During such blackout periods, Goldman' traditionally very busy buyback desk typically expects flows to decrease by 30-35% as 10b-5.1 plans kick in. Indicatively, Goldman's buyback desk Friday ran at 0.7x the 2021 average daily volume, so this slowdown matters "and can’t come at a worse time."