The year-end rally we’ve been enjoying could get another boost as companies buy into their own stocks. Stocks are rising this month, with the tech-heavy Nasdaq Composite up a good 10% since early November. Those gains are mainly due to falling Treasury yields, as well as third-quarter results that have been largely better than expected. But some market watchers expect stocks could get another boost from the number of companies exiting the “buyback lockup” window. This period covers several weeks around quarterly results, when companies are restricted from buying back shares. “We mentioned the potential this has to add additional supply to the stock heading into the end of the year and it looks like we may very well be in the middle of that now,” Strategas’ Ryan Grabinski wrote in a note Thursday. In fact, Jill Carey Hall, quantitative and equity strategist at Bank of America, noted in a Nov. 14 note that corporate buyback activity in the previous week was the largest since the firm began tracking data in 2010. Additionally , noted that buyback activity was above seasonal levels for the first time since May. All of this may contribute to the rally in stocks as Wall Street heads into the holiday season. Strategas’ Grabinski noted that investor sentiment is rising lately, with most investors the firm recently surveyed anticipating the next 10% move in the S&P 500 to be larger. At the close of the survey last Tuesday, that would mean the S&P 500 would hit 4,945, or an all-time high. Similarly, the AAII survey of investor sentiment showed that 43.8% of investors in the week ending November 15 felt optimistic, above the historical average of 37.5%. —CNBC’s Michael Bloom contributed to this report.
