Corporate America’s buying force should give the stock market a support as soon as next week, and some shares could see an outsized boost, according to Goldman Sachs. The Wall Street firm estimated that 75% of S & P 500 companies will be out of their blackout windows by the end of next week. Companies are restricted from making discretionary buybacks of their stock during the weeks leading up to earnings reports. “With a substantial share of earnings reported, some investors have asked whether the re-opening of the buyback window will provide a near-term boost to equities,” Goldman said in a note. Big stock repurchasers tend to enjoy a pop in their stocks in the period after the end of blackout windows. Since 1995, Goldman’s buyback basket, which consists of stocks with the largest buyback yields in the last 12 months, has outperformed the S & P 500 by an average of 0.8 percentage points in the five weeks after the expiration of the blackout period. Companies that appeared in Goldman’s buyback basket included MGM Resorts , Charter Communications, Constellation Brands and Marathon Petroleum. To be sure, Goldman said the boost from buybacks may be particularly small this time around as companies tighten their purse strings amid an economic slowdown. Reported repurchases for the S & P 500 companies in the first quarter have fallen 21% year over year, Goldman said. “The outlook for corporate buybacks is less favorable and a slowdown is already in motion,” Goldman said in a note.
