Surge in U.S. Stock Buybacks Gains Support From Idle Factories
- Capacity utilization below 80% threshold for spending growth
- Schwab's Sonders: Repurchases `are not the market's bogeyman'
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Companies in the U.S. have yet to encounter the kind of capacity constraints that would indicate a surge in stock repurchases is misplaced, according to Liz Ann Sonders, Charles Schwab & Co.’s chief investment strategist.
The chart below is similar to one Sonders presented in a blog posting two days ago to support her conclusion. She compared the amount of U.S. factory, utility and mining capacity in use with the year-to-year change in investment in buildings, equipment and other assets. Data for this version was compiled by the Federal Reserve and the Commerce Department, respectively.