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Stock Supply Glut Looming Over Market as Companies Suck In Cash

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RF markets stocks
Photographer: MicroStockHub/Getty Images

Voracious cash appetite among virus-strapped companies and a battered economy that makes buybacks tough to justify are warping supply and demand dynamics in the stock market, something for bulls to worry about heading into year end.

While American firms normally repurchase way more stock than they sell, this year has been different, as offerings by everyone from Snowflake Inc. to Warner Music Group Corp. flooded the market with shares. Companies hurt most during the pandemic, from airlines to cruise lines, are rushing to raise cash and shore up balance sheets.