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Stephen Gandel

Add Stock Buybacks to the Causes of the Market Downturn

Stock repurchases turbocharge the low-volatility trade.
Photographer: SeongJoon Cho/Bloomberg

There's a new reason to dislike stock buybacks: They contributed to last week's market downturn.

Some market watchers are adding corporate share repurchases to the list of reasons for last week's turmoil, which already included rising interest rates, higher inflation, growing government debt, volatility-linked investment funds and Washington instability. More significantly, those pointing the finger at buybacks say continued corporate stock purchases -- which, unlike some of those volatility funds, survived the brief market downturn -- will make the next one far worse.