Even though the S&P 500 posted its biggest weekly gain of 2015 and the Dow was on pace to record its best week since February, industry insiders (CEOs & corporate directors and founders) were not buying. The big question is: why? Today’s CNN-Money explained it this way:
“Typically, when the stock market tanks like it did in late August and September, top management will jump at the opportunity to buy cheap stock. It’s the ultimate sign of confidence they believe better days are ahead. Consider this: In August 2011 when America was downgraded and stocks plunged, insiders bought $100 million worth of stock daily for a long time. They just kept buying. This August, insiders only bought $100 million of stock for three days. And it was not across the board. Only a handful of companies were doing most of the buying. That trend continued in September. Insider purchases were low and just two companies accounted for 41% of the insider volume. So far October looks sluggish as well. As if the insider trading data isn’t alarming enough, corporate stock buybacks have also slowed dramatically.The market hasn’t seen four straight months of low corporate buybacks like that since late 2012. Investors and executives continue to be concerned about a global economic slowdown and whether it will hold the U.S. back too. “
The three major averages remained within 10 percent of their 52-week highs. U.S. crude settled up 20 cents at $49.63 a barrel, up more than 8 percent for the week.
Here are the final numbers from Friday, 10/9/15 on Wall Street:
Dow Jones Industrial Average: 17, 084.96 (+34.21/ +0.20%)
NASDAQ: 4,830.47 (+19.68 / +0.41%)
S&P 500: 2,013.43 (+1.46 / +0.07%)