Bond buying by central banks and stock buying by corporations have ratcheted off each other as there is too much money chasing too few assets. In other words, even though the market has gone up due to buybacks, buybacks have benefited the whole market, not just the buyback stocks. This trifecta of positives (for the stock market) has created a systematic bid whenever markets correct downwards. By all estimates, corporates are the marginal price setters for the stock market as a whole, and central banks are the marginal price setters for the bond market. What are the risks if the mutually reinforcing cycle of central bank bond buying and corporate stock buying hits a big bump?

Source: Forbes March 14, 2019 13:52 UTC