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The year-end rally we’ve been enjoying could get another lift as companies scoop up shares of their own stock. Stocks are rallying this month, with the tech-heavy Nasdaq Composite a good 10% higher from the start of November. Those gains are driven mainly by falling Treasury yields, as well as third-quarter results that have come in largely better than anticipated. But some market observers expect equities could get another boost from the number of companies exiting the “buyback blackout” window. This period spans several weeks around quarterly results when companies are restricted from repurchasing shares. “We mentioned the potential this has to add an additional bid to equities heading into year end and it appears that we may very well be in the midst of that now,” Strategas’ Ryan Grabinski wrote in a Thursday note. In fact, Bank of America’s equity and quant strategist Jill Carey Hall in a Nov. 14 note observed corporate buyback activity in the previous week was the largest it had been since the firm first started tracking data in 2010. Additionally, she noted buyback activity was above seasonal levels for the first time since May. All this can add to the equity rally as Wall Street heads into the holiday season. Strategas’ Grabinski noted investor sentiment is running high as of late, with the majority of investors the firm recently surveyed anticipating the next 10% move in the S & P 500 will be higher. As of the survey’s close last Tuesday, that would mean the S & P 500 would reach 4,945, or an all-time high. Similarly, the AAII Investor Sentiment Survey showed 43.8% of investors in the week ending Nov. 15 are feeling bullish, above the historical average of 37.5%. — CNBC’s Michael Bloom contributed to this report.
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