Will Record Issuance Be A Headwind For US Stocks

While US equity issuance is projected to hit record dollar volumes this year, UBS does not view this as a material threat to stock performance. Strong market demand and substantial offsetting share buybacks suggest that the supply increase is manageable.

Key Takeaways

• 1.Rising US equity issuance (IPOs and secondary offerings) is not expected to be a material headwind for markets.
• 2.Issuance levels remain manageable when assessed relative to total market capitalization rather than absolute dollar volume.
• 3.Share buybacks act as a significant offset to new supply, keeping net supply increases limited.

Table of Contents

• Equity issuance in the US has picked up after a long quiet period.
• But record dollar issuance should not be a headwind for equity markets.
• We continue to view US stocks as Attractive, with recent strength providing an opportunity to improve resilience.
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