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The largest public companies in the United States will continue to repurchase their own equity well into 2019 and goose the broader stock market higher, according to J.P. Morgan and Canaccord Genuity. It's expected that S&P 500 companies will execute some $800 billion in buybacks and return an additional $500 billion through dividends in 2019, J.P. Morgan's chief U.S. equity strategist, Dubravko Lakos-Bujas, told clients Friday. "Despite the recent market volatility, buyback activity has been very strong during the fourth quarter and we expect it to remain robust in 2019 given profit growth, lower valuation, and a record high $700 billion available to execute under existing authorizations," Lakos-Bujas wrote in a note Friday.

And while the J.P. Morgan strategist acknowledged a more attractive leverage spread, he added that the brokerage still expects the upcoming corporate buybacks to be funded principally by cash flow and balance sheet cash. "Buyback executions in 2018 have been some of the highest quality of this cycle as they have been predominantly funded by cash rather than debt, a trend we expect to persist into 2019," Lakos-Bujas wrote. "If volatility remains elevated, corporates are likely to opt for buybacks over M&A and dividend growth." J.P. Morgan's early call for persistent buyback strength came with the 2018 fourth-quarter earnings season in full swing. More than 20 percent of S&P 500 companies have already reported results, with more than 70 percent of the group topping Wall Street's profit expectations. J.P. Morgan expects a lot of upside for the domestic market in 2019. Its price target is 3,000 for the full year, a more than 13 percent gain from the current level.

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