The biggest buyer in the market isn't an investor. It's the company itself.

I keep checking. I know I shouldn't.

But my account keeps hitting new highs, and every time I look it sits a little higher. New record. Then another one a few days later.

It feels good. It also makes me uneasy.

When a market only goes up, I want to know who's doing the buying. Most of the time you never find out. This time I did.

It wasn't a pension fund. It wasn't the neighbor who won't stop talking about his gains. It was the companies themselves.

American companies spent a record $1.02 trillion buying back their own stock in the year through September. This year they're on pace to top it.

So who's selling? The people who run those same companies.

Corporate insiders have been letting go of their shares much faster than they buy them. Across the market this summer, insiders sold about four shares for every one they bought.

That's the divergence. The biggest buyer in the market is the corporation. The best-informed seller is the person running it.

The two used to move together. Now they've split. And that split is the whole issue.

The strangest part of a record-high market is who isn't in it.

Corporate insiders file every trade they make. Add it all up and the picture is one-sided. In early July the buy-to-sell ratio sat at 0.23. The long-run average is about 0.39. The all-time low is 0.12.

Back in January it was even more lopsided. Insiders sold nearly five shares for every one they bought — the widest gap since 2021.

This matters because insiders and buybacks used to move together. When a company bought its stock, the people running it bought too. Now the company buys and they sell.

Insiders tend to buy low and sell high. Companies tend to buy high.

One of these two buyers has a good record of timing the market. It isn't the one doing the buying.

And here's where it spreads. The record bid isn't broad. It's a handful of giants.

In the third quarter of last year, the twenty largest buyers accounted for 49.5% of all repurchases. Before the pandemic that top-twenty share averaged about 44.5%.

Apple alone spent more than $100 billion on its own stock in 2024, and greenlit another $100 billion program this spring.

The gains in the index lean the same way. In one week this month the S&P 500 rose about 1.3%. The average stock in it fell. Strip out the biggest names and the market went nowhere.

So the bid and the returns rest on the same short list. That's a lot of weight on a few shoulders.

Meanwhile, this buyer doesn't buy all the time. It goes quiet on a schedule.

Around each earnings season most companies stop buying back stock, to avoid trading on results the public hasn't seen yet. The window shuts, and the market's steadiest bid steps away for weeks.

Some of the buying is borrowed too. Salesforce set up a $50 billion buyback this year and funded part of it with $25 billion of new debt.

So the floor under the market comes from a buyer that pauses on a calendar and sometimes pays with an IOU.

That's fine while cash flows and share prices stay high. It's the day both slip at once that I keep thinking about.

Three more things worth keeping track of…

China wakes up.
Chinese stocks jumped about 4.4% in a single week this month, their best stretch in months, after weeks of steady selling. The whole emerging-market group is up more than 20% this year. But the big institutions still hold less than their usual share. So the move is happening without them. A real turn, or a bounce they're missing? I don't know yet.

The other America.
Almost 13% of credit-card balances are now at least three months past due. That's the worst since 2011. Total card debt sits at $1.25 trillion. It isn't everyone — most people pay on time. It's a smaller group sinking deeper. A record-high market and a fifteen-year high in late payments, side by side.

A hike, not a cut.
The new Fed chair dropped the usual roadmap and told markets he'll move on the data alone. Now traders put real odds on a rate increase by September, even as headline inflation falls. Rate-hike bets rising into record stock highs is not the usual pairing. We'll see.

For most of the last century, buying back your own stock could get you charged with a crime.

The Securities Exchange Act of 1934 treated a company propping up its own share price as market manipulation. Executives stayed away from it. The legal risk wasn't worth it.

Then came 1982.

A new man ran the SEC. John Shad, a former E.F. Hutton executive — the first Wall Street insider to lead the agency since the 1930s.

On November 17 that year, his SEC adopted Rule 10b-18. It offered a "safe harbor." Follow four simple conditions and your buyback would no longer count as manipulation.

The conditions were easy to meet. Use one broker for the day. Don't trade at the open or the close. Pay the going price. Keep your buying under a quarter of the recent daily volume.

One critic called it a license to move your own price.

What had been rare became routine. Then it became the biggest source of demand for American stocks.

Today companies spend around a trillion dollars a year buying their own shares. That's more than they pay out in dividends. The steadiest buyer in the market is doing something that, within living memory, could have landed an executive in front of a judge.

None of this makes it wrong. The rule has real limits, and most firms stay well inside them.

But it's worth knowing what holds the tape up. Not earnings surprises. Not a wave of new investors. A buyer that was, until 1982, breaking the law.

The floor under this market is legal now. It wasn't always.

We'll see.