www.forbes.com/sites/drewhansen/2018/08/01/triple-stock-buybacks-apple-workers-economy/
Companies have been taking out loans or dipping into their cash reserves in order to buy up their own stock, to the tune of millions or billions of dollars worth. This drives up the price of that stock, not only because there is less of it, but because its perceived value increases through it being bought and sold.
Similar to GDP, it gets its value not from any kind of objective valuation, but from its perceived value. If in your country you have a corporation making Whatsits and charging 1 dollar a pop for it, if you instead charge 2 dollars a pop, the GDP will see a proportional increase in production despite there being no material difference between these $1 and $2 Whatsits.
For corporations, stock purchases have a similar effect. Buying up stocks make those stocks more valuable, which makes the company more valuable. In effect, its a way for corporations to create the appearance of a thriving and expanding company despite it not necessarily being true. This has been a major driver of the economy since 2008 as the Federal Reserve has been pumping it month after month, year after year, with low or zero interest loans. These companies have been taking this money and inflating their success, whether or not they've actually been expanding, or producing more, or gaining more sales or profitability.
This used to be illegal until the Reagan administration for exactly that reason. It creates the illusion of growth without the uncomfortable necessity of actual growth. It distorts the actual appreciation of market value, discoupling it from a company's actual performance. This hasn't been so much of a problem until recently for myriad reasons, but in the last decade it's become a serious factor for the stock market. Despite there being little to no actual growth, and until very recently an actual decline in productivity and productive forces, the overall valuation of the stock market has risen pretty much unimpeded year after year.
In theory it does portend a harder crash at some point. The common thread of market failures from the 20th century until now is that market distortions have compounding effects, with production outstripping consumption. Because everything receives its value in relation or comparison to everything else, these disproportionate forces can spread throughout the economy, creating bubbles, bull markets, etc, based on nothing but the appearance of profitability.
