Financial insiders are buying their own stock at the slowest pace in nearly 23 years—a ‘negative data point’ just as bank earnings kick off

Despite a surge in record-setting trading and blockbuster public offerings, Wall Street's biggest banks appear to be exhibiting a cautious tone ahead of their Q3 earnings. According to a new report from VerityData, insider buying by financial executives has reached a nearly 23-year low during the July-to-September quarter. Only 298 unique financial-sector buyers made at least one purchase of their company's stock in Q3, the lowest number in VerityData's history dating back to 2004.

The report also noted that while there were more sellers, the drop in buying was significant enough to be considered a "negative data point." The lack of insider buying may signal that executives are "skittish" about valuations, as they prefer to avoid purchasing shares at what they perceive as a price dislocation. While some experts remain skeptical about how much insider trading can predict future returns, especially in the complex banking sector, the data suggests caution among those who know the industry best as bank earnings kick off.