What does he know about Apple and the stock market that we don't?
Also interesting to see that Warren Buffett and Berkshire Hathaway now own 4% of all T-Bills issued to the public… Buffett has ~$277 Billion. The Fed has $195 Billion. Warren Buffett is now a larger holder of US Treasury Bills than the Federal Reserve. Source: FT, Geiger Capital
Berkshire Hathaway’s cash pile swelled to a record $276.9 billion last quarter as Warren Buffett sold big chunks in stock holdings including Apple
The Omaha-based conglomerate’s cash hoard jumped significantly higher from the previous record of $189 billion, set in the first quarter of 2024. The increase came after the Oracle of Omaha sold nearly half of his stake in Tim Cook-led tech giant in the second quarter. Berkshire has been a seller of stocks for seven quarters straight, but that selling accelerated in the last period with Buffett shedding more than $75 billion in equities in the second quarter. That brings the total of stocks sold in the first half of 2024 to more than $90 billion. The selling by Buffett has continued in the third quarter in some areas with Berkshire trimming its second biggest stake, Bank of America, for 12 consecutive days, filing this week showed. For the second quarter, Berkshire’s operating earnings, which encompass profits from the conglomerate’s fully-owned businesses, enjoyed a jump thanks to the strength in auto insurer Geico. Operating earnings totaled $11.6 billion in the second quarter, up about 15% from $10 billion a year prior. $BRK Berkshire Hathaway Q2 FY24. • Stock repurchase $0.3B. • $AAPL stake cut by nearly half. • Segment margin 14% (+2pp Y/Y). • Cash and short-term securities $277B. Source: App Economy Insights, CNBC
Is inflation in the US reaccelerating?
The 3-month annualized core PPI inflation rose to 5.0% in June, its highest since 2022. This metric has more than DOUBLED in just 6 months. This is also higher than in any period over the last 15 years, except for 2021 and 2022. Something to watch closely. Source: The Kobeissi Letter, Bloomberg
JUST IN: Over $2.9 trillion has been wiped out from major indices and stocks this morning due to growing fears of a global recession.
This is the worst day for stocks since March 16, 2020, during the COVID-19 pandemic fears. Source: Jacob King, Bloomberg
Are markets now pricing in a Kamala victory?
Source: PredictIt
Should the FED wait for a financial accident to happen BEFORE cutting interest rates?
Source chart: Mac10
As highlighted by Otavio (Tavi) Costa, the need for the FED to cut interest rates is not driven just by labor data and inflation.
As shown on the chart below, the costs of servicing Federal debt in the US is soaring more than in any other country. Not just once, not twice, or even three times — multiple rate cuts would be needed to bring US interest payments as a percentage of GDP in line with the rest of the world. This is what financial repression is about. Source: Tavi Costa, Bloomberg
The recessionary trade was in full effect yesterday following weak ISM data.
Cyclicals underperformed Defensives by 429bps, one of the worst days in the last 16+ years. The only other comparable days were during the March 2020 Covid crash and 2008 GFC. $SPY $QQQ $IWM Source: David Marlin, Bloomberg
