The stock market posted mild losses Monday morning to start the new trading week. Warren Buffett’s Berkshire Hathaway (BRKB) reported first-quarter results at its annual shareholder meeting Saturday. Bank stocks got a boost.
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According to Reuters, vice president at CFRA Research Cathy Seifert issued a pessimistic note after the Berkshire meeting, cautioning Warren Buffett to manage his enormous Apple (AAPL) exposure wisely.
She warned that “portfolio management practices would suggest there is definitely concentration risk with having so much Apple in that portfolio.”
Apple makes up an astounding 42% of Berkshire’s total portfolio, according to recent reports.
By The Numbers
The Dow Jones Industrial Average inched down 0.2% while the Nasdaq trimmed 0.3%. The S&P 500 gave up 0.1%. The Russell 2000 fared slightly worse than the major indexes, falling 0.4%.
NYSE and Nasdaq volume shrank compared with the same time on Friday.
The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) dipped 0.3% while the Innovator IBD 50 ETF (FFTY) edged lower 0.2%.
Crude oil gained 2% to $72.75 per barrel. Gold futures added 0.3% and traded at the $2,031 level.
Bitcoin plunged 6.5% to $27,830. Cryptocurrency exchange Coinbase (COIN) dropped in sympathy with crypto, lost 5.4%.
The 10-year U.S. Treasury yield added 6 basis points to 3.51%. The CME FedWatch tool shows nearly 90% odds for no rate hike at the June Fed meeting.
European stocks were mixed, with the German DAX pulling back 0.1% and Paris CAC adding 0.2%. The London FTSE rallied the most, gaining 1.0% in afternoon trading.
Stock Market: Warren Buffett Weekend
Warren Buffett’s Berkshire Hathaway (BRKB) gained 1% following Q1 numbers released at the annual meeting on Saturday. The holding company posted operating earnings of $8.065 billion, up 12.6% vs. year earlier.
The company reported over $130 billion in cash and Treasury bills on its balance sheet. It’s insurance writing profits soared to $911 million from $167 million in the prior year.
He squashed the rumor that Berkshire is looking to take over Occidental Petroleum (OXY), saying “We’re not going to buy control.”
Berkshire owns over 20% of OXY shares. Shares of OXY dipped 0.5%.
Buffett said the commercial real market is starting to see the effects of higher borrowing rates. He discussed the banking crisis, saying he is cautious about the sector but stressed that customer deposits are safe.
Its Burlington Northern Santa Fe (BNSF) railroad and energy businesses posted earnings drops.
BKRB shares are in a long cup-with-handle base with a 331.94 buy point on the weekly chart. A three-week tight pattern also formed in the handle, according to MarketSmith pattern recognition.
Berkshire holding Paramount Global (PARA) fell another 3.3% after last week’s sell-off, following a worse-than-expected Q1 earnings release. Shares are below the 50-day line, a red flag.
The media and streaming provider drastically cut its dividend. Buffett said it’s never a good thing when a company slashes its dividend.
Key Economic Data Out This Week
Investors await inflation reports midweek and the U.S. debt ceiling meeting on Tuesday.
Look for the April Consumer Price Index (CPI) Wednesday at 8:30 a.m. ET. and the Producer Price Index (PPI) Thursday.
Econoday estimates a 0.4% increase in April CPI and core CPI, with the 5% year-over-year numbers holding pat over March. April PPI is expected to increase 0.3% vs. a decrease of 0.5% in March. The year-over-year increases are projected at 2.5%, down from 2.7% in March.
President Joe Biden meets Tuesday with Congressional members on a debt ceiling agreement. Secretary of State Janet Yellen said on Sunday, there are “no good options” for avoiding the dire consequences if Congress fails to raise or suspend the nation’s debt ceiling, according to Barron’s.
The U.S. hit the $31.4 trillion debt ceiling in January, and has been maneuvering to pay its obligations. It could run out of money by June 1, Yellen warned last week.
Stock Market: Regional Banks Get A Lift
PacWest (PACW) soared 10% in heavy volume, after cutting its dividend. Peer regional bank Western Alliance (WAL) gave back early morning gains, dropping 1.4%.
Cloud security company Zscaler (ZS) popped over 19% after higher-than-forecast quarterly sales. It also raised full-year revenue guidance.
Management expects $415 to $419 million for the quarter, compared to last year’s $286.8 million. Analysts project 121% EPS growth this year.
Six Flags (SIX) spiked over 19% in heavy volume, after the theme park operator reported better-than-expected Q1 sales. The move sent shares back above the 50-day line.
Tyson Foods (TSN) fell over 13% in heavy volume, after reporting a surprise loss and lower-than-expected sales in its March-ended quarter.
Other Stock Market Movers: Uber In Buy Zone
IBD 50 stock Shockwave Medical (SWAV) tumbled over 5% in heavy volume, on news that talks between the medial device manufacturer and Boston Scientific (BSX) have deteriorated. BSX gained 2.8% on the news.
IBD stock Uber Technologies (UBER) rose 1.6% and is in the 5% buy zone reaching to 39.56, after hitting the 37.68 buy point of a cup base last week. The ride sharing operator beats Q1 estimates last week.
American Airlines (AAL) rallied 4.3% after JPMorgan upgraded the airlines stock to overweight from neutral, and raised its price target to 29 from 26.
Catalent (CTLT) plunged over 25% in very heavy volume after postponing its third quarter earnings results.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
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Source: https://www.investors.com/market-trend/stock-market-today/stock-market-indexes-pause-ahead-of-inflation-numbers-buffetts-berkshires-not-interested-in-full-ownership-of-oxy/?src=A00220&yptr=yahoo