|Day's Range||3,355.61 - 3,374.62|
|52 Week Range||2,722.27 - 3,385.09|
Dallas Fed President Robert Kaplan said Tuesday that the economy is "likely at or past" full employment, hinting at a weaker case for lowering rates.
(Bloomberg) -- Legendary investor Warren Buffett’s Berkshire Hathaway Inc. just gave its blessing to the $4.6 trillion exchange-traded fund market -- at least in one of its pension plans.Berkshire added to the Vanguard S&P 500 ETF, ticker VOO, and SPDR S&P 500 ETF Trust, known as SPY, in the final quarter of 2019, according to a regulatory filing. The relatively small investments, which totaled $25 million across both funds, are Berkshire’s only publicly disclosed ETF holdings in its most recent quarterly 13F filing. The investments are in a pension plan, according to Buffett’s assistant, Debbie Bosanek.Buffett, whose Berkshire holds a record $128 billion in cash and U.S. Treasury bills, has been questioned before about why he didn’t put the firm’s unused cash into an index fund. The 89-year-old investor said last year at his annual shareholder meeting that he thinks Berkshire should have some cash available to quickly deploy if the chance to strike a big acquisition arises, even though he’d rather own an index fund than U.S. Treasury bills. He argued back in 2007 that he thought Berkshire’s stock picks could do better than the S&P 500 Index. Berkshire’s set to release its annual letter to shareholders on Saturday.The fourth-quarter addition is arguably the “ultimate endorsement” for ETFs and their different usages, according to Bloomberg Intelligence’s Eric Balchunas. Large institutions will often park money in ETFs to keep exposure to the market while minimizing cash drag in their portfolios, he said -- which is likely what Berkshire has started to do with its record cash pile.“They use it almost as a temporary parking spot, and I think the liquidity is what they’re attracted to,” Balchunas said.In that scenario, ETFs are essentially being used as an alternative for derivatives contracts, Balchunas said. He estimates that this manner of institutional usage accounts for roughly 5% to 10% of ETF assets.Climbing Cash PileBerkshire has accumulated a more than $71 billion stake in Apple Inc. in recent years and purchased stock in Kroger Co. and Biogen Inc. during the last three months of 2019.Still, Berkshire’s failed to find a massive acquisition of a company to keep growing the conglomerate in recent years. That’s weighed on Berkshire stock with the Class A shares increasing nearly 11% last year, short of the almost 29% gain in the S&P 500 during the same period.In the meantime, Berkshire is likely using these ETFs as a liquidity way-station of sorts, according to Todd Rosenbluth, CFRA Research’s New York-based director of ETF research.“SPY and VOO provide institutional investors the ability to stay in the market, while keeping their options open as they seek out individual stocks,” Rosenbluth said.To contact the reporters on this story: Katherine Greifeld in New York at email@example.com;Katherine Chiglinsky in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, ;Michael J. Moore at firstname.lastname@example.org, Rita Nazareth, Dave LiedtkaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Steel stocks are getting hammered even though steel prices aren't. And no steel stock is getting hit harder than United States Steel.
Renaissance Technologies, added more than 3 million shares of Tesla to its holdings in the fourth quarter of last year, as the electric-vehicle maker’s shares catapulted higher, according to public filings.
Speaking on CNBC on Tuesday, the outspoken billionaire Cooperman says that he views the infectious disease, known as COVID-19, as a short-lived problem.
Canopy Growth Corp.’s U.S.-listed shares rose Monday, extending gains made Friday after the Canadian cannabis company surprised investors with better-than-expected earnings.
Conagra Brands cut financial guidance Monday, sending its stock down more than 5% in Tuesday trading. Management cited softness in the food service business. That could signal choppy upcoming earnings reports from restaurant operators.
Nasdaq trades nearly flat, while other major U.S. stock benchmarks are lower Tuesday, after Apple Inc. said a viral outbreak in China would hurt its second-quarter results, reigniting fears that the global economy could be harmed.
Investors have become more comfortable with the likes of UnitedHealth as Elizabeth Warren’s political fortunes have soured.
U.S.-listed shares of China brand and marketing company Acorn International Inc. slid 10% Tuesday, after its executive chairman said he was pulling an offer for the company made in November because of risks relating to the coronavirus. Robert Roche said in a letter to the Shanghai-based company that he and shareholders of a buyer vehicle were not willing to pursue a $19.50 per American Depositary Share offering made in a Nov. 4 letter. The parties are willing to continuing talks with a special committee formed to review the offer. "No additional terms or proposals have been discussed at this time and there can be no assurance that negotiations will continue or that a revised offer will be made, that any agreement related to the Acquisition will be reached, or that the Acquisition or any other similar transaction will be consummated," said the letter. Shares have fallen 42% in the last 12 months, while the S&P 500 has gained 22%.
Shares of Macy's Inc. took an midday dive Tuesday, after S&P Global Ratings downgraded the department store chain's credit to "junk" status, citing a weaker profitability outlook after the company unveiled its three-year strategic plan. The stock was down 3.9%, after being down about 1.4% prior to the downgrade. S&P cut its rating one notch to BB+, which is the highest speculative grade rating, from BBB-. The rating's outlook is stable. S&P said Macy's three-year "Polaris" plan, which includes a significant reduction of the store network, focus on growth in private label brands and off-price stores and cost cutting, has "considerable" execution risks. "While we believe management's strategic plan is a necessary step toward rightsizing the enterprise, it demonstrates to us that the company's competitive advantage has diminished more than we expected, and to a point that we no longer believe is consistent with an investment-grade rating," S&P wrote in a research note. "We now project operating performance will deteriorate over the next several quarters, with declines in comparable same-store sales." Fellow rating agencies Moody's Investors Service rates Macy's at Baa3, the lowest investment-grade rating, and said last week that the strategic plan was "credit positive." Macy's stock has lost 5.1% over the past three months, while the SPDR S&P Retail ETF has eased 0.1% and the S&P 500 has gained 7.8%.
Investors will be looking to Zillow’s fourth quarter and full year earnings on February 19 for the answer. Zillow’s stock tumbled nearly 16% the day following the company’s second quarter earnings report. At the time, Zillow CEO told Barron’s the drop was due to a change in when the company gets paid for its services.
Technically speaking, the S&P 500 has staged a thus far orderly pullback from record highs, though the downturn is worth tracking for potential acceleration, writes Michael Ashbaugh.
Public Service Enterprise Group Inc. , known as PSE&G, said Friday it raised its quarterly dividend by two cents to 49 cents a share. The new dividend will be payable March 31 to shareholders of record on March 10. The electric and gas utility company's stock rose 0.6% in midday trading. Based on current stock prices, the stock new annual dividend rate would imply a dividend yield of 3.33%, compared with the yield for the SPDR Utilities Select Sector ETF of 2.69% and the implied yield for the S&P 500 of 1.80%, according to FactSet. PSE&G's stock has lost 3.6% over the past three months, while the utilities ETF has run up 12.7% and the S&P 500 has gained 7.6%.
Shares of Tesla Inc. shot back above $850 Tuesday before paring gains, after Bernstein analyst Toni Sacconaghi nearly doubled his price target, saying he didn’t see any negative catalysts on the horizon for a stock that wasn’t especially expensive.
Buffett disclosed late on Friday that he had taken a position in the beaten-down grocer, and after a long holiday-weekend, Kroger stock jumped on Tuesday.
It’s virtually certain the stock market over the next decade will not come anywhere close to equaling its historical total return of 6.9% annualized above inflation. The reason for this confidence: There are only a few ways in which the stock market can grow faster than the overall economy, and none of them appears likely. According to the Congressional Budget Office, real GDP in the U.S. is projected to grow at a 1.7% annualized pace through 2030.
Conagra Brands Inc. stock sank 7.7% in Tuesday trading after the food company announced a downward revision to its fiscal 2020 guidance. Conagra now expects organic net sales growth to be flat to up 0.5% and adjusted earnings per share to be $2.00 to $2.07. Previous guidance was for 1% to 1.5% sales growth and adjusted EPS of $2.07 to $2.17. The FactSet consensus is for sales of $10.66 billion, implying a 2.4% increase, and EPS of $2.08. "Consumption softness in the quarter first emerged in the foodservice industry, with holiday restaurant traffic weaker than last year," said Chief Executive Sean Connolly in a statement. "Softness pivoted to retail in January and impacted numerous categories across food, including several in which we compete." Conagra presented at the Consumer Analyst Group of New York Conference on Tuesday, and is scheduled to report fiscal third-quarter earnings on March 19. Conagra Brands portfolio includes Healthy Choice, Birds Eye, Slim Jim and Vlasic. Conagra stock has gained 23.2% over the last 12 months while the S&P 500 index is up 21% for the period.
An investor group announced Tuesday morning a deal to buy Dell Technologies Inc.'s RSA cybersecurity business for $2.08 billion in cash. That confirms a Wall Street Journal report that said a deal was imminent. The investor group buying RSA is led by Symphony Technology Group, Ontario Teachers' Pension Plan Board and AlpIvnest Partners. The deal is expected to close in the next six to nine months. Morgan Stanley was the exclusive financial advisor to Dell, and UBS and Jefferies were the financial advisors to Symphony Technology Group. Dell's stock fell 0.2% in morning trading. It has lost 5.1% over the past three months, while the S&P 500 has gained 7.9%.
Shares of Sanofi ADR were up 1% in trading on Monday after the French drugmaker announced plans to work on a vaccine for COVID-19, the new coronavirus that has sickened more than 73,000 people and led to the deaths of 1,873. The company said it will leverage previous work on a pre-clinical vaccine for severe acute respiratory syndrome (SARS) while it collaborates with the Biomedical Advanced Research and Development Authority (BARDA) on a COVID-19 vaccine. COVID-19 and SARS are both coronaviruses. A number of large drugmakers including GlaxoSmithKline and Johnson & Johnson have said they are also working on vaccines for the virus. Sanofi's stock is up 19% over the past year, while the S&P 500 has gained 23%.