- Carbon Finance
- Posts
- Warren Buffett is building up his cash position
Warren Buffett is building up his cash position
Inflation Rises Slightly In July, Berkshire Hathaway Near-Record Cash Pile, Moody’s Drops Credit Rating For 10 U.S. Banks, Credit Card Debt Surpasses $1T
Hello! Hope you all had a wonderful week. Warren Buffett was a net seller of stocks in Q2. Could this be a foreshadow of something greater to come or just routine portfolio management?
In today’s newsletter:
🔥 Inflation Rises Slightly In July
📊 Berkshire Hathaway Near-Record Cash Pile
🏦 Moody’s Drops Credit Rating For 10 U.S. Banks
💳 Credit Card Debt Surpasses $1T
& more!
Let’s dive right in!
Read time: 4 minutes
Not subscribed yet? Sign up today!
Data as of 8/13/23 9:30 AM EST
🔥 Inflation Rises Slightly In July [WSJ]
Inflation pressures eased as the CPI rose by only 0.2% in July, potentially influencing the Fed to hold off on interest rate hikes in its upcoming September meeting.
📊 Berkshire Hathaway Near-Record Cash Pile [NYT]
Berkshire Hathaway announced record quarterly operating profit and, despite challenges in sectors like the BNSF railroad, saw a 7% increase in operating profit from the previous year. The company's market actions included a $1.4B stock repurchase and net selling of around $8B in stocks, boosting its cash position to $147.4B (up from $130.6B three months prior).
🏦 Moody’s Drops Credit Rating For 10 U.S. Banks [BB]
Moody's lowered ratings for several US banks due to concerns over rising funding costs, potential regulatory capital weaknesses, and risks related to commercial real estate. This led to a decline in bank stocks, with investors wary of the industry's stability amidst rising interest rates and eroding bank assets.
Source: Bloomberg, Moody’s
💳 Credit Card Debt Surpasses $1T [WP]
Americans' credit card debt reached $1.03T in Q2, a 4.6% increase from the previous quarter. Despite the rise, many Americans have managed their credit card payments well, but the resumption of student loan payments may pose challenges. Data also reveals that high-income households also carry significant debt, often for discretionary expenses.
Source: WSJ, Federal Reserve Bank of New York
🪙 PayPal Launches Its Own Stablecoin [R]
PayPal has introduced a U.S. dollar stablecoin named PayPal USD, marking the first major fintech firm to integrate digital currencies into its payment system. PayPal's move signifies growing confidence for the potential of stablecoins in mainstream consumer payments.
💃 Cathie Wood Buys Robinhood While Google Sells [B]
Alphabet significantly reduced its stake in Robinhood by nearly 90%, while Cathie Wood continues to purchase shares for her ARK funds. Robinhood's stock has faced challenges, with a recent decline following a drop in trading activity, despite the company's first quarterly profit.
♠️ ESPN Enters Sports Betting With Penn [NYT]
ESPN has entered a 10-year partnership with Penn Entertainment to launch an online sports betting brand, ESPN Bet, with Penn paying ESPN $1.5B for branding and promotional rights. As part of the deal, Penn is selling Barstool Sports back to its founder, David Portnoy, and ESPN Bet will replace the Barstool Sportsbook branding.
🚚 UPS Drivers To Earn $170,000 [CNBC]
UPS has reached a five-year contract with the Teamsters Union where drivers will average $170,000 in pay and benefits. The agreement, covering 340,000 workers, raises part-time wages to at least $21/hour and ends mandatory overtime for drivers on their days off.
Major Earnings Recap Week of August 7th:
Palantir ($PLTR) reported Q2 revenue growth and provided an optimistic Q3 forecast. The data-analytics company highlighted its focus on monetizing artificial intelligence and introduced a $1B buyback program. [CNBC]
⚪️ EPS $0.05 Meets $0.05 Estimate
⚪️ Sales $533M Meets $533M Estimate
Eli Lilly’s ($LLY) Q2 revenue and earnings exceeded expectations, driven by the strong performance of its diabetes drug Mounjaro. Following these results, the company raised its full-year revenue and earnings forecasts. [B]
🟢 EPS $2.11 Beats $1.98 Estimate
🟢 Sales $8.31B Beats $7.58B Estimate
Disney’s ($DIS) Q3 revenue slightly missed expectations and the company reported a 7.4% global decline in Disney+ subscribers. In response, Disney announced major price hikes for its streaming services, Disney+ and Hulu, targeting profitability for its streaming segment by September 2024. [WSJ]
🟢 EPS $1.03 Beats $0.95 Estimate
🔴 Sales $22.3B Misses $22.5B Estimate
Alibaba ($BABA) reported a 14% rise in quarterly revenue, surpassing expectations, driven by domestic e-commerce and events like the 618 shopping festival. Despite economic concerns in China, Alibaba's growth strategy involves targeting bargain-seeking consumers. [R]
🟢 EPADS $2.40 Beats $2.01 Estimate
🟢 Sales $32.3B Beats $31.1B Estimate
Notable Companies Reporting Earnings This Week:
Monday: monday.com ($MNDY), Rumble ($RUM)
Tuesday: Home Depot ($HD), Agilent ($A), Sea ($SE)
Wednesday: Cisco ($CSCO), TJX ($TJX), JD ($JD), Target ($TGT)
Thursday: Walmart ($WMT), Keysight ($KEYS), Bill ($BILL)
Friday: Deere & Co ($DE), Palo Alto Networks ($PANW), Estee Lauder ($EL)
All of the companies that are reporting earnings this week can be viewed here.
Major Trades Published 8/7 - 8/11 [Source: 2iQ]
Buys:
Mark Green [R] Purchased $250K-$500K of NGL Energy Partners ($NGL)
Jonathan Jackson [D] Purchased $30K-$100K of Linde ($LIN)
Ro Khanna [D] Purchased $15K-$50K of American Express ($AXP)
Sells:
Rick Allen [R] Sold $625K-$1.4M of SouthState Corporation ($SSB)
Mark Green [R] Sold $250K-$500K of Energy Transfer ($ET)
Richard Blumenthal [D] Sold $65K-$150K of Robinhood Markets ($HOOD)
Michael Burgess [R] Sold $30K-$100K of Blackstone Group ($BX)
Ro Khanna [D] Sold $15K-$50K of Walt Disney ($DIS)
All times in ET
MONDAY, AUG.14
None scheduled
TUESDAY, AUG.15
8:30 am U.S. Retail Sales - July
8:30 am Retail Sales Minus Autos - July
8:30 am Import Price Index - July
8:30 am Import Price Index Minus Fuel - July
8:30 am Empire State Manufacturing Survey - August
10:00 am Business Inventories - June
WEDNESDAY, AUG.16
8:30 am Housing Starts - July
9:15 am Industrial Production - July
9:15 am Capacity Utilization - July
2:00 pm FOMC Minutes Of July Meeting
THURSDAY, AUG.17
8:30 am Initial Jobless Claims - Aug. 12
8:30 am Philadelphia Fed Manufacturing Survey - August
10:00 am U.S. Leading Economic Indicators - July
FRIDAY, AUG.18
None scheduled
How was today's newsletter?We value all of feedback we receive. Let us know how we did so we can continue to make this the best investing newsletter available! |
Review of the Week
Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author.
Carbon Finance is a publisher of financial information, not an investment or financial advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
The information contained on this website/newsletter has been crafted with the assistance of an AI language model to enhance the content of this newsletter. We have made efforts to ensure the quality and reliability of the information presented, but we cannot guarantee its absolute accuracy. Therefore, readers are advised to exercise their own judgment and seek additional sources if necessary.
THE INFORMATION CONTAINED ON THIS WEBSITE/NEWSLETTER IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.