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Currency stocks: Warren Buffett is still betting on the US economy

What’s Happening: Last Quarter, Warren Buffett’s Berkshire Hathaway (BRKA) increase its holdings in Apple (AAPL) 3.9 million shares, according to new financial disclosures. It also increased its stake in Ally Financial (ALLY)a financial services company based in Detroit, with 21 million shares, and purchased 2.3 million shares of Chevron.
Berkshire’s top stocks are currently Apple, Bank of America, Coca-Cola (KO), Chevron (CVX) and American Express (AXP)according to data from Refinitiv.
Buffett reduces stakes in companies like Kroger (KR), Synthetic engine (GM) and Bancorp USA (USB)and has completely exited positions at Verizon and Royal Pharma.

But the popular investor’s willingness to continue buying shows continued confidence in the position of the US economy and financial markets.

Berkshire reported net buying of shares of about $3.8 billion in the second quarter. This is more than the $40 billion of shares Berkshire bought in the first quarter.

Why it matters: Given Buffett’s track record of success and his consistent focus on the long-term, his investment patterns are closely watched by traders.

The economic data that Buffett and others on Wall Street are looking at are currently mixed, making their jobs difficult.

Manufacturing activity in the New York area affected big and unexpected failure in August, according to a survey released Monday. The New York Federal Reserve said the Empire State Manufacturing Survey fell 42 points. That marks the second-largest monthly record drop, just behind April 2020, in the early days of the Covid-19 pandemic.
However, other indicators looks more promisingAs my CNN colleague Matt Egan recently noted:
  • The economy added more than half a million jobs in July. That pushed the unemployment rate to 3.5%, the lowest level since 1969.
  • Gas prices have fallen below $4 a gallon.
  • Consumer sentiment has fallen to a record low.
  • The US stock market has rallied for 4 consecutive weeks.

“This is not a recession. It’s not even in the same universe as a recession,” said Mark Zandi, chief economist at Moody’s Analytics.

Should Disney split up ESPN as sports betting grows?

Disney (DIS) Last week, Wall Street wowed Wall Street with huge earnings thanks to solid Disney+ subscribers and healthy theme park attendance. But one activist investor thinks they can do more to revive their lagging stock.
The Latest: Daniel Loeb’s third point said Monday that it has buy a new share in the huge entertainment industry and is lobbying for change, said Paul R. La Monica, my colleague at CNN Business.

Among its most dramatic pitches was Disney’s launch of the ESPN television channel.

Loeb admits that the sports network is an attractive element of a broader streaming package with Disney+ and Hulu. However, he said there is a “strong case” for ESPN to stand alone with the fast-growing sports betting industry, which can be hugely profitable but hamper Disney’s image as a business. “family first” business.

“ESPN will have more flexibility to pursue business initiatives that may be more challenging as part of Disney,” Loeb wrote in a letter to the company outlining its proposals.

CEO Bob Chapek last week said his team is “working hard” on providing sports betting services.

“We expect to have something to announce in the future about a partnership there that will allow us to access that revenue stream,” he told analysts.

Still, Loeb thinks Disney stock will do better if ESPN is fixed, a trend common among large companies trying to simplify their offering to Wall Street investors. .

Investor Insights: Shares of Disney jumped more than 2% on Monday. But they’re still down nearly 20% this year, making the company one of the worst performers in the Dow.

Former WeWork CEO attracts investors again

I spent a lot of time thinking about the failure of WeWork. For me – and a lot financial commentator – the boom of the company’s glittering debut on Wall Street in 2019 has been likened to an allegory of Silicon Valley’s excess, as investors pour money into startups that don’t profitable and little thought of the consequences.

If you’ve watched “WeCrashed” on Apple TV+, there are other lessons you can learn, too. The ouster of former CEO Adam Neumann was framed as an occurrence, as an egotistical and unsupervised founder was dealt with an overdue fact-check (even if he floating on a golden parachute).

But when will the new stories be so neat?

Neumann return: Andreessen Horowitz on Monday disclosure that it is supporting Neumann’s latest project, a residential real estate company called Flow. The famous venture capital firm’s $350 million investment valued the startup at more than $1 billion, New York Times reported.
In one blog postco-founder Marc Andreessen outlines his belief in Neumann, who he calls a “visionary leader.”

“Adam and the WeWork story have been chronicled, analyzed, and fully fictionalized—sometimes accurate,” writes Andreessen. “For all the energy that goes into the story, it’s often underestimated that only one person has fundamentally redesigned the office experience and led a paradigm-shifting global company in the process. .”

That said: Operational details are still scant. And Neumann will take his next course of action in a much harsher environment, as fears of an economic downturn and market volatility hurt the startup ecosystem and force companies that used to fly. must significantly reduce their valuation.

Next

Home Depot (HD) and Walmart (WMT) Report results before US markets open.

Also today: U.S. housing data starts and building permits for July arrive at 8:30 a.m. ET. Industrial production data follows at 9:15 a.m. ET.

Coming tomorrow: Economists polled by Refinitiv are expected to know that US retail sales in July increased by just 0.1% month-on-month.

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