Pre-market stocks: Warren Buffett fans have something to cheer about this weekend

Buffett has reason to celebrate. Major Berkshire holdings such as Coca Cola (KO) and Kraft-Heinz (KHC) are booming. The two food and beverage giants recently reported strong earnings. Coke’s stock has risen 11% this year while Kraft Heinz has jumped more than 20%.
Berkshire also has a significant stake in the oil giant Chevron (CLC)the top Dow Jones stock this year with a gain of more than 35%.

Buffett and Berkshire Vice Chairman Charlie Munger have come under fire from some investors in recent years as tech stocks have taken the market by storm. But Buffett and Munger, 98, are convinced that owning quality large-cap U.S. companies in the consumer, financials and energy sectors is a recipe for long-term success.

That’s not to say Berkshire is totally against the idea of ​​owning tech stocks. In fact, Berkshire’s biggest holding is Apple (AAPL). The company has also recently invested in Amazon (AMZN) as well as resume (HPQ).

Yet investment experts point out that Buffett’s penchant for buying the best companies and keeping them for a long time is what remains the key to Berkshire Hathaway’s success.

“One thing that stands out with Buffett and Munger is their ability to produce such good returns over such a long period of time,” Bill Stone, chief investment officer at The Glenview Trust Company, said in a report. “The investment industry is littered with shooting stars that have had great returns only to die out, sometimes dramatically.”

Stone is also a Berkshire shareholder and will attend the meeting.

But other experts say they want to know how Buffett and Munger feel about the market in light of the recent economic downturn and concerns that the Federal Reserve should continue to raise interest rates.

“With rates rising and inflation rising, what kind of asset allocation is appropriate? We seek that wisdom from Buffett and Munger,” said Sean Bonner, CEO of Guild, an education app. investment for the military. Bonner is a Berkshire shareholder who plans to attend the meeting for the first time.

Investors will also want to know what Berkshire plans to do with its massive cash pile, which stood at nearly $147 billion at the end of February.

Berkshire has put cash to work this year, with plans to buy insurer Alleghenia (Yes) and a strengthening of its stake in the oil company western oil (OXY). But Buffett has long spoken of wanting to make an “elephant-sized” deal.
There is, however, one issue that Berkshire investors won’t need to ask this year: the issue of succession planning. Buffett announced last year that Vice Chairman Greg Abel, who oversees Berkshire’s energy, consumer and other non-insurance businesses, will eventually take over as as CEO.

Amazon and Apple add to market confusion

It’s been a volatile month for Big Tech, and the markets aren’t sure what to make of it all.

Investors are suffering a blow: Mega-cap tech stocks dragged the Dow down 1,000 points last week, then rallied on Monday. On Tuesday we saw another 800 point decline in the Dow and another big rally on Thursday.

Investors’ hopes of finally removing their neck braces hinged on Apple and Amazon reporting their first-quarter results yesterday afternoon. Some cohesion between the two trillion-plus companies could shed some light on the market outlook.

Strong numbers from Apple and Amazon would boost investor confidence as the Federal Reserve plans to hike rates next week. The two companies also serve as gauges of consumer confidence; good news could allay fears of an upcoming economic downturn.

But that didn’t happen.

Apple beat earnings estimates. Revenues increased by almost 9% on an annual basis, while sales increased by 19%. Earnings per share were $1.52, beating estimates of $1.43. The company announced a $90 billion share buyback and a 5% increase in the dividend.

But Apple’s prospects are not very good. Shares fell after Chief Financial Officer Luca Maestri warned Covid-related supply constraints could hurt second-quarter sales by $4 billion to $8 billion. Apple is not immune to supply chain challenges, CEO Tim Cook added.

Amazon disappointed investors with good earnings expectations. The stock fell nearly 13% post-market after the company reported a $7.6 billion loss on its investment in electric vehicle company Rivian. Amazon posted earnings of $7.38 per share, missing estimates of $8.36.

Amazon’s revenue rose 7% in the first quarter, compared to 44% last year. That’s the company’s slowest growth rate since the dot-com breakout in 2001. Second-quarter guidance was also disappointing. Growth could slow to 3% compared to the previous year.

“The pandemic and subsequent war in Ukraine has brought about unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement.

McDonald’s must abandon millions of Russian burgers

Trash cans in Russia are overflowing with bad Big Macs and moldy McNuggets.

McDonald’s lost $100 million worth of food and supplies after closing its restaurants in Russia following the country’s invasion of Ukraine. Inventory will “likely be eliminated,” the company said.

McDonald’s chose to close its 850 Russian restaurants and 108 restaurants in Ukraine due to the conflict but continued to pay its 62,000 employees and many suppliers in the region.

McDonald’s reported better-than-expected profits and revenue as it offset Russian losses with price increases in the United States and strong international growth.

McDonald’s announced in February that it was closing its Ukrainian restaurants for safety reasons, but that employees would provide local councils with additional food when possible. The restaurant said it hopes councils will distribute items like bread rolls, donuts, cheese, milk and water to Ukrainians in need.

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