How Warren Buffett could steal the show in the second quarter: Morning Brief
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Monday, April 3, 2023
Today's newsletter is by Brian Sozzi, Executive Editor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Read this and more market news on the go with the Yahoo Finance App.
There is lot coming at investors over the next four weeks — a jobs report, political intrigue, earnings season.
But despite all of these inevitable market-moving events, I think Warren Buffett's annual meeting for Berkshire Hathaway (BRK-A, BRK-B) shareholders on May 6 will hold more importance than in recent years.
And it's the one event I think the market is discounting.
Buffettpalooza will be the first time markets will hear from the 'Oracle of Omaha' on the banking crisis while this year's meeting also comes just days after a Federal Reserve meeting.
When you have someone sitting on $130 billion in cash, as Buffett is, any word on bank valuations, if Berkshire considered doing deals for troubled regional banks, and government actions to save financial institutions will carry tremendous weight.
And it's not just the money aspect here, it's Buffett's knowledge of the banking system that further ups the intrigue.
Buffett saved Solomon Brothers in the early 90s after a trading scandal. He gave a lifeline to Goldman Sachs (GS) during the financial crisis. And he is a top shareholder in several financial stocks, including American Express (AXP), Bank of America (BAC), Citigroup (C), and U.S. Bancorp (USB).
What Buffett may say on high-profile tech holdings HP (HPQ), Apple (AAPL), and Amazon (AMZN) — where CEO Andy Jassy is increasingly on the hot seat — could come as the tech trade stays in favor beyond the first quarter. Some have even begun musing tech is this year's safety trade, and we're curious on how Buffett sees it.
Elsewhere as this quarter kicks off we have an indicted former president, Donald Trump, still running for four more years in the White House. The former president's indictment is "potentially destabilizing one way or the other" for markets, The Bulwark's editor-at-large Bill Kristol said on Yahoo Finance Live.
This Friday will also see the March jobs report released, notable, of course, from the standpoint of potential impacts from the bank crisis.
Speaking of that, earnings season for the banks kicks off mid-April. Conference calls from the likes of JPMorgan (JPM) and Bank of America will offer key snapshots into the state of the financial system amid March's sector hurricane.
I would also plan to listen to at least 10 regional bank earnings calls, too.
Come May 3, the Federal Reserve will announce its latest decision on interest rates. It's a coin flip sitting here today on whether interest rates will be lifted another 25 basis points, although large-cap tech stocks trade as if the Fed is poised to pause.
As ever, Buffett will have a lot to chew on and appears ready to weigh in a broad array of topics.
And Buffett seems intent on emphasizing broad this time around, writing in a message to shareholders, "Last year, I made a mistake by spending too much time on a few subjects. Consequently we answered far too few questions. I won't go astray this year."
I am looking forward to attending the Berkshire annual meeting for Yahoo Finance.
If you plan to be there in person, drop me a line.
Until then, happy trading!
What to Watch Today
Economy
Construction spending, February
ISM Manufacturing PMI, March
S&P Global Manufacturing PMI, March
Wards auto sales, March
Earnings
No notable companies set to report earnings.
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