The Rundown - Nvidia Joins the Dow, Warren Buffett's Berkshire Hathaway has $325B in Cash

Episode Date: November 4, 2024

Stock market update for November 4, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadmani, and today is Monday, November 4th. In today's episode, we preview a very busy and very pivotal week in the markets. We also dive into Borgshar, Hathaway earnings, and tell you why Warren Buffett is sitting on a record amount of cash. Then stick around to the end of the show to find out the newest member of the Dow Jones that caused me to go on a mini rant.

All right, let's go. Well, guys, markets have now gone down for two streams. weeks in a row. Both the S&P and NASDA got by more than 1% last week thanks to a big sell-off on Halloween. I guess investors weren't loving all the earnings from big tech giants that we got last week. Microsoft, Meta, Apple, and AMD all dropped after reporting earnings. Google and Amazon were a bright spot, though. They both finished higher. Now, last week was pretty crazy. There was over 150 companies that reported earnings, some of the biggest companies in the world. But, you know, this week could be crazier if you can believe that. We're still in the middle

of earnings seasons. We'll be getting earnings from companies like Pallenteer, Qualcomm, Super Mice, I go Airbnb, just to name a few. But let's be honest, the biggest event this week, the event that everyone's been waiting for, probably the most impactful event for our portfolio. I'm obviously talking about the Fed meeting. All right, what is the Fed going to do with interest rates? Okay, I guess there's the election too.

Both are happening this week. The election obviously is on Tuesday, and the Fed meeting wraps up on Thursday with a Jerome Powell press conference. All signs point to the Fed cutting interest rates by 25 basis points. So yeah, this week could get pretty volatile to say the least, especially on Thursday as the markets fully digest the results of the election. Hopefully we have a result by then. And then we'll officially find out what the Fed and Jerome Powell

decides to do with interest rates. So yeah, we got a lot going on this week. Again, we're going to be locked in this week, a lot to keep an eye on. And we'll be recapping the market reactions to all these events here on the rundown. If you're a new listener to the show, you picked a great time to tune in. Let's run through some headlines. And we should start with Berkshire Hathaway, because they released earnings over the weekend. I'm not sure why. either the only company to report earnings on Saturday, but it gives people the weekend to digest everything, and there's a lot to digest here. I think the main headline coming out of this was the amount of cash that Warren Buffett is sitting on now. Berkshire Hathaway now has over

$325 billion in cash. That's up $50 billion from the end of Q2. And Warren Buffett keeps selling a ton of stock. This year so far, he's bought about $5.8 billion worth of stock and has sold $133 billion. That includes selling a ton of Apple's. stock, which in Q3 Buffett dumped 100 million shares, and then also billions of dollars in Bank of America. And as far as what Warren Buffett plans to do with the cash, well, he's not just keeping $325 billion in a checking account, all right? He's buying short-term treasury bills with that cash. Berkshire is currently sitting on more than $288 billion worth of T-bills, probably earning a nice interest on those. But I think the biggest shocker from this earnings report

was the fact that Buffett didn't use any of the cash to buy back Berkshire stock. This is the first time that Berkshire Hathaway didn't buy back their own stock since 2018. I guess it could be a sign that Warren Buffett thinks that even Berkshire's stock might be overvalued. Because, look, Warren Buffett is one of the goats when it comes to investing. So the fact that he's sitting on a record amount of cash selling stocks and not even buying back his own stock, has people wondering like, what does he think is going to happen? Is Buffett expecting the markets to drop and keeping a lot of dry powder on the side to buy the dip? I don't know, but I'm definitely wondering that.

I'm not going to lie. So we'll have to see what Warren Buffett decides to do with all that cash if he just keeps stacking cash until a market correction or if he's going to finally put some of that money to use. Warren Buffett, I know you're listening. If you want some advice on what to do with some of that cash, maybe consider buying the Dallas Cowboys and turn the team around, you know? I heard they need some help right now. Sorry, Cowboys fans. I don't think they were expecting to catch strays on a finance podcast Monday morning. Let's ship gears and talk about the U.S. government's plans to ramp up their efforts to remove Chinese companies from the semi-com.

conduct their supply chain. This is something that the U.S. government's pushing hard this year, and it's resulting in companies in the U.S. to make some changes. Like chip toolmakers, applied materials and lamb research have told their suppliers that they need to find alternatives to components obtained from China, because if they don't, they risk losing their vendor status. On top of that, these suppliers have been told that they can't have Chinese investors or shareholders. So the U.S. government has been tightening their rules on importing from China in the interest of national security, as well as maintaining an edge in next-gen technology. But this could result in rising costs because it might not be easy to find non-Chinese alternatives to certain components.

On top of that, lamb research and applied materials are kind of put in a tough spot here because they make a ton of revenue from China. China is the biggest customer for both applied materials and lamb research globally. Lamb and applied materials generate 37 and 32% of global revenue from China respectively. Chinese suppliers are now already starting to find a workaround. Like, for example, one Chinese supplier set up a holding company in Singapore to help get around some of the, these restrictions. So we'll see how this ultimately plays out. It's like a game of whackamol. You set up certain restrictions and these companies find a way to get around them. Let's talk about some stocks making moves today. Shares of Viking therapeutic syrup after they release promising

data for their weight loss pill. The study which was released on Sunday showed that users shed 6.8% of their body fat after 28 days, putting the drug on track to enter mid-state trials in the fourth quarter. Now, we all know about the weight loss drugs that have gotten really popular these days, but those require a needle. Pills, on the other hand, are like the next frontier, right? They're more convenient, and they also come with less side effects. All the major players are racing to get a weight loss pill on the shelves. Eli Lilly is in advanced clinical trials for their oral drug. Pfizer and Astrozenic are also working on their own pill. Nova Nordus, the maker of Ozepic, which kind of started this whole trend, have an oral pill, but it's dealing with

supply issues right now and a lukewarm reaction from Wall Street. So this is a race to get on the market with a weight loss pill. So whichever company gets there first can see a huge payoff in their stock price. Shares of Viking Therapeutics jump. Oh, wait a minute. Wow, this is crazy. Viking Therapeutic stock was up more than 20%, but it's now down 6%. Oh, something must have happened. That's some crazy volatility right there. Now, on the flip side, shares of energy companies are moving lower after the nuclear energy trend hit a speed bump this morning. A federal regulator struck down an agreement between Amazon and Talon Energy, which owns the Susquehanna Nuclear Plan. The federal energy regulatory committee voted against the proposals that would have increased the amount of power dispatched

to an Amazon data center campus. This decision is setting energy stocks down across the board. Talon, Constellation Energy, and Vistra are all lower this morning. These are some of the companies that were viewed as a beneficiary for future deals involving big tech companies and nuclear power plants. Talon and Vistra energy are down more than 2% and Constellation energy stock is down more than 10%. Let's wrap the show with a fun fact. Invitya is being added to the Dow Jones Index. replacing Intel, the committee for the Dow Jones that makes these decisions that they want to have a more representative exposure to the semiconductor industry. So they're replacing Intel with Invidio, which makes a lot of sense, right? Intel used to be the leader in the chip space, but over the last few years they've been overtaken not just by Nvidia, but also rivals like AMD and Qualcomm.

So, Nvidia will officially be added to the Dow Jones before the trading day on Friday. So does that mean that we should all start caring about the Dow now? Absolutely not. This changes nothing for me, okay? I will still. be a Dow hater. It's still only 30 companies with an extremely flawed calculation method. I don't care that they just added the hottest company in the world. I will not stop being a Dow hater. You know, for all we know, they might have just added Nvidia at the top. Sorry, I didn't expect that to turn into a rant. I get a little heated when it comes to talking about the Dow. So yeah, congrats to Nvidia for being added to the Dow, but still don't

care about the Dow. Well, all right, guys, that's the rundown for today. We have an action pack week coming up. I already talked about it in the intro. A lot happening this week. We're going to be covering it all here on the rundown. So make sure you guys tune in this week. I have no idea what the vibe in the markets are going to be by the time we get to Friday. But hey, that's what makes the markets fun, right? By the way, if you guys enjoyed today's episode, consider giving us a five-star rating on Apple and Spotify. And if you have like 15 extra seconds, consider writing a review on Apple. Leave a comment on Spotify. Vote in today's Spotify poll. All that engagement really does help us out. Thank you guys so much for listening. Shout out to Mike and Connor for all the help

behind the scenes, and we'll see you guys back here tomorrow. This is the rundown, your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell, or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals. Learn more at public.com disclosures. In partnership with Zaid Money, brokerage services for U.S. listed, registered securities

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