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Apple shares drop 7% after Buffett’s Berkshire slashes stake by half

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5 months ago

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Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 3, 2024.

David A. Grogen | CNBC

Warren Buffett sent shockwaves through the investing world over the weekend by slashing his big Apple stake by half, causing the tech stock to crater on Monday amid the intensifying global sell-off.

Berkshire Hathaway disclosed in its earnings filing that its Apple holding was valued at $84.2 billion at the end of the second quarter, indicating that the Oracle of Omaha dumped a little more than 49% of the tech stake.

Shares of Apple dropped more than 7% in premarket trading Monday. Global stock markets are on the brink of a major correction, triggered by concerns of an economic slowdown.

The 93-year-old legendary investor has been on a massive selling spree, offloading more than $75 billion in equities in the second quarter and raising Berkshire’s cash pile to a whopping $277 billion, an all-time high for the conglomerate. Buffett also started selling his second-biggest holding Bank of America in July.

Buffett had already sold 13% of his Apple stake in the first quarter and he indicated previously that it was a tax-saving move as he expected the U.S. government to raise the rate to fund a burgeoning fiscal deficit. However, the magnitude of the second-quarter sale could mean tax was not the only motivating factor.

Berkshire began buying the stock in 2016 under the influence of Buffett’s investing lieutenants Ted Weschler and Todd Combs. Over the years, Buffett grew so fond of Apple that he increased the stake drastically to make it Berkshire’s biggest and called the tech giant the second-most important business after his cluster of insurers.

Berkshire’s Apple holding grew so big that it once took up half its equity portfolio, so the selling could also be out of portfolio management concerns.

Shares of Apple climbed 23% to a record high in the second quarter amid renewed optimism surrounding its artificial intelligence capabilities.

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10-year Treasury yield back above 4.6% after mixed jobless claims data

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December 27, 2024

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Treasury yields were slightly higher early Friday after a mixed set of data on weekly jobless claims.

The yield on the benchmark 10-year Treasury was 3 basis points higher at 4.607%, slightly down from its peak earlier in the week but back above the 4.6% level it had not breached since May. The 2-year Treasury was fractionally higher at 4.334%.

One basis point is equal to 0.01%. Yields move inversely to prices.

After the Christmas break, jobless claims data released Thursday for the week ending Dec. 21 came in 1,000 lower at 219,000, below the 225,000 consensus forecast from Dow Jones.

However, continuing claims rose by 46,000 for the week ending Dec. 14 to the highest level since November 2021.

The 10-year Treasury yield has risen more than 40 basis points in December as traders anticipate a more hawkish Federal Reserve in 2025. The central bank next meets at the end of January, when a rate hold is expected.

Monthly data on wholesale inventories is due Friday.

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