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Warren Buffett’s Berkshire Hathaway sells Bank of America for ninth straight day

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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

Berkshire Hathaway’s selling streak in its big Bank of America stake has extended to nine straight days, suggesting that Warren Buffett is not just trimming the longtime holding.

The Omaha-based conglomerate sold a total of 18.4 million shares of the bank from Thursday to Monday for $767 million at an average price of $41.65, a new regulatory filing late Monday revealed. Over the past nine trading sessions, Berkshire has cut its stake by 71.2 million shares with just more than $3 billion of sales.

After the selling spree, Berkshire still owns 961.6 million shares of BofA with a market value of $39.5 billion. BofA remains Berkshire’s second-largest equity holding after Apple, but if the conglomerate continues to offload those shares, the bank could fall below third-place American Express, currently valued at $37.6 billion.

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Berkshire is still BofA’s largest shareholder with a 12.3% stake. As an owner of more than 10%, Berkshire has two business days to report any transactions, so we won’t know until Thursday if the selling streak continues Tuesday.

Buffett famously bought $5 billion worth of BofA’s preferred stock and warrants in 2011 in the aftermath of the financial crisis, shoring up confidence in the embattled lender struggling with losses tied to subprime mortgages. He converted those warrants in 2017, making Berkshire the largest shareholder in BofA, vowing that it would be a “long, long time” before he would sell.

Berkshire’s cost basis on the BofA position was about $14.15 per share or $14.6 billion as disclosed at the end of 2021. At the end of March, the holding was worth $39.2 billion. BofA closed Monday at $41.09.

The conglomerate could be taking some profits after BofA’s strong run, culminating in a big year this year. The bank stock has rallied 22% in 2024, outperforming the S&P 500′s 14.5% return.

Berkshire is set to release second-quarter earnings Saturday morning, which will also reveal further info on the conglomerate’s biggest holdings.

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Morgan Stanley picks China stocks to ride out a worst-case scenario in U.S. tensions

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Elon Musk endorses Trump’s transition co-chair Howard Lutnick for Treasury secretary

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Elon Musk at the tenth Breakthrough Prize ceremony held at the Academy Museum of Motion Pictures on April 13, 2024 in Los Angeles, California.

The Hollywood Reporter | The Hollywood Reporter | Getty Images

On Saturday, Elon Musk shared who he is endorsing for Treasury secretary on X, a cabinet position President-elect Donald Trump has yet to announce his preference to fill.

Musk wrote that Howard Lutnick, Trump-Vance transition co-chair and CEO and chairman of Cantor Fitzgerald, BGC Group and Newmark Group chairman, will “actually enact change.”

Lutnick and Key Square Group founder and CEO Scott Bessent are reportedly top picks to run the Treasury Department.

Musk, CEO of Tesla and SpaceX, also included his thoughts on Bessent in his post on X.

“My view fwiw is that Bessent is a business-as-usual choice,” he wrote.

“Business-as-usual is driving America bankrupt so we need change one way or another,” he added.

Musk also stated it would be “interesting to hear more people weigh in on this for @realDonaldTrump to consider feedback.”

Howard Lutnick, chairman and chief executive officer of Cantor Fitzgerald LP, left, and Elon Musk, chief executive officer of Tesla Inc., during a campaign event with former US President Donald Trump, not pictured, at Madison Square Garden in New York, US, on Sunday, Oct. 27, 2024.

Bloomberg | Bloomberg | Getty Images

In a statement to Politico, Trump transition spokesperson Karoline Leavitt made it clear that the president-elect has not made any decisions regarding the position of Treasury secretary.

“President-elect Trump is making decisions on who will serve in his second administration,” Leavitt said in a statement. “Those decisions will be announced when they are made.”

Both Lutnick and Bessent have close ties to Trump. Lutnick and Trump have known each other for decades, and the CEO has even hosted a fundraiser for the president-elect.

The Wall Street Journal also reported that Lutnick has already been helping Trump review candidates for cabinet positions in his administration.

On the other hand, Bessent was a key economic advisor to the president-elect during his 2024 campaign. Bessent also received an endorsement from Republican Senator Lindsey Graham of South Carolina, according to Semafor.

“He’s from South Carolina, I know him well, he’s highly qualified,” Graham said.

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Protecting your portfolio against risks tied to Trump’s tariff plan

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Biggest Risks After the Rally: Trade & Top Valuations

Money manager John Davi is positioning for challenges tied to President-elect Donald Trump’s tariff agenda.

Davi said he worries the new administration’s policies could be “very inflationary,” so he thinks it is important to choose investments carefully.

“Small-cap industrials make more sense than large-cap industrials,” the Astoria Portfolio Advisors CEO told CNBC’s “ETF Edge” this week.

Davi, who is also the firm’s chief investment officer, expects the red sweep will help push a pro-growth, pro-domestic policy agenda forward that will benefit small caps.

It appears Wall Street agrees so far. Since the presidential election, the Russell 2000 index, which tracks small-cap stocks, is up around 4% as of Friday’s close.

Davi, whose firm has $1.9 billion in assets under management, also likes staying domestic despite the tariff risks.

“We’re overweight the U.S. I think that’s the right playbook in the next few years until the midterms,” added Davi. “We have two years of where he [Trump] can control a lot of the narrative.”

But Davi plans to stay away from fixed income due to challenges tied to the growing budget deficit.

“Be careful if you own bonds for sure,” said Davi.

Since the election, the benchmark 10-year Treasury yield is up 3% as of Friday’s close.

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