May 22, 2022

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Wall Street is turned upside down: Warren Buffett earns $650 million in tech stocks

Wall Street is turned upside down: Warren Buffett earns $650 million in tech stocks

After a two-day slump, US stock markets rose on Thursday

This is how Wall Street’s three leading indices ended:

  • The Standard & Poor’s broad index rose 0.43 percent.
  • The Dow Jones Industrial Average rose 0.27 percent.
  • The Nasdaq Technology Index rose 0.06 percent.

The drop could be seen earlier this week linked to the Federal Reserve’s announcement of future monetary policy tightening. On Wednesday, the central bank published the minutes of its previous interest rate decision.

The minutes showed that the central bank is considering a quarter percentage point larger than usual rate hikes. Future increases could be up to double, ie half a percentage point.

Acquires a significant stake in technology share HP Inc.

The share of technology company HP Inc soared after it became known that the company of legendary investor Warren Buffett, Berkshire Hathaway, is buying a large stake in HP Inc. It thus becomes the largest shareholder in the manufacturer of computers and printers.

Berkshire Hattaway has purchased approximately 121 million shares in HP. The stake is worth approximately $4.2 billion based on Wednesday’s closing price of the stock. This corresponds to an ownership stake of about 11 percent.

HP Inc. rose. 14.75 percent.

According to CNBC, the value of Buffet’s stake in HP has increased by nearly 650 million dollars to $4.85 billion on the day.

Fewer first-time applicants for unemployment benefits

Statistics from the US Department of Labor show that the number of first-time applicants for unemployment benefits (unemployment claims) in the US reached 166,000 last week, according to Yahoo Finance.

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This is the lowest number of first-time applicants since 1968, and thus marks the third week in a row with new applications below 200,000.

According to consensus forecasts from Trading Economics, 200,000 first-time applicants were expected in advance last week.

Compared to before the epidemic, the level of application is low. In 2019, the average was around 218,000 first-time applicants per week.

He wants to normalize monetary policy

For its part, the European Central Bank (ECB) published the minutes of its latest monetary policy meeting on Thursday afternoon in Norwegian time.

According to the minutes, inflation in the euro area is expected to remain above the target in 2023. Meanwhile, the main criteria for the upward adjustment of the bank’s key interest rates have been met, or are about to be met, according to TDN Direkt.

During the meeting, the risks of a stronger impact of inflation expectations were discussed. The news agency reported that a number of members believed it was time to take further steps towards normalizing monetary policy.

At the beginning of March, the Central Council decided that the APP (Asset Purchase Program), i.e. support for securities purchases, should consist of net purchases of 40 billion euros in April, 30 billion euros in May and 20 billion euros in June. It appears from the minutes of the meeting published on Thursday that members believe that the APP purchases made so far have worked well.

Because of the war in Ukraine, there is a high degree of uncertainty surrounding the central bank’s directives. Among other things, it has been discussed that higher gasoline prices and sanctions against Russia are likely to limit future growth, TDN Direkt reports.

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The ten-year-old has reached a new peak

The interest rate on the US 10-year government debt rose to 2.65 percent on Thursday. The high level with respect to the Federal Reserve appears on Tuesday which gives indications of a tighter monetary policy.

During Thursday, the 10-year-old was up 2.65 percent.

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