The stock market posted tiny losses into Monday afternoon, ahead of this week's market movers. Warren Buffett's Berkshire Hathaway reported Q1 results Saturday. Bank stocks got a boost. Dow Jones component Walt Disney gained 2.9% ahead of Wednesday's earnings report.
According to Reuters, vice president at CFRA Research Cathy Seifert issued a pessimistic note after the Berkshire meeting, cautioning Buffett to manage his enormous Apple exposure wisely.
She warned that "portfolio management practices would suggest there is definitely concentration risk with having so much Apple in that portfolio."
Apple makes up an astounding 42% of Berkshire's total portfolio, according to recent reports.
By The Numbers
The Dow Jones Industrial Average inched down 0.3% while the Nasdaq gained less than 0.1%. The S&P 500 was relatively unchanged, adding less than 0.1%. The Russell 2000 fared worse than the major indexes, falling 0.5%.
NYSE and Nasdaq volume shrank compared with the same time on Friday.
The Nasdaq 100-tracking Invesco QQQ Trust ETF crawled up 0.1%, while the Innovator IBD 50 ETF edged 0.2% higher.
Crude oil gained 2.8% to $73.36 per barrel. Gold futures added 0.4% and traded at the $2,033 level.
Bitcoin plunged 6.1% to $27,960. Cryptocurrency exchange Coinbase held up better than crypto, rising 0.5%.
The 10-year U.S. Treasury yield added 5 basis points to 3.5%. The CME FedWatch tool shows over 90% odds for no rate hike at the June Fed meeting.
European stocks were mixed, with the German DAX pulling back 0.1% and Paris CAC adding 0.2%. The London FTSE rallied the most, gaining 1% to close out the day.
Stock Market: Warren Buffett Weekend
Warren Buffett's Berkshire Hathaway rose 0.8% following Q1 results last weekend.
The Wizard of Omaha's company posted operating earnings of $8.065 billion, up 12.6% vs. a year earlier. It held over $130 billion in cash and Treasury bills on its balance sheet. Its insurance writing profits soared to $911 million, from $167 million in the prior year.
Warren quashed the rumor that Berkshire is looking to take over Occidental Petroleum, saying "We're not going to buy control." Berkshire owns over 20% of OXY shares. Shares of OXY dipped 1.7%.
Buffett said the commercial real estate market is starting to see the effects of higher borrowing rates. He discussed the banking crisis, saying he is cautious about the sector but stressed that customer deposits are safe.
Berkshire's Burlington Northern Santa Fe (BNSF) railroad and energy businesses posted earnings drops.
BKRB shares are in a long cup-with-handle base with a 331.94 buy point on the weekly chart. A three-weeks-tight pattern also formed in the handle, according to MarketSmith pattern recognition.
Berkshire holding Paramount Global changed direction, up 1% after last week's sell-off, following a worse-than-expected Q1 earnings news release. Shares are below the 50-day line, a red flag.
The media and streaming service provider drastically cut its dividend. Buffett said it's never a good thing when a company slashes its dividend.
Key Economic Data Out This Week
Investors await inflation reports midweek and the U.S. debt ceiling meeting on Tuesday.
Look for the April Consumer Price Index (CPI) Wednesday at 8:30 a.m. ET. and the Producer Price Index (PPI) Thursday.
Econoday estimates a 0.4% increase in April CPI and core CPI, with the 5% year-over-year numbers holding pat over March. April PPI is expected to increase 0.3% vs. a decrease of 0.5% in March. The year-over-year increase is projected at 2.5%, down from 2.7% in March.
President Joe Biden meets Tuesday with Congressional members on a debt ceiling agreement. Secretary of State Janet Yellen said on Sunday, there are "no good options" for avoiding the dire consequences if Congress fails to raise or suspend the nation's debt ceiling, according to Barron's.
The U.S. hit the $31.4 trillion debt ceiling in January, and has been maneuvering to pay its obligations. It could run out of money by June 1, Yellen warned last week.
Stock Market: Regional Banks Get A Lift
PacWest rallied 2.4% in heavy volume, despite cutting its dividend. Peer regional bank Western Alliance reversed course and added 1.9%.
Cloud security company Zscaler popped over 22% after higher-than-forecast quarterly sales. It also raised full-year revenue guidance.
Management expects $415 to $419 million sales for the current quarter, compared to last year's $286.8 million. Analysts project 121% EPS growth this year.
Six Flags spiked over 20% in heavy volume, after the theme park operator reported better-than-expected Q1 sales. The move sent shares back above the 50-day line.
Tyson Foods fell over 15% in heavy volume, after reporting a surprise loss and lower-than-expected sales in its March-ended quarter.
Stock Market Movers: Walt Disney Gains Ahead Of Earnings
Morgan Stanley raised its Walt Disney price target to 120 from 115 ahead of this week's earnings report.
Disney is expected to post 93 cents in Q1 earnings per share, a 13.8% drop from the prior year's quarter. Sales are projected at $21.8 billion, a 13.5% increase.
Analysts forecast 16% 2023 EPS growth and a healthy 32% surge in 2024. The total number of streaming subscribers for Disney+, Hulu and ESPN+ is forecast at 238,880, a 1.8% increase over the prior quarter.
DIS shares reclaimed the 200-day moving average. Disney is the Dow Jones leader today.
Chip stock Advanced Micro Devices surged 5.8% as chip and AI stocks saw strength. Shares are in a newly-formed base with a 102.53 buy point. Shares gained an impressive 47% this year so far.
IBD 50 component Royal Caribbean rose 2.4% and is in the 5% buy zone stretching to 80.22, after hitting the 76.40 buy point of a cup base. The relative strength line hit a 52-week high, as shown by the blue dot on MarketSmith.
The cruise line reported better-than-expected Q1 sales and a smaller-than-expected loss on Thursday.
Shares have shown an impressive 58% gain this year so far. RCL was Tuesday's IBD Stocks to Watch pick.
Airline Stock Takes Off After Upgrade
Peloton gained 4% after BMO Capital upgraded the interactive fitness platform stock to market perform from underperform, with a price target of 9.50.
Also in the IBD 50, cybersecurity provider Fortinet notched up 2.7% after BofA Securities upgraded the stock to buy from neutral and raised its price target to 75 from 66.
IBD 50 stock Shockwave Medical tumbled 5.4% in heavy volume, on news that talks between the medical device manufacturer and Boston Scientific have deteriorated. BSX gained 3.2% on the news.
Uber Technologies rose 2.8% and is in the 5% buy zone reaching to 39.56, after hitting the 37.68 buy point of a cup base last week. The ride-share operator beat Q1 estimates last week.
American Airlines rallied 4.2% after JPMorgan Chase upgraded the airline stock to overweight from neutral, and raised its price target to 29 from 26.
Catalent plunged over 26% in very heavy volume after postponing its third quarter earnings results. Catalent is the biggest S&P 500 loser today.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
