Dow breaks new record: Buffet's portfolio change brings movement

Wednesday 17th February 2021

Dow breaks new record
Buffet's portfolio change brings movement

After a weak start, the Dow Jones really got going and cracked a new record during the day. In particular, a restructuring campaign by star investor Warren Buffett is helping the leading index on its feet.

After a roller coaster ride, the indices on Wall Street closed inconsistently. The Dow Jones index hit another all-time high. The technology stocks on the Nasdaq as partial pandemic crisis winners, however, had to give up in hopes of a revival of the economy. The slowing factor remained the recent rise in bond yields, which, according to the US data released earlier, gave up some of their recent gains.

Of the Dow Jones Index gained 0.3 percent to 31,613 points. In the meantime, he noted a new record with 31,643 points. Of the S&P 500 tended almost unchanged and the Nasdaq composite gave up 0.6 percent. The US data published before the starting bell was well above expectations. Retail sales rose much faster than expected in January. US industrial production also climbed faster than forecast in January.

But it was primarily those that moved the market Producer priceswho did in January so increased strongly are like never before since December 2009. For the experts, the increase came as a complete surprise. The data should fuel fears of a significant surge in inflation. Some economists have already warned that the new US administration's planned economic stimulus package could cause the economy to overheat.

Fed outlook supports prices

In the Fed minutes of the latest meeting, the affirmed loose monetary policy for the foreseeable futurewhat sustained the courses. Inflation is unlikely to rise so strongly that a turnaround will be necessary. In the US bond markets, the ten-year yield fell more sharply after the recent gains. The high returns have recently been a drag on the stock market.

In addition, the reporting season rolled on. The insurer's shares American International Group (AIG) turned positive after losses and rose 2.4 percent. AIG had reported a 10 percent decline in net income – burdened by natural disasters and travel insurance, among other things. Avis Budget Group (-6.3 percent) did better than analysts expected. The car rental company did not dare to look ahead due to the imponderables associated with the corona pandemic.

In addition, changes in the portfolio of investor legend Warren Buffett caused movement: the Apple stock lost 1.8 percent after it became known in a statement to the stock exchange that Buffett and his company Berkshire Hathaway had last parted with some of his Apple shares. In contrast, pharmaceutical stocks such as Abbvie (+1.9 percent), Bristol-Myers Squibb (+1.9 percent) and Merck & Co. (+1.8 percent) were increased significantly. Berkshire also doubled its stake in T-Mobile US (-0.6 percent) and also increased positions at Verizon (+5.3 percent), Chevron (+3.1 percent) and Kroger (+2 percent). Inventories were reduced at Wells Fargo (+4.9 percent) and Suncor Energy (+1.2 percent).

Bitcoin climbs above $ 52,000

Bitcoin continued to climb, setting a new record high above $ 52,000. That corresponds to an increase of almost 78 percent for the year. The day before, the cryptocurrency had exceeded the $ 50,000 mark for the first time, doubling its value in less than two months. More and more financial services companies are now enabling their customers to trade Bitcoin. In addition, Bitcoin Gold is increasingly outstripping as an inflation hedge. The dollar showed strength across the board.

The persistent Cold spell in the US propped up oil prices continue. According to a report, US oil production is said to have fallen by 3.5 million barrels a day, as analyst Warren Patterson of ING notes. The winter storm is expected to last until Thursday. In the meantime, the increased price environment will also draw more attention to the Opec + group when the oil cartel meets on March 4th, the participant added. In the early afternoon German time, prices gave up much of the gains after reports that Saudi Arabia will increase output from April.

Of the Gold price showed up again with taxes. The US data hardly moved the precious metal. Investors' interest in the safe haven of gold is low because the mood in the financial markets has stabilized, said Eugen Weinberg, head of commodity research at Commerzbank. "In addition to the good mood on the financial markets, we have rising returns, which also make gold less attractive as a non-interest-bearing investment," he added.

Of the Euro temporarily fell towards the $ 1.20 mark. Most recently, however, the common currency cost $ 1.2042 again.