Berkshire Hathaway's Q2 earnings reveal signs of US economic slowdown, as several of its consumer-facing businesses experienced
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2023-08-08 | Sign Up | View Online | Advertise
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Market Snapshot 📷
S&P 500 4,518.53 +0.90%
Nasdaq 13,994.40 +0.61%
Dow 35,473.79 +1.16%
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Markets & Economy
Buffett's Berkshire signals consumer spending slump, recession risks (3 min read)

Berkshire Hathaway's Q2 earnings reveal signs of US economic slowdown, as several of its consumer-facing businesses experienced significant declines in revenues and profits. Many of its consumer businesses across the railway, real estate, or manufacturing faced challenges due to factors like falling consumer product demand, rising rates, and slower home sales. Although Berkshire's overall operating earnings grew by 7%, it’s also holding a record level of cash and the slowdown in its consumer businesses hints at a broader decline in US consumer spending.
Foreign investment plummets as the West snubs China (2 min read)

Foreign direct investment in China has significantly declined, with only about $5 billion of capital invested in Q2, compared to nearly $100 billion per quarter in 2021. This article shared a chart that shows how steeply foreign direct investment in China fell in the last few years and discusses some possible reasons for it. While some attribute this decline to COVID-19 disruptions, it also reflects enduring factors, including concerns about vulnerability for being an export-oriented economy and political tensions between China and the Western countries.
Business & Stocks
Trucker Yellow Goes Bankrupt After Debt (2 min read)

Yellow Corp has filed for bankruptcy and will permanently shut down due to ongoing financial troubles compounded by labor disputes. The 100-year-old trucker company will liquidate its assets as part of the bankruptcy and is estimated to put around 30,000 workers out of jobs. This comes after years of financial strain and a dispute with the Teamsters Union. Experts believe Yellow’s closure will impact the freight industry further. Yellow stock is down about 30% after the news but is still up more than 200% over the recent weeks due to the meme-craze rally.
Even Zoom is making its staff return to the office (2 min read)

Zoom is adopting a "structured hybrid approach," requiring employees near offices to be on-site two days a week. The company's decision aligns with the broader trend in the tech industry, as Google, Amazon, and Salesforce also call employees back to the office. However, this shift contradicts the previous remote work flexibility trend, leading to some worker resistance. Zoom itself has faced challenges due to declining demand post-pandemic, with its stock plunging since and only recovered about 3% this year, significantly lagging other tech stocks.
Funds & ETFs
Investors Wiped Out on Double, Triple Leveraged ETF Misuse (3 min read)

This article discusses a case where a group of investors lost around $2 million when their financial advisor placed their funds in high-risk double- and triple-leveraged ETFs. These ETFs can amplify returns but the same goes for the losses. The financial advisor, who matched these volatile investment vehicles with risk-averse clients, had breached suitability standards This case highlights the importance of proper assessment when evaluating investment products.
Options Traders Flood to QQQ During Tech Earnings Season (2 min read)

The Invesco QQQ ETF, which tracks the Nasdaq-100 index that includes tech giants like Apple, Microsoft, and Amazon, saw a surge in option bets during the tech earnings season last week. A record-high of 4.7 million contracts were traded in both speculative and hedging positions. The size of the options volume reflects a mix of investors’ risk appetite and caution, given the rally in tech stocks. While some tech giants like Amazon reported strong sales, others like Apple missed expectations, influencing stock movements beyond some investors’ anticipation.
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