Research Market strategy
By Swissquote Analysts
Published on 15.11.2022
Morning news

Berkshire Hathaway Bought $9 Billion in Stock in Third Quarter

Topic of the day

The stock market has had a rough year. That has made it irresistible to Warren Buffett ‘s Berkshire Hathaway Inc. Berkshire spent roughly $9 billion on the stock market in the third quarter, with roughly a third of that money going toward energy companies Occidental Petroleum Corp. and Chevron Corp. , according to filings. Overall, Berkshire spent $66 billion buying stocks in the first nine months of the year. That is more than 13 times its spending over the same period in 2021. Berkshire wound up seizing narrow windows of opportunity to buy energy stocks when they were trading down from recent highs - a move that has proved prescient, given how energy stocks have soared once again. For instance, Occidental Petroleum climbed to $75.26 a share in August. At the time, that marked its highest price for the year. Over the following weeks, the stock market tumbled. Berkshire waited. Then, in the final week of September, Berkshire bought nearly 6 million more Occidental shares at prices ranging from $57.91 to $61.38, according to an SEC filing. The timing could hardly have been better. Occidental stocks have risen above $70 a share once again. Over the course of the third quarter, Berkshire also added to its stake in Chevron. Energy stocks have soared in 2022, thanks to Russia’s invasion of Ukraine sending oil prices higher.

Swiss stocks

The Swiss stock market ended Monday's trading session with losses. The index was burdened mainly by the heavyweight Roche. The SMI lost 1.1 per cent to 11,000 points. Among the 20 SMI stocks, there were 12 price losers and 8 price winners. 38.08 (previously: 61.34) million shares were traded. The pharmaceutical company Roche failed to meet the primary requirements in a study on its Alzheimer's candidate Gantenerumab; a slowing of the clinical course of the disease was not achieved. The share lost 4.0 per cent. Rival Novartis fell 0.3 per cent. The share of the third heavyweight, Nestle, also failed to catch up with the SMI. The share closed barely unchanged. Sonova edged 1.4 per cent lower after presenting figures for the first half of the 2022/23 financial year. The hearing aid manufacturer increased sales but earned less. The company now expects to reach the lower end of its forecast growth range. Among banking stocks, Credit Suisse advanced 0.5 per cent, while UBS slipped 0.7 per cent. Insurance stocks held up well. Zurich Insurance increased by 0.7 per cent while Swiss Life improved by around 1.0 per cent.

International markets


European stocks displayed gains on Monday, helped by China's partial easing measures and despite a warning from a Federal Reserve official that the U.S. inflation fight had a 'ways to go.'The DAX added 0.6 per cent to 14,313 points, the Euro-Stoxx-50 rose by 0.5 per cent to 3,888 points. Among the individual stocks, Morphosys was in the spotlight. The share slumped by 29.2 per cent. According to Morphosys partner Roche, phase 3 trials of an Alzheimer's drug failed to meet their primary endpoints and a slowdown in the clinical course of the disease was not achieved. Infineon was the day's gainer of the DAX, with premiums of 7.8 per cent. According to Citigroup, the chip manufacturer's financial results exceeded market expectations across virtually all key figures. The management also predicts strong growth opportunities. Bayer went up by 2.3 per cent. Reference was made to a new ruling by a US jury in the US state of Missouri on Friday. There, a lawsuit was rejected that the weedkiller Roundup caused the plaintiff's cancer. Merck gained 4.4 per cent after positive analyst comments. Profit-taking set in at Adidas (-2.8%) after the recent rally. Shares in automotive supplier Vitesco were down 3.0 per cent. The company's third quarter operating profit was slightly disappointing, Adesso rose 9.4 per cent after financial results. Rheinmetall added 6.7 per cent. The MDAX-listed group is buying Spanish ammunition manufacturer Expal Systems amounting to 1.2 billion euros. Biontech is acquiring a production facility in Singapore from Novartis. The facility is to serve as Biontech's regional headquarters and become the company's first mRNA production facility in Singapore. The share price subsequently increased by 4.3 per cent on Xetra.

United States

U.S. stocks finished lower Monday after last week’s big rally, while investors digested fresh comments from Federal Reserve officials about the outlook for further interest-rate increases. The S&P 500 fell 35.68 points, or 0.9%, to 3957.25, and the Nasdaq Composite sank 127.11 points, or 1.1%, to 11196.22. The Dow Jones Industrial Average shed 211.16 points, or 0.6%, to 33536.70. In corporate news, Tesla shares declined $5.02, or 2.6%, to $190.95. Chief Executive Elon Musk said he has too much work to juggle after the Twitter takeover and that he was running Tesla’s operations “with great difficulty.” Hasbro fell $6.25, or 9.9%, to $57.16, its largest percentage decrease since March 2020. The maker of Monopoly board games and My Little Pony dolls fell after Bank of America analysts double downgraded the rating to underperform from buy. Amazon (-2.3%) is preparing to lay off thousands of people this week, particularly in its administrative departments, due to the deteriorating economic situation, a source close to the company said. Tyson Foods (-3.8%) reported better-than-expected revenue in the quarter, helped by higher prices and sales volumes. Sales rose 7.2% to $13.74bn, against a consensus of $13.49bn. Cosmetics group Estée Lauder (-3.2%) is close to buying fashion brand Tom Ford for $2.8bn, including debt, the Financial Times reported on Saturday. Elon Musk, the chief executive of electric vehicle manufacturer Tesla (-2.7%), believes he has too much work to do since buying the social network Twitter for $44 billion. In addition, a lawsuit over Elon Musk's compensation will open Monday in a Delaware court. Cryptocurrency prices generally stabilized after last week’s bankruptcy filing by FTX. Bitcoin traded at $16,392.99 at 5 p.m. ET. Ether, the second most-popular cryptocurrency, inched up to trade at $1,226.43.


In Asia, major indexes broadly closed with gains on Tuesday. China’s benchmark Shanghai Composite edged up 1.5 percent, while Hong Kong’s Hang Seng added 4 percent. Sands China rose by 7 per cent and Galaxy Entertainment by 3.8 per cent. Japan’s Nikkei 225 is holding its ground well at 28,013 points. Mitsubishi UFJ Financial is up 2.6 per cent after its second quarter net profit beat consensus estimates. Nippon Paint climbs 3.9 per cent after third-quarter figures. The Kospi (-0.1 per cent) in South Korea hovers around the previous day's close.


Two- and 10-year U.S. government debt yields advanced by the most in over a week on Monday, following weekend comments by Federal Reserve Governor Christopher Waller who said financial markets seem to have “gotten way” ahead of themselves over October’s consumer price index. The 10-year Treasury note recovered 4 basis points to 3.871%, while the 2-year rate, which is more sensitive to the Fed's short-term rate policy, climbed 8 basis points to 4.406%.


JPM lifts Richemont target to CHF 160 (155) - Overweight
Baader cuts PSP Swiss Property target to CHF 120 (125) - Add
CS starts Swiss Life with Neutral and target CHF 505

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