HP Stock Surges as Warren Buffett's Berkshire Hathaway Takes 11% Stake
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Shares of HP surged 15%, or $5.15, to $40.06 after Warren Buffett’s Berkshire Hathaway disclosed in a filing Wednesday that it has built a stake of more than 11% in the computer-and-printer maker. The holding was worth more than $4.2 billion, based on HP’s closing price on Wednesday. Berkshire’s Class B shares ticked up 0.5%, or $1.93, to $346.51. After long expressing wariness about investing in tech, the 91-year-old Mr. Buffett has taken big positions in two other storied tech brands in recent years, starting with an ill-fated bet on International Business Machines Corp. before making a far more successful investment in Apple Inc. Berkshire began betting on IBM in 2011 but within a few years had reversed course and had sold out most of its stake by early 2018. Mr. Buffett’s colleagues first took a $1 billion toehold in Apple in 2016, and since then Berkshire has increased its stake, to nearly 5.6% as of the end of 2021. The Apple position was worth some $161 billion at the end of last year and is among Berkshire’s biggest holdings. The purchase makes Berkshire the single largest shareholder in HP. Before this, HP’s biggest investors were Vanguard Group and BlackRock Inc., with stakes of nearly 11% and slightly more than 10%, respectively, according to S&P Global Market Intelligence data.
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The Swiss stock market continues to impress within Europe due to its relative stability. The SMI market barometer rose by 0.4 per cent to 12,372 points on Thursday and was thus the leader amid the more relevant European indices. Among the 20 SMI stocks, there were 11 gainers and 9 losers. 39.79 (Wednesday: 44.26) million shares were traded. Once again, due to the current challenging environment with rising interest rates and the war in Ukraine, in particular defensive stocks stabilised, especially since some of them are still heavily weighted in the SMI. Novartis and Roche gained 1.0 per cent, while Alcon (+2.0 per cent), another share from the healthcare sector, topped the list. Swisscom gained 1.4 per cent; telecommunications companies, along with pharmaceuticals and utilities, are also considered to be less cyclical, i.e. relatively recession-resistant. Swiss Re ranked at the bottom with a minus of 1.1 per cent, only undercut by UBS (-1.3%).
European equity indices lost further ground on Thursday as investors anticipated accelerated monetary policy tightening in light of the latest Federal Reserve (Fed) and European Central Bank (ECB) meeting minutes. The Stoxx Europe 600 index fell 0.2% to 455 points. In Paris, the CAC 40 and SBF 120 lost 0.6% and 0.5%, respectively. The DAX 40 and the FTSE 100 each gave up 0.5%. Euronext (+1.1%) is trading at a sector valuation discount, although the company has a more virtuous revenue growth trajectory than its competitors, according to Credit Suisse, which began tracking the stock with an "outperform" recommendation and a price target of 96 euros. According to the Swiss bank, this discount could diminish as the integration of Borsa Italiana progresses, synergies materialise and Euronext deleverages. Edenred gained 1.5%. Oddo BHF raised its target price for the specialist in payment solutions in the world of work from 51 to 54 euros, while maintaining its "outperform" recommendation. Sanofi (+1.6%) announced the approval by the European Commission of its drug Dupixent (dupilumab) for the treatment of children aged six to 11 years with severe asthma with inflammatory signature type 2. Atlantia shares jumped 6.9% in Milan. Edizione, the Benetton family's holding company, confirmed on Thursday that it was in talks with US private equity firm Blackstone about a deal for the Italian infrastructure manager. British energy company Shell (-2.1% in London) warned that it would book between $4 billion and $5 billion of impairments in the first quarter related to its Russian operations.
U.S. stocks rose and the yield on the 10-year U.S. Treasury note hit a three-year high as investors digested the possibility of more aggressive monetary tightening by the Federal Reserve. Stocks, which had fallen earlier in the week, rallied Thursday afternoon after starting the day down. The Dow Jones Industrial Average added 87.06 points, or 0.25%, to close at 34583.57, the S&P 500 rose 19.06 points, or 0.4%, to 4500.21, and the Nasdaq Composite edged up 8.48 points, or 0.1%, to 13897.30. Before this week, the U.S. stock market had been in the midst of a brisk rally, helping indexes erase many of the losses notched in 2022. The rebound, which began in mid-March, seemed to defy issues including the war in Ukraine, rising Covid-19 cases in China and soaring inflation that threatens to worsen supply-chain snarls. Even after losing 2.2% in the previous two sessions, the S&P 500 was down just 6% for 2022, based on Wednesday’s closing prices, a comeback from its more than 12% loss at its low this year. On the economic front, fresh data Thursday showed that new applications for U.S. unemployment benefits last week fell to a near 54-year low. Banks are particularly sensitive to inflation and monetary policy; on Thursday, financials were among the S&P 500’s early losers but recovered ground late. The KBW Nasdaq Bank Index was down 0.7%, its seventh down session, matching its longest losing streak since 2018. Bank of America (-0.8%) fell for a ninth consecutive session. Twitter fell 5.4%, or $2.74, to $48.03 as investors continued to digest the implications of Tesla Chief Executive Elon Musk’s stake in the social-media company and his appointment to its board. Online retailer Flipkart, controlled by US Walmart (+1%), plans to go public in the US in 2023 instead of this year, and has raised its valuation target to a range of $60 billion to $70 billion from $50 billion, Reuters reported on Thursday. Pharmaceutical company Pfizer (+4.3%) announced on Thursday it would acquire unlisted biotech company ReViral for up to $525 million.
In Asia, major indexes closed with slight declines at the end of the week. The Nikkei-225 in Tokyo and the Kospi in Seoul turned marginally negative. The Shanghai Composite (-0.1%) and the Hang Seng Index (-0.6%) are also down. Auto stocks were slightly higher, despite data showing that China passenger car sales fell 15% on year in March due to Covid-19 lockdowns.
Yields on 10-year Treasury notes and 30-year Treasury bonds climbed to levels last seen in 2019 on Thursday, though rates were broadly mixed, as investors assessed Federal Reserve officials’ tentative plans to begin shrinking the central bank’s almost $9 trillion balance sheet. The 10-year US Treasury yield rose by another 5 basis points to 2.650%, following a 19 basis point jump in the last two sessions. The 2-year rate fell 2 basis points to 2.462%, which steepened the spread between 2- and 10-year yields to as much as 22 basis points.
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