Morning Brief: Berkshire buys Teva and Apple, dumps IBM
Thursday, February 15, 2018
What to watch today
Inflation is here. And right now, the stock market seems OK with it. On Wednesday, we learned that consumer prices rose more than expected in January, and on Thursday we’ll get another reading on price pressures in the economy from the January print on producer prices.
Economists expect that on a core basis — which excludes the more volatile costs of food and energy — producer prices were up 2% over last year in January. Producer prices tend to lead consumer prices as they reflect pricing pressures on the supply, rather than demand, side of the consumption chain.
Elsewhere on the economic data schedule Thursday investors will get readings on initial jobless claims, industrial production, and the February check on homebuilder sentiment. Notable earnings releases scheduled for Thursday include CBS (CBS), Consolidated Edison (ED), Zoetis (ZTS), and Shake Shack (SHAK).
Top news
Berkshire buys Teva, feels IBM blues as Apple becomes top investment: Warren Buffett’s Berkshire Hathaway Inc. on Wednesday disclosed a new stake in generic drugmaker Teva Pharmaceutical Industries Ltd. (TEVA) and said it bought more shares of Apple Inc. (AAPL), which surpassed Wells Fargo & Co. (WFC) as its largest common stock investment. Berkshire also nearly completed its yearlong exit from International Business Machines Corp. (IBM), selling more than 94% of what was left from an investment Buffett has admitted was not among his best. [Reuters]
Google’s Chrome begins an ad crackdown: On Thursday, Google (GOOG, GOOGL) will begin using its Chrome browser to eradicate ads it deems annoying or otherwise detrimental to users. It just so happens that many of Google’s own most lucrative ads will sail through its new filters. The move, which Google first floated back in June, is ostensibly aimed at making online advertising more tolerable by flagging sites that run annoying ads such as ones that auto-play video with sound. [Reuters]
Elliott Management cuts Alcoa stake, Soros exits: Paul Singer’s Elliott Management Corp. pared its stake in Alcoa Corp. (AA) by almost two-thirds last quarter and billionaire George Soros’s hedge fund exited. By the end of December, Elliott Management owned 2.9 million shares in Alcoa, compared with 8.3 million the previous three months, a regulatory filing showed. Elliott Management was the third-largest Alcoa shareholder as of the third quarter. Soros Fund Management LLC sold all of its remaining 123,787 stake in the aluminum producer in the fourth quarter, a separate filing showed. [Bloomberg]
Cisco tops estimates: Cisco Systems Inc. (CSCO) reported its first rise in quarterly revenue in more than two years and forecast upbeat current-quarter profit, as the network gear maker’s years-long efforts to transform into a software-focused company begins to pay off. Shares of the Dow component, which also benefited from growth in its switching business, jumped 7.1% to $45.09 in after-market trading on Wednesday. [Reuters]
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