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After standing on the doorstep for almost a week, the S&P 500 Index (SNPINDEX: ^ SPX) is back at an all time high. The index closed at 3,389.78 on August 18, up 7.8 points and surpassing the previous high, reached on February 19. This marks the fastest bearish rally in history, with the index recouping all of its losses in 126 trading days.
At the top of the index today was Amazon.com Inc (NASDAQ: AMZN), gaining 4% after the late release yesterday of information that he was seeking to acquire a minority stake Rackspace, the cloud services company known for its high quality customer service that often pairs with Amazon’s AWS offering. Amazon also just announced plans to invest $ 1.4 billion in rental and new office space. In other tech news, Oracle (NYSE: ORCL) would have entered the tender for North America from TikTok and certain other assets.
On the profit front, the retail giants Walmart (NYSE: WMT) and Home Depot (NYSE: HD) released its most recent quarterly results, showing huge growth in same-store sales. In other news, a closer look at Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) the filings show something surprising: Berkshire sold shares of 32 different companies in the first half of the year.
Image source: Getty Images.
Index fully recovered, most stocks still down
Today marks a big statistical and emotional moment, with the S&P 500 Index recouping all of its losses since the February high. However, of the 505 stocks in the index, 284 are still below their start-of-year prices. The influence of tech giants at the top supported the index. Amazon shares are up 72% year-to-date, while Apple gained 56% and Microsoft stocks are up 33%. The three combine for more than $ 5 trillion in market cap, pulling the index higher than the smaller laggards.
Is Oracle a player on TikTok auctions?
According to multiple media outlets, the database giant is said to be engaged with ByteDance, the owner of TikTok, and “is strongly considering” making an offer to acquire the video-sharing app. Oracle could offer up to $ 50 billion to buy TikTok businesses in North America, Australia and New Zealand, according to reports.
Whether the rumors have any merit remains to be seen, and there doesn’t appear to be a business reason for this deal to happen. A cynical observer might think that this automatically puts Oracle in the lead. After all, big tech companies – including Oracle – have already overpaid for daring acquisitions that didn’t match or create value.
Walmart and Home Depot win coronavirus lockdown
Millions of Americans were stranded in their homes in the second quarter, and two of the nation’s largest retailers became huge winners. Walmart said same-store sales rose 9.3%, with online sales nearly doubling during the period. The mega-retailer, which offers almost everything under one roof, benefited from a one-stop shop: Transactions fell 14%, but the average ticket rose 27% as people stocked up on items and pulled out get the most out of every shopping visit.
Home Depot sales rose again. The home improvement giant said comps rose 25%, leading to a 27% increase in earnings per share, as millions of homeowners took advantage of the foreclosure to complete home improvement projects.
Berkshire sold shares in the first half of 2020
Berkshire Hathaway CEO Warren Buffett has long been optimistic about American business, and his track record of success over the past half century shows us how rewarding that optimism can be. However, Berkshire shares in the first half of 2020 did not exactly match Buffett’s usual sentiment.
As my colleague Sean Williams recently reported, documents filed by Berkshire with the SEC revealed that the company had sold shares of 32 separate companies in the first half of the year. This included the complete sale of its stake in nine companies, double-digit cuts in five others and a more modest reduction of its stake in 18 others.
Did Uncle Warren Miss The Coronavirus Crash? In a very real way, yes, it seems to have been. However, Buffett clearly still sees an opportunity. Another filing revealed that more recently Berkshire has purchased even more Bank of America (NYSE: BAC) actions. BofA is now Berkshire’s second-largest holding company, worth more than $ 25 billion, and controls around 12% of the bank’s shares.
Has Buffett lost touch? Don’t give up so quickly. Berkshire’s best investments during the global financial crisis came in 2010, more than a year after stocks hit their lowest point.
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