Premarket action on Tuesday had the three major U.S. indexes trading mixed. The Dow Jones industrials were down 0.26% and the S&P 500 down 0.11%, while the Nasdaq Composite was 0.01% higher.
On Tuesday, the World Health Organization (WHO) issued a new “conditional” guideline recommending that people not use nonsugar sweeteners to control their weight or to reduce the risk of non-communicable diseases. The advice follows a review of the available evidence and also suggests that non-sugar sweeteners may produce “undesirable effects from long-term use … such as an increased risk of type 2 diabetes, cardiovascular diseases, and mortality in adults.”
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The recommendation is conditional, meaning that policy decisions based on the recommendation “may require substantive discussion in specific country contests.” For more details related to why non-sugar sweeteners are not effective for weight loss and how sugar producers reacted (pretty much as you would expect), see this article in FoodNavigator-USA.
As Congress is in the process of writing and passing a new Farm Bill, the story of whether the federal government subsidizes sugar producers will get its quadrennial 15 minutes in the news. Here is how the U.S. Department of Agriculture describes the federal government’s support of sugar producers. The words “subsidy” and “sweetener” do not appear in the USDA description.
Speaking of sugar, the late Steve Jobs once told John Sculley, then the CEO at Pepsi and whom Jobs was trying to lure to Apple Inc. (NASDAQ: AAPL), “Do you want to sell sugar water for the rest of your life or come with me and change the world?” Sculley took the job and later forced Steve Jobs out of the company he had founded with Steve Wozniak. Sculley ran Apple between 1983 and 1993 before he, too, was kicked out. Two CEOs later, Jobs returned to Apple in 1997.
The rest, as they say, is history. On Tuesday, Apple’s market cap surpassed the combined market cap of companies included in the Russell 2000 index.
24/7 Wall St.Apple $AAPL is back to being bigger than all ~2,000 small-caps in the Russell 2,000. The last time it happened, it didn’t last long. pic.twitter.com/T6e5VKc5iF
— Bespoke (@bespokeinvest) May 14, 2023
Tuesday was the deadline for hedge funds, private equity funds and other large investors to file their Form 13-Fs with the Securities and Exchange Commission. These forms list ownership and changes in ownership of equities in the various funds’ portfolios. Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-B) gets a lot of attention, but other fund managers also come in for scrutiny.
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According to the filing, as of the end of March, Buffett no longer owns shares of Bank of New York Mellon, U.S. Bancorp, Taiwan Semiconductor or RH. He opened a new position in Capital One Financial with a purchase of some $900 million in the bank’s stock.
Due to a change in the way Buffett reported holdings of its General Re insurance unit, Berkshire Hathaway’s positions in Apple, BofA, Chevron and HP appear to be higher but are, in fact, unchanged from the previous quarter. Apple stock now accounts for nearly 45% of Berkshire’s portfolio. Sugar, indeed. Berkshire Hathaway’s portfolio is valued at around $325.1 billion.
Dan Loeb’s Third Point opened a new position in Alphabet with the purchase of 4.75 million shares for around $473 million. Alphabet is now the fifth largest holding in Third Point’s portfolio. Loeb also opened new positions in Salesforce, HCA, Alibaba, Micron and AMD, among others. Third Point closed its positions in 11 companies, including Disney, TJX and SentinelOne. The fund has $6.1 billion in assets under management (AUM). Its largest holding (about 15.7% of the portfolio) is Pacific Gas & Electric.
Tiger Global has $10.99 billion in AUM and added to its holdings in Alphabet (up about 3.9% to 7.9% of the fund’s total), Meta Platforms (up 2.7% to 14.4% of the portfolio) and Intuit (up 1.8% to 1.8% of the portfolio total). Tiger’s biggest reductions came in its holdings of JD.com (down about 5.4% to 9.6% of the portfolio total) and Snowflake (down 1.89% to 2.6% of the portfolio).
Fintel maintains an up-to-date list of the changes to fund holdings.
Here is a look at how the markets fared on Monday.
Six of 11 market sectors closed higher on Monday. Materials (0.85%) and financials (0.82%) had the day’s largest gains. Utilities (−1.24%) and consumer staples (−0.27%) posted the day’s worst losses. The Dow closed up 0.14%, the S&P 500 up 0.30% and the Nasdaq up 0.66% on Monday.
Two-year Treasuries added one basis point to end Monday at 3.99%, and 10-year notes also rose by four basis points to close at 3.50%. In Tuesday’s premarket, two-year notes were trading at around 3.97% and 10-year notes at about 3.47%.
Before U.S. markets open on Tuesday, the U.S. Census Bureau will release its April report on retail sales. Economists are looking for an increase of 0.7% for the total index and 0.3% for the index excluding auto sales. In March, the total index declined by 1% and the index excluding auto sales dipped by 0.8%.
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