Buffett Allays Fears of Bank Runs, But Warns of Headwinds for Commercial Real Estate

Highlights 

• Berkshire Hathaway held its annual meeting over the weekend. 
• Warren Buffett revealed that the slowing economy is hurting earnings. 
• Berkshire Hathaway is not targeting Occidental Petroleum in an M&A deal. 

Berkshire Hathaway held its highly anticipated annual shareholder meeting over the weekend. Chairperson Warren Buffett provided some calm to an otherwise tumultuous market environment but also offered a sobering outlook.

He noted that the slowing economy is making a dent in the year-over-year earnings performance of his companies. Buffett also warned that commercial real estate could continue to face headwinds due to higher borrowing rates.

And while banks might not be out of the woods yet, he assured investors that customer deposits are not at risk despite the bank runs that have rocked the regional banking sector. Last week, bank stocks including PacWest ended on a high note in the midst of major volatility despite finishing lower for the week.  

M&A Rumors Debunked

Buffett also addressed scuttlebutt that his holding company, Berkshire Hathaway, was interested in acquiring oil major Occidental Petroleum. He cleared things up, saying that his company “wouldn’t know what to do with it.” 

Besides, he’s content with the current management team at the oil major. Nevertheless, his company maintains a major stake in Occidental of over 23%. 

Buffett on the USD 

While there has been a trend of emerging markets moving away from the U.S. dollar as their reserve currency, Buffett isn’t losing any sleep over it. He does not expect the USD to lose its status as the world’s reserve currency in the near future, pointing to a lack of other viable options. 

Buffett on Tech 

Buffett’s never been too excited about technology, and it shows in his take on artificial intelligence. While he doesn’t ignore the rise of robotics in society, he remains “skeptical of some of the hype in AI.” 

Stocks Headed Into the New Week 

Stocks finished last week on a high note thanks to a better-than-expected jobs report. Tech giant Apple sparked a shift in the market mood thanks to a better-than-expected earnings report, sending the S&P 500 higher.

This week companies like PayPal and Occidental Petroleum are on deck to report their latest quarterly results.