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Daily Scoop

Buffett’s Successor

By Wed, May 5, 2021

Hey Scoopers,

After Fed authorities suggested a higher interest rate soon, the Nasdaq index declined to log its worst session since March. — More on that in the “Overall Market” section.

Beyond the overall market, a biotech company’s progress into its oral COVID-19 vaccine raised confidence among investors. Meanwhile, a social media company can’t change analysts’ minds. — More on that in the “What’s Up?” and “What’s Down?” sections.

By the way, do you think Warren Buffett made the right decision? — More on that in the “Water Cooler” section.

But, first, here is a recap of what happened in the market yesterday:

Market Recap

  • U.S. markets: The stock market ended mixed on Thursday. Scroll down to the “Overall Market” section to read more.
  • Cryptocurrency: Bitcoin‘s price stayed at $54K per coin.

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Market in the Red

The stock market ended mainly in the red zone on Thursday.

After the markets closed yesterday, the Nasdaq index faced its worst session since March. The index sharply decreased 1.88%, following Treasury Secretary Janet Yellen’s statements about a possible increase in interest rates. The Secretary said that interest rates could rise to prevent an economic overheating as the economy recovers. Along with the Nasdaq index’s dip, the S&P 500 also logged negative results.

One More Vaccine

So, what happened?

Shares of Vaxart (Ticker: VXRT) were up by more than 9% on Thursday. Although not widely known in the stock market, the biotech company is in the race to develop an oral coronavirus vaccine. Oral vaccines’ advantages include cheaper mass immunization costs and more accessible transportations. Vaxart’s phase study showed the vaccine is potentially protective against not just the COVID-19 but also a broad array of coronavirus-related illnesses. It seems that investors are confident that the company will get approval for its oral vaccine.

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Delayed Delivery

So what happened?

Shares of Snap (Ticker: SNAP) were down by more than 7% on Tuesday. The recent growth stock weakness might be affecting the social media’s stock. Moreover, on Tuesday, the Citi analyst Jason Bazinet increased its price target on Snap but kept a sell rating on the stock. Although Snap reported positive earnings results, investors decided to adhere to analysts’ positions.

Buffett’s Successor

So what happened?

Berkshire Hathaway (Ticker: BRK.B) decided its next CEO.

After more than 50 years, Warren Buffett pointed to Greg Abel as the next Chief Executive Officer. Although the markets don’t expect Abel to become the CEO immediately, the choice puts an end to one of the biggest succession debates. Since 2018, Mr. Abel has worked as Berkshire’s vice-chairman under the mission to oversee the company’s non-insurance business. Despite becoming the vice-chairman only in 2018, Abel is famous for having the same approach as Buffett. Answers questions, helps to allocate resources, and supports other CEOs but never tells them how to control their companies. Therefore, Berkshire’s executives expect Abel to keep the Buffett-like approach as he becomes the CEO in the future. Furthermore, Buffett said that Abel’s age was determinant as the billionaire was seeking someone to stay in command of Berkshire for at least ten years.

It seems that although Berkshire’s CEO might change, its policies would not.

If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.

About the Author

Felipe Nebesnyj is an Economics student who is passionate about the stock market and investing in the market. Originally from Brazil, he is working and studying in the U.S. and started learning about and researching the stock market at 16. Before joining Stock Card, Felipe worked on multiple stock market research projects that gave him the necessary knowledge and confidence to put into his stock market analyst career at Stock Card. Last but not least, he is an excellent violinist and enjoys video games.