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버핏의 대규모 주식 매도와 3,250억 달러 현금 보유는 주식이 과대평가됐다는 신호로 해석됨. 반도체지수(SOX)와 S&P500의 비정상적 괴리는 7월 CPI 발표 이후 시작됐고, 엔캐리 트레이드 청산과 경기 사이클 우려가 반영된 것으로 봄. 독일 DAX는 S&P500과 계속 동조하는 반면 프랑스 CAC는 거시 민감도가 높아져 괴리가 발생. 전반적으로 미국 경기 및 글로벌 경기 둔화 신호가 누적되고 있다는 주장.
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Warren Buffett has been selling huge positions in his Equity portfolio whether Bank of America or apple Buffett's Berkshire has been dumping shares and raising massive amounts of cash so understandably the whole investment World wants to know why that might be one glaring Divergence among two key stock market indexes seems to have that answer now I don't have much use for stocks because they're not fundamental or mostly not fundamental stocks go up because people buy them and then later on someone supplies a narrative as to why that was the simple truth is that Americans in particular put most of their savings and equities so they go up so long as Americans put their Savings in them they don't tell us anything about economic circumstances especially the last decade we get even less from the stock market where it comes to liquidity this isn't hard to document just look at the ridiculously strong correlations between indexes and places that otherwise have nothing else in common why is Germany's Dax a near perfect match for the S&P 500 when Germany has been mired in recession for 2 years already and we'll come back to that one there are times though when you might want to pay closer attention to stocks Warren Buffett selling as much as he has is one of those another is when two key indexes that were highly related and traded together like they were twins all of the sudden they diverge and when one of those two just so happens to have a track record for being a cyclical indicator all the more reason to consider the possibility of the signal and when that Divergence traces back to a time period that shows up in a whole lot of other markets well outside the NYSC or Philadelphia it starts to tell a compelling story or at least add another chapter to one that is already being written are these stock market signals trying to tell us something very important about where the US and global economy are heading or where they may already be given the amount of sh shares that Warren Buffett is selling we better hope not and Warren Buffett and birkshire haway selling has gotten a lot of attention because it is absolutely enormous according to CNBC earlier this month Berkshire Hathway's monstrous cash pile topped $300 billion in the third quarter as Warden Buffett continued his stock selling spree and held back from repurchasing shares that's a big one too the Omaha Nebraska based conglomerate saw its cash Fortress swell to a record 3 25.2 billion by the end of September up from 276.50 iCal types of consumer and household debt credit cards auto loans they're telling us something about the economy too they're telling us something that happens and pertains to Bank of America now Warren Buffett ever since the summertime has been selling loads of shares in Bank of America in particular he's also been selling quite a lot of Apple Burkshire dumped about a quarter of its gigantic Apple Stak in the third quarter making the fourth consecutive quarter that has downsized this bet meanwhile since mid July Berkshire has reaped more than 10 billion from offloading its longtime Bank of America investment I don't think that is just coincidence we have a lot of things going back to the middle of July I already talked about the US CPI report that kicked off the reversal in the carry trade or at least kicked off the more violent stage of that reversal because the US CPI the marching band full of red flags held a lot of warning signs about where the US economic condition was and where it was likely to head not toward a soft Landing so it's understandable that these various markets including the the stock market too at least parts of it were picking up on the same signals whether it's the US CPI data itself or not the underlying conditions have shown up in so many places including the dollar exchange value as I've been talking about in other recent videos but another important aspect here back to the CNBC article birkshire did didn't repurchase any company shares During the period amid the selling spree repurchase activity had already slowed down earlier in the year as Berkshire shares outperformed the broader Market to hit record highs and I believe this is the first time in quite some time that Buffett hasn't bought back his own shares suggesting again that what's going on here is that Burkshire Buffett the entire organization views Equity prices in general as being overvalued now there are explanations as we go back to the CNBC article one more time it potentially has to do with capital gains taxes Buffett has hinted this year that he was selling some stock Holdings on the notion that tax rates on capital gains would have to be raised at some point to plug the growing deficit and Buffett's probably not wrong in that regard because at some point some Administration somewhere at some time is going to have to deal with the mismatch between revenues and expenses from the federal government not about the treasury market blowing up just PL Common Sense the issue with the debt is how much of a drag government spending is inefficient as wasteful as it is on the overall economy and it would be prudent to try to at least generate revenue from some place including raising capital gains that's certainly on the menu maybe not for a trump Administration but at some point that's going to come back but I don't think that's what Buffett is actually doing that wouldn't be enough for him to completely unload as much stock as he has to raise more than $325 billion in cash cash and then just hold it that's the other part of this not only is he not buying back his shares with that cash he's also just sitting there on it as if he was saying in fact he did say at the May shareholder meeting for Brookshire haway Buffett was quoted as saying I don't think anybody sitting at this table has any idea of how to use it effectively talking about the cash pile and therefore we don't use it we only swing at pitches we like so he's basically telling you stocks are in his estimation overvalued in general we've seen that with the with Apple shares in particular as well as Bank of a Bank of America is a big one because of how how much that's tied to the credit cycle and credit conditions in the real economy but also Apple according to the 13f filings Apple Berkshire haway held 905 million shares as of the fourth quarter last year that was paired back to 789 million in the first quarter then 400 million in the second quarter and 300 million as of the latest filing so apple as berkshire's biggest holding has been paired back an enormous amount here in 2024 in 2024 we continue to get all of these signals that the downside of the supply shock is indeed a downside of the supply shock and it is getting worse not better and where would we see that downside of the supply shock getting worse but in technology in semiconductors stuff related to Apple and Apple products highly cyclical semiconductors and that's the Divergence I was talking about in the introduction of this video we look at the Philadelphia Stock Exchange semiconductor index and the S&P 500 those two were practically twins for years goes back further than the last couple years but you go 2021 2022 2023 and the first 7 and 1 half months of 2024 the socks as a known and the S&P 500 were very tightly correlated which as I also mentioned in the introduction is something you that shouldn't happen the only reason it does happen is because most of the time stocks aren't really trading on fundamentals they're trading on other factors including just Americans saving more money in equities the semiconductor index in the S&P 500 should not be this this highly correlated and they were highly correlated up until that point when the CPI report report came out in the middle of July so July 11th the semiconductor index sells off because we see a lot of signals around the world this maybe having a little bit of a Japan carry trade flavor on top of it US economic risks were Rising were perceived to be rising and they were perceived in this highly cyclical index July 16th the S&P finally joins in and the two sell off pretty substantially late into July and early August the Yen carry trade explod exposion but then ever since early August the S&P 500 has come roaring back there was first of all a smaller decline during the cell but has come absolutely roaring back new record highs and all of that whereas the Philadelphia semiconductor index has traded more like the nikay in Asia essentially going sideways to lower since around middle of July so it's up off the lows in August but it really hasn't gone much of anywhere meaning this Divergence now lasts a total of four plus months this is a critical Divergence because the semiconductor index and the semiconductor business overall is a well-known cyclical indication here's Franklin Templeton the semiconductor industry has long been a poster child of cyclicality historically industry revenues have been 90 plus% correlated to Global gross domestic product growth why would value investors want to own these stocks late in the cycle and what the stocks index is saying said maybe this is late in the cycle because think about it the semiconductor business has been an atrocious business over the last several years suddenly with there's some nent signs that the business may be picking up maybe they're just false signals now all of a sudden in July the semiconductor index diverges from the S&P find why was it in July why wasn't it back in 2022 when the cyclical downswing in specifically semiconductors was at its most obvious what changed in July summertime stumble summertime time for recession to here's another one deoe the infamously cyclical semiconductor industry had a challenging year in 2023 the seventh downturn since 1990 with sales expected to be down 99.4% for the year but that's not as bad as was expected in the spring before a relatively strong second and third quarter and the previous forecast had been 515 billion now 2024 was predicted to see global sales of around 588 billion so things were looking up in the semiconductor business at least from that perspective and then something happened in July the semiconductor index was happy to trade along with the S&P 500 no fundamentals don't care about anything then suddenly in July now the semiconductor index is with the Nik and other indications of cyclicality swap spread for example it tells you that something has shifted even the stock market or parts of the stock market has been able to pick up on I mentioned the Nik the Nik index well that one hit a record high in early March and then it backed off I mean there was rate height angst from the bank of Japan and as we know stock market investors are convinced that higher rates are somehow bad for stocks and it becomes a self-fulfilling prophecy but it was only enough to back off the N index for a couple different couple weeks there it rebounded and then June into July early part of July another record high in the ek2 25 on July 11th the US CPI sudden League Harry Traders and everything else that goes along with them and and the the consequences of the carry trade reversal seen from the perspective of the Nik index so we have the N down big throughout July just like the semiconductor index that crashes in early August obviously it's the big one that got most people's attention then it crashed again in early September when we saw repo fails jump the three-month Bill spread the three-month Bill rate in Japanese government Bond markets that one dropped um swap spreads everything in early September suggesting a another sharp unwinding of the carry trade and we see that also hit the Philadelphia semiconductor index as well but it got back to 40,000 the n on September 27th but it's been sideways to lower ever since then just like the Philadelphia semiconductor index so it's a similar pattern to the socks which means that the socks went from Trading and corresponding to the S&P 500 to suddenly trading on Yen carry trade after effects and byproducts when the Yen carry trade itself is being unwind due to concerns about the cycle in the US and what that what the downturn of that cycle might do to the rest of the global economy there's also another Divergence that's shown up too that we probably should note here that's between Germany and France so you have the German Dax index and in the in the French CAC index big cap stock indexes for both countries and they had been just like the socks and the S&P 500 and in fact with the S&P 500 both Germany's index and France's index they had all traded together in basically lock step fashion up until around this one the middle of May suddenly the French stock index has a much worse time performing than its German counterpart now a lot of that could be chalked up to the elections that happened around that part of the that part of the calendar though not necessarily explaining the this Divergence that we see developing because French elections the the Parliamentary election that really kicked every everything off went the same in France as it did in Germany now the French responded to it with a snap presidential election that didn't go quite the way that maybe the French President macron wanted it but either way the undercurrent of electoral dissatisfaction was there in Germany as well as France yet it only traded in French stocks not German and the German Dax index has corresponded and continue to correlate with the S&P 500 so that suggests a couple different things maybe there is really the election difference that explains the Divergence or what it really suggests is that the French index is more economically and macro sensitive suddenly just like the socks index is in Philadelphia whereas the German Dex index and the S&P 500 are they're more for show they're more for just where people Park their money because in Broad index is because it's perceived to be the safest and best opportunity out there so the CAC index like the socks index picking up more macro focused fundamental signals and therefore greatly and noticeably diverging from what had been dependable correlations for years and at the the same time as all this is happening Warren Buffett is escalating his shares and refusing to buy other alternative Investments or to reinvest th the cash proceeds into other investments from Warren Buffett's perspective or what we know of Warren Buffett it seems the most obvious explanation is yeah tax gains or ta capital gains taxes and that type of thing but the most obvious explanation is share prices are overvalued overvalued because of what reason though is it just because share prices have gotten too far ahead and the econom is generally fine and everybody's just a little bit too excited over this year soft Landing lower interest rates and all that or are we seeing overvalued because economic fundamentals are shifting in the wrong direction that would certainly go to what we know of Bank of America what Bank of America has reported what the Federal Reserve reported as far as rising delinquencies which all tie back to the same cyclical processes so buffets overvalued stocks May maybe not just about stocks going too far ahead maybe also he's worried the business cycle is shifted too that's certainly the verdict what appears to be the verdict from the Philadelphia semiconductor index rather than having fewer signals fewer negative signals we keep getting more including those now from the stock market summertime was indeed maybe the time for recession that's what we keep coming back to over and over again and in more and more places the downside of the supply shock isn't just continuing it may have actually accelerated the downside to such an extent we're seeing it in stocks as well maybe that's what Warren Buffett knows maybe that's what he's doing maybe that's why we see these key divergences and it's just why those divergences are correlating strongly with everything else but what about consumer spending in the goods economy what are they saying about the cyclical prospects in the US well I talked about that with Steve and the video link below as always thank you very much for joining me huge thank you to your University members and subscribers and until next time take care
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