Nearly $2 Trillion Wiped Out from Stock

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Nearly $2 Trillion Wiped Out from Stock Market as Fears of Global Recession Spark Panic Among Investors — Warren Buffett Dumped Nearly Half of Apple Stake and Holds $277 Billion in Cash Reserve
By Jim Hᴏft Aug. 5, 2024

The first Monday in August has arrived with panic sweeping through the finance sector, as nearly $2 trillion was wiped out of the S&P 500 at market open. Investor anxiety over a looming global recession triggered a selloff that sent U.S. stock futures plummeting and raised urgent questions about the Biden’s administration’s economic policies.

As trading began on August 5th, a staggering $1.93 trillion was wiped out from the S&P 500, with stock index futures taking a massive hit. S&P 500 futures fell more than 4.4%, while Dow futures were down 3%, translating to a loss of 1,212 points. The Nasdaq 100 futures fared even worse, plummeting over 5.2%, according to Watcher.guru.



The Nasdaq has never been down by that amount in its history.



In a striking move, investor Warren Buffett’s Berkshire Hathaway dumped nearly half of its gigantic Apple stake last quarter, according to CNBC.

Buffett’s recent actions have raised eyebrows across Wall Street; the 93-year-old investment titan has been on a massive selling spree, offloading over 75 billion** in equities during the second quarter alone. This aggressive liquidation has raised Berkshire’s cash reserves to an unprecedented **277 billion, an all-time high for the conglomerate. Notably, Buffett also began selling his second-largest holding, Bank of America, in July.



According to Quartz:

Warren Buffett’s Berkshire Hathaway has $234.6 billion worth of short-term investments in U.S. Treasury bills, the massive conglomerate’s second-quarter earnings report Saturday showed.

Buffett has always been a fan of U.S. Treasury bills (also known as T-bills). At the annual Berkshire conference in May, the 93-year-old investor called them “the safest investment there is.”

Treasury bills are short-term securities issued — and backed — by the U.S. government. They are issued in maturities ranging from four weeks to 52 weeks, at a minimum purchase amount of $100. The bills then increase in value to pay off their entire face value at maturity.

With Berkshire buying up $229.5 billion in T-bills and fixed maturity securities in the first six months of the year, it surpassed the Federal Reserve in its investment into the securities. The Federal Reserve reported last week that it holds $195.3 billion in the bills.



Elon Musk weighed in on Buffett’s strategy, stating, “He [Buffett] is clearly expecting a correction of some kind or otherwise simply cannot see better investments than Treasury bills.”“The Fed needs to drop rates. They have been foolish not to have done so already,” he added.



Meanwhile, Joe Biden’s senior economic advisor, Gene Sperling, resigned on Monday after stocks tumbled around the world.

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