Breakfast News: Berkshire’s Buys

• Focus on B2C: Two notable additions for the quarter include a $550 million stake in Domino’s Pizza (DPZ 0.44%) and $152 million in Pool Corp (POOL -0.97%). The business sold Floor & Decor (FND 1.10%) and cut from positions in stocks including Ulta Beauty (ULTA -3.07%) and Capital One (COF -0.96%).
• The Big Short is actually long: Burry’s investment firm focused on doubling down on its exposure to China, increasing existing holdings in Alibaba (BABA -0.94%), JD.com (JD -0.74%), and Baidu (BIDU -1.54%)

Stock markets fell and commodities including gold followed suit after Fed Chair Powell commented that the central bank was not in a rush to cut interest rates thanks to the resilient economy.

• “The economy is not sending any signals that we need to be in a hurry to lower rates”: In a speech to business leaders, Powell struck an upbeat tone on the state of the labor market, but flagged up that the job on lowering inflation isn’t done yet.
• Losing some shine: Gold prices have fallen for six days straight and is set for the worst weekly performance since June 2021. The safe-haven metal tends to perform during periods of high uncertainty or concern.

• A key year for transformation: Revenue of $22.6 billion was up 6% versus prior year, with adjusted earnings of $1.14 per share jumping 39% from Q4 2023. The key direct-to-consumer (DTC) streaming business posted another profitable quarter, with operating income of $321 million.
• Optimism around further gains: The company provided detailed guidance for 2025, with high single-digit adjusted earnings per share (EPS) growth expected. Management is forecasting for the DTC division to increase operating income by $875 million for the year.

• A fourth straight month of growth: Even though this would represent a slight slowing of pace from the 0.4% reading from last month, any figure above 0% would show consumer demand and validate Powell’s stance on the economy.
• Sensitive to China: Alibaba is due to report ahead of the opening bell, with revenue expected to rise by 5% to $33.27 billion and EPS of $2.07, a slight fall from the $2.17 a year ago.