Market highlights: Tech earnings, investor concerns, Berkshire's moves




A handful of results, and lots of annual meetings, are scheduled for the US and European markets this week.

Major companies due to report this week include tech giants Oracle, Broadcom, and Adobe, as well as major grocery chain Kroger, which is attempting to merge with rival Albertsons. However, strong opposition from consumer groups and regulators indicates that this merger may not proceed.

All three major Wall Street averages notched a winning week last week. The Dow posted a 0.29% gain, while the S&P 500 added nearly 1.32%, and the Nasdaq advanced 2.38% (thanks to Nvidia and its final week advance of more than 6% before its 10-for-1 split completed late last week).

Non-farm payrolls rose by 272,000 in May, surpassing the market's expectations ranging from 178,000 to 190,000, as well as April’s gain of 175,000 (revised down to 165,000). Average hourly wages increased by 0.4% last month and rose by 4.1% from a year ago. However, despite the job gains, the unemployment rate rounded up to 4% (or 3.96%).

The positive jobs news caused the yield on the benchmark 10-year Treasury to increase by more than 15 basis points to 4.439%, up from 4.428% on Thursday. The US dollar rose, pushing the Aussie back under 66 US cents to 65.90.

After three stocks reached over $US3 trillion in value midway through last week - Microsoft, Nvidia, and Apple - at Friday’s close, there were only two: Microsoft ($US3.15 trillion) and Apple ($US3.02 trillion). Despite its strength, Nvidia ended the week at $US2.97 trillion.

This trio is making more investors nervous. For the first time dating back to at least 2000, the three account for more than 20% of the value of the S&P 500.

Norway’s huge sovereign wealth fund says it will again vote against approving Tesla CEO Elon Musk’s $US56 billion pay package, which is up for a shareholder vote this Thursday after it was rejected by a Delaware court in January.

The fund is Tesla’s eighth-largest shareholder and voted against the deal when first put to shareholders in 2018.

The fund’s manager stated on Saturday that it appreciated “the significant value generated under Mr. Musk’s leadership since the grant date in 2018.” However, “we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk,” said Norges Bank Investment Management (NBIM), the fund manager.

The fund also announced that it would support the re-election of Musk’s younger brother Kimbal, 51, to Tesla’s board of directors. The fund had voted in favor of his election in 2018, according to fund data.

Tesla shareholders will also vote on the re-election of directors at Thursday’s annual meeting.

Tesla shares were down less than 0.4% last week but are still down more than 28%, and have completely missed the 16% rise in the Nasdaq, though much of that is due to Nvidia’s 151% surge so far in 2024.

Meanwhile, Warren Buffett's Berkshire Hathaway bought more shares in Occidental Petroleum to lift its stake closer to 30%.

In a filing over the weekend, Berkshire said it bought around 2.57 million Occidental shares over June 5-7, at a cost of $US150 million, and now owns 250.6 million shares.

Occidental shares closed at $US59.48 on Friday.


Name Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.