Warren Buffett Sells Millions of Shares Amid Recession Fears

Recent economic indicators have raised concerns about a potential recession, as evidenced by a jobs report showing significantly fewer jobs created than anticipated for two consecutive months. In response to these economic signals, Warren Buffett's Berkshire Hathaway has made substantial stock sales, now holding a record cash position of $276 billion. This selling trend mirrors actions taken before 2022, which was marked as the worst year for markets since the 2008 financial crisis. Among the stocks sold, Apple Inc. saw a nearly 50% reduction in Berkshire's position, dropping from over $135 billion to just over $84 billion. Buffett cited tax reasons for this decision, but the slowdown in Apple's earnings and revenue growth, with only 4.9% revenue growth reported last quarter, cannot be overlooked. This raises questions about the tech giant's future performance amid economic uncertainty. Bank of America also faced a significant reduction in Berkshire's holdings, with a $37 billion cut as the bank reported negative quarterly earnings growth of 6.8%. Analysts predict a further 10% dip in growth for the bank, highlighting the vulnerability of financial institutions during economic downturns, particularly as rising defaults impact earnings. Additionally, Buffett's decision to unload 30.6 million shares of Chevron Corp. indicates a shift in strategy regarding energy stocks. With Chevron reporting a 26.2% decline in quarterly earnings, it appears Buffett anticipates a prolonged period of lower energy prices, which typically accompany recessions and diminish demand for oil and gas products.