It's only been just over a week since the election and Federal Reserve Chair Jerome Powell is already raining on president-elect Donald Trump's parade.

He wasn't trying to. All Powell said was that the Fed would act carefully and wasn't in a rush to lower interest rates. That should be obvious, given that data just this week showed inflation is still a little hot. But traders quickly dialed back expectations for another quarter-point cut in December.

The reaction from stocks was even bigger. All three major indexes fell on Thursday. While Trump has mostly bolstered markets so far, it didn't help that he nominated vaccine-skeptic Robert F. Kennedy, Jr. to his cabinet--healthcare stocks were some of the biggest losers.

Not all sectors were equally gloomy. The S&P 500 Banks Industry Group finished the day where it started, and is still up more than 8% in the past month. JPMorgan Chase CEO Jamie Dimon explained why. "A lot of bankers have been dancing in the streets" after Trump's win because regulation under President Joe Biden has crimped lending, he said.

While Trump ruled out bringing Dimon into his cabinet to help cut red tape, investors are still expecting the former president to make life easier for business. The question now is how much of a boost, given how much shares have already risen on so-called Trump trades.

One investor who may be missing out is billionaire Warren Buffett. The latest filings show that at the end of September, the cash pile at Berkshire Hathaway, the company he runs, had risen to a record as it sold more stocks than it bought. At least the shares Berkshire did buy-- fast food chain Domino's Pizza and swimming-pool supplies distributor Pool--make products that can provide comfort food and relaxation if recent market gains passed them by.

-- Brian Swint

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Fed's Powell Sees No Hurry to Cut Rates in Current Economy

The U.S. economy's recent performance has been remarkably solid. According to Fed Chair Jerome Powell, it's by far the best of any major economy in the world and isn't sending any signals that the central bank should hurry to lower interest rates.

   -- That economic strength gives policymakers time to figure out the best 
      path toward the Fed's 2% sustained inflation target, Powell said, in his 
      first remarks since a press conference after the Fed lowered rates last 
      week. Powell was speaking at the Dallas Regional Chamber. 
 
   -- Futures traders saw a lower probability of another quarter-point drop in 
      rates when the Fed meets in December following Powell's remarks. They now 
      see a 62% chance of such a cut, down from a 75% chance seen before Powell 
      began speaking. There's a 38% probability of no cut. 
 
   -- Powell pointed to 3% real gross domestic product growth last year and 
      2.5% growth this year, noting that consumer spending remains elevated, 
      supported by wage growth and strong household balance sheets, while 
      business investment has accelerated over the past year. Housing-related 
      costs, however, remain high. 
 
   -- He said the U.S. labor market has cooled from the overheated postpandemic 
      rebound to normal levels more consistent with the Fed's employment 
      mandate. Hiring and quits both slowed to prepandemic levels or below, and 
      October's 4.1% unemployment rate remains historically low. 

What's Next: Inflation is much closer to the Fed's 2% goal, but isn't there yet, he said. Finishing the job with an "appropriate recalibration of our policy stance" won't mean a recession or weakening employment. New economic projections by Fed officials in December will signal their path in 2025 and beyond.

-- Nicholas Jasinski and Janet H. Cho

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Berkshire Hathaway Nibbles at Domino's as Billionaires Report Holdings

Warren Buffett's Berkshire Hathaway piled into pizza and backyard pools in the third quarter, while fellow billionaire investors dabbled in other pursuits. David Tepper's Appaloosa sold its holdings of Boeing, while Pershing Square's Bill Ackman took on 2 million shares of Howard Hughes spinoff Seaport Entertainment.

   -- Berkshire had 1.3 million shares in Domino's Pizza at the end of 
      September, according to a quarterly filing, the only sizable new equity 
      holding by Berkshire in the period. It also reported holding 404,000 
      shares of Pool Corp. The stakes may have shifted since the end of 
      September. 
 
   -- The Domino's and Pool stakes could be the ideas of either Ted Weschler or 
      Todd Combs, Buffett's two investment managers overseeing Berkshire's $300 
      billion equity portfolio. Berkshire was a net buyer of just $1.5 billion 
      of stocks in the third quarter while selling about $36 billion. 
 
   -- Daniel Loeb's Third Point traded out of its Uber Technologies stake to 
      take on a new 400,000 share stake in Tesla, which unveiled its robotaxi 
      in October along with an autonomous van. Tesla's fledgling AI-fueled 
      ride-hailing business could be a competitive threat to Uber. 
 
   -- Ackman also raised his stake in Nike to 16.3 million shares from 3 
      million the prior quarter, and in Canadian investment manager Brookfield 
      Corp. to 32.7 million from 6.8 million shares. Pershing also trimmed 
      stakes in Hilton and Restaurant Brands International, parent of Burger 
      King. 

What's Next: Once considered a candidate for Treasury Secretary in the Trump's administration, fund manager John Paulson has gone in on energy bets. His fund reported a new 2.2 million share stake in natural gas producer Southwestern Energy and a bigger 30 million share stake in liquefied natural gas firm Tellurian.

-- Andrew Bary and Liz Moyer

***

Trump Taps Vaccine Skeptic RFK Jr. as Secretary of Health

President-elect Donald Trump nominated Robert F. Kennedy Jr., a vaccine skeptic and critic of federal health agencies, to be his Secretary of Health and Human Services $(HHS)$ Thursday.

   -- The nomination was made in a post on Truth Social. "HHS will play a big 
      role in helping ensure that everybody will be protected from harmful 
      chemicals, pollutants, pesticides, pharmaceutical products, and food 
      additives that have contributed to the overwhelming Health Crisis in this 
      Country," Trump wrote. 
 
   -- The implications of Kennedy's nomination could go far beyond the vaccine 
      industry. At the helm of HHS, Kennedy would shoulder the burden of a long 
      list of pressing health challenges, including an increasingly worrying 
      outbreak of avian influenza. 
 
   -- Kennedy is an unorthodox pick to lead HHS. His reputation as a skeptic of 
      established public health science, and a critic both of the 
      pharmaceutical industry and the public health system, have cast 
      significant uncertainty over the health sector. 
 
   -- The announcement appeared to take the industry by surprise and vaccine 
      makers such as Moderna and Novavax stocks fell in response. 

What's Next: Now, the industry's attention will turn to the Senate, which must approve Trump's nomination. Kennedy is likely to receive little support from Democrats. Senator Ron Wyden, a Democrat from Oregon, issued a statement late Thursday calling Kennedy's views "outlandish."

-- Josh Nathan-Kazis and Elsa Ohlen

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Amazon Makes Latest Disruptive Move Into Cheaper Drugs

Amazon.com is aiming at the online healthcare business, offering upfront pricing for telehealth visits for a variety of ailments and low-price generic versions of popular drugs used to fight hair loss and treat erectile dysfunction. It's a new threat to telehealth providers such as Hims & Hers Health and Ro.

   -- The Amazon platform is available to Prime members. The prices are lower 
      than those offered by the growing industry of telehealth providers. For 
      example, Amazon will charge $16 a month for the generic hair loss pill 
      finasteride, sold by Hims for $22 a month, and Ro for $20 a month. 
 
   -- Leerink Partners analyst Michael Cherny wrote that Amazon is introducing 
      a "serious competitive threat" to the market. Hims & Hers told Barron's 
      that it's committed to offering high-quality personalized solutions. Ro 
      couldn't be reached for comment. 
 
   -- The new platform builds on Amazon's existing business, which offers 
      on-demand messaging medical visits for $29 or video visits for $49, 
      payable by credit card or by using a flexible spending account or health 
      savings account. The new service doesn't include weight loss drugs. 
 
   -- Telehealth companies are flourishing by offering cheaper, copycat 
      versions of Novo Nordisk's GLP-1 medicine Wegovy as demand for 
      weight-loss drugs soars. But that market could dry up if regulators 
      declare that the shortages of Novo's drug have ended. 

What's Next: Patients prescribed generic drugs through Amazon's One Medical program will buy them through Amazon Pharmacy. Amazon plans to expand same-day prescription delivery by opening pharmacies in 20 more U.S. cities by the end of 2025.

-- Josh Nathan-Kazis and Janet H. Cho

***

Citigroup's Ties to Sanctioned Putin Ally Draw Federal Scrutiny

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November 15, 2024 06:58 ET (11:58 GMT)

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