Bulls and Bears Square Off- Buffett Buys as Analysts Predict Recession
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The markets are at an inflection point. Buyers and sellers squared off again today, with mixed results.
Warren Buffett of Berkshire Hathaway purchased energy stocks including Chevron and Occidental Petroleum. As the market has softened, Buffett has been adding to his largest positions including Apple and banking giants Wells Fargo, Ally and Bank of America. Buffett's buys are inflation hedges- as inflation rises, energy and banking sectors typically flourish. Banks make more money as interest rates rise, and energy companies make more profits as their commodities rise in price relative to the dollar.
Conversely, it has been predicted that there is a 30-35% chance of recession by 2023. Analysts have been predicting a recession, but they seem even more sure of it now.
The Cryptocurrency market is sluggish, and Bitcoin is fighting a wall of worry around $30,000. After falling from an all time high of over $60,000 this retracement seems a bit excessive.
I am conflicted between bullish and bearish tendencies. It appears that there is a chance for a recession, but Buffett is loading up on stock positions. I see the bear case for the cryptocurrency and stock markets, and am cautiously optimistic about a bounce here. I have been continuously adding to quality dividend producing stocks and indicies as the market has fallen, but am keeping a hand on the sell button in case things go sideways.
What is your take on this? Are you a bull or bear?
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