Good Evening. Following Federal Reserve Chair Jerome Powell’s second day of testimony on Capitol Hill on Thursday, U.S. markets ended the volatile session higher.
The Dow Jones gained 0.64%, while the S&P 500 increased by 0.95%. The Nasdaq increased by 1.62%.
BERKSHIRE IS BACK AT IT AGAIN
In order to increase its holding in Occidental Petroleum Corp. (OXY) to 16.30%, Warren Buffett’s Berkshire Hathaway Inc. purchased an additional 9.6 million shares of the oil business. In a regulatory filing on Wednesday, Berkshire stated that the transactions were made over the previous week and cost around $529 million. These are in addition to Berkshire’s $336 million share acquisition in the oil giant last month and its $7 billion in earlier-year purchases.
Based on the stock’s closing price on Wednesday, which is down more than 21% since it reached its year’s high in May, Berkshire currently holds approximately 152.7 million Occidental shares, valued at nearly $8.52 billion.
However, the price has increased by more than 90% this year after more than tripling, thanks to Berkshire’s acquisitions and rising oil prices as a result of Russia’s invasion of Ukraine.
In 2022, Berkshire has been on a spending binge. In the first quarter, it invested $51.1 billion in stocks, including a growing $25.9 billion investment in the oil major Chevron Corp.
According to analysts, Berkshire may use Occidental and Chevron to profit from increased oil prices as a result of Russia’s invasion of Ukraine.
GAS TAX HOLIDAY
President Biden requested Congress to grant a three-month suspension of federal gas taxes. It is the president’s most recent attempt to reduce the skyrocketing gas costs before the upcoming midterm elections.
The proposed tax holiday would take 18 cents and 24 cents, respectively, off the top of each gallon of gasoline and diesel, respectively. Drivers would save around 3.60% if businesses passed along the whole savings to customers.
Furthermore, other factors have drastically out of balance the supply and demand for gas. The amount of oil that can be brought to market is restricted by US oil refineries being almost at capacity. Even with average gas prices of $5 per gallon, though, drivers are still accelerating toward their summer travel plans.
So what did Biden say? “I fully understand that a gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief.” In addition to other relief measures, he asserted that the tax break may bring down gas costs by up to $1 per gallon. However, Congress must first authorize the suspension of taxes.