In comments that will send shockwaves to the financial markets already pulverized by the economic shock of the outbreak, Buffett said the outbreak could have an “extraordinarily wide” range of possible outcomes.
Around the world, stocks are ready for another scorching week as global virus cases approach 3.5 million and deaths nearly 250,000. Despite massive intervention by the central bank and the government, the markets Scholars were shaken by the continued spread of Covid-19, the drop in oil prices and Donald Trump’s threats to reignite his trade war with China.
Buffett, 89, who has become known as the Sage of Omaha for his investment skills over the decades, said he believed stock markets had not bottomed out today.
Speaking at his Berkshire Hathaway’s annual virtual meeting in Omaha, Nebraska, Buffett said he had not provided financial support to businesses as he did during the 2008 financial crisis. because he didn’t see anything sufficiently “attractive” even after the recent dip in the markets.
The outlook looks particularly bleak for the airline industry, which has been hit by the cessation of most of its traffic, which has resulted in mass layoffs and even bankruptcies. FlyBe in the UK went into administration at the start of the crisis and Virgin Atlantic asked the government for a bailout. British Airways has announced massive layoffs, as has Ryanair. Virgin Australia collapsed.
Berkshire Hathaway held significant positions in major U.S. airlines, including 11% in Delta Air Lines, 10% in American Airlines, 10% in Southwest Airlines and 9% in United Airlines in late 2019, according to its annual report and corporations.
But with thousands of planes parked on the tarmac around the world and no clear timetable for resuming air travel, Buffett said he had sold off stocks as the outlook for the airline industry changed rapidly. .
“We made this decision regarding the airlines. We basically took money out of the business, even with a substantial loss, “said Buffett. “We will not finance a business … where we think it will chew money in the future.”
Southwest, American and United declined to comment, but Delta said in a statement that it was aware of the sale and had “immense respect for Mr. Buffett and the Berkshire team.” The airline added that it remains “confident that the forces at the heart of Delta’s business – our people, our brand, our network and our operational reliability – will last and allow Delta to succeed.”
On Sunday, there was hope for the travel industry in China, where domestic travel increased sharply on May 1, the first day of a long vacation weekend. The jump in travel was spearheaded by Wuhan, the epicenter of the coronavirus epidemic that struck the country late last year.
The number of people traveling outside their hometown jumped nearly 50% at the start of Labor Day weekend, compared to the first day of vacation on April 4, according to Reuters calculations on data from Chinese Internet giant Baidu.
China reported two new cases of coronavirus only on May 2, against one the day before, according to data from the country’s national health authority on Sunday.
The numbers contrast with the rapid spread of the disease to other countries like Brazil where there have been 4,970 new cases of the virus and 421 deaths within 24 hours until Saturday. The nation has now recorded 95,559 confirmed virus cases and 6,750 deaths. New cases increased by around 5.4% on Saturday from the previous day, while deaths increased by around 6.7%.
Other developments around the world on Sunday include:
- A poll has shown that most Britons want the lockdown rules to stay in place until the epidemic is brought under control. The total death toll from Covid-19 in the UK rose from 621 to 28,131 on Saturday, second only to the United States and Italy.
Boris Johnson revealed that doctors are planning to deal with a “Stalin-like death” scenario if his condition worsens while he is being treated for Covid-19 in the hospital.
European leaders have come together to pledge billions of euros to find a vaccine for the virus. The leaders of France, Germany, Italy and Norway as well as senior EU officials told the Independent that the epidemic had “caused havoc and pain around the world.” world. “
The Spaniards were allowed to leave their homes for the first time in weeks, as the lockout rules were relaxed on Saturday.