Everyone knows Warren Buffett hates Mondays (I'm guessing), and he tried to spread the love. Over the weekend, “Ole Diet Cherry Coke” himself was pontificating about how the airlines are awful and he is selling his airline shares.
In 2001 Warren said: “Now if I get the urge to invest in airlines, I call an 800 number, and I say: 'Hello, my name is Warren, and I'm an air-o-holic."
Buffett also said in 2007 (the other time he swore never to invest in airlines again):
“Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”
—Warren Buffett, in the 2007 Berkshire Hathaway shareholder letter
So last month when it was found out Warren was buying airline shares, people felt “this must be a great deal if Mr. Buffett is liking it”. Sunday, he came out again saying he is selling.
This sent the Dow down about 350 points on the open with the SPX down -32. Airline stocks opened down 10-11% on the news.
We were also hearing news that we are likely to enter a cold war with China, and at least times worse than the tariff war. Later in the day, there were rumors that top officials in China were preparing for a shooting war, but it is not from the mouths of anyone close to President Xi, so it got dismissed 15 minutes later. China is the most aggressive bullies on the world playground, so it would be no surprise if they did say it. Previous presidents may change their foreign policy to avoid war if threatened, but Trump won't tolerate the rhetoric.
After the airline selling on the open and fanning of the fog from China, the market slowly climbed out of its hole by the end of the day.
BOEING (BA) which had been as low as 124.35 closed at 131.46 (-1.91).
American Airlines (AAL) which had been as low as 9.15 closed at 9.82 (-0.82) or 7.71%.
TESLA (TSLA) even managed to climb after Friday's twitter rant from Elon. Mr. Musk was saying he is selling all of his assets, and sure enough....yesterday he put two of his homes on the market. No word on if he and the love of his life, Grimes, mended their ways, but who is she going to get other than Musk?
In the MORNING COFFEE REPORT yesterday I wrote that we will likely test 2,800 in the SPX. You can see that below. The low was 2797.85. Pretty damn close for a Chicago pollock.