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Warren Buffett went wild with Berkshire Hathaway's (BRK.B, $309.29) checkbook during the first quarter, scooping up equities at his fastest pace since the Great Financial Crisis.

True, it took an epically bad start to the year for stocks and the worst inflation in four decades to lure Berkshire's chairman and chief executive back into the market.

But he's back, and in a big way.

The Berkshire Hathaway equity portfolio scooped up $41.5 billion in net stock purchases in the first quarter. That's the most cash Buffett has splurged on equities in a quarter since 2008. 

Contrast that with last year, when Berkshire was a net seller of equities in all four quarters of 2021.

In addition to spending another $3.2 billion buying back BRK.B shares and acquiring insurer Alleghany outright for $11.6 billion, Buffett and his lieutenants Ted Weschler and Todd Combs found plenty of other ways to make a serious dent in the conglomerate's cash pile.

Among the more notable moves, Buffett deployed serious financial resources into the energy sector in Q1, taking advantage of both rising oil prices and crude's properties as an inflation hedge. Elsewhere, Apple's (AAPL) Q1 stock skid prompted Buffett to add about $600 million to Berkshire's top holding.

And, of course, we all remember that Buffett bought a commanding 11.4% stake in PC and printer maker HP (HPQ). 

We know what the greatest long-term investor of all time has been up to because the U.S. Securities and Exchange Commission requires investment managers with at least $100 million in assets to file a Form 13F quarterly report disclosing changes in share ownership. These documents add an important level of transparency to the stock market and give Buffett-ologists a bead on what the Berkshire chief is thinking.

When Buffett initiates a stake in some company, or adds to an existing one, investors read into that as a vote of confidence. But if he pares his holdings in a stock, it can spark investors to rethink their own investments.

Here's the scorecard for what Warren Buffett was buying and selling during the first quarter of 2022, based on Berkshire Hathaway's 13F filed on May 16, 2022, for the period ended March 31, 2022. You can check out the entire list of Buffett stocks here, or continue reading if you're most interested in Buffett's most recent transactions.

And remember: Not all "Warren Buffett stocks" are actually his picks. Some of Berkshire Hathaway's positions are handled by portfolio co-managers Weschler and Combs.

Current share prices are as of May 16, 2022. Holdings data is as of March 31, 2022. Sources: Berkshire Hathaway's SEC Form 13F filed May 16, 2022, for the reporting period ended March 31, 2022; and WhaleWisdom.

Read more: https://www.kiplinger.com/investing/stocks/604684/stocks-warren-buffett-is-buying-and-selling-in-q1-2022

Warren Buffett finally returned to the bull camp during the first quarter of 2022. So says Berkshire Hathaway's (BRK.B) 13F, which was filed Monday afternoon and revealed that Buffett's collection of stocks actually grew in number during the first three months of 2022.

That was a refreshing change for Buffett followers, who watched the Oracle of Omaha and his team act as net sellers during all four quarters of 2021.

Berkshire's 13F showed the holding company spent $41.5 billion in net stock purchases in the first quarter – the most since 2008 – putting nearly 30% of its huge cash pile to work in equities over the three-month period. This included Buffett entering eight new positions and increasing stakes in seven other stocks.

Buffett and his team clearly used a market dip as a chance to return to buying in 2022, with the S&P 500 down as much as 13% from its all-time high at one point during the quarter. But, as we noted recently, rising inflation drove much of the Q1 spending spree.

The Oracle of Omaha also did some selling in the first quarter, exiting three positions completely and reducing his holdings in four stocks.

Let's dig into the biggest Buffett stock adjustments made during the first quarter of 2022, based on Berkshire Hathaway's 13F filed on May 16, 2022, for the period ending March 31, 2022.

Buffett's buying spree included topping up his stake in blue chips Apple (AAPL), which he pounced on after a three-day drop in the Dow Jones stock, buying 3.8 million shares of the tech titan. Berkshire Hathaway's position in Apple now accounts for 42.8% of the Berkshire Hathaway equity portfolio.

However, Buffett's bigger buys came in the energy patch, as oil prices soared – West Texas Intermediate crude futures gained 33% over the three-month period. Berkshire bought an additional 120.9 million shares of Chevron (CVX), a 316% increase, and initiated a stake in Occidental Petroleum (OXY).

That wasn't Berkshire's only new position. The Oracle opened stakes in financial stocks Ally Financial (ALLY), Citigroup (C) and Markel (MKL); made a classic Buffett bet by scooping up 10.5 million shares of HP (HPQ); entered materials firm Celanese (CE) and jumped into media play Paramount Global (PARA).

Berkshire also increased its stakes in retail stocks Floor & Decor Holdings (FND) and RH (RH), as well as video game name Activision Blizzard (ATVI), motorsports firm Formula One Group (FWONK) and automaker General Motors (GM).

Buffett and his lieutenants finally exited their stake in banking giant Wells Fargo (WFC) – a position that had persisted for more than two decades. They also cut loose healthcare stocks AbbVie (ABBV) and Bristol-Myers Squibb (BMY). 

Berkshire also slashed its stake in telecommunications firm Verizon Communications (VZ) by 99%, reducing its holdings to just 1.4 million shares, or 0.02$ of the Berkshire Hathaway equity portfolio. 

Rounding things out, BRK.B's 13F revealed the company reduced its holdings in real estate investment trust Store Capital (STOR) and grocery chain Kroger (KR), as well as royalties company Royalty Pharma (RPRX). The latter marks a pretty quick about-face, considering Buffett first entered that position during the third quarter of 2021.

Read more: https://www.kiplinger.com/investing/stocks/604686/buffett-boosts-stakes-in-apple-chevron-amid-q1-buying-spree

The potential for the U.S. to slip into recession was the topic du jour Monday as stocks kicked off the week with a wobbly, uneven session.

Over the weekend, former Goldman Sachs chief Lloyd Blankfein told CBS' Face the Nation that recession was "a very, very high risk factor." That opinion was met by a number of other calls Monday morning.

Wells Fargo Investment Institute, for instance, says "our conviction is that the chances of an outright recession in 2022 remain low" but believes odds are growing that 2023 could see an economic contraction. UBS strategists say the chances are different depending on where you look – their global economists say "hard data" points to a sub-1% chance of recession over the next 12 months, but the yield curve implies 32% odds.

"There's no crystal ball to predict what's next, but historical trends can come into play here. With the [S&P 500] closing 15% below its weekly record, there's only been two times in the past 60-plus years that the market didn't fall into bear territory after a similar drop," adds Chris Larkin, Managing Director of Trading at E*Trade. "This doesn't mean it's bound to happen, but there is room for potential downside."

Larkin says to keep an eye on major retail earnings this week – which will kick off in earnest with Walmart's Tuesday report – to get a pulse check on the American consumer.

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Monday itself was a fairly quiet affair. Exxon Mobil (XOM, +2.4%) and Chevron (CVX, +3.1%) were among a number of plays from the energy sector (+2.7%) that popped after U.S. crude oil futures jumped another 3.4% to $114.20 per barrel.

Twitter (TWTR, -8.2%) shares dropped after Tesla (TSLA, -5.9%) CEO Elon Musk spent the weekend questioning how much of Twitter's traffic comes from bots. Wedbush analyst Daniel Ives said the move feels more like a "'dog ate the homework' excuse to bail on the Twitter deal or talk down a lower price." TWTR stock has now given up all its gains since Musk announced his stake in the social platform.

The major indexes finished an up-and-down session with mostly weak results. The Dow Jones Industrial Average managed to eke out a marginal gain to 32,223, but the S&P 500 declined 0.4% to 4,008, while the Nasdaq Composite retreated 1.2% to 11,662.

Also worth noting: Warren Buffett's Berkshire Hathaway will file its quarterly Form 13F soon. Check back here tonight as we examine what Buffett has been buying and selling. 

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Other news in the stock market today:

If you're seeking out more stable opportunities amid an uncertain U.S. market … well, the rest of the world is admittedly looking pretty shaky, too. But that doesn't mean there aren't a few morsels worth a nibble. 

BCA Research notes that while there's negative news around the globe, "European benchmarks already discount a significant portion of the negative news." And looking ahead, inflation there is expected to peak over the summer "as the commodity impulse is decelerating" – that should help stagflation fears recede and help European shares.

Graham Secker, Morgan Stanley's chief European and U.K. equity strategist, chimes in that his firm remains "overweight [European] stocks offering a high and secure dividend yield."

We've previously highlighted our favorite European dividend stocks, which on the whole tend to produce higher yields than their U.S. counterparts.

But we'd also like to shine the spotlight on Europe's twist on an American income club: the Dividend Aristocrats. The S&P Europe 350 Dividend Aristocrats have somewhat different qualifications than their U.S. brethren, but in general, they've proven their ability to provide stable and growing dividends over time.

Read on as we look at the European Dividend Aristocrats.

Read more: https://www.kiplinger.com/investing/stocks/604685/stock-market-today-051622-stocks-lower-recession-odds

U.S. equity markets aren't the only place where you can find income-producing royalty. Indeed, a quick look across the pond yields dozens, in the form of the European Dividend Aristocrats.

Admittedly, Europe's dividend stocks have posted subpar returns compared to their U.S. counterparts over the past decade. However, that could change this year, says Goldman Sachs strategist Guillaume Jaisson, who points to an unusually large yield gap between European stocks and bonds. At present, yields on eurozone bonds are miniscule; the choice between dividend-paying stocks and bonds seems an easy one.

In addition, Jaisson notes that higher-yielding dividend stocks are less sensitive to interest-rate hikes, and that their stable income payments look more attractive in both high-inflation and high-volatility environments, in which capital gains look less like a lock.

The European Dividend Aristocrats in specific look enticing given the difference between dividend growth here and abroad. Jaisson says the Stoxx Europe 600 Index is expected to deliver 10% dividend growth this year, well beyond the 7% forecast for the S&P 500. (And beyond 2022, says CME Group, S&P 500 dividend growth is predicted at 1% excluding inflation.)

Another financial strategist recommending European dividend stocks is Morningstar senior equity analyst Michael Field. At present, the selection of high-yielding European dividend stocks is much larger than previous years, Field says. As a result, investors can build a high-yielding portfolio of European stocks without overly relying on traditional income sectors like financial and utilities.

"The European Central Bank is unlikely to be as aggressive in raising interest rates as the Federal Reserve, giving companies on the continent some headroom," Field adds.

Field warns that rising interest rates will likely penalize high-debt companies, however. So he recommends investors stick with high-quality European names that offer defensible moats and sustainable cash flow.

You can find many of these traits among the European Dividend Aristocrats – a small subset of the S&P Europe 350 Index.

Like their U.S. counterparts, European Dividend Aristocrats are recognized for steady and growing dividends. Consistently rising dividends are not the norm in Europe so these stocks are a rare breed indeed.

Unlike the S&P 500 Dividend Aristocrats, which must deliver a minimum of 25 consecutive years of dividend growth, European Dividend Aristocrats need only show 10 years of stable or increasing dividends.

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Another important difference is the frequency of payout. U.S. dividend stocks tend to pay dividends quarterly, whereas European payers tend to distribute income semiannually.

In other respects, the two groups of Aristocrats are similar. Companies that earn this elite status tend to be market leaders with multibillion-dollar valuations, consistent profits and mature business models.

The current crop of European Dividend Aristocrats offers several names that stand out for their rich yields and modest valuations. We'll look at a few highlights, then produce the full list.

There are a total of 40 names on the 2022 list of European Dividend Aristocrats. Member stocks and their recent dividend yield are provided in the table below:

S&P Dow Jones Indices, corporate websites

Read more: https://www.kiplinger.com/investing/stocks/dividend-stocks/604632/european-dividend-aristocrats

The latest consumer price index (CPI) released last week indicates inflation remained sky-high in April. And while rising prices were a headwind for most companies in the first three months of 2022, they likely served as a tailwind for mega-retailer Walmart (WMT, $147.48).

Wall Street will find out this week, with WMT an early entrant on the earnings calendar; WMT will report its first-quarter results ahead of the May 17 open. 

The consumer staples stock has shown resilience amid the recent market volatility, up roughly 2% for the year-to-date compared to a more than 17% decline for the broader S&P 500.  

WMT beat on both the top and bottom lines in its fourth quarter thanks in part to its ability to keep prices competitive in a high-inflation environment. And this trend probably continued in Q1, despite a challenging backdrop, says UBS Global Research analyst Michael Lasser (Buy).

"With low prices as its core value proposition, WMT is uniquely positioned to benefit from rising inflation," the analyst adds. "Its scale helps give it the ability to keep healthy price gaps versus its peers, which can help it achieve further share gains in the grocery channel.  

While Lasser admits there will likely be some "moving pieces" in the report – including unpredictability related to macro headwinds – components such as U.S. same-store sales and full-year guidance will be good.

"We view WMT's shares as compelling as they offer more certainty than others in this uncertain backdrop," the analyst says.

Amid tough year-over-year (YoY) comparisons that include last year's stimulus-related pop, consensus estimates are for Walmart to report a 12.4% drop in earnings to $1.48 per share. Revenue is expected to arrive at $138.8 billion (+0.4% YoY).

First-quarter earnings from Lowe's (LOW, $191.70) are due out before Wednesday's open. Similar to Walmart, the home improvement retailer is facing hard comparisons from Q1 2021. 

As such, analysts, on average, are calling for a slim 0.9% YoY rise in earnings to $3.24 per share. And revenue is projected to be flat at $23.8 billion.

Still, Lowe's entered 2022 with momentum following a solid fourth-quarter print, says UBS Global Research analyst Michael Lasser (Buy). 

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Additionally, the consumer discretionary name raised its full-year guidance in February. This reflects an inflation tailwind due to LOW's "prudent pricing power" that will likely last for at least a few more quarters, the analyst adds. 

"We believe LOW is building a track record of solid execution with every passing quarter," Lasser says. "Plus, it has several unique drivers to propel its results in the next few years independent of the market growth."

Kohl's (KSS, $47.51) will report its first-quarter earnings ahead of the May 19 open. 

The department store chain ended 2021 with record adjusted earnings of $7.33 per share and year-over-year revenue growth of 21.8% to $19.4 billion.

And Deutsche Bank analyst Gabriella Carbone (Buy) thinks the company is just getting started. "KSS has laid the groundwork for growth along with improving profitability, and is a more nimble company today than it was pre-pandemic," Carbone says.

Included in the company's plans to drive growth are goals for Kohl's to reach $2 billion in sales from its partnership with beauty company Sephora and expand its operating margin to a range of 7% to 8%.

Carbone adds that these goals "may prove to be prudent as management has greatly considered a number of headwinds," including supply-chain woes and a tight labor market.

As for the retail stock's first-quarter results, analysts, on average, expect earnings to arrive at 72 cents per share (-31.4% YoY) and revenue to land at $3.7 billion (-0.5% YoY).

In addition to the company's financial results, Wall Street will be looking for additional updates on the company's strategic initiatives. Last Wednesday, shareholders voted on Kohl's new slate of directors, rejecting an attempt from Macellum Advisors to add its nominees to the board. The activist investor has been pushing KSS to make changes, including unloading some of its real estate and putting itself up for sale.

Read more: https://www.kiplinger.com/investing/stocks/604663/walmart-q1-earnings-likely-boosted-by-inflation