Oct 3, 2017

Warren Buffett explains the bull market

AP Photo/Nati Harnik, File

Warren Buffett this morning told CNBC that the stock markets continue to climb, in large part, because of low interest rates:

Interest rates are gravity.

Context: The Federal Reserve cut the federal funds rate to effectively nothing in December 2008, as a response to the financial crisis. It has since climbed to 1.25%, but that's still well below historic norms and not nearly enough to push yield-hungry investors out if public equities.

More from Buffett:

  • Waiting game: "Everybody expects interest rates to change, but they've been expecting it quite a while."
  • Future math: "If three years from now interest rates are 100 basis points higher, then the stocks-- stocks will still look cheap at these prices. If they're 300 or 400 basis points, they won't look cheap."
  • Taxes: "It'd be kinda foolish to have a gain now and pay 35% tax on it if by waiting a few months you were likely to pay 25%.

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 11:30 p.m. ET: 1,484,811 — Total deaths: 88,538 — Total recoveries: 329,876Map.
  2. U.S.: Total confirmed cases as of 11:30 p.m. ET: 432,132 — Total deaths: 14,817 — Total recoveries: 23,906Map.
  3. Federal government latest: Top Trump administration officials had been developing a plan to give cloth masks to huge numbers of Americans, but the idea lost traction amid heavy internal skepticism.
  4. States latest: New York has reported more cases than the most-affected countries in Europe. Chicago's Cook County jail is largest-known source of coronavirus in U.S.
  5. Business: One-third of U.S. jobs are at risk of disappearing, mostly affecting low-income workers.
  6. World: WHO Director-General Tedros Adhanom Ghebreyesus urged countries to put politics aside "if you don’t want to have many more body bags.”
  7. Environment: COVID-19 is underscoring the connection between air pollution and dire outcomes from respiratory diseases.
  8. Tech: A new report recommends stimulus spending to help close the digital divide revealed by social distancing.
  9. What should I do? Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

U.S. nearly empties medical supplies stockpile to fight coronavirus

The Intensive Care Unit of MedStar St. Mary's Hospital on April 8 in Leonardtown, Maryland. Photo: Win McNamee/Getty Images

The federal government is in the process of deploying 90% of its stockpiled medical equipment to fight the coronavirus pandemic, Health and Human Services spokesperson Katie McKeogh told Axios Wednesday night.

Why it matters: These shipments aren't enough to meet current demands from states, who are bracing for staggered surges in hospital resource demand through May.

U.S. coronavirus updates: Daily death toll exceeds 2,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

The novel coronavirus has now killed more than 2,000 people for the second day in a row, and it's infected more than 431,000 others, per Johns Hopkins data.

Where it stands: More than 14,700 people have died of COVID-19 in the U.S. — including over 4,500 in New York. The state's death toll surged to its highest one-day total on Wednesday — beating the previous day's record. 779 people died in New York in 24 hours. The state has reported more cases than the most-affected countries in Europe.

Go deeperArrowUpdated 3 hours ago - Health