Major benchmarks kept moving higher on Monday morning, adding to investor enthusiasm that sent the S&P 500 (SNPINDEX:^GSPC) to record closing levels last week. Market participants still seem to hope that long-standing issues like the U.S.-China trade talks will resolve themselves favorably. As of 11 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 142 points to 27,490. The S&P 500 rose 14 points to 3,081, and the Nasdaq Composite (NASDAQINDEX:^IXIC) was higher by 42 points to 8,429.
One surprising move came from McDonald's (NYSE:MCD), which unexpectedly fired its CEO over the weekend amid controversy. Earnings season also continued to move forward, and Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) weighed in with numbers that gave shareholders of the Warren Buffett-led company plenty of confidence for the future.
Steve Easterbrook gets shown the exit
Shares of McDonald's dropped 2.5% following the fast-food giant's announcement that it had terminated its chief executive officer. In the company's words, outgoing CEO Steve Easterbrook "separated from the company following the board [of directors'] determination that he violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee."
To replace Easterbrook, the Big Mac maker tapped McDonald's USA President Chris Kempczinski. In explaining the choice, the company noted that Kempczinski played a key role in its overall strategic plan toward global growth. The fast-food chain's transformation in its U.S. locations in recent years came directly under the new CEO's oversight.
The executive transition comes at an unfortunate time for McDonald's, though, as the stock just got rocked in late October following its third-quarter financial report. Earnings fell short of what investors had wanted to see, and the company has had a tough time producing any significant growth in revenue or net income.
Long-term investors had gotten used to McDonald's excellence, and so seeing a new face in the corner office of the executive suite is a bit jarring. Time will tell whether Kempczinski can keep the initiatives in place that brought the Golden Arches back to relevance in the restaurant industry.
More cash for Buffett
Meanwhile, shares of Berkshire Hathaway were up about 1%. The insurance giant announced its third-quarter financial results over the weekend, and although the accounting methodology that the company uses makes its quarterly numbers a bit misleading, the report revealed that Warren Buffett has more money than ever to deploy.
Berkshire posted strong operating profits, due largely to success from its railroad subsidiary BNSF. In addition, the stock market performed well during the third quarter, and the gains in the stock portfolio that Berkshire manages under its corporate umbrella fell through to the conglomerate's bottom line. Net income attributable to shareholders totaled $16.5 billion for the quarter, working out to $6.75 per Class B share.
Even more closely watched was Berkshire's cash balance, which continued to rise. Buffett now has a total of $124.4 billion to deploy within its insurance and other business segment, up from $109.3 billion just since the beginning of 2019.
Buffett has taken some criticism for holding such high levels of cash, but his search for worthy investments of a size that make sense still hasn't provided any good leads. Eventually, Berkshire might be able to put that money to good work, but for now, short-term Treasury bills are providing a home for a considerable portion of the company's available cash.