Buffett’s Berkshire Hathaway sets, closes at record high

Berkshire Hathaway’s share price set a record high on Monday, reflecting investors’ confidence in Warren Buffett’s company, which is often regarded as a microcosm of the broader American economy.

The price of Berkshire’s Class A shares closed up 2.1% at USD 652,997.17. They earlier reached USD 653,861, surpassing the previous high of USD 647,039 set on Feb. 26. Berkshire’s more widely held Class B shares are worth about 1/1,500th as much.

Monday’s gain boosted the market value of Omaha, Nebraska-based Berkshire to approximately USD 937 billion, based on reported shares outstanding. The stock trades at about 23 times the full-year operating profit that analysts project.

Some stock price services show Berkshire’s record-high Class A share price was USD 741,971 on June 3. That appears to reflect a glitch that also caused the price of the Class B shares to briefly fall more than 99% that day.

Berkshire owns dozens of insurance, energy, manufacturing, retail and service businesses including Geico car insurance, the BNSF railroad, Berkshire Hathaway Energy and Dairy Queen ice cream.

It also owns a huge stock portfolio led by Apple, whose share price has risen 37% since the end of March.

Despite having donated more than half his Berkshire stock since 2006, the 93-year-old Buffett still owns about 14.5% of the company, worth about USD 135.8 billion.

His overall fortune is about USD 137 billion, making him the world’s eighth-richest person, Forbes magazine said on Monday.

Berkshire shares have risen 20% this year, compared with an 18% gain in the Standard & Poor’s 500.

Over the last decade, Berkshire shares have performed close to the index, but with less volatility, after accounting for dividends. Berkshire does not pay a dividend.

(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama, Jan Harvey, and Matthew Lewis)

Apple at all-time high after Morgan Stanley calls stock ‘top pick’ for AI efforts

Apple’s shares rose 2.5% to a record high on Monday after Morgan Stanley raised its price target on the iPhone maker’s shares and designated the stock as a “top pick,” citing the company’s AI efforts as a boost to device sales.

In what was seen as a move to catch up with Alphabet’s Google and Microsoft-backed OpenAI, the iPad maker last month unveiled Apple Intelligence, luring customers to upgrade their devices to be able to use the new technology.

Apple’s shares, which have jumped nearly 20% this year, rose to USD 236.30, giving the company a market value of USD 3.62 trillion, the highest in the world.

“Apple Intelligence is a clear catalyst to boost iPhone and iPad shipments,” Morgan Stanley analysts said.

The new technology is compatible with only 8% of iPhone and iPad devices and Apple has 1.3 billion units of smartphones currently in use by customers, the analysts said, adding that the company could sell nearly 500 million iPhones over the next two years.

Morgan Stanley, which previously expected Apple to sell between 230 million and 235 million iPhones annually over the next two years, raised its price target on the company’s shares to USD 273 from USD 216.

The stock has an average rating of “buy” with a median price target of USD 217, and has outperformed the S&P 500 index this year, according to LSEG data.

Industry analysts expect Samsung and Apple to lead the charge in global smartphone market recovery this year given the buzz around GenAI-enabled smartphones.

Apple sold 45.2 million smartphones globally in the three months ending June, up from 44.5 million a year earlier, but its market share fell to 15.8% from 16.6% in the same period, according to IDC data.

(Reporting by Akash Sriram in Bengaluru; Editing by Shounak Dasgupta)

Trump shooting overshadows markets, China GDP in spotlight

A dramatic escalation in US political tension and violence looms over world markets on Monday after the attempted assassination of former President Donald Trump on Saturday, with Asian assets the first to show what the impact – if any – will be on trading and investing.

If the shooting strengthens Trump’s election hopes, analysts reckon so-called ‘Trump-victory trades’ could include a stronger dollar and a steeper US Treasury yield curve. Bitcoin was up 4% at USD 60,000 early in Monday’s global session.

Even before Saturday’s violence, there was no shortage of meaty issues for investors in Asia to get their teeth into on Monday – from snowballing US rate cut expectations to suspected Japanese FX intervention and a deluge of economic data from China including second-quarter GDP.

Last week’s surprisingly soft US inflation can keep the ‘risk on’ flame burning if US bond yields, implied rates, and the dollar all ease. Rates traders expect the Fed to cut rates by 75 basis points this year, starting in September.

But if that’s being driven by weakening growth and a softer labor market, exuberance will be consumed by caution, especially with the Q2 US earnings season getting underway.

Asia’s calendar on Monday is dominated by the June ‘data dump’ from China as Beijing releases house price, industrial production, urban investment, retail sales, and unemployment figures for last month, and Q2 GDP.

Analysts and investors have set their expectations low.

Asia’s largest economy is expected to have expanded 1.1% from the January-March period, resulting in year-on-year growth of 5.1%. Both would be down from prior readings of 1.6% and 5.3%, respectively.

China continues to struggle with a prolonged property crisis that has curbed investment, soured consumer confidence and demand, and kept alive the specter of deflation. Trade, bank lending figures, and key money gauges last week darkened the gloom further.

China’s central bank, meanwhile, is widely expected to leave the interest rate on its one-year medium-term lending facility loan unchanged at 2.50% on Monday.

Japanese markets are closed for a holiday on Monday but the yen will be traded across the continent, going into the session near a four-week high against the US dollar following its rise on Friday.

Japanese authorities remain tight-lipped on whether they intervened last week. But the yen’s sharp rally and daily Bank of Japan money market balance projections strongly point to official action, analysts say.

The yen had languished at 38-year lows around 162.00 per dollar last week, but goes into Monday around 157.90 per dollar.

Does the short-covering rally have more juice in it? Probably – hedge funds are holding their largest net short yen position in 17 years, US futures market figures show.

The surging yen triggered a 2.4% slump in Japanese stocks on Friday, its steepest fall since April. Having hit a record high above 42,000 points on Thursday, it could have more room to fall.

Elsewhere in Asia on Monday, India’s wholesale price inflation is seen rising sharply to a 3.5% annual rate in June from 2.6% in May.

Here are key developments that could provide more direction to markets on Monday:

– China ‘data dump’ (June)

– China GDP (Q2)

– India wholesale price inflation (June)

(Reporting by Jamie McGeever; Editing by Diane Craft)

Oil prices settle down after data shows weaker US consumer sentiment

NEW YORK – Oil futures prices settled slightly lower on Friday as investors weighed weaker US consumer sentiment against mounting hopes for a Federal Reserve rate cut in September.

Brent crude futures settled 37 cents lower to USD 85.03 a barrel. US West Texas Intermediate crude futures fell 41 cents, or 0.5%, to close at USD 82.21 a barrel.

For the week, Brent futures fell more than 1.7% after four weeks of gains. WTI futures posted 1.1% weekly decline.

A monthly survey by the University of Michigan showed US consumer sentiment fell to an eight-month low in July, although inflation expectations improved for the next year and beyond.

The US Labor Department said the producer price index (PPI) rose 0.2% in June, slightly more than expected, as the cost of services climbed. Still, investors expect the Fed could start cutting rates in September.

“The market isn’t afraid of the Fed at this point,” said Phil Flynn, an analyst at Price Futures Group.

Lower rates are expected to boost economic growth, which could boost fuel consumption.

“Cooling US inflation numbers may support the case for the Fed to kick-start its policy easing process earlier rather than later,” said Yeap Jun Rong, market strategist at IG.

“It also adds to the series of downside surprises in US economic data, which points to a clear weakening of the US economy,” he added.

Oil prices have drawn some support from US gasoline demand, which government data showed on Wednesday was at 9.4 million barrels per day (bpd) in the week ended July 5, the highest since 2019 for the week that includes the Independence Day holiday. Jet fuel demand on a four-week average basis was at its strongest since January 2020.

The strong fuel demand encouraged US refiners to ramp up activity and draw from crude oil stockpiles. US Gulf Coast refiners’ net input of crude rose last week to more than 9.4 million bpd for the first time since January 2019, government data showed.

Signs of weaker demand from China, the world’s biggest oil importer, could counter the outlook from the United States and weigh on prices.

“The recent downside correction is evidently over, although the speed of further ascent might be hindered by falling Chinese crude oil imports, which plummeted 11% in June from the previous year,” said Tamas Varga of oil broker PVM.

US active oil rig count, an early indicator of future output, fell by one to 478 this week, the lowest since December 2021, energy services firm Baker Hughes reported on Friday.

Money managers raised their net long US crude futures and options positions in the week to July 9, the US Commodity Futures Trading Commission (CFTC) said on Friday.

(Reporting by Nicole Jao and Shariq Khan in New York, Paul Carsten in London, Arunima Kumar in Bengaluru, and Jeslyn Lerh in Singapore; Editing by Sherry Jacob-Phillips, Susan Fenton, David Evans, Will Dunham, and David Gregorio)

US yields on long end rise modestly after producer prices data

NEW YORK – US Treasury yields rose marginally on the long end of the curve Friday after producer prices data came in firmer than expected, which overall did not alter expectations that the Federal Reserve was likely to cut interest rates at its September meeting.

The benchmark 10-year yield rose 1 basis point (bp) to 4.202%. On the week, however, it fell 7.3 bps, on track for its largest weekly fall in about a month.

The US 30-year yield dipped 1.4 bps to 4.418%.

On the short end of the curve, the two-year yield slid 2.6 bps to 4.481%. It hit a more than four-month low of 4.47%, before sliding. On the week, it was down 11.8 bps.

US yields initially climbed after Friday’s data showed the producer price index (PPI) rose 0.2% last month after being unchanged in May. Economists polled by Reuters had forecast the PPI edging up 0.1%.

Details on the components in the producer prices report that go into the calculation of the key inflation measures tracked by the Fed were mostly favorable. That along with the weaker numbers on consumer prices led economists to expect personal consumption expenditures (PCE) inflation rose slightly in June.

“The PPI is a little mixed, but it’s more encouraging than it appears on the surface. There was some knee-jerk selloff reaction at first and maybe some algorithms were programmed to trade based on the miss versus consensus,” said Will Compernolle, macro strategist, at FHN Financial in New York.

“A closer look at the details and it is not as concerning, that’s why yields have backed off. This shouldn’t change anyone’s call for a September rate cut,” he added.

A separate report showed that the University of Michigan’s preliminary reading on the overall index of consumer sentiment fell to 66.0 this month, compared with a final reading of 68.2 in June. Economists polled by Reuters had forecast a preliminary reading of 68.5.

In addition, the survey’s reading of one-year inflation expectations dipped to 2.9% from 3.0% in June. Its five-year inflation outlook also fell to 2.9% from 3.0% in the prior month.

Following the data, the US rate futures market priced in about two rate cuts this year of 25 bps each, which will most likely start in September, with a 94% probability, according to LSEG calculations.

That was higher than the 75% odds seen earlier this week.

The yield curve steepened, or reduced its inversion, with the yield spread between US two-year and 10-year notes narrowing by as much as minus 27.9 basis points (bps) US2US10=TWEB following the PPI report. That’s the tightest spread in more than a week.

The curve has been on a steepening trend since late June. Investors reckoned that the short end of the curve has hit a top since the Fed is unlikely to raise interest rates again. That’s holding the short end relatively steady.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Lucia Mutikani; Editing by Christina Fincher)

Gold holds firm above USD 2,400 level, set for third weekly rise

Gold prices held above the key USD 2,400 per ounce pivot on Friday and were headed for their third straight weekly gain, as investors grew confident that the US Federal Reserve was on track to lower interest rates soon.

Spot gold was steady at USD 2,417.36 per ounce as of 1:50 p.m. ET (1750 GMT). The bullion was up 1% for the week so far.

US gold futures settled mostly unchanged at USD 2,420.70.

Gold prices rallied to their highest since May 22 on Thursday after an unexpected decline in US consumer prices. The data strengthened the view that the disinflation trend has resumed and lifted hopes for rate cuts by the Fed.

“We’re seeing some profit-taking pressure, a routine corrective pullback after the solid gains. Today’s producer price index report was hotter than expected and that added to some selling pressure,” said Jim Wyckoff, senior market analyst at Kitco Metals.

“However, judging from the reaction of the stock market and the bond market, today’s PPI number does not really mitigate the cooler inflation report we saw on Thursday. So the odds are high for a rate cut this year, possibly as early as September.”

US producer prices increased moderately in June, further confirming that inflation had resumed its downward trend and strengthening the case for a September interest rate cut.

Markets are now pricing in a 94% chance of a rate cut in September, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.

Elsewhere, spot silver slipped 1.5% to USD 30.95 per ounce after scaling an over one-month high on Thursday.

Platinum fell 0.1% to USD 1,003.10 and palladium slipped 1.8% to USD 976.63. Both metals were set to register weekly declines.

“We still consider the new technologies so far to be insufficient to offset the loss in autocatalyst demand, particularly for palladium, and therefore remain long-term bearish,” Citi said in a note.

(Reporting by Brijesh Patel in Bengaluru; Editing by Vijay Kishore, Shinjini Ganguli and Shailesh Kuber)

Yen pops higher, sparking suspicions of Japan intervention

LONDON – The yen jumped briefly against the dollar on Friday, putting traders on alert for signs of fresh intervention by Japanese authorities, who likely stepped in the previous day to prop up a currency still close to its lowest in 38 years.

The dollar fell as much as 1% to a one-month low of 157.30 yen, but pared some of those losses to trade down 0.55% at 158.01 yen. The euro was last down 0.2% at 172.28 yen.

Japan’s top currency diplomat Masato Kanda declined to say whether forex market intervention or a rate check were conducted, Jiji Press reported on Friday. He did say that the fact that there had been a one-sided, speculative move in exchange-rate fluctuations could not be ignored.

Japan’s Ministry of Finance and the New York Federal Reserve were not immediately available for comment sought by Reuters.

Daily operations data earlier in the day suggested the Bank of Japan (BOJ) may have spent over 3 trillion yen (USD 18.85 billion) on defending the currency on Thursday, less than three months after it last intervened.

It was not immediately clear what was behind this latest move. Several analysts noted that it bore some of the hallmarks of official buying, but the yen’s strengthening was more modest than Thursday’s, raising some doubt as to whether or not the central bank was behind the trend.

“It could be a modest further round of intervention. I wouldn’t be as confident as yesterday when the move was much bigger,” said Chris Scicluna, head of economic research at Daiwa Capital Markets.

“Given that we have the Japan holiday on Monday, it’s not a bad time for them (Japanese authorities) to enforce the move.

“It’s not the greatest of shifts of the yen so far, so I wouldn’t be overly confident that it’s them,” he added.

NO BREAK FOR THE YEN

Some analysts said the brief bounce in the yen could have been the result of the BOJ making checks with dealers on the exchange rate – often a precursor to buying.

The Nikkei news outlet said earlier on Friday the BOJ had made rate checks during Asia trading hours for the euro/yen currency pair.

With the Japanese currency near its weakest since the mid-1980s, the chances of another round of BOJ buying remain high and Monday’s public holiday in Japan, when market liquidity is likely to be much thinner, could provide a window, analysts said.

“They need to change tactics to keep the market on its toes and show they are serious,” said James Malcolm, head of FX strategy at UBS.

A softer reading of US inflation on Thursday has helped raise the chances of a September rate cut by the Federal Reserve, which could take some pressure off the yen by making it less attractive for investors to trade the large gap between US and Japanese interest rates.

“It wouldn’t surprise me if it were the BOJ, going for a 1-2 punch strategy. Liquidity probably isn’t great so it is a good time, and (Fed Chair) Jerome Powell’s speech on Monday could help things along,” said Kenneth Broux, Societe Generale head of corporate research FX and rates.

Fed Chair Jerome Powell will take part in an interview hosted by the Economic Club of Washington on Monday in which he may offer some kind of signal over whether a September cut might transpire.

(USD 1 = 159.1200 yen)

(Reporting by Karen Brettell and Gertrude Chavez in New York, Alun John, Amanda Cooper, Dhara Ranasinghe and Harry Robertson in London, and Makiko Yamazaki in Tokyo; editing by Mark Heinrich)

Yen rallies: CPI short squeeze or intervention?

Did they or didn’t they? The yen surged across the board on Thursday in what may have been a perfectly timed round of Japanese intervention upon the release of a tame US inflation report that sent Treasury yields and the dollar lower.

While analysts did not rule out intervention, they said forex players could have been caught wrong-footed on short yen positions. But local Japanese television cited government sources as saying official intervention did occur and, while Jiji said Japan’s currency boss Masato Kanda could not comment yes or no, the news service did quote him saying recent yen moves were not in line with fundamentals.

Either way, the yen jumped more than 2% at one point against the greenback and the euro moments after news that US consumer prices fell for the first time in four years, which bolstered the case for a circumspect Fed to lower interest rates in September.

The 0.1% CPI drop from May to June smacks of an important dovish watershed for data-dependent Fed policymakers. Friday brings the US Producer Price Index as potential confirmation, bits of which feed into the Fed’s favorite inflation gauge, the Personal Consumption Expenditures prices index.

Futures traders raised the odds of a Fed easing in September to 85% from 70% before the report and added to bets for a second cut in December.

While Wall Street took the S&P 500 and Nasdaq to another set of intraday records after the open, a plunge in Treasury yields, was not enough to keep the rally going. Only the Dow closed in the green.

Taiwan Semiconductor needs to carry the baton for the chips sector, and growth stocks in general, after rotation out of Nvidia, Apple, and Tesla took the froth out of US markets.

Many Asia bourses have their own momentum. No one would rule out the Nikkei taking a breather from its record-setting streak. MSCI’s Asia ex-Japan stock index rose 1.4% on Thursday.

Beijing’s quinquennial Party plenum looms next week as a source of signals for China’s markets. Meanwhile, fresh curbs on short selling could mean another day of positive vibes for the Shanghai Composite index after it’s 1.06% gain Thursday. Likewise for the blue-chip CSI300 index.

Dollar/yen was down 1.8% at 158.79 in late US trade. The euro rose 0.34%.

The yuan strengthened against the falling dollar and was last at 7.2582 per dollar.

Here are key developments that could provide more direction to markets on Friday:

– Malaysia industrial output (May)

– Japan industrial output (May)

– US Producer Price Index (June)

– JPMorgan, Wells Fargo, Citigroup earnings (Q2)

(Compiled by the Global Finance & Markets Breaking News team; Editing by Josie Kao)

Dollar drops, yen surges as consumer prices fall in June

The dollar dropped on Thursday after data showed headline consumer prices unexpectedly fell in June, with the Japanese yen at one point gaining more than 2% as traders priced in the likelihood that the Federal Reserve will begin cutting interest rates in September.

The sharp gain in the yen increased speculation that Japanese authorities may have intervened to shore up the currency, which fell to a 38-year low against the greenback last week.

Analysts said that while an intervention is possible, the move was likely related to repositioning, with many traders being caught on the wrong side of the market.

“I’d say most likely it’s position squaring rather than any official moves,” said Steve Englander, head of global G10 FX research and North American macro strategy at Standard Chartered Bank in New York.

Englander noted that long dollar/yen positions have accumulated due to the large interest rate advantage in the US relative to Japan, but the rate differential will shrink now that a September rate cut is highly probable.

Thursday’s data showed the consumer price index dipped 0.1% last month after being unchanged in May, and posted an annual gain of 3%, the smallest in a year.

Core prices rose 0.1% in June, for an annual gain of 3.3%.

Fed Chair Jerome Powell said this week he was not ready to conclude that inflation is moving sustainably down to 2% though he has “some confidence of that.”

Unexpectedly elevated inflation in the first quarter raised concerns that it will take longer for prices to recede than previously thought.

There have also been worries that it would be more difficult for inflation to continue to recede compared to 2023, following an improvement in the second half of last year.

“The question was, could we match or beat it to keep the year-on-year disinflation path going down,” said Englander, but “this was a pretty decisive” improvement.

Some softer details in Friday’s employment report for June have also bolstered the case for rate cuts.

Traders are pricing in an 89% probability of a rate cut in September, up from 73% on Wednesday, according to the CME Group’s FedWatch Tool. A second cut is also likely by December.

The dollar index was last down 0.58% at 104.36 and got as low as 104.07, the lowest since June 7.

Against the yen, the dollar was down 1.94% at 158.52 after hitting 157.4, the weakest since June 17.

The euro rose 0.38% to USD 1.0872 and reached USD 1.090, the highest since June 7.

Sterling hit an almost one-year high as comments from Bank of England policymakers and better-than-forecast GDP data led traders to reduce bets on an August rate cut in Britain.

BoE chief economist Huw Pill said on Wednesday that price pressures remained persistent and Thursday data showed British economic output increased by 0.4% in May, above expectations.

The pound was last up 0.57% at USD 1.2916 and reached USD 1.2947, the highest since July 27, 2023.

In cryptocurrencies, bitcoin BTC= gained 0.85% to USD 57,887.

(Reporting By Karen Brettell; Editing by Toby Chopra, David Evans, and Richard Chang)

Gold reclaims USD 2,400 mark after US inflation data lifts rate-cut bets

Gold prices jumped more than 2% on Thursday, breaking above the USD 2,400 per ounce level, after data showed US consumer prices unexpectedly slipped last month, boosting bets for interest rate cuts by the Federal Reserve.

Spot gold was up 1.8% at USD 2,414.75 per ounce by 2:37 p.m. ET (1837 GMT), its highest since May 22.

US gold futures settled 1.8% higher to USD 2,421.90.

“Gold surges above USD 2,400 as the friendly CPI number nearly cements a September rate cut. Gold bulls are likely to push for a new all-time high perhaps as soon as next week,” said Tai Wong, a New York-based independent metals trader.

Spot gold prices hit a record high of USD 2,449.89 per ounce on May 20.

US consumer prices unexpectedly fell and the annual increase was the smallest in a year, reinforcing views that the disinflation trend was back on track and drawing the Fed another step closer to cutting interest rates.

Interest-rate futures prices reflected about an 85% chance of a rate cut at the Fed’s September meeting, compared with about a 70% chance seen before the data.

Non-yielding bullion’s appeal tends to shine when interest rates fall.

Following the US inflation data, the dollar dropped to a more than one-month low, making gold more attractive for other currency holders, while the benchmark US 10-year Treasury yield fell to a four-month low.

Fed Chair Jerome Powell, over his two days of commentary before the Senate and House committees that oversee the central bank, indicated the Fed was edging closer to a rate cut decision.

“Given the overall trajectory on monetary policy and gold demand I think the bull run is not over yet,” said Zain Vawda, market analyst at MarketPulse by OANDA.

Meanwhile, spot silver climbed 2% to USD 31.44 per ounce, its highest since May 31. Platinum rose 1.4% to USD 1,002.86 and palladium gained 0.7% to USD 992.75.

(Reporting by Brijesh Patel in Bengaluru; Editing by Shounak Dasgupta and Mohammed Safi Shamsi)

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