Before the bell: happy with weak jobs report

As the American election stew gets more toxic than ever, the dollar falls. Buffett holds on to less Apple and an ever-growing mountain of cash.

Thanks to a strong performance on Friday, the week’s losses were kept in check. As is often the case, weaker economic figures gave the financial markets some breathing room. In October, hardly any jobs were added in the U.S., while the expectation was already modest at 110,000. As a result, long-term interest rates eased after weeks of rising, and investors are convinced that the Fed will cut rates on Thursday. Will this still be true if we wake up Wednesday with Trump as the new U.S. president? He is expected to drive inflation higher. However, things are rarely as bad as they seem. That said, things are quite tense in the U.S., so it’s surprising that the markets remain relatively calm. The dollar, however, is falling, as are individual stocks. Even Microsoft posted a one-day loss of 5.9% last week. The next day, calm returned, and Amazon rose by 6.2%. The latter’s results were more favorable than Microsoft’s, though neither could be called bad. Investors also reacted (excessively?) harshly to AB InBev (-7.4% for the week) and Melexis (-14.7% for the week) following their earnings.

In Asia, Japan is down this morning, while China is up. Ryanair lowered its forecast, and PostNL released quarterly results. In the U.S., Yum China will report pre-market, followed by Palantir after the close.

Buffett waits for a new Apple

On Saturday, Berkshire Hathaway, Warren Buffett’s holding company, released its quarterly results. For a holding company, results are often less relevant than for an ordinary company, but adjustments to its portfolio are interesting. Through required disclosures as a major shareholder, we know that Berkshire has been steadily reducing its stakes in Apple and Bank of America. The reduction has been significant and fast: while the holding company started the year with about $174 billion in Apple shares, by the end of September, that had fallen to less than $70 billion. The result? The cash position has swelled to $325 billion—a doubling since the beginning of the year and a tripling compared to two years ago. It seems Buffett is content with current interest returns and is waiting for a ripe apple (though not an Apple) to fall from the tree.

Food for Colruyt

Colruyt was surprisingly the best stock in Brussels last week with a 9% gain, following a somewhat weaker period. The family’s Korys holding increased its stake in the Colruyt Group from 61.3% to 64.4%, partly due to Colruyt’s continued buybacks. The family now holds over 75% of the voting rights, which could fuel speculation about a buyout offer. The retail group also regularly updates its growth strategies, including new urban Okay stores and periodic acquisitions. With a healthy balance sheet, the group has ample room for these moves. ING also reported that Colruyt is trading at an unwarranted discount compared to the sector.

Did you know…

that Nvidia will replace Intel in the Dow Jones index as of November 7? With a market capitalization of $3.3 trillion, Nvidia has left the former chip king far behind. Intel is now worth “only” $100 billion.

This article was translated from Dutch and was originally published on Spaarvarkens.be.