The last 10 days have been pretty interesting for both Indian and global markets to say the least.
Dramatic turn of events
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Firstly, we had an eventful budget that confused many but pleasantly surprised none. Markets and participants had a lot going against them but we somehow climbed the wall of worry and touched 25000 for the first time ever.
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While things locally were still extremely buoyant somehow, Globally, things started getting somewhat shaky with the Japanese headline index Nikkei correcting nearly 12% in a month and 15% from its highs mainly due to the rate hike done by its central bank for the second time after 17 years, with yen to appreciating significantly against the dollar and the overall implications on the great carry trade based on these above events. If you are interested in learning about it just like me, @Karthik’s Z-connect post on this topic is the best way to start
- US markets too were mostly optimistic till the Fed’s FOMC meeting day. Markets cheered the commentary from the central bank on almost a certainty of a rate cut cycle beginning from September and Dow and broader markets closed near highs.
But as it often turns out, Markets get overexcited many times and this time around suddenly realized - Oh !! Things aren’t that great with its jobs and manufacturing data and started selling off on fears that the Fed might actually be late in cutting rates there. This was reflected in the sudden rally in bond markets (sell-off in the bond yields) implying money moving to safer assets as stocks started selling off.
- As if all of the above was not enough, Geographical tensions in the Middle East started blowing out after Hamas chief Haniyeh was killed by Israel. The heightened tensions between Israel, Iran, and other Middle Eastern countries are expected to remain elevated going forward.
While this was like a recap of the key events in the last fortnight, One of the interesting news that we got today was related to Berkshire Hathaway.
Berkshire slashes its Apple position by 50% !!
A few months ago Buffet said that selling “a little Apple” would be beneficial in case there is a capital gains tax rates rise. What was surprising is little Apple selling here turned out to be nearly a $80 billion state cut.
After this selling, Berkshire is sitting on cash of more than a quarter TRILLION dollars in cash.
One interesting thing to note is, this disclosure by Berkshire comes as a part of its Quarterly results ending June 30, 2024. it wouldn’t be surprising if they further trimmed their positions after June 30 till now.
Is it a bearish view on Apple for now or is it a sign of him being bearish on Tech stocks itself? it’s tough for now to have a clear answer to this question but one thing is for sure - Mr Buffet is fully ready with his dry powder sorted in case there is a decent correction in markets in the future.
