Buffett’s big buyback; SoftBank sticks with Saudis; Amazon’s offer

Posted at 3:33 AM, Nov 05, 2018
and last updated 2018-11-05 05:42:14-05

1. Trade optimism wanes: Stock markets across Asia fell on Monday, as hopes of a potential ceasefire in the trade war between the United States and China faded.

Hong Kong’s Hang Seng index dropped more than 2%, while Japan’s Nikkei and China’s Shanghai Composite fell around 1.5% and 0.5% respectively. European markets opened mixed, while US futures were edging lower.

China’s President Xi Jinping spoke out against protectionism in a speech in Shanghai on Monday, in what appeared to be a veiled swipe at President Donald Trump. “A global economy is an irreversible trend and won’t change because of one person,” Xi said.

Trump’s economic adviser Larry Kudlow on Friday downplayed the possibility of a trade agreement with China. “There’s no massive movement to deal with China,” Kudlow told CNBC.

2. Buffett’s Berkshire buyback: Berkshire Hathaway (BRKB), the company owned by renowned investor Warren Buffett, has repurchased nearly $1 billion of its own stock after removing limits earlier this year that essentially prevented it from doing so.

Berkshire announced the $928 million stock buyback, its first in nearly six years, over the weekend. The company also said its net income rose from $4.1 billion to $18.5 billion in the past year.

Berkshire shares jumped around 3% in premarket trading Monday. The company’s stock is already up more than 4% this year.

3. SoftBank sticks with Saudis: The Japanese tech giant will maintain close financial ties with Saudi Arabia despite the outcry over the killing of Saudi journalist Jamal Khashoggi.

SoftBank (SFTBF) CEO Masayoshi Son expressed “strong regret” over Khashoggi’s death during an earnings presentation in Tokyo on Monday, but said the company must “fulfill its responsibility for the future of the Saudi people.”

Saudi Arabia provided $45 billion of the $93 billion that SoftBank raised for its Vision Fund, which has made big investments in startups such as WeWork and Slack.

4. Amazon holiday offer: Amazon is giving its customers a bit of festive cheer, announcing that all holiday orders will be eligible for free shipping. The offer will apply to all orders arriving in time for Christmas, the company said, covering hundreds of millions of products.

Meanwhile, Amazon (AMZN) is battling the rumor mill over the location of its second headquarters, known as HQ2. A key executive hit back at a Washington Post report that said the company was close to picking Crystal City, Virginia, as the location.

5. Iran sanctions kick in: The latest US sanctions on Iran took effect Monday, but their impact on global oil markets may not be as severe as expected after a number of countries were granted temporary exemptions.

Eight “jurisdictions” will temporarily be allowed to keep buying Iranian oil, US Secretary of State Mike Pompeo said Friday, without revealing the names of those exempted. Six of those jurisdictions will import Iranian crude oil at greatly reduced levels, while two will completely end their imports, Pompeo added.

The United States and Saudi Arabia have ramped up their oil output in recent months, easing fears of a shortage. Oil prices ticked lower early on Monday.

6. Coming this week:

Monday — Avis Budget Group (CAR), SeaWorld Entertainment (SEAS), Paramount (PGRE), Michael Kors (KORS), and Mylan (MYL) earnings

Tuesday — Eli Lilly and Co. (LLY), 21st Century Fox (FOXA), CVS Health (CVS), Wendy’s (WEN), Etsy (ETSY), GoDaddy (GDDY), Zillow Group (ZG), Match Group (MTCH), Overstock (OSTK) earnings; US midterm elections

Wednesday — Monster Beverage (MNST), Sinclair Broadcast Group (SBGI), Hostess Brands (TWNK), Tribune Publishing (TPCO), News Corp. (NWSA), Groupon (GRPN), Humana (HUM), Qualcomm (QCOM), TripAdvisor (TRIP), Roku Inc. (ROKU), IAC (IAC), Wynn Resorts (WYNN) earnings; FOMC meeting

Thursday — AMC Entertainment (AMC), Activision Blizzard (ATVI), Crocs (CROX), Gannett (GCI), Walt Disney (DIS), Party City (PRTY), Discovery (DISCA), Dropbox (DBX), Hertz Global Holdings (HTZ), Yelp (YELP), FOMC meeting

Friday — E.W. Scripps Co. (SSP), McClatchy (MNI) earnings; consumer sentiment