Globally, governments like to see lower interest rates because it boosts growth. President Trump, who criticized the Fed for keeping rates too low, changed his stance after the election. He has lashed out at Fed Chair Jerome Powel for raising rates.
Berkshire Hathaway’s portfolio is overweight in the financial sector (XLF). The company holds stakes in Wells Fargo (WFC), Bank of America (BAC), Goldman Sachs (GS), American Express (AXP), JPMorgan Chase (JPM), and U.S. Bancorp (USB). Berkshire Hathaway also has a stake in Apple (AAPL). However, the company exited Oracle (ORCL) in the fourth quarter.
After raising rates four times this year, the Fed took a dovish stance and said that would be “patient” with future rate hikes. However, the Fed isn’t the only central bank that’s patient with rate hikes. Last week, the Bank of Japan kept its key interest rate unchanged.
At the beginning of March, the ECB (European Central Bank) said, “The Governing Council now expects the key ECB interest rates to remain at their present levels at least through the end of 2019.” The current language is more dovish than last year when the ECB said that the rates would be on hold “at least through the summer of 2019.”
While central banks in developed countries have taken a dovish stance amid softer growth, their counterparts in emerging countries have gone a step further and have been loosening their monetary policy.
The interest rates are much lower compared to the levels in 2007 before the global recession. The federal funds rate is less than half the level in 2007.
Verizon Communications stock (VZ) closed down 2.09% on Tuesday after the leading US mobile carrier reported mixed results for the first quarter of 2019 before the market bell yesterday.
Several European auto companies want Nokia’s (NOK) patent business subjected to an antitrust probe.
The first-quarter semiconductor earnings season has begun, and the stock market is showing bullish sentiment as investors buy ahead of earnings releases.
Netflix (NFLX) is working its way through a series of price increases in several markets, including the United States and parts of Europe.
Netflix (NFLX) is aiming to add 14.6 million paying subscribers in the first six months of 2019.
Earlier today, the second-largest US automaker, Ford Motor Company (F), announced a plan to invest $500 million in Plymouth-based automotive company Rivian.