Market View: Buffett Bows Out, BOJ Hikes & the Yen Falls, ST Engineering’s 30% Upside?

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Good morning, folks. It is now time for Market View. It's the end of an era at Berkshire Hathaway. We'll also look at Japan raising interest rates, the end falling anyway, and a little bit in up or down for you. But let's start with Warren Buffett after more than six decades at the helm of Berkshire Hathaway. The Oracle of Omaha is stepping down as chairman. Buffett, now 96, becomes chairman emeritus and remains on Berkshire's board. His son Howard Buffett takes over as chairman. And now the succession itself has been planned for years. But here's the investing question. Are you ready? How much of Berkshire Hathaway's value has always been Warren Buffett himself? Now listen, if you're a Buffett discipline, a disciple wondering where to look next, well, I came across an interesting column by Brett Aarons over at Market Watch. And he has a really interesting suggestion. Go directly to Japan. He argues investors should look at the five great Japanese trading houses that Buffett has spent the last six years buying into Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. So as Buffett's reign at Berkshire ends, one of his final great investment themes might be where investors find his next great act. And that is Japan. Isn't that interesting? He built one of the most successful investment firms in history, he's seen as a sage of American capitalism, stepping down as chairman of Berkshire Hathaway. Turn 96 and his oldest son Howard G. Buffett will become chairman under the succession plan. In a letter to Berkshire shareholders recently, Mr. Buffett wrote, Serving as your chairman has been the privilege of a lifetime. I have never taken your trust for granted. But father time always wins.

He's been really generous with Warren Buffett though. I have to say, what an enormous investment portfolio. Stakes in Apple, Bank of America, the largest shareholder, Berkshire Hathaway is in giants like American Express, Coca Cola.

At one point, the world's wealthiest man on paper, his net worth estimated to be $145 billion.

All right, let's go to Japan now and take a closer look at what is happening with those great hikes. The central banks around the world grapple with different problems, from Buffett's Japanese investments to Japan itself. The Bank of Japan raised interest rates on Friday to the highest level in 31 years. The benchmark rate moved from 1% to 1.25%.

And yet, investors sold a yen. So why? The hike was widely expected, but two of the BOJ's nine policymakers voted against it. And that descent raised questions about just how aggressively the central bank can keep tightening from here. So we got a slightly counterintuitive market reaction, which I sort of got into with Swapnil Mishra this morning. Japan raising rates and yet seeing its currency weaken, that doesn't usually happen. So it's a great pub quiz question, right? For decades, Japan was synonymous with ultra low interest rates, but among the major Asian economies, Japan no longer has the lowest policy rate. Can you guess who does? Thailand. Yeah, the Bank of Thailand's policy rates currently 1% compared that with Japan's at 1.25%.

And that shift tells you just how extraordinary Japan's monetary policy journey has been. After years of zero, even negative rates, Japan is slowly becoming a higher rate economy. And that matters well beyond Tokyo. The big question for global investors is what happens to the yen carry trade and to the huge pools of Japanese money invested overseas? If the Japanese rates continue to climb, are we going to see sort of repatriation of those funds? And what might that mean for bond markets around the world? Super interesting. Japan Central Bank raising the benchmark interest rate 1.25%. That is the highest rate in 31 years.

BOJ has been trying to normalize monetary policy after decades of keeping interest rates near or below zero to encourage more borrowing and spending to counter deflation and to pull Japanese economy out of the doldrums.

The decision to raise rates came after looking at various risks like geopolitical risks, the war in Iran, expanding market demand for AI and currency fluctuations as well. The Bank of Japan has set a target inflation rate of about 2% inflations around there in Japan, although some consumers complain that the recent surge in prices is too much, especially in gas and oil related products. All right, time for up or down. And you can play along at home. Oh, look what's up. My favorite running pair of shoes. On Cloud, which I buy for many of my loved ones. Now, when it comes to on running, one of the football's biggest stars has a new footwear deal. Kylian Mbappé is leaving Nike for sportswear company, Swiss, the best in the world if you ask me. On, publicly listed, by the way. I've been nethering on about them since I put on a pair of ons. Thank you, on. Fascinating coup for a challenger brand that has made enormous strides in running, but is now pushing deeper into the global sporting mainstream. So, Nike losing a superstar. On gets one of the most recognizable athletes on the planet. Can you imagine Mbappé leaving Nike for on? This is a major new foothold for the brand in global soccer. See what else? Mbappé's move from Nike to on, I think signifies product innovation. You know, Nike has to do something, so it really has to think about rebuilding brand loyalty now. It's been sluggish, particularly in China. Meanwhile, this is great for on. This definitely gets an up for me. What did Mbappé say about the brand? He says, I want to bring my experience and perspective into what we create, push what's possible during innovation, stay true to the joy of football. We have a shared dream and this is only the beginning. On says it wants to bring a fresh perspective to the sport. Understandable. This is definitely an up for on. Makes me want to go on and buy another pair. Next, let's look at Wendy's. Wendy's gets down from me. This major franchisee has filed for chapter 11 bankruptcy protection as the burger chain grapples with a difficult consumer environment. This is just another reminder, I think, that even some of America's most familiar fast food names are not immune when consumers become more selective about where they spend. For six straight quarters, we've seen Wendy's report same store declines, Meritage Hospitality is one of Wendy's largest US franchises and they failed for chapter 11 bankruptcy. So you can guess where I'm going with Wendy's. It's definitely a downright. All right. Next, let's look at Disney, shall we, who names the CTO for the first time as a media giant expands its tech push.