Buffets Ramps Up Japan Stock Bets, Weighs Buying Even More

Market Movers

• Japanese trading houses rise as Warren Buffett raises stakes. Warren Buffett is turning his focus back to Japan, with the billionaire investor telling Nikkei that he’s mulling a boost to his stock investments in the country shortly after Berkshire Hathaway Inc. kicked off a yen bond sale. Shares of Japan’s major trading houses jumped* after Buffett said he has raised his holdings in them to 7.4% from about 5% in 2020 and is looking to increase his exposure to the country’s stocks, according to the Nikkei report.

• Occidental makes a billion-dollar climate moonshot. It is spending more than $1 billion to build the first in a planned fleet of plants using direct-air capture to pull the CO2* out of the air, a budding technology with fuzzy economics. Bolstering the move are generous tax incentives included in the climate package President Biden signed into law last year that cover up to 45% of Occidental’s expected initial costs per metric ton.

• Chipotle unveils sustainable-restaurant design as it aims to cut carbon footprint. Chipotle Mexican Grill is piloting a new restaurant design to help the company reach its sustainability goals. Next year, more than 100 of the burrito chain’s new locations will use all-electric equipment and some additional elements from the new design. The company is aiming to halve greenhouse gas emissions by 2030.

• TD bank is now the most shorted bank stock. Traders have taken $3.7 billion worth of bets against the bank. Investors are concerned about TD's exposure to Charles Schwab and its pending acquisition of First Horizon. Investors are also fretting about TD's residential mortgage and commercial real estate exposure.

• Leading index for commercial real estate decreased in March. he Dodge Momentum Index (DMI), issued by Dodge Construction Network, slipped 8.6% in March to 183.7. Lending standards for small banks in particular have substantially tightened as banking insecurity intensifies. As a result, owners and developers are more likely to pullback in the short-term, which would further contract the DMI as we continue into the year.

What to Watch

• Biden administration weighs possible rules for AI tools. In a first step toward potential regulation, the Commerce Department on Tuesday put out a formal public request for comment on what it called accountability measures, including whether potentially risky new AI models should go through a certification process* before they are released. The administration’s action comes amid a boom in the use of artificial-intelligence tools.

• Exxon deal hunt signals possible shale M&A wave. The oil giant has held preliminary talks with Pioneer Natural Resources Co., a Texas fracker with a roughly $52 billion market capitalization, about a potential acquisition. Such a transaction would send the strongest signal yet that drillers in the Permian, the hottest U.S. oil field, are set to bulk up through acquisitions.*

• Newmont raises bid for Australia’s Newcrest to $19.5 billion. Newmont’s decision to improve its all-stock offer for Newcrest comes at a time when gold prices are approaching a record high amid stress in the global banking system and heightened worries over the economic outlook. The U.S. company had previously had an around $17 billion bid rebuffed by Newcrest, Australia’s largest-listed gold miner.

• The party might be over for Tupperware. Tupperware has had a hard time convincing Gen Zers and millennials that it’s more than an uncool brand that helped their parents feed them leftovers, and competition has been stiff. Tupperware says it’s trying to raise cash from investors and is looking into selling off some of its real estate.

• US companies face biggest decline in profits since Covid shutdowns. Corporate America is facing its sharpest drop in profits since the early stages of the Covid-19 pandemic. Companies in the S&P 500 index are expected to report a nearly 7 percent decline in first-quarter earnings. Forecasts now see high inflation squeezing margins and fears of a recession holding back demand. Source(1:08)