Warren Buffett’s Berkshire Hathaway Inc. has eased the pace of its sales of Bank of America Corp. stock, marking a third consecutive slowdown in the process.

The sales, which began in mid-July, fetched some of the lowest prices seen since the legendary investor started liquidating shares.

While these stock sales may appear routine, analysts and investors are beginning to wonder if they hint at something more significant on the horizon.

Buffett’s stock sale slows—but why?

According to a regulatory filing on Wednesday, Berkshire Hathaway generated $338 million from selling Bank of America shares earlier this week, a sharp drop from earlier rounds, which averaged about $750 million per sale.

The most recent transactions, which took place on Tuesday and Wednesday, saw an average stock price of $39.40—among the lowest prices Buffett has secured since initiating the sales in mid-July.

Despite the gradual reduction of his position, Buffett’s Berkshire Hathaway remains the largest shareholder of Bank of America, holding 10.2% of the bank’s stock, a stake valued at more than $31 billion.

Yet, the Oracle of Omaha has remained tight-lipped on the rationale behind these disposals, leaving market observers speculating: What is Buffett’s next move?

Could Buffett be preparing for a larger play?

Buffett’s sales of Bank of America shares come amid a time of economic uncertainty and market volatility.

Some market analysts suggest that these sales could be part of a broader strategy to free up capital for a significant acquisition or investment.

Buffett has a history of amassing cash reserves before making big moves during periods of economic turbulence, and with over $147 billion in cash and cash equivalents at Berkshire’s disposal, the company is in a prime position to make substantial acquisitions.

Historically, Buffett has taken advantage of market downturns to buy undervalued companies or invest in industries poised for long-term growth.

With inflation concerns, interest rate hikes, and geopolitical tensions all weighing on global markets, it’s possible that Buffett is preparing for a large-scale move into an entirely new sector—or doubling down on a business he views as undervalued.

Berkshire Hathaway’s size and influence

Under the leadership of Warren Buffett, now 94 years old, Berkshire Hathaway has cemented itself as one of the most successful companies in history.

With a market capitalization of around $990 billion, Berkshire ranks as one of the largest corporations in the S&P 500 and holds the title of the eighth-largest company in the world.

While Berkshire Hathaway is known for not paying dividends, Buffett has crafted a portfolio that thrives on dividend-paying companies.

This strategy has been pivotal in helping Berkshire outperform the broader market, consistently delivering impressive returns for its long-term shareholders.

Diversified holdings across industries

Berkshire Hathaway’s portfolio is vast and varied, spanning several sectors. In addition to utilities, the company owns the BNSF railroad, a number of major insurance firms—including Geico—and an array of manufacturing and retail businesses.

Among these are Precision Castparts, a maker of aviation parts, as well as household names like Dairy Queen and See’s Candies.

This diversification strategy has allowed Berkshire to maintain a dominant position across multiple industries, solidifying its reputation as one of the world’s most formidable conglomerates.

Despite the recent slowdown in Bank of America stock sales, Buffett’s moves are always closely watched, leaving investors speculating on his next strategic play.

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Costco (COST) may not be your typical destination for precious metals, but the retail giant is expanding its portfolio by adding platinum to its offerings, following the success of its gold and silver products.

The retailer now lists 1-ounce platinum bars on its website, priced at $1,089.99.

Customers can also purchase a 1-ounce Canada Maple Leaf platinum coin for the same amount. Both products come with a $94 premium over their base price.

However, not all shoppers can access these offerings—Costco notes that the bars and coins are not available in every state, and delivery is restricted in Nevada and Louisiana.

Additionally, these items are non-returnable and non-refundable, so buyers need to act fast as the products tend to sell out quickly.

In fact, the demand is so high that it has inspired a dedicated subreddit called “Costco Precious Metals,” where Reddit users share updates on restocks of gold, silver, and now platinum products.

E-commerce boost from precious metals

The inclusion of precious metals in Costco’s online store has proven beneficial for its e-commerce growth.

Earlier this year, Chief Financial Officer Richard Galanti highlighted during an earnings call that the surge in online sales for the last quarter of 2023 was primarily driven by strong demand for gold and more recently silver.

Among Costco’s metal offerings, gold appears to be the customer favorite.

An analyst report from Wells Fargo suggested that gold bar sales contribute between $100 million and $200 million to the company’s monthly revenue.

Costco started selling 24-karat gold bars in October 2022, priced at around $2,000 each, and these bars quickly became a hit with consumers.

Despite the substantial revenue generated from these sales, analysts suggest the actual profit margins on these precious metals are minimal.

Instead, the strategy is seen as a way to bolster Costco’s value proposition, similar to its famous rotisserie chickens—offering an irresistible deal that draws customers in.

Gold and platinum: a lucrative market

Costco’s foray into the precious metals market has continued to gain momentum.

After launching gold bars in August 2023, the retailer saw these items fly off the virtual shelves, often selling out within hours of a restock.

By April 2024, Wells Fargo analysts estimated that Costco was moving as much as $200 million worth of gold bars per month.

“I’ve received calls from people noticing that we’re selling 1-ounce gold bars online,” said Galanti during a September 2023 earnings call.

When we upload them to the site, they usually sell out within a few hours. We also limit purchases to two bars per member.

Gold’s allure has only grown, with its value increasing over 40% in the past year and more than 70% over the last five years.

Platinum, on the other hand, has experienced more volatility.

Over the past year, platinum’s value has risen by over 15%, though it has dropped more than 8% after peaking at $1,100 earlier in 2024.

Costco’s expanding involvement in the precious metals market underscores its commitment to offering a diverse range of products, whether you’re shopping for bulk groceries or bullion.

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The escalating conflict in the Middle East sent oil prices higher on Thursday, as traders kept a close eye on potential disruptions in crude flows from the region.

However, a robust global supply outlook helped limit significant price surges.

By early Thursday morning, Brent crude futures had climbed 80 cents, or 1.08%, to reach $74.70 a barrel. US West Texas Intermediate (WTI) crude also saw a rise, gaining 85 cents, or 1.21%, to settle at $70.95 per barrel.

Market participants remain cautious about the ongoing hostilities between Israel and Iran-backed Hezbollah in Lebanon.

“Following the initial jitters from geopolitical risks in the Middle East, we have seen some calm return to global markets,” Yeap Jun Rong, a market strategist at IG, told Reuters.

But of course, with market participants still keeping a side-eye on any upcoming Israeli response.

Tensions in the Middle East Escalate
The situation in the Middle East worsened after Israel conducted airstrikes in central Beirut early Thursday, killing six people.

The strike followed a deadly day for Israeli forces on the Lebanese front, in their continued clashes with Hezbollah.

The violence escalated further after Iran fired over 180 ballistic missiles at Israel the previous day, pushing the conflict beyond the borders of Israel and Palestine into Lebanon and Syria.

“The question for oil now is whether Iran’s energy infrastructure will be in Israel’s crosshairs,” Yeap added, raising concerns about a possible Israeli strike on Iran’s oil facilities.

Tony Sycamore, an IG market analyst, commented on the potential impact of further military action.

“It’s a waiting game to see what Israel’s response will be,” he said.

But I doubt that Israel will target Iranian oil infrastructure, as such a move would likely push oil prices toward $80, which could face resistance from Israel’s allies fighting inflation.

Rising US oil inventories keep prices in check

Even as geopolitical tensions lifted prices, data from the U.S. Energy Information Administration showed a build-up in crude inventories, tempering some of the market’s concerns.

US crude inventories increased by 3.9 million barrels in the week ending September 27, reaching a total of 417 million barrels.

This far exceeded the expected 1.3 million-barrel draw, as forecasted in a Reuters poll.

“Swelling U.S. inventories added evidence that the market is well supplied and can withstand any disruptions,” analysts from ANZ said in a note, providing further reassurance to investors.

Global supply still sufficient despite conflict

Despite the heightened tensions, global oil supplies remain steady for now. Investors remain largely unfazed, as no significant disruptions to crude exports from the Middle East have occurred so far.

OPEC’s spare capacity also offers a buffer against potential supply shortages, according to Jim Simpson, CEO of East Daley Analytics.

“After Iran’s attack, prices may stay elevated or remain more volatile for a little longer, but there’s enough production, there’s enough supply in the world,” he told Reuters.

OPEC’s surplus capacity could absorb the impact of a complete loss of Iranian supply if Israel were to target the country’s oil infrastructure.

However, analysts warn that the situation could change quickly if Iran retaliates by attacking oil installations in neighboring Gulf states.

“The effectively available spare capacity might be much lower if renewed attacks on energy infrastructure in the region occur,” noted Giovanni Staunovo, an analyst at UBS.

As the situation unfolds, oil markets remain on edge, with both geopolitical risks and supply factors keeping prices from swinging too far in either direction.

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The Bank of England (BoE) could adopt a more aggressive stance on interest rate cuts if inflation data continues to improve, according to Governor Andrew Bailey.

However, the escalating conflict in the Middle East poses risks to oil prices, which could complicate the central bank’s plans.

In an interview with The Guardian, Bailey suggested that the BoE might become “a bit more activist” and “a bit more aggressive” in cutting interest rates if inflation continues to show signs of easing.

This comes after recent positive inflation data, which has alleviated some of the central bank’s earlier concerns about persistent price pressures.

Sterling reacted swiftly to Bailey’s comments, dropping by nearly three-quarters of a cent against the US dollar as investors digested the possibility of faster rate cuts in the near future.

Market expectations for a quarter-point rate cut at the BoE’s November meeting surged, with rate futures pricing in a 90% chance of a reduction.

Current interest rate landscape

The BoE’s current benchmark interest rate stands at 5%, following the first rate reduction in four years in August.

While the central bank held rates steady in its most recent meeting, markets are anticipating a further 0.25% cut at the upcoming November meeting.

Bailey’s comments indicate a shift in the BoE’s approach, driven by easing inflation.

“I’m encouraged by how inflation pressures have proven less persistent than we feared,” Bailey said, while emphasizing the importance of monitoring global events that could impact inflation trends.

Middle East conflict and its impact on oil prices

While inflation trends are improving, Bailey also highlighted the risks posed by geopolitical instability in the Middle East.

Rising tensions in the region could lead to a spike in oil prices, complicating the BoE’s efforts to manage inflation and stabilize the economy.

“Geopolitical concerns are very serious,” Bailey told The Guardian.

It’s tragic what’s going on. There are obviously stresses, and the real issue then is how they might interact with some still quite stretched markets in places.

He acknowledged the global efforts to keep oil markets stable, but warned of potential volatility.

There’s a strong commitment to keep the oil market stable, but there’s a point beyond which that control could break down if things got really bad. You have to continuously watch this thing, because it could go wrong.

Investors eye November rate cut

Investors are now fully pricing in a quarter-point rate cut at the BoE’s November meeting, a sentiment that has grown stronger following Bailey’s remarks.

With inflation showing signs of slowing, the central bank may have more room to cut rates and support the economy, provided that global oil prices remain stable.

The BoE’s balancing act between domestic inflation control and external geopolitical risks will be closely watched in the weeks leading up to its November meeting.

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A significant rally in Chinese stocks is prompting a shift in global portfolios, as investors seek to capitalize on new opportunities, Bloomberg has reported.

Following Beijing’s aggressive economic stimulus measures, the flow of funds, which previously favored stocks from Japan and Southeast Asia, is reversing direction, according to market analysts.

Shares in markets like South Korea, Indonesia, Malaysia, and Thailand have seen net outflows, while BNP Paribas reports that over $20 billion has been pulled from Japanese equities in the first few weeks of September.

Strong gains in China, challenges for other Asian markets

The rotation of capital may signal the end of a robust run for non-Chinese Asian markets.

Earlier this year, Taiwan benefited from the booming chipmaking sector, while India saw its markets surge on the back of accelerating economic growth.

Southeast Asia also enjoyed a boost due to lower US interest rates, helping regional markets.

However, China’s resurgence, driven by favourable government policies, is now drawing investor attention away from these markets.

Eric Yee, senior portfolio manager at Atlantis Investment Management, confirmed the trend in the report,

“We are trimming our long positions across Asia to fund China purchases. Everyone is doing so. It’s a good policy-driven recovery from rock bottom. You wouldn’t want to miss out on such an opportunity.”

Chinese stocks see a 30% rise, attractive valuations remain

The MSCI China Index has surged more than 30% from its recent low after Chinese authorities rolled out a series of stimulus measures aimed at reviving economic growth.

Trading volumes in both China and Hong Kong hit record highs earlier this week.

Despite the rally, valuations remain attractive, with the MSCI China gauge trading at 10.8 times forward earnings, still below its five-year average of 11.7 times.

This leaves room for further gains, as global mutual funds currently have only a 5% allocation in Chinese equities—an all-time low over the past decade, according to EPFR data from August.

The possibility of more funds flowing into Chinese markets as investors reallocate resources is becoming more apparent.

Early stages of reallocation

While the shift toward Chinese equities is in its initial stages, BNP Paribas strategists, including Jason Lui, noted that investors are beginning to reduce their exposure to Japanese stocks and reallocate funds back into China.

Although this trend has yet to lead to significant outflows from Indian and other emerging markets, the potential for more substantial changes remains.

Maybank analyst Jeffrosenberg Chenlim sees the current fund flow as a “temporary event.”

However, others like Mohit Mirpuri, a fund manager at SGMC Capital, argue that China could be the top performer by the end of 2024.

“The current momentum is hard to ignore,” Mirpuri said, emphasizing the potential for China’s continued growth.

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