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Warren Buffett bets big on Japan!

XAG/USD – 4hr Candlesticks
Source: GKFX / MT4 (August 31, 2020)

Spot silver is back over $28 per oz for a re-test of its August 18 peak. The move follows the breakout of a possible triangle pattern, signaling an extended move beyond the August 6 peak and above $30.
 

TAKEAWAYS


•    Dollar backtracks, EUR/USD over 1.195 & silver over $28 per oz
•    Warren Buffet adds 5% stake in Japanese trading companies
•    Apple and Tesla shares jump after stock splits
•    Zoom (ZM) shares set for +25% gains after huge Q2 earnings beat
•    DAY AHEAD: RBA, Final August manufacturing PMIs
 

MARKETS


The US dollar has now dropped four months in a row with another daily decline to 2-year lows on Monday. Other major currencies benefitted with the Aussie dollar making a 2-year high over 0.74 and euro re-testing its own 2-year highs. 

US stock markets finished lower but still managed the best August return in decades. Historically August is quite directionless but in the past few years has seen some extended sell-offs. 

Chinese shares dipped on the day despite data showing manufacturing returning to expansion in August. Japan was the big regional winner on Monday with investors tracking the big investment by Warren Buffet’s Berkshire Hathaway into five Japanese trading companies.

Gold and silver prices rose on Monday, reflecting the weakness in the US dollar and a softer tone more broadly. However, two big daily drops in August meant a monthly decline in the precious metals after four months of gains. 
 

GURU WISDOM

“Today is the fodder of tomorrow’s dreams, so we’d be wise to invest in today so that we don’t show up with empty hands tomorrow.” ― Craig D. Lounsbrough
 

Buffett in Japan

90-year old billionaire investors Warren Buffet made an uncharacteristic bet outside of America over the past 12 months, growing stakes up to 5% in Japan’s biggest trading companies – Mitsubishi, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp. The investments appear to be a broad investment in Japan since these companies have many subsidiaries and partners that make them well diversified businesses- much like Berkshire Hathaway. 
 

RBA Preview:


The RBA is expected to keep interest rates steady today’s meeting; however the tone will likely be cautious owing to the economic risks posed by the lockdown in Melbourne and trade tensions with China. At the last meeting the RBA resumed its bond purchases to hold down the yield on 3-year government bonds. Notably in the minutes of the last meeting, Aussie central bankers called the value of the Australian dollar ‘in line with fundamentals’ but it’s possible AUD/USD at a 2-year high changes this sentiment.
 

Zoom in Q2


American video conferencing company Zoom easily beat earnings expectations by quadrupling  revenues with a 4,700% growth in monthly active users over the same time last year. The results go some way to justify the massive 370% share price gain this year as a ‘COVID stock’ favourite, excluding the 25% gain expected tomorrow.
 

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