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Buffett tells CNBC Berkshire bought 120 million Apple shares in 2017

NEW YORK Warren Buffett, chairman and chief executive of Berkshire Hathaway Inc (BRKa.N), told CNBC on Monday that his conglomerate had purchased about 120 million shares of Apple Inc. (AAPL.O) in 2017 and that U.S. stocks were not in “bubble territory.”

“Apple strikes me as having quite a sticky product,” Buffett said. He said Berkshire’s Apple stake, at 133 million shares, was worth about $17 billion and amounted to Berkshire’s second-biggest holding.

Apple Chief Executive Tim Cook had done a “terrific job,” Buffett said, but added he had not bought shares since the company’s earnings report.

Buffett, who told the cable television network that Berkshire had spent about $20 billion on stocks since just before the Nov. 8 U.S. election, also said the U.S. stock market was cheap with interest rates at current levels.

The billionaire investor said it was extremely difficult to attempt to find a floor in stock prices and that he did not know what would happen in the near term in the equity market. He said U.S. shares could conceivably “go down 20 percent tomorrow.”

Buffett said Berkshire’s positions in airlines remained unchanged. He said pricing shares of airlines has historically been a “very tough game” and that he had never met the chief executives of any of the four airlines in which Berkshire holds stakes.

Buffett, who was a vocal supporter of Democratic presidential candidate Hillary Clinton, said he would judge U.S. President Donald Trump based on how safe the country is in four years. He said he would also judge the Republican president according to how the U.S. economy performs overall and how wide participation in a better economy extends.

Despite his disagreement with some of Trump’s policies, Buffett said the U.S. economy would be better off in four years under any president. Buffett said that U.S. Secretary of State Rex Tillerson made “a lot of sense.”

On Kraft Heinz’s (KHC.O) snubbed bid for Unilever (ULVR.L), Buffett said it was never intended to be a hostile offer and that there was not a “backup deal” for the company. Berkshire is a key investor in Kraft Heinz.

Asked about Berkshire’s $86 billion cash pile, he said the conglomerate was “always looking” for acquisitions but that there was “nothing close.”






(Reporting by Sam Forgione; Editing by Bernadette Baum)

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U.S. pending home sales fall to lowest level in a year

WASHINGTON Contracts to buy previously owned U.S. homes dropped in January on a shortage of inventory in the Midwest and West regions, the National Association of Realtors said on Monday.

The NAR said its pending home sales index, based on contracts signed last month, fell 2.8 percent to 106.4. The pending home sales index for December was revised up to 109.5.

Analysts polled by Reuters had forecast a 0.9 percent increase in January. The index last month, however, was still 0.4 percent higher than in January 2016.

Buyers are easily outnumbering sellers in several metro areas, NAR chief economist Lawrence Yun said in a statement.

“Most notably in the West, it’s not uncommon to see a home come off the market within a month,” Yun said.

Across the nation’s four regions, contracts in January increased 2.3 percent in the North and edged up 0.4 percent in the South. That contrasted with declines of 9.8 percent in the West and 5.0 percent in the Midwest.

The NAR reported last week that U.S. existing home sales hit a 10-year high in January as buyers shrugged off higher prices and mortgage rates.

(Reporting by Lindsay Dunsmuir; Editing by Paul Simao)

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GE’s Immelt says U.S. ‘diverging’ from the world

The United States is “diverging” from the rest of the world and will be “less of a leader in trade”, General Electric Co (GE.N) Chief Executive Jeffrey Immelt said in a letter to shareholders.

There was “deep skepticism” toward the ideas that have powered economic expansion of the industry for a generation and concepts such as “innovation, productivity, and globalization” were being challenged and “protectionism” was on the rise, he said in the letter. (

“We’re in an era when some very basic assumptions about the global economy are being tested – an era when trust in big institutions is so low that the most valued “strategy” is simply change in any form,” Immelt said.

President Donald Trump has vowed to stop U.S. manufacturing from disappearing overseas and in January formally withdrew the United States from the 12-nation Trans-Pacific partnership trade deal.

Trump also wants to renegotiate the North American Free Trade Agreement with Mexico and Canada.

However, Immelt, also said years of bad regulatory and economic practices were being stripped away to promote competitiveness.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila)

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U.S. core capital goods orders unexpectedly fall in January

WASHINGTON New orders for U.S.-made capital goods unexpectedly fell in January after three straight months of strong gains, but did little to change views that manufacturing was recovering from a prolonged slump amid rising commodity prices.

The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 0.4 percent after an upwardly revised 1.1 percent increase in December.

These so-called core capital goods were previously reported to have gained 0.7 percent in December. There were declines in orders for primary metals and electrical equipment, appliances and components, as well as computers and electronic products. Orders for machinery and fabricated metal products rose.

Economists polled by Reuters had forecast core capital goods rising 0.5 percent last month. January’s drop in core capital goods orders likely reflects caution among businesses as they await details of the Trump administration’s proposed tax reform.

U.S. financial markets were little moved by the report.

President Donald Trump has promised a “phenomenal” tax plan that the White House said would include tax cuts for businesses and individuals. Details on the plan remain vague, though Treasury Secretary Steven Mnuchin said last week that he wanted the tax relief enacted by August.

Expectations of tax cuts, increased infrastructure spending and a lighter regulatory burden have boosted business confidence in recent months, spilling over into investment on capital goods. Business investment shifted into higher gear in the fourth quarter, with spending on equipment increasing at a 3.1 percent rate after four straight quarterly declines.

The Trump administration’s perceived business-friendly policies, together with rising oil prices, are driving manufacturing, which accounts for about 12 percent of the U.S. economy. A strong dollar, however, remains a challenge for manufacturers as it makes their goods less competitive on overseas markets.

Shipments of core capital goods fell 0.6 percent last month after jumping 1.6 percent in December. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

A 6.0 percent surge in demand for transportation equipment buoyed overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, which leapt 1.8 percent last month. Durable goods orders decreased 0.8 percent in December.

Last month’s surged reflected a 69.9 percent jump in civilian aircraft orders. The surge came even as Boeing reported on its website that it had received orders for only 26 aircraft last month.

Economists believe not all of the 290 aircraft ordered in December were reflected in the durable goods orders report for that month. Orders for motor vehicles and parts rose 0.2 percent in January, while bookings for defense aircraft soared 59.9 percent.

Pointing to continued manufacturing recovery, unfilled orders of core capital goods increased 0.5 percent last month after rising 0.4 percent in December.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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U.S. blockchain, securitization industry groups join forces

NEW YORK The lobby group for Wall Street’s structured finance companies has partnered with the trade association for the blockchain industry to explore ways blockchain technology can streamline the $1.9 trillion U.S. securitization market.

The partnership, set to be announced on Monday, will see the Chamber of Digital Commerce and the Structured Finance Industry Group work together on research and other projects, the groups said.

The effort kicked off with the publication of a study looking at how distributed ledger technology can be deployed to simplify the securitization market, which despite its size, remains highly manual and opaque.

According to the study by Deloitte, blockchain could help increase the certainty of securitization transactions and improve market transparency, which in turn would lead to better liquidity.

Blockchain is an immutable shared ledger of transactions that is maintained by a network of computers, rather than a centralized authority. As it creates a shared golden source of data, it can reduce errors and the need for reconciliation.

Financial institutions have been ramping up their investments in blockchain in the hopes that it can help make some of their processes more efficient and cheaper to manage.

(Reporting by Anna Irrera; Editing by Cynthia Osterman)

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Trump budget plan boosts Pentagon, trims State Dept, EPA: officials

WASHINGTON The White House will send federal departments a budget proposal on Monday containing the defense spending increase President Donald Trump promised, financed partly by cuts to the U.S. State Department, Environmental Protection Agency and other non-defense programs, two officials familiar with the proposal said.

One of the officials said Trump’s request for the Pentagon included more money for shipbuilding, military aircraft and establishing “a more robust presence in key international waterways and chokepoints” such as the Strait of Hormuz and South China Sea.

A second official said the State Department’s budget could be cut by as much as 30 percent, which would force a major restructuring of the department and elimination of programs.

The officials requested anonymity because the draft budget had not been made public yet.

Trump, in a speech to conservative activists on Friday, promised “one of the greatest military buildups in American history.”

Some defense experts have questioned the need for a large increase in U.S. military spending, which already stands at roughly $600 billion annually. By contrast, the United States spends about $50 billion annually on the State Department and foreign assistance.

The amounts that Trump is proposing to add to the Pentagon budget and trim elsewhere are not yet publicly known.

John Czwartacki, a spokesman for the White House’s Office of Management and Budget, said the budget blueprint would be released in mid-March.

“It would be premature for us to comment – or anyone to report – on the specifics of this internal discussion before its publication,” he said in a statement.

The budget plans that the White House is expected to send to departments and agencies on Monday are just one stage in a lengthy process.

The agencies can argue for more funding, and final spending plans must be approved by the U.S. Congress.

Trump’s budget assumes annual economic growth of 2.4 percent, the second official said. While campaigning for the presidency last year, Trump called for a “national goal” of 4 percent economic growth.

Treasury Secretary Steven Mnuchin, speaking on Fox News earlier on Sunday, said Trump’s budget would not seek cuts in federal social programs such as Social Security and Medicare.

(Reporting by Washington Newsroom; Additional reporting by Roberta Rampton.; Writing by Warren Strobel; Editing by Peter Cooney and Paul Tait)

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Asia stocks erase losses but some investors await Trump talk

HONG KONG Asian stocks erased early losses but stayed below 19-month highs on Monday as a renewed drop in sovereign bond yields on political concerns prompted some investors to move to the sidelines after a recent rally.

Markets remained in recent broad trading ranges, and interest is focused on U.S. President Donald Trump’s speech to a joint session of Congress on Tuesday night, where he is expected to unveil some elements of his plans to cut taxes.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat after declining 0.3 percent in early trades. Japan .N225 was down 1.2 percent, and Australia off 0.2 percent.

The broad Asia-Pacific index, which fell 0.7 percent on Friday, is still up more than 11 percent since end-December.

“Until we see some strong earnings, we are in for a correction phase,” the head of equities at a U.S. fund in Hong Kong predicted.

On a forward valuation basis, Asia-Pacific shares traded at a price/earnings multiple of 15 times compared to nearly 19.6 times in the U.S. and 16 times in Europe, according to Thomson Reuters data.

“With the market getting impatient with Trump’s proposed stimulus spending program, the rising political uncertainty around the globe is getting the bulk of the market’s attention,” ANZ strategists wrote in a morning note.

Though U.S. stocks clawed their way to a higher close on Friday, major indices spent much of that day’s session in negative territory, suggesting increased caution.


Sovereign bond yields fell on Friday, pushing yields down in Australia and Japan on Monday, as a renewed flight to safety bid thanks to weak stock markets and a looming election in France that poses a key political risk for markets.

Investors fear far-right National Front leader Marine Le Pen might win the presidential election this year and lead France out of the euro zone. Polls show Le Pen losing to either centrist Emmanuel Macron or right-wing Francois Fillon, but few people are willing to count her out.

Ten-year German bond yields DE10YT=TWEB have dropped nearly 30 basis points so far this month, far outpacing a 13 basis point decline in yields of comparable U.S. debt. US10YT=RR

In Asia, yields on five-year Japanese benchmark debt JP5YT=RR plumbed to their lowest levels since mid-November, at minus 0.14 percent, while ten-year Australian bonds AU10YT=RR edged three basis points lower to 2.71 percent.

In currencies, the dollar JPY= scored some early gains against the Chinese yuan CNY=CFXS and the Philippine peso PHP= but remained in narrow ranges against major currencies.

Many investors have a core overweight position on the greenback betting on a rebound in the global economy, firmer commodity prices and a U.S. rate hikes. Goldman Sachs Asset Management expects the dollar to gain against the Aussie, kiwi and the yen.

In commodities, Brent crude LCOc1 edged higher to $56.04 per barrel while U.S. West Texas Intermediate CLc1 was broadly flat at $54 a barrel.

(Editing by Richard Pullin and Richard Borsuk)

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SoftBank nears deal to invest $3 billion in U.S. startup WeWork: CNBC

TOKYO/HONG KONG Japan’s SoftBank Group Corp (9984.T) is close to making an investment in U.S. office-sharing startup WeWork expected to be worth over $3 billion, CNBC reported on Monday, as it expands its reach beyond tech and telecoms.

Led by founder Masayashi Son, SoftBank has made a string of surprising acquisitions and investments over the past months, most recently an all-cash deal to buy asset manager Fortress Investment Group (FIG.N).

The deals come as SoftBank moves towards cutting-edge tech investments as telecoms services markets mature, announcing last year the creation of a tech investment fund with Saudi Arabia that could grow to $100 billion and make the group one of the world’s largest private equity investors.

SoftBank is looking at a $2 billion primary tranche of funding in New York-based WeWork, followed by a secondary round worth more than $1 billion, CNBC reported, citing an anonymous source.

The company could increase the size of the secondary investment to nearly $2 billion for a total investment of almost $4 billion, CNBC added. If the deal closed, WeWork would be valued at more than $20 billion.

SoftBank and WeWork declined to comment.

SoftBank had been in discussions for some time regarding an investment, two people at one of WeWork’s investors said, without elaborating.

WeWork, which provides shared workspaces to start-ups in the Americas, Europe, Hong Kong and Shanghai, plans to expand to Beijing in May, co-founder Miguel McKelvey told reporters in Hong Kong last week.

It will continue to raise capital for expansion ahead of an expected public listing, McKelvey said, without indicating a time frame.

Chinese private equity giant Hony Capital, its backer Legend Holdings Corp (3396.HK) and property developer China Oceanwide Holdings Ltd (0715.HK), among others, last year ploughed $700 million into WeWork.

The deal valued WeWork at $16.7 billion, Hony said – less than that reported by CNBC but still making it among the world’s most valuable startups.

SoftBank shares fell as much as 2.3 percent in morning trade, compared with a 1.4 fall for the benchmark Nikkei average .N225.

SoftBank, a diverse company that holds stakes in U.S. carrier Sprint (S.N), Chinese e-commerce giant Alibaba (BABA.N) and other firms, last year bought chip designer ARM Holdings, Britain’s most valuable technology company, for $32 billion.

Son also promised a $50 billion investment and 50,000 new jobs in the United States after meeting U.S. President Donald Trump in early December.

Some of SoftBank’s moves have caused concern among analysts, as it is wrestling with a heavy debt pile.

(Reporting by Ismail Shakil in Bengaluru; Thomas Wilson and Makiko Yamazaki in Tokyo; Julie Zhu in Hong Kong; Editing by Stephen Coates)

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No cuts to U.S. entitlement programs in Trump budget: Mnuchin

WASHINGTON U.S. President Donald Trump’s first budget proposal will spare big social welfare programs such as Social Security and Medicare from any cuts, Treasury Secretary Steven Mnuchin said in an interview broadcast on Sunday.

Mnuchin said Trump would also use a major policy speech to a joint session of Congress on Tuesday night to preview some elements of his sweeping plans to cut taxes for the middle class, simplify the tax system and make American companies more globally competitive with lower rates and changes to encourage U.S. manufacturing.

Speaking on Fox News Channel’s “Sunday Morning Futures” program, Mnuchin, who has acknowledged that tax reform is his top policy priority, said the budget plan would not seek cuts to federal benefits programs known as “entitlements.”

“We are not touching those now. So don’t expect to see that as part of this budget, OK,” Mnuchin said of the programs, according to a transcript provided by Fox. “We are very focused on other aspects and that’s what’s very important to us. And that’s the president’s priority.”

Trump during his election campaign promised not to cut Social Security, Medicare healthcare for seniors nor Medicaid healthcare for the poor. Preservation of these programs, coupled with a middle-class tax cut, would aid the retirees and working class Americans who make up a significant portion of Trump’s political base.

In a transcript of the Fox News Channel interview, Mnuchin said Trump will be “touching on tax reform” in his speech. Mnuchin said the plan would cut the number of tax brackets and “create a level playing field for U.S. companies to be able to compete in the world.”

But Wall Street, which has sent stocks to record highs on anticipation of Trump’s tax cut plans, has grown impatient and could react negatively to a lack of substantive details about the plan in Trump’s speech, financial analysts said.

With both chambers of the U.S. Congress in Republican hands, Trump has the potential to enact major elements of his legislative agenda.

But divisions with the Republican Party over the approach on Obamacare and taxes could prove to be an obstacle. Some Republican lawmakers have urged Trump to lay out more specifics on his policy plans, saying that more White House engagement is needed to build momentum in Congress for his agenda.


Mnuchin offered little new information and said key tax plan elements were not yet settled. He said Trump was looking at a “reciprocal tax” that would help create more trade parity with other countries. Trump administration officials have complained that many countries charge value-added taxes on imports while exempting exports from taxation.

But Mnuchin again said he was still “studying very carefully” a House Republican border tax adjustment plan that would levy a 20 percent tax on imports to encourage more U.S.-based production and exports. That plan aims to raise more than $1 trillion in revenue over a decade to offset lower tax rates for businesses.

“There are certain aspects that the president likes about the concept of a border-adjusted tax, there are certain aspects that he’s very concerned about,” Mnuchin said.

He added that the Trump administration would work with the House of Representatives and Senate to craft “a combined plan that takes the best of all of this when we bring it forward.”

In a comment suggesting that Trump’s budget and tax plans may use aggressive revenue assumptions, Mnuchin said the administration “fundamentally believes in dynamic scoring,” a budget calculation method that assumes that a lower tax burden boosts revenues by encouraging economic activity.

The Congressional Budget Office has previously used mainly “static” scoring methods that assume very conservative economic effects of tax and budget changes.

(Additional reporting by Lewis Krauskopf; Editing by Alan Crosby and Alistair Bell)

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