The biggest European stock markets rose yesterday for the fourth consecutive trading session, although the pace of the rise was slowed by declines in shares of companies operating in the commodities sector.
What will happen to European stock markets futures?
The new U.K. Treasury Secretary Jeremy Hunt on Monday announced a rejection of much of the fiscal stimulus proposed by the former head of the British Treasury Quasi-Quartering on September 23. In particular, the British government will return to plans to increase the corporate tax rate from 19% to 25% from April 2023, and will also abandon plans to cut dividend tax, carry out pay reform, “freeze” duties on alcohol and introduce a zero rate of VAT for foreign buyers.
Also, the basic income tax rate reduction to 19% from 20%, scheduled for April, will be delayed, and the homeowner energy subsidy program will be cut. Hunt’s proposals are expected to save the British government 32 billion pounds.
The Financial Times reported Tuesday that the Bank of England is likely to postpone sales of government bonds from the central bank’s portfolio until the debt market stabilizes. It had originally planned to start selling government bonds on October 6, but then postponed it to October 31. The Bank of England, however, called the FT report “incorrect. It had a good effect on European stock markets.
German statistical data released on Tuesday showed some improvement in investor and analyst sentiment. Index of economic expectations for the next six months rose to minus 59.2 points in October from minus 61.9 points a month earlier. Experts polled by Trading Economics on average expected it to fall to minus 65.7 points.
Earlier, we reported that U.S. stock indices rose 0.9-1.1%.
Warren Buffett says Berkshire ‘built to last’ though eye-popping gains are over
© Reuters. FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott
By Jonathan Stempel
(Reuters) – Warren Buffett on Saturday moved to reassure investors that his conglomerate Berkshire Hathaway (NYSE:) would serve them well over the long term, even as he mourned the recent passing of his longtime second-in-command Charlie Munger.
In his widely-read annual letter to Berkshire shareholders, which accompanied a record $37.4 billion full-year operating profit, Buffett said his more than $900 billion conglomerate has become a fortress capable of withstanding even an unprecedented financial disaster.
“Berkshire is built to last,” Buffett wrote.
Buffett also tempered expectations for Berkshire’s stock price, saying the company’s huge size left “no possibility of eye-popping performance.”
“There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others,” Buffett wrote. “Some we can value; some we can’t.”
But the 93-year-old billionaire also assured investors that Vice Chairman Greg Abel, his designated successor, was “in all respects ready to be CEO of Berkshire tomorrow.”
Buffett also saved his most heartfelt words for Munger, who died in November at age 99.
He called Munger the “architect” of Berkshire, with Buffett being only the “general contractor,” and reminded investors how Munger pushed him to buy wonderful businesses at fair prices instead of fair businesses at wonderful prices.
Berkshire’s “extreme fiscal conservatism,” including reluctance to make major acquisitions at inflated prices, is one reason Buffett has let the Omaha, Nebraska-based company’s cash stake swell to a record $167.6 billion.
“In a way his relationship with me was part older brother, part loving father,” Buffett wrote, referring to Munger. “Even when he knew he was right, he gave me the reins, and when I blundered he never–never–reminded me of my mistake.”
Cathy Seifert, a CFRA Research analyst who rates Berkshire “buy,” said Buffett tried to show how Berkshire could withstand rocky shoals, even after Munger helped him transform a once-failing textile company into a colossus mirroring the broader economy.
“Nothing is perfect,” she said. “He tried to show there is a succession plan, and Berkshire would stick to its knitting.”
Buffett likened Berkshire’s caution in making acquisitions, with the stock market now routinely setting record highs, to an insurance policy against the kind of hurried, unwise business decisions that would have irked Munger.
“I have a sense that Berkshire wants to make Charlie proud,” said Thomas Russo, a portfolio manager and longtime shareholder at Gardner, Russo & Quinn in Lancaster, Pennsylvania.
GEICO BOOSTS RESULTS
Buffett’s letter was accompanied by Omaha, Nebraska-based Berkshire’s quarterly and annual results.
Operating profit from its dozens of insurance, railroad, industrial, energy, and retail businesses rose 28% in the quarter to $8.48 billion and 21% for the year to a record $37.4 billion.
Insurance businesses such as Geico benefited from improved underwriting quality and higher investment income as interest rates rose, offsetting wage pressures at the BNSF railroad and wildfire losses at Berkshire Hathaway Energy.
“Results reflect the value of holding a diversified collection of operating businesses,” said Jim Shanahan, an Edward Jones analyst with a “hold” rating on Berkshire.
Investment gains in Berkshire’s $354 billion equity portfolio, including stocks such as Apple (NASDAQ:), American Express (NYSE:), Bank of America and Coca-Cola (NYSE:), helped Berkshire generate a $96.2 billion annual profit.
The amount reflects accounting rules that require Berkshire to report gains in stocks it hasn’t sold, however, making it “worse-than-useless” to investors according to Buffett.
Berkshire’s caution, and one of the reasons for its record cash stake, was reflected in its having sold about $24 billion more stocks than it bought in 2023.
Results also included some of Occidental Petroleum (NYSE:)’s earnings, which reflected Berkshire’s approximately 28% stake in the oil company.
Buffett said he expects Berkshire will keep that stake “indefinitely,” along with its stakes in five Japanese trading houses: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.
Berkshire’s businesses also include industrial parts and chemical companies, a big real estate brokerage, and retail brands such as Dairy Queen, Fruit of the Loom and See’s candies.
Pope accepts resignation of Polish cleric accused of ignoring abuse
WARSAW (Reuters) – Pope Francis’s representatives in Poland said on Saturday that he had accepted the resignation of an archbishop who was accused in a documentary of turning a blind eye to child abuse.
The TVN24 news channel’s documentary in 2021 alleged that priest Andrzej Dymer, who died that year, had abused children and that the archbishop of the diocese of Szczecin-Kamien, Andrzej Dziega, had known since 1995 but taken no action.
“Holy Father Francis accepted the resignation of Archbishop Andrzej Dziega from serving as Archbishop Metropolitan of Szczecin-Kamien,” Poland’s apostolic nunciature, the equivalent of the Vatican’s embassy, said on its website.
A statement on the website of the Szczecin-Kamien archdiocese also said Dziega was retiring.
Neither of the statements referred to the accusations against Dziega, who had served as Archbishop Metropolitan of Szczecin-Kamien since 2009.
The archdiocese did not immediately respond to a request for comment. Dziega could not be reached for comment.
TVN24 reported on Saturday that after the documentary, Dziega had dismissed Dymer from his position as director of a medical institute in Szczecin in northwest Poland.
Polish media reported that in 2008 Dymer was convicted by a church tribunal of sexually abusing minors. Dymer appealed but the appeal was not dealt with before his death.
One of Europe’s most devoutly Catholic countries, Poland has seen a string of child abuse scandals, with the church saying two years ago that between July 1, 2018, and Dec. 31, 2020, it received 368 reports regarding abuse of minors.
According to 2021 census data, 71% of the population consider themselves Catholic.
Flooded Greek lake a warning to European farmers battling climate change
© Reuters. An irrigation hose reel is partially submerged by floodwater, following the extreme flooding of last September, near the village of Stefanovikeio, Greece, February 17, 2024. REUTERS/Alkis Konstantinidis
By Angeliki Koutantou
KANALIA, Greece (Reuters) – Sitting in a small motorboat, farmer Babis Evangelinos glides over land he once cultivated on the Thessaly plain in central Greece, the nearby trunks of his fruitless almond trees submerged by floodwater.
His small plot, near Lake Karla, is among tens of thousands of acres of cotton fields, almond trees and grazing lands that were wiped out by unprecedented flooding last year in one of Greece’s key breadbaskets.
Five months on, much of the area – and a lot of expensive equipment – remain underwater. A pumping station meant to stop flooding is marooned in a shallow lake. Pelicans and herons, previously uninterested in the once dry plain, swoop overhead.
“I could never have imagined I would have to board a boat to get to see my land,” said Evangelinos as he drifted by his sodden trees. “Work of a lifetime ruined, gone in three, four days of rain.”
The situation has fuelled anger among farmers who, like many across Europe, have found their livelihoods under threat from rising costs and climate change, and created a headache for governments expected to pay the bill.
Farmers from India to France and Poland have taken to the streets in recent days, bemoaning competition from abroad, a lack of government support and low prices. Thousands descended on central Athens on Tuesday calling for more aid.
Greece has been buffeted by extreme weather too. Wildfires ripped through the north last year, then Storm Daniel dumped 18 months of rain in four days in September, raising questions about the Mediterranean country’s ability to deal with an increasingly erratic climate. It also offers a warning of what other countries further north may face in future.
Daniel and another storm, Elias, flooded about 35,000 acres near Lake Karla in Thessaly plain, which accounts for 25% of Greece’s agricultural produce and 5% of GDP. Some 30,000 farmers were impacted across the province.
Lake Karla had been drained in the 1960s to increase farmland and a small part of it was recovered in recent years, only for 450-500 million cubic metres of water to rush back in during the floods. The area near the Lake has a small man-made outlet, and HVA, a Dutch agricultural company hired by the government to assess the damage, said it could take up to two years for the water to subside.
Evangelinos had just picked a one-tonne batch of almonds before the rain came and washed it away. He would normally expect 10 tonnes over the season, about 20,000 euros worth, but managed just 40% of that. Now he is not sure how he will pay for his two daughters’ university expenses.
“It’s very sad. Because those trees you see now being 20 and 30 years old, you grow them out of a small branch.”
Responding to farmers’ protests over rising costs, Greece’s government has offered discounts on power bills and extended a tax rebate for diesel. It’s not clear if the government, cash-strapped after a decade-long financial crisis, will offer more.
In Thessaly, farmers have so far received 150 million euros ($162 million) in compensation for the flooding. The government said another 110 million euros will come in July.
Many say they want more. Farmers from near Lake Karla attended Wednesday’s protests in Athens. One tractor parked in the central square bore a placard that read: “Karla. 180,000 stremmas underwater,” referring to a land measurement used in Greece. “We want our fields back.”
Local authorities have proposed speeding up the recovery by using floating machines to pump out the water as early as April in one area, said Thessaly governor Dimitris Kouretas.
“There are several thousands of families living here. Do we want them to go?” he said.
Some already have.
Vangelis Peristeropoulos, 35, a father of two, lost nearly all his 640 pigs and sheep in Stefanovikeio, another town near the lake. He took a job as a truck driver at the port city of Volos in November to make ends meet.
“When we saw the catastrophe and that there was nothing we could do, we looked for another job because expenses kept running.”
Evangelinos is staying put for now. He says once the soil dries out, experts will have to analyse it and make sure it is fit for cultivation. He hopes to uproot damaged trees and plant new ones.
“What I want is to set foot on the muddy land and start cultivating all over again.”
($1 = 0.9244 euros)
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