Friday was a pretty quiet day in the markets, and the early Monday action is more of the same. Stocks are largely unchanged along with Treasuries and the dollar. Crude oil, gold, and silver are slightly lower.
In last week’s MoneyShow MoneyMasters Podcast, Jim Iuorio of TJM Institutional Services talked about how the shrinking of the overnight reverse repurchase facility could raise Treasury yields. Now, the Wall Street Journal is reporting on the same trend.
The so-called “reverse repo” facility once had about $2.5 trillion outstanding. But that has shrunk to less than $500 billion – and the trend is likely to continue. As fewer financial firms look to swap cash for short-term Treasuries via the facility, the government may have to pay higher rates to entice investors to buy bills, notes, and bonds. That will put upward pressure on other rates, such as those charged on home mortgages and car loans.
Berkshire Hathaway (BRK.A)
Guess which NON-tech company is approaching the “$1 trillion valuation” threshold? Warren Buffett’s Berkshire Hathaway (BRK.A). The conglomerate just reported a sizable jump in fourth-quarter operating earnings – up 28% to $8.48 billion. The stock was already up 17% in the year to date through Friday, and now it’s rallying even more. That’s pushing BRK’s market cap closer to a trillion bucks.
Finally, AT&T (T) apologized to its customers after a network problem on Thursday caused widespread outages for wireless phone users. Tens of thousands of customers were knocked offline due to what was apparently a self-inflicted problem. AT&T is crediting customers $5 for the partial day they lacked service.
