Nasdaq Drops; Berkshire's Cash Hits Record High

U.S. stock markets experienced a significant downturn on Friday following a disappointing jobs report that heightened recession fears. The unemployment rate climbed to 4.3%, the highest level since October 2021, as the market reacted to the nonfarm payrolls data. Consequently, the likelihood of a 50-basis point cut to the Federal Reserve's benchmark interest rate surged to 69.5%, up from just 22% prior to the report, according to the CME FedWatch Tool. In corporate news, Berkshire Hathaway reported a substantial increase in its cash reserves, reaching a record $276.9 billion at the end of the last quarter. This surge was partly attributed to Warren Buffett's decision to sell nearly half of the company's stake in Apple. Meanwhile, ExxonMobil's second-quarter net income rose by 17% to $9.2 billion, surpassing expectations due to record production levels in Guyana and the Permian Basin. Financial historian Russell Napier highlighted the implications of rising Japanese interest rates, which he believes signal the end of the "carry trade" strategy. This shift could impact U.S. equity prices, as the Bank of Japan recently raised its benchmark interest rate to around 0.25%, narrowing the gap with U.S. rates and affecting the yen's value. In a positive development for homeowners, U.S. mortgage rates have fallen to their lowest levels in over a year, with the 15-year fixed mortgage rate dropping to 5.89%, offering some relief to the housing market amid the shifting economic landscape.