The rally in Berkshire Hathaway stock this year could stall after the company’s fourth-quarter earnings report released on Saturday. The results beat expectations: Operating earnings per Class A share rose 30% to $5,881 in the fourth quarter, about 3% above the FactSet consensus. But the beat was smaller than in the third quarter, when earnings topped expectations by nearly 15%. Profits were lower in the fourth quarter at two of Berkshire’s key divisions - Burlington Northern Santa Fe Railway, a freight transportation company, and Berkshire Hathaway Energy, which operates a group of electric utilities, natural gas pipelines, and a real estate brokerage business. Berkshire CEO Warren Buffett, 93, discussed the disappointing results in 2023 for both divisions in his annual shareholder letter. He cited higher labor costs at BNSF and wildfire losses at BHE’s western utilities. “Berkshire might need to have delivered much stronger than expected results to keep momentum going,” said Jim Shanahan, an analyst at Edward Jones who has a Hold rating on the stock.

After posting losses in the previous two sessions, Swiss stocks moved higher on Friday with investors reacting to earnings updates. Data showing an increase in Swiss non-farm payroll employment, and optimism about interest rate cuts in the near future helped underpin sentiment. Data from Swiss Federal Statistical Office showed Switzerland's non-farm payrolls rose 1.7% year-on-year to a record 5.488 million in the fourth quarter of 2023, following a 1.9% increase in the third quarter. The benchmark SMI ended with a gain of 110.59 points or 0.97% at 11,496.76, slightly off the day's high of 11,505.72. Swiss Re climbed nearly 2.5%. Geberit and Roche Holding gained 1.6% and 1.55%, respectively. Richemont, Sika, Nestle, Novartis and Givaudan ended higher by 1 to 1.4%. Lonza Group, Partners Group, Zurich Insurance Group, Logitech International and Sonova gained 0.7 to 1%. ABB ended lower by 0.62%. Alcon and Kuehne & Nagel ended marginally down. In the Mid Price Index, Georg Fischer soared 8.27%. Flughafen Zurich ended nearly 2% up. ams OSRAM AG, Schindler Holding and Baloise Holding gained 1.5 to 1.75%. Galenica Sante, Schindler Ps, Helvetia, Clariant, Lindt & Spruengli and Temenos Group advanced 0.7 to 1.2%. Meyer Burger Tech tanked 9.7%. Swatch Group, Julius Baer and VAT Group ended lower by 1 to 1.2%.

Europe
European markets closed mostly higher on Friday, led by gains in financial stocks after Standard Chartered reported upbeat quarterly earnings. Dovish comments by European Central Bank officials helped underpin sentiment. ECB member Centeno suggested that the central bank should remain open to the possibility of a rate cut as early as March. Another board member Isabel Schnabel expressed confidence that inflation expectations appeared to be under control. The pan European Stoxx 600 climbed 0.43%. The U.K.'s FTSE 100 and Germany's DAX both gained 0.28%, and France's CAC 40 ended 0.7% up. Switzerland's SMI ended stronger by 0.97%. Among other markets in Europe, Belgium, Iceland, Ireland, Poland, Portugal, Sweden and Turkiye closed higher. Austria, Denmark, Greece, Netherlands and Norway ended weak, while Finland and Spain closed flat. In the UK market, Standard Chartered shares soared over 10% after reporting an 18% jump in earnings. Despite paring some gains, the stock ended nearly 5% up. The lender also announced a $1 billion share buyback. AstraZeneca, Ocado Group, JD Sports Fashion, Kingfisher, B&M European Value Retail, Beazley, IHG, RightMove, Anglo American Plc, HSBC Holdings, Natwest Group, Bunzl and Convatec Group gained 1 to 2%. In the German market, Deutsche Boerse, Porsche, Siemens and BMW ended higher by 1.5 to 2%. SAP gained nearly 1.5%, while Merck, Volkswagen, Brenntag, Daimler Truck Holding and Deutsche Bank advanced 1 to 1.4%. Allianz lost more than 3% after its fourth quarter profit came in slightly below expectations. Infineon drifted down 1.5%, while Siemens Energy, HeidelbergCement and Fresenius Medical Care lost 1 to 1.1%.

United States
Stocks extended Thursday's substantial rally in early trading on Friday but turned in a relatively lackluster performance over the remainder of the trading session. Despite the choppy trading, the Dow and the S&P 500 reached new record closing highs. The major averages bounced back and forth across the unchanged line before closing narrowly mixed. While the Nasdaq dipped 44.80 points or 0.3 percent to 15,996.82, the Dow rose 62.42 points or 0.2 percent to 39,131.53 and the S&P 500 inch up 1.77 points or less than a tenth of a percent to 5,088.80. For the holiday-shortened week, the S&P 500 surged by 1.7 percent, while the Nasdaq and the Dow jumped by 1.4 percent and 1.3 percent, respectively. The early upward move reflected an extension of the rally seen in during Thursday's session, which came on the heels of upbeat earnings news from AI darling Nvidia (NVDA). Overall trading activity remained somewhat subdued as the day progressed, as a lack of major U.S. economic data kept some traders on the sidelines ahead of the release of several key reports next week. The Commerce Department's report on personal income and spending is likely to be in focus next week, as it includes readings on inflation said to be preferred by the Federal Reserve. Reflecting the lackluster performance by the broader markets, most of the major sectors showed only modest moves on the day. Airline stocks also saw considerable weakness on the day, moving lower along with oil service and computer hardware stocks.

Asia
Stock markets in East Asia and Australia were mixed in the course of trading on Monday. Observers are talking about consolidation and profit-taking after the recent gains. The indices in Hong Kong and Shanghai as well as in Seoul, South Korea, are down by 0.4 to 0.6 per cent, while Sydney has already ended the trading day with a mini gain.

Bonds
In the U.S. bond market, treasuries moved notably higher after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.7 basis points to 4.260 percent.

Analysis
Bank of America raises Telefonica target to EUR 4.60 (4.40) – Buy
UBS raises Repsol target to EUR 16 (15) – Buy
UBS raises Danone target to EUR 72 (70) – Buy

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