Monday morning got the second half of 2019 off to a strong start as investors reacted favorably to news out of the G-20 meeting over the weekend. Leaders from the U.S. and China managed to find enough common ground to avoid escalating trade tensions between the two countries any further, and market participants chose to see that as a sign that an anticipated global economic slowdown might not be a foregone conclusion. As of 11:15 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 165 points to 26,765. The S&P 500 (SNPINDEX:^GSPC) rose 23 points to 2,965, and the Nasdaq Composite (NASDAQINDEX:^IXIC) picked up 88 points to 8,094.
Warren Buffett and Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) stand to gain from good news in the corporate world, and the Oracle of Omaha took another step in his lifelong mission to donate the vast majority of his wealth to charity. Meanwhile, half a world away, Las Vegas Sands (NYSE:LVS) got a nice boost from improving conditions in the Asian gambling capital of Macao, and a stronger Chinese economy could spell further gains for the casino giant in the future.
Buffett makes a move
Shares of Berkshire Hathaway were up about 1% Monday morning after the company’s chairman and CEO made a major announcement. Warren Buffett said that he would convert 11,250 of his Class A Berkshire shares into Class B shares, in preparation for donating them to several charitable foundations.
Warren Buffett. Image source: The Motley Fool.
In a press release, Berkshire revealed that Buffett will make immediate gifts of roughly 16.8 million Class B shares to five different entities. Buffett has had a long connection with the Bill & Melinda Gates Foundation, and the other four foundations getting gifts all have ties to the Buffett family. The Susan Thompson Buffett Foundation and the Howard G. Buffett Foundation both contain the key philanthropic activities of their two namesakes. The Sherwood Foundation also includes Susan Buffett as its chair, while Jennifer and Peter Buffett were instrumental in the creation of the NoVo Foundation.
Warren Buffett pledged back in 2006 to give away the bulk of his Berkshire holdings over time, with annual gifts expected to be complete within 10 years of the settlement of his estate. Although the bulk of Buffett’s holdings are in Class A shares, the Berkshire leader has committed to converting those shares to Class B shares prior to using it for gifts.
Buffett’s latest gift amounts to roughly $3.6 billion in value, bringing his total giving to roughly $34 billion. Yet Buffett’s less than halfway done with his mission of donating most of his wealth, and that leaves plenty of possibility for future gifts for years to come.
Las Vegas Sands comes up aces
Meanwhile, shares of Las Vegas Sands were higher by nearly 5%. Despite the casino giant’s name, Sands gets a huge portion of its profits from the former Portuguese colony of Macao, and good news there helped lift the company’s stock.
Macao’s Gaming Inspection and Coordination Bureau reported that gambling revenue was up 5.9% last month compared to June 2018. That was far better than the 1% to 3% gain that most of those following the casino industry in Macao had expected, although the roughly $2.95 billion in revenue was down about 8% from May’s levels.
As a Chinese territory, Macao now has strong links to the mainland economy, and prospects for stronger economic growth bode well for the gambling mecca. The city brings in gambling enthusiasts from across Asia, and because Las Vegas Sands was one of the first major casino operators to start doing business there, it’s in a strong position to reap the rewards. Competition is fierce in Macao, but Sands is doing all the right things to remain a leader in the region.