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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

US stocks enjoyed their best day in more than two months after a critical jobs report undershot expectations, bolstering hopes that investors could look forward to interest rate cuts later in the year.

The US added 175,000 jobs in April, well below the 241,000 forecast in a Bloomberg poll and the smallest rise for six months.

The cooling labour market spurred a 1.3 per cent gain for the blue-chip S&P 500 index, ending a week in which Federal Reserve chair Jay Powell signalled that rates would remain at a 23-year high of 5.25-5.5 per cent for even longer than anticipated.

Investors were relieved that Powell also said that it was “unlikely” the next move in rates would be higher. While rate increases had been considered unlikely, the prospect had returned to investors’ discussions after several sets of strong inflation data.

Futures market traders responded to Friday’s jobs report by bringing forward expectations for the Fed’s first rate cut to September, from November.

Although their initial conviction faded in later trading, about 70 per cent of bets still implied that rates would be lower after the Fed’s September meeting, according to the CME’s FedWatch tool. Almost two quarter-point cuts this year are now priced in by the futures market.

The two-year Treasury yield, which moves with interest rate expectations, was down 0.07 percentage points at 4.81 per cent in late-afternoon trading on Wall Street, but had been down as much as 0.16 percentage points at a one-month low shortly after the report was released.

US unemployment rose slightly to 3.9 per cent, compared with estimates of 3.8 per cent.

Revisions to data for February and March showed that 22,000 fewer jobs were created than previously reported. The slowdown in job creation was most pronounced in leisure and hospitality, construction and the government sector, while employment remained strong in healthcare and retailing.

The report also showed average weekly hours worked edged lower and earnings growth was soft.

“It was a record, or near record, warm winter, which might have boosted employment growth a bit, and now we’re returning to trend,” said Paul Ashworth, chief North America economist at Capital Economics. “But this definitely gets

Squishmallows of Waren Buffett and Charlie Munger display at the Berkshire Hathaway Annual Shareholders Meeting at Omaha, Nevada on May 3, 2024. Sarah Min | CNBC

OMAHA, Nebraska — Warren Buffett’s annual shopping event, the pregame to Berkshire Hathaway‘s annual meeting, is wowing shareholders flocking to Omaha this weekend.

With over 20,000 square feet of showroom space and more than 50,000 items of inventory, the exhibit hall in downtown Omaha at the CHI Health Center features goodies from various Berkshire’s holding companies, from Brooks Running to See’s Candies and Jazwares.

Only shareholders can participate at the event and they can buy items at a special discount.

The annual meeting will be exclusively broadcast on CNBC and livestreamed on CNBC.com. Our special coverage will begin Saturday at 9:30 a.m. ET.

Jazwares Squishmallow pit at the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nevada on May 3, 2024. Sarah Min | CNBC

Jazwares, the American toymaker best known for its Squishmallows plushie line, was a hit last year when it first displayed its wares at Berkshire Hathaway’s conference, including the debut of a Warren Buffett plushie. This year, the company expanded its exhibit in the convention hall, making it three times larger.

Displays at the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nevada on May 3, 2024.  Sarah Min | CNBC

Some highlights include the latest Squishmallows toys for Buffett and Charlie Munger, a splashy Squishmallows pit, as well as other displays.

Poor Charlie’s Almanack Charles Munger remembrance ahead of the Berkshire Hathaway Annual Shareholders Meeting at Omaha, Nevada on May 3, 2024. Sarah Min | CNBC

The Bookworm only had one book to sell this year: “Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger.” That was at the request of Buffett in honor of his business partner of more than 60 years, who passed away in November at the age of 99.

FlightSafety Flight Safety at the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nevada on May 3, 2024.  Sarah Min | CNBC

Berkshire acquired pilot training company FlightSafety in 1996. At Friday’s shopping event, the firm brought a taste of what its training program looks like for professional pilots. Shareholders lined up

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Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

As any old-school currencies trader will tell you: buy dollars, wear diamonds. It is certainly shaping up to be a decent bet this year, in a manner that is throwing up pockets of stress around the world. But if you are waiting for a shock-and-awe exercise to turn this around, you are likely to be waiting a long time.

At a glance, the world’s dominant reserve currency is pretty dull at the moment. The DXY dollar index, which tracks it against a clutch of other major currencies, is up 4 per cent or so in 2024 — a decent ascent but nothing spectacular. The index still sits about 7 per cent below the record high it struck in September 2022. 

But to many analysts and investors, that just gives the buck space to keep stretching higher as markets recalibrate their US interest rate expectations. “The dollar still has more to give,” wrote Shahab Jalinoos and Vassili Serebriakov, currency analysts at UBS. Some strain is already spilling over in Asia and emerging markets, and it is not too hard to imagine it becoming a source of broader market volatility later this year.

The reason for all this, of course, is that while the US still seems likely-ish to cut interest rates this year, that will not be until September at the earliest. And the Federal Reserve is expected to move once, twice at a pinch, whereas other major developed market central banks are on track for cuts much sooner or, in the case of Japan, stuck on a loose setting. That gap is a classic recipe for dollar strength. In late April, Goldman Sachs said it expected the dollar to be “stronger for longer”, with some “disruptive” elements. The best hope for turning that around is a continuation of Friday’s disappointing US employment data.

The exchange rate against the Japanese yen is right now the point of greatest tension, as evidenced by what looks an awful lot like an official intervention by the country’s authorities this week. The yen has been sliding pretty consistently now since early 2022. It has lost a third of its value since that time, leaving the dollar trading at highs not seen since the mid-1980s. But the latest lurch in which the yen breached ¥160 to the dollar was followed by a

Berkshire Hathaway, led by legendary investor Warren Buffett, has been making a confidential wager on the financial industry since the third quarter of last year. The identify of the stock — or stocks — that Berkshire has been snapping up could be revealed Saturday at the company’s annual shareholder meeting in Omaha, Nebraska. In a time when Buffett has been a net seller of stocks and lamented a dearth of opportunities capable of “truly moving the needle at Berkshire,” he has apparently found something he likes — and in the financial realm no less. Warren Buffett tours the grounds at the Berkshire Hathaway Annual Shareholders Meeting in Omaha Nebraska. David A. Grogan | CNBC

Berkshire Hathaway, led by legendary investor Warren Buffett, has been making a confidential wager on the financial industry since the third quarter of last year.

The identity of the stock — or stocks — that Berkshire has been snapping up could be revealed Saturday at the company’s annual shareholder meeting in Omaha, Nebraska.

That’s because unless Berkshire has been granted confidential treatment on the investment for a third quarter in a row, the stake will be disclosed in filings later this month. So the 93-year-old Berkshire CEO may decide to explain his rationale to the thousands of investors flocking to the gathering.

The bet, shrouded in mystery, has captivated Berkshire investors since it first appeared in disclosures late last year. At a time when Buffett has been a net seller of stocks and lamented a dearth of opportunities capable of “truly moving the needle at Berkshire,” he has apparently found something he likes — and in the financial realm no less.

That’s an area he has dialed back on in recent years over concerns about rising loan defaults. High interest rates have taken a toll on some financial players like regional U.S. banks, while making the yield on Berkshire’s cash pile in instruments like T-bills suddenly attractive.

“When you are the GOAT of investing, people are interested in what you think is good,” said Glenview Trust Co. Chief Investment Officer Bill Stone, using an acronym for greatest of all time. “What makes it even more exciting is that banks are in his circle of competence.”

Under Buffett, Berkshire has trounced the S&P 500 over nearly six decades with a 19.8% compounded annual

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