🇯🇵 Microsoft invests nearly $3B into Japan

PLUS: Deloitte and KPMG fined millions for cheating; Costco sells $200M in gold bars.

Yesterday’s market performance 🏆️ 

S&P 500: +0.74% 📈 
Nasdaq: +1.68% 📈 
Dow 30: -0.006% 📉 
Russell 2000: +0.70% 📈 

Microsoft is investing nearly $3B into Japan, its largest investment ever in the country

On Wednesday, Microsoft announced that it will invest $2.9B in Japan over the next two years. The investment will go a long way in improving Japan’s AI and cloud computing capabilities, which are essentially the backbone of technology in first-world countries today. 

 The $2.9B investment will go towards:

  • Building and expanding data centers.

  • AI R&D (Research and Development). 

  • Training ~3 million Japanese people to understand how to use artificial intelligence (AI) and build a capable workforce. 

But why is Microsoft doing this in Japan? Well, we think Microsoft sees Japan as the gateway to entering and eventually dominating the Asia-Pacific region, one of the fastest-growing regions in the world.

1️⃣ Microsoft ($MSFT) is up 1.86% this week.

Asia-Pacific (APAC) stats:

  • Asia-Pacific's (APAC) GDP is over two times that of the Americas, four times that of Europe, and ten times that of Africa.

  • APAC accounted for over 70% of global GDP growth from 2013 to 2023, with China alone contributing 31%.

  • Tech spending in the APAC region is expected to grow by 5.7% in 2024, the fastest rate of growth among any region.

Japan can provide Microsoft with a central location from which to coordinate regional operations, manage supply chains, and distribute products and services to neighboring countries like China, India, and South Korea.

2️⃣ Japan is the third-largest economy in the world.

Not to mention, with U.S.-China relations at their most strained in decades, Microsoft's dependence on Japan, with its strong ties to other Asian nations, is absolutely crucial for the company's expansion in the region and beyond.

💸 KPMG and Deloitte smacked with massive fines for exam cheating

📸 Starling Insights

You might want to hold off on hiring a Big 4 accounting firm for the time being. Earlier this week, the PCAOB penalized KPMG and Deloitte affiliates for exam cheating.

  • KPMG Netherlands faces a $25M penalty for widespread cheating from 2017-2022. 

  • Deloitte affiliates in Indonesia and the Philippines were fined $2M for violating rules on answer sharing.

1️⃣ The Public Company Accounting Oversight Board (PCAOB) ensures that auditors adhere to strict rules when examining the finances of public companies.

And this isn't the first time exam cheating is an ongoing issue in the audit industry. 

  • In 2019, KPMG agreed to pay $50 million to the U.S. Securities and Exchange Commission (SEC) for violations, including cheating on internal training exams.

  • In 2022, Ernst & Young agreed to a $100 million fine, the SEC's largest ever against an audit firm, over exam cheating.

While we don’t condone cheating on tests, there are definitely some fields where it isn't the biggest deal; accounting, on the other hand, is definitely not one of them.

Hopefully, this mess gets cleaned up before we have another Enron or Bernie Madoff-level catastrophe on our hands.

🥇 Costco is selling up to $200M worth of gold bars


Costco has a brand-new best-selling item: gold bars.

  • According to Wells Fargo, Costco is selling as much as $200M in gold bars monthly; we're not kidding.

  • Soon after debuting last August, Costco's gold bars generated about $100M in sales in Costco's first quarter ending in late November 2023.

Costco's gold bars are 1-ounce bars made of nearly pure 24-karat gold, and they sell them for around 2% above the spot price (immediate purchase price).

Why are people suddenly buying so much gold? Well, gold has been on a tear over the past year.

The spot price of gold has increased by over 13%, mainly due to some very unfortunate events.

With grueling global conflicts, war, and rising inflation, many people are in desperate search for safe places to protect their wealth.

Gold has long been considered one of the best monetary hedges because it holds value everywhere in the world and is not tied to a single government, making it a great solution for preserving wealth.

And Costco, being the retail geniuses they are, has been cashing in.

1️⃣ Costco ($COST) is up 12.56% this year.

Here’s what else you might’ve missed…

Paramount ($PA) board members step down amid talks with Skydance

Margot Robbie is producing a live-action ‘Monopoly’ game movie

The Olympics will be giving out prize money for the first time ever this summer

Ex-NFL player O.J. Simpson dies of cancer.

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