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As Donald Trump heads into the Republican National Convention, there's high anticipation around his economic agenda, particularly his tax policy. Despite minimal detailed planning, Trump has signaled intentions to implement broad tariffs and lower taxes, aiming to stimulate the economy. He proposes no taxes on tips and suggests lowering the corporate tax rate slightly from its current 21%. These moves are part of a broader strategy that includes defeating inflation and boosting domestic production by increasing output of oil, natural gas, and coal. Critics argue that Trump's fiscal strategies, especially his continuation of tax cuts, could exacerbate inflation and add over $5 trillion to the national debt. Furthermore, the economic implications of his proposed tariffs are debated, with some analysts warning of increased consumer costs and heightened inflation. As Trump recovers from the assassination attempt, the convention is set to focus heavily on these economic strategies, reflecting his administration's past actions and hinting at more aggressive fiscal maneuvers if re-elected.

 

AP News

Washington Post

Tam Vo, director at Moss Adams, discusses the mixed impact of tax incentives on corporate relocations. With CBRE reporting that 465 corporations moved their headquarters within the U.S. from 2018 to 2023, 122 of these moves were motivated by tax incentives. While such incentives can spur growth and profitability, they also pose significant challenges. Companies must manage the complexities of new tax landscapes, adhere to local regulations, and meet stringent compliance standards to avoid penalties and reputational harm. Vo suggests that corporations weigh these factors against potential benefits, considering long-term strategic goals and the broader impacts on politics, public perception, and employee satisfaction to navigate these waters effectively.

 

Bloomberg Tax

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Following the attempted assassination of Donald Trump, global financial markets have responded with a clear surge in what's known as the "Trump trade," anticipating the former president's possible return to the White House. This resurgence is driven by expectations of tax cuts, higher tariffs, and deregulation under a potential second Trump administration. After the incident, which saw Trump shot in the ear during a rally, investors showed their confidence in his policies by driving up long-dated bond yields and the U.S. dollar, while the Mexican peso and other currencies fell. Bitcoin and U.S. stock futures also saw gains, suggesting a bet on Trump’s growth-spurring fiscal and trade agenda. However, the political violence introduces new uncertainties into the market, with potential shifts towards safer assets amid heightened instability fears. Investors are balancing these dynamics with the ongoing risks from high valuations in AI stocks and political tensions. The situation remains volatile with the U.S. election looming, making the markets sensitive to further developments.

 

Bloomberg

Deloitte's CFO Signals survey for Q2 2024 reveals a split sentiment among CFOs regarding their companies' financial prospects. Thirty-eight percent of finance leaders are "more optimistic" about the future, while 39% express less optimism. The survey, which includes responses from 200 CFOs of companies with over $1bn in annual revenue, also highlights mixed views on the valuation of U.S. equity markets and the appeal of debt and equity financing. A significant 61% of CFOs are concerned about economic factors such as growth and consumer demand, with geopolitics and cybersecurity also ranking high among external risks. Internally, the top risk is talent management, with a focus on adapting to generative AI and technology transformation. The survey underscores the need for CFOs with operational experience and technological acumen, reflecting the evolving role of finance leaders in navigating complex business landscapes.

 

CFO Journal

The FASB has officially issued the final chapter of its Conceptual Framework, which focuses on the measurement of items in financial statements. This new chapter, known as Chapter 6, integrates into FASB Concepts Statement No. 8, rounding off the board's foundational framework for financial reporting. The FASB chair, Richard Jones, highlighted the completion as a critical milestone, thanking all involved for their contributions over the years. The framework serves as a nonauthoritative guide that aids the FASB in creating standards that fulfill the objective of financial reporting and enhance clarity for stakeholders, including investors, lenders, and donors. This completion marks a significant step in standard-setting by providing a comprehensive basis for future accounting practices and standards development.

 

The Accountant Online

A new community, CFO Forum, has been launched as a strategic initiative to support CFOs of rapidly scaling companies. This forum is a collaborative effort between Cooper Parry's High Growth team and Founders Forum Group, aiming to bridge the gap in resources available for senior financial leaders. The forum will offer access to a network of like-minded CFOs, curated events, and valuable insights into navigating economic challenges and opportunities in venture capital, private equity, and public markets. The initiative will feature an invite-only community, hosting over 100 CFOs from founder-led and fast-growing U.K. companies at its inaugural event in September. This event will include fireside chats and roundtable discussions tailored to the strategic needs of CFOs. The partnership marks the first step in a broader financial services offering being developed by Founders Forum Group and Cooper Parry, enhancing Founders Forum’s professional services suite. 

 

International Accounting Bulletin

Estée Lauder said Thursday that chief financial officer Tracey Travis will step down from the roles on June 30th 2025, with her successor to be named in the coming weeks. The news follows the exit of Deirdre Stanley as general counsel in April and comes as the company goes through a restructuring plan aimed at cutting costs, boosting margins and increasing the speed of innovation.

 

Bloomberg

Wall Street Journal

OpenAI whistleblowers have filed a complaint with the Securities and Exchange Commission (SEC) over the company's allegedly restrictive non-disclosure agreements (NDAs). The whistleblowers claim that OpenAI made employees sign agreements that waived their federal rights to whistleblower compensation,  alleging that it issued overly restrictive employment, severance, and non-disclosure agreements, which could have penalized workers who raised concerns about the company to federal authorities. They also claim that OpenAI required employees to obtain prior consent before disclosing information to federal regulators and did not provide exemptions for disclosing securities violations to the SEC.

 

Reuters

The delinquency rate for U.S. office loans has increased in June, largely due to escalating vacancies and high interest rates, as per recent analyses from ratings agencies. Fitch Ratings reported a rise in the overall delinquency rate for commercial mortgage-backed securities (CMBS) loans to 2.45% in June from 2.42% in May, with the volume of 30-day delinquencies climbing to $1.92bn from $1.86bn. Office loans, significantly impacted by the shift to remote work since the pandemic, constituted 55% ($1.05bn) of the 30-day delinquencies. The trend reflects a broader struggle within the commercial real estate sector, with office vacancies reaching a historic high of 20.1% in the second quarter, according to Moody’s Ratings. This ongoing rise in vacancies, coupled with permanent changes in workplace dynamics, continues to put pressure on the office sector, highlighting significant challenges in loan performance and property valuations. 

 

Reuters

Federal Reserve Chair Jerome Powell is set to start a crucial week of communications from U.S. central bank officials as they assess the easing inflation and consider signaling upcoming interest rate cuts. The Fed, which meets July 30-31, is in a critical pre-meeting quiet period starting July 20. Recent shifts in economic data have increased expectations that rate cuts might begin as soon as September, especially following a notable drop in June inflation figures. Central to the Fed's considerations is the Consumer Price Index's recent decrease and a slowing in wholesale prices, suggesting that inflation pressures are abating. Powell, who will speak at the Economic Club of Washington, has indicated that continued positive inflation data could lead to reduced borrowing costs, though he refrained from specifying a timeline. This upcoming week's remarks by various Fed officials, including Powell, Fed Governor Adriana Kugler, and others, will be closely analyzed for further clues about the central bank's policy direction amidst evolving economic conditions.

 

Reuters