American Fund Managers Welcome Decision to Scrap Section 899
The Institute of Investment Companies (ICI), which represents US fund managers and some European entities, has expressed support for the Senate Finance and House Ways and Means Committee’s decision to remove Section 899 from President Trump’s expense bill.
Previously, ICI had lobbied against this section, arguing that it negatively impacted foreign investments in the US stock market, as noted in documents reviewed by CNBC.
“ICI praises the announcement from Chairmen Crapo and Smith regarding the elimination of Section 899,” the ICI stated, mentioning the administration’s agreement with G7 nations.
“We extend our gratitude to Treasury Secretary Scott Bescent, Chairman Crapo, and Chairman Smith for their negotiation efforts, which have helped maintain the US as a prime venue for global investment,” it added.
JD Sports Shares Rise 8%
UK sportswear retailer JD Sports has surpassed the Stoxx 600 index with a rise of 7.8%.
This surge follows a better-than-expected fourth-quarter performance, outperforming projections from sports giant Nike, which constitutes over 90% of JD’s sales, driven by major brands like Nike, Adidas, and Puma.
US Treasury Secretary Bescent Calls for End to “Revenge Tax” on Foreign Investors
U.S. Treasury Secretary Scott Bescent has urged Congress to reconsider measures in President Trump’s spending bill that would have imposed penalties on certain foreign investors.
Section 899, often referred to as a “revenge tax,” would have added taxes for investors from specific countries, potentially lowering the gains from US assets.
Bescent argued for the removal of this section after US officials reached a cooperative agreement with G7 nations regarding global tax matters, asserting that “OECD Pillar 2 taxes do not apply to US companies.” He emphasized that this progress would enhance certainty in the global economy and foster growth in the US.
Car Inventory Increases
Car inventory in Europe saw an uptick in trade as investors reacted to news from the White House, with speculation that the upcoming deadline for country-specific tariffs might be less urgent and potentially extended.
This followed an agreement between Beijing and Washington earlier this month regarding the details of a trade deal struck in London.
Europe’s Stoxx Automobiles and Parts Index showed a positive response, trading around 2% higher, with significant gains from companies like Porsche and Valeo.
Ever since April, US imports of vehicles and parts have faced a 25% tariff, though blanket duties on EU imports remain paused until July 9.
China and the US Agree on London Trade Framework Details
The US and China have made further progress on the details of their trade agreement established earlier in London, according to a statement from China’s Ministry of Commerce on Friday.
European Markets Open Higher
European stocks are expected to continue their upward trend as trading kicks off on Friday. Positive forecasts from White House Press Director Karoline Leavitt concerning the mutual tariff deadline contributed to this sentiment.
The pan-European Stoxx 600 index saw a rise of 0.6%, with most sectors performing well. The automobile and mining industries led the advance, jumping by 1.4% and 1.1%, respectively, though utility stocks dipped slightly.
Mediobanca Aims to Dodge $5.7 Billion MPS Takeover
Italian bank Mediobanca announced on Friday a plan to return 4.9 billion euros (around $5.7 billion) to shareholders over the next three years.
Mediobanca critiqued a proposed legislative takeover bid as lacking a solid industrial or financial basis and flagged significant execution risks. The bank expressed concerns about the combined entities being overly susceptible to macroeconomic fluctuations without adequately strengthening Mediobanca’s business segments.
Opening Call
Good morning from London. European stocks appear set to build on the previous day’s gains as trading opens on Friday.
Futures for the FTSE 100 are trending slightly upward, with German DAX and French CAC 40 futures up by 0.8% and 0.6% respectively, following the Trump administration’s indication that the impending mutual tariff deadlines could be extended.
Trump Trade Deadline in July “Uncritical”: White House
President Trump may opt to delay the imposition of severe tariffs on imports from various countries, according to statements made by the White House.
The deadlines of July 8th and 9th for these tariffs have been described by Press Chief Karoline Leavitt as “uncritical.” She mentioned that extending the deadlines would be at the president’s discretion.
Leavitt also noted that if any countries fail to meet their trade obligations by the deadline, the president could provide contracts directly to those nations.
