G-7 Puts Pressure on Russia; Trump's Tax Cut Plans | Bloomberg Daybreak: US Edition

Summary

The G7 leaders summit in Bari, Italy, focuses on supporting Ukraine with a pledge to tighten the price cap on Russian oil. President Biden signs a 10-year security agreement with Ukraine, emphasizing self-defense. Meanwhile, the US S&P 500 hits record highs with tech stocks leading the way, as inflation eases and earnings growth remains strong. Biden also plans executive action to protect certain undocumented immigrants from deportation, while the corporate tax rate may be cut to 20% if former President Trump's promise materializes.

Takeaways

• 🌍 Day two of the G7 leaders Summit in Bari, Italy, focuses on support for Ukraine with plans to tighten enforcement of the Russian oil price cap and cut Moscow's revenues from metals.
• 🤝 President Biden signs a 10-year bilateral security agreement with Ukraine, emphasizing Ukraine's self-defense as crucial for lasting peace and pledging US support until they prevail in the war.
• 🏆 Biden may take executive action to protect undocumented immigrants, allowing certain spouses of US citizens without legal status to remain and work in the country, potentially leading to a path to citizenship.
• 💼 Former President Trump promises to cut the corporate tax rate to 20%, offset by future tariffs, aiming to appeal to corporate CEOs and House Republicans.
• 📈 The S&P 500 hits new highs, driven by bets that the Federal Reserve will cut interest rates and positive economic data, with equities expected to remain bullish in the foreseeable future.
• 🍎 Apple's stock experiences its biggest three-day advance since August 2020, adding nearly $324 billion to its market value and regaining the title of the world's most valuable company.
• 🎨 Adobe shares surge after the company raises its annual profit outlook and projects strong future sales for its creative products, indicating customer adoption of new AI-based tools.
• 🚗 Tesla shareholders approve CEO Elon Musk's pay package and the company's move of incorporation from Delaware to Texas, which could revive Musk's compensation plan in a more favorable legal environment.
• 💴 The yen slumps against the dollar as the Bank of Japan delays its bond buying plan decision, leading to market uncertainty and yen selling.
• 🛒 A federal judge indicates a likely rejection of a $3 billion settlement between Visa, Mastercard, and retailers, which aimed to cap credit card swipe fees, as retailers continue to fight for reduced costs.
• 🏈 In sports, Rory McIlroy ties for the lead at the US Open, while the Yankees and Mets achieve walk-off wins, and the Florida Panthers are one win away from sweeping the Stanley Cup Final.

Q & A

What is the main theme of the G7 leaders Summit in Bari, Italy?

Support for Ukraine is the key theme of the G7 leaders Summit in Bari, Italy.

What actions are the G7 leaders planning to take against Russia?

The G7 leaders plan to tighten enforcement of the existing price cap on Russian oil, choke off future Russian energy projects, and cut Moscow's revenues from metals.

What is the significance of the 10-year bilateral security agreement signed by President Biden and President Zalinski?

The 10-year bilateral security agreement signifies a long-term commitment by the US and its allies to support Ukraine's ability to defend itself and deter future aggression.

What is the potential executive action President Biden is considering regarding undocumented immigrants?

President Biden is considering an executive action that would protect certain undocumented immigrants from deportation, specifically allowing spouses of US citizens who lack legal status to remain in the country and seek authorization to work.

What promise did former President Donald Trump make to the business community?

Former President Donald Trump promised to cut the corporate tax rate to 20%, offset by future tariffs, and to make permanent the sweeping 2017 tax law.

How has the S&P 500 performed recently?

The S&P 500 has been performing well, coming off a fourth consecutive record close and reaching its 29th record of the year on bets that the Federal Reserve will cut interest rates before the year is out.

What significant change occurred with Apple's stock?

Apple's stock registered its biggest three-day advance since August 2020, adding almost $324 billion to the iPhone maker's market value and surpassing Microsoft as the world's most valuable company.

Why did Adobe's shares rise in early trading?

Adobe's shares rose after the company raised its annual profit outlook and projected strong future sales for its creative products, suggesting that its customers are adopting the company's new artificial intelligence-based tools.

What resolutions did Tesla shareholders approve, and what is the significance of these decisions?

Tesla shareholders approved CEO Elon Musk's pay package and the moving of Tesla's state of incorporation to Texas from Delaware. The pay vote is advisory and does not guarantee Musk will get his compensation, but moving the legal home to Texas could allow the board to revive the package in a new state with potentially more favorable courts.

What is the current situation with the yen against the dollar after the Bank of Japan's decision?

The yen is slumping against the dollar after the Bank of Japan delayed a decision on its bond buying plan, leaving the market guessing as to the amount until the next meeting in July.

What is the potential impact of the market's reaction to disinflation on the S&P 500?

The market's reaction to disinflation could potentially sustain the rally in the S&P 500, as easing inflation and stable economic expectations create a good backdrop for risk-taking and investment in the index.