30/06/2025

BIZ & FINANCE MONDAY | JUNE 30, 2025

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Trump’s policymaking causes market angst o Investors see rally in stocks to fresh highs as fragile

G7 agrees to avoid higher taxes for US and UK companies OTTAWA: The United States and the Group of Seven nations have agreed to support a proposal that would exempt US companies from some components of an existing global agreement, the G7 said in a statement on Saturday. The group has created a “side-by-side” system in response to the US administration agreeing to scrap the Section 899 retaliatory tax proposal from President Donald Trump’s tax and spending bill, it said in a statement from Canada, the head of the rolling G7 presidency. The G7 said the plan recognises existing US minimum tax laws and aims to bring more stability to the international tax system. UK businesses are also spared higher taxes after the removal of Section 899 from President Donald Trump’s tax and spending bill. Britain said businesses would benefit from greater certainty and stability following the deal. Some British businesses had in recent weeks said they were worried about paying substantial additional tax due to the inclusion of Section 899, which has now been removed. “Today’s agreement provides much-needed certainty and stability for those businesses after they had raised their concerns,” Finance Minister Rachel Reeves said, adding more work was need to tackle aggressive tax planning and avoidance. G7 officials said that they look forward to discussing a solution that is “acceptable and implementable to all”. In January, through an executive order, Trump declared that the global corporate minimum tax deal was not applicable in the US, effectively pulling out of the landmark 2021 arrangement negotiated by Joe Biden’s administration with nearly 140 countries. He had also vowed to impose a retaliatory tax against countries that impose taxes on US firms under the 2021 global tax agreement. This tax was considered detrimental to many foreign companies operating in the US. – Reuters

little sign of the kind of euphoria that characterised stock market rallies of the recent past. “On the institutional front, we do see a lot of hesitation in chasing the market rally,” Stefano Pascale, head of US equity derivatives research at Barclays, said. Unlike past episodes of sharp market selloffs, institutional investors have largely stayed away from employing bullish call options to chase the market higher, Pascale said, referring to plain options that confer the right to buy at a specified future price and date. Bid/ask spreads on many stocks are well above levels O’Connor witnessed in late 2024, while market depth – a measure of the size and number of potential orders – remains at the lowest levels he can recall in the last 20 years. “The best way to describe the markets in the last couple of months, even as they have recovered, is to say they are unstable,” said Liz Ann Sonders, market strategist at Charles Schwab. Sonders said she is concerned that the market may be reaching “another point of complacency” akin to that seen in March. “There’s a possibility that we’ll be primed for another downside move,” she addded. Mark Spindel, chief investment officer at Potomac River Capital in Washington, said he came up with the term “Snapchat presidency” to describe the whiplash effect on markets of the president’s constantly changing policies on markets. “He feels more like a day trader than a long-term institutional investor,” Spindel said, alluding to Trump’s policy flip-flops. “One minute he’s not going to negotiate, and the next he negotiates.” – Reuters

NEW YORK: As Wall Street puts April’s tariff shakeout in the rearview mirror and indexes set record highs, investors remain wary of US President Donald Trump’s rapid-fire, sometimes chaotic policymaking process and see the rally as fragile. The S&P 500 and Nasdaq composite index advanced past their previous highs into uncharted territory last Friday. Yet traders and investors remain wary of what may lie ahead. Trump’s April 2 reciprocal tariffs on major trading partners roiled global financial markets and put the S&P 500 on the threshold of a bear market designation when it ended down 19% from its Feb 19 record-high close. Last week’s leg up came after a US-brokered ceasefire between Israel and Iran brought an end to a 12-day air battle that had sparked a jump in crude prices and raised worries of higher inflation. But a relief rally started after Trump responded to the initial tariff panic that gripped financial markets by backing away from his most draconian plans. JPMorgan Chase, in the midyear outlook published last Wednesday by its global research team, said the environment was characterised by “extreme policy uncertainty”. “Nobody wants to end a week with a risk-on tilt to their portfolios,” said Art Hogan, market strategist at B. Riley Wealth. “Everyone is aware that just as the market feels more certain and confident, a single wildcard policy announcement could change everything”, even if it does not More than US$500 million of the share sales took place this month as the California-based chips designer’s share price climbed to an all-time high, the report said. Jensen Huang, Nvidia’s chief executive, started selling shares this week for the first time since September, the SEC filing showed. Nvidia’s stock hit a record last Wednesday, and the chipmaker reclaimed the crown as the world’s most valuable company after an analyst said the chipmaker was set to ride a “Golden Wave” of artificial intelligence. Its latest gains reflect the US stock market’s return to the“AI trade”that fuelled massive gains in chip stocks and related technology companies in recent years on optimism about the emerging technology. Nvidia did not immediately respond to a Reuters request for comment. Nvidia’s shares have rebounded over 60% from their closing low on April 4, when Wall Street was reeling from President Donald Trump’s global tariff announcements. US stocks, including Nvidia, have recovered on expectations the White House will reach trade deals to soften the tariffs. – Reuters

ignite a firestorm of the kind seen in April, he said. Part of this wariness from institutional investors may be due to the magnitude of the 6% S&P 500 rally that followed Trump’s re-election last November and culminated in the last new high posted by the index in February, said Joseph Quinlan, market strategist at Bank of America. “We were out ahead of our skis,” Quinlan said. A focus on deregulation, tax cuts and corporate deals brought out the “animal spirits”, he said. Then came the tariff battles. Quinlan remains upbeat on the outlook for US stocks and optimistic that a new global trade system could lead to American companies opening new markets and posting higher revenues and profits. But he said he is still cautious. “There will still be spikes of volatility around policy unknowns.” Overall, measures of market volatility are now well below where they stood at the height of the tariff turmoil in April, with the CBOE VIX index now at 16.3, down from a 52.3 peak on April 8. “Our clients seem to have become somewhat desensitised to the headlines, but it’s still an unhealthy market, with everyone aware that trading could happen based on the whims behind a bunch of” social media posts, said Jeff O’Connor, head of market structure, Americas, at Liquidnet, an institutional trading platform. Trading in the options market shows

Nvidia insiders sold over US$1 billion in stock amid market surge: FT SAN FRANCISCO: Nvidia insiders sold over US$1 billion (RM4.2 billion) worth of company stock in the past year, with a notable uptick in recent trading activity as executives capitalise on surging investor interest in artificial intelligence, the Financial Times reported yesterday.

The Nvidia headquarters in Santa Clara, California. – AFPPIC