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Today’s Agenda: Staff at the Israeli Embassy who was killed in Washington. Telegram’s first annual profit. Interview with CEO Nestlé. Anti-West icon of Burkina Faso. Has Starlink already won the space race?
good morning. As Donald Trump approaches passing a drastic budget bill to extend tax cuts and increase US federal debt, he starts with market fallout. This is what you need to know.
Market response: US government bonds and stocks have declined. Treasury yields for 2030 have reached its highest level in evening trading in New York since late 2023, rising for several days. The S&P 500 fell 1.6%, with over 95% of its member stocks falling one day. Finance, real estate and healthcare were the worst-performing sectors of the benchmark index, but Big Technology’s sales added to the decline. Bond prices recovered slightly during Asian trading this morning, but futures on the S&P 500 and NASDAQ have been higher.
Why is this happening: Investors are worried about the US financial outlook. The bill is expected to add at least 3tn to national debt over the next decade. Their horror was also reflected in the weak Treasury Department’s $16 billion auction in 2020, which was sold at the highest interest rates since 2020. Primary Dealer – the banks needed to buy unsold bonds – purchased over 15.1% of the offering. Read the whole story, “There’s really no appetite here in the market.”
Description: Trump’s “big and beautiful” bill means for the US economy and the president’s political agenda.
FT’s View: In its current form, the economic outcomes of the bill are far more ugly risky than Trump portrays, the editorial board wrote.
To learn more about Capitol Hill, sign up for our White House Watch newsletter. Here is the other thing we keep tabs today:
Economic Data: The Eurozone, the UK, the US, France and Germany issue indexes for manufacturing and services purchase managers, while the UK reports that public sector finances and the European Central Bank are publishing minutes from the latest pricing meeting.
Chagos Islands: The UK was able to sign a controversial deal to hand over the territory to Mauritius right away today.
Brussels Economic Forum: EU economic committee members and CEOs of Renault and Electrolux will make a statement.
Company: Johnson Matey was able to announce the sale of catalytic units to Honeywell with a full cash deal of £1.8 billion. We’ll also report on BT and EasyJet.
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Five more top stories
1. Two Israeli embassy staff were shot dead in Washington late yesterday outside an event at the Jewish Museum in the US capital. Homeland Security Secretary Christie Noem said her department had vowed to investigate and “take this fallen perpetrator to justice.” More details on this developing story can be found here.
2. The EU is offering to expand tariff-free access to American lobsters to invite Trump to a wider trade deal. The 2020 agreement to eliminate shellfish taxation will expire on July 31, but officials in the block say it could be expanded as part of a package to remove the US president’s recent tariffs. Andybound has details from Brussels.
3. Trump attacked South African president Cyril Ramaphosa at a television White House meeting yesterday on television. At one point, Trump took the unprecedented step of projecting the video onto a screen on an oval office wall that aimed to show the persecution of white farmers. For more information about the meeting, please see here.
Opinion: White minorities in South Africa justify anxiety, written by Alec Russell, but many are thriving and it’s ridiculous to talk about “genocide.”
Catarijet: The Pentagon has officially accepted the $400 million luxury jumbo jet to be used as a plane for the US president despite bipartisan concerns about ethics and safety.
4. Exclusive: Telegram jumped to $540 million last year. This is because messaging apps have grown rapidly despite French legal procedures against founder Pavel Doloff. According to a company presentation seen by the Financial Times, the Dubai-based group told investors it had told the investors its first annual profit from a loss of $173 million in 2023.
5. Exclusive: The UK has discussed using new laws to wipe out nearly £1 billion in British Steel’s debt. This is what some government people think can ease the sale of their businesses. The controversial move to erase the money owed on China’s owner Jingye could undermine business confidence in the UK and exacerbate tensions with Beijing.
Detailed news
Since taking power in the 2022 coup, Burkina Faso’s Ibrahim Traore has launched an anti-corruption drive, snatching greater control of its country’s mineral wealth from global mining companies, and attempting to reorganize it from former colonial ruler France towards Russia. How did the unclear military officers become anti-western icons of the continent?
We’re reading too. . .
Nestlé: CEO Laurent Freixe told FT that his predecessor “weaked the organization’s fabric” by diversifying into new products.
US Market: Investors are asking “the next thing” as American exceptionalism breaks down, Katie Martin writes.
UK Housing: Unless you are willing to move further away, you may be stuck in your existing home longer than you would expect, Neil Hudson writes.
EuroStar’s rivals: funding, regulation and various rail systems mean potential competitors are years away from launching services.
The chart of the day
With over 7,000 operational satellites circling the Earth, Starlink is a major force in the industry. Has Elon Musk’s company already won the new Global Space Race while China and European Amazons and rivals catch up?
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Take a break from the news
What distinguishes the best airport lounges? Frequent flyer Andrew Jones crossed the world to find answers. Cleaning architecture, shoe shine, “the feeling of a journey awaits you” are some of the things to note.
