US stocks declined as investors grew nervous over a global minimum tax rate, taper fears remain following hawkish comments from Treasury Secretary Yellen, and as meme stock mania enters its third wild week.
Biogen shares soared after its Alzheimer drug Aduhelm (aducanumab) won FDA approval, the first new treatment for Alzheimer’s disease in nearly two decades. Apple’s Worldwide Developers Conference didn’t deliver any major surprises. Apple announced its new iOS updates, major improvements with FaceTime, and enhanced privacy reporting.
G-7 agree on multinational tax
The world just got a lot closer to a global minimum tax rate after the G-7 agreed on a minimum tax of at least 15% which paves the way to tax the profits of digital companies. The next step is for the G-20 to discuss the proposed global tax rate in early July. Resistance from tax haven countries such as Ireland is expected, but that might not matter if the majority of large developing countries approve the global tax.
Even if G-20 supports the global tax rate, the US can’t sign off the global tax without Congressional support, which could see resistance from antitax GOP members. A lot needs to go right for this new tax to get implemented, which seems at the earliest would be around 2023.
It appears that Amazon, who has a profit margin around 5.5%, well below the 10% proposed threshold, won’t be exempt to the proposed global tax. If this global minimum tax rate was a baseball game, they’d be in the bottom of the second inning.
Bitcoin shrugged off weekend pressure that stemmed from the acceleration in the crypto crackdown in China. The microblogging platform Weibo restricted around a dozen popular cryptocurrency accounts over the weekend. This is not the first Weibo banned accounts but has helped many crypto traders anticipate further actions from Beijing.
The news however is not all negative for cryptocurrencies, El Salvador is poised to become the world’s first country to adopt bitcoin as legal tender. El Salvador, like many LATAM countries, pays significant fees with international transfers, so the embracement of cryptos should not come as a surprise.
Bitcoin continues to stabilize between the USD30,000 and USD40,000 and that should be healthy for the entire crypto market as a whole.
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