This Earnings Season Is a Rorschach Test for Investors
This earnings season is a bit of a Rorschach test: Bulls will anchor to the fact that corporate profits have solidly beaten expectations, while bears will lean on executives' commentary around the costs of tariffs and heightened recession risks.
I'll try to split the difference: This is clearly a wobbly corporate environment that will get worse if President Donald Trump barrels ahead with tariffs around the highest in a century. But the corporate sector could yet find its footing if the president backtracks soon.
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US will never default on its debt, claims Trump's Treasury Secretary
The US will never default on its debts, Donald Trump's Treasury Secretary has claimed, as he sought to downplay growing concerns over the state of the country's public finances. Scott Bessent told CBS news on Sunday that the US was 'on the warning track' but insisted it would not run out of cash despite approaching the so-called debt ceiling – the legal limit that the US government is permitted to borrow. He said: 'I will say the United States of America is never going to default. That is never going to happen. We are on the warning track and we will never hit the wall.' Economists have warned that Donald Trump's 'big, beautiful' spending bill will add trillions to the US's $37 trillion (£27.4 trillion) federal deficit over the next decade. The bill, which was approved by the US's House of Representatives last month, proposes raising the US debt ceiling by $4 trillion. It promises increased spending on the US military and a clampdown on illegal immigration alongside cuts to food aid, clean energy tax credits and Medicare, America's healthcare programme for poorer households. The US was downgraded by the credit ratings agency Moody's in May, in part owing to concerns over Mr Trump's policies and slowing economic growth across the Atlantic. In early May, Mr Bessent said there was a 'reasonable probability' that the US could run out of money by August without lifting the debt ceiling. Mr Bessent's comments come after Jamie Dimon, the chief executive of JPMorgan, warned last Friday that Donald Trump's financial plans could 'crack' the American bond market. Investors have become increasingly worried over the impact of Mr Trump's borrowing plans on US Treasuries. Mr Dimon said: 'I just don't know if it's going to be a crisis in six months or six years, and I'm hoping that we change both the trajectory of the debt and the ability of market makers to make markets.' Mr Bessent hit back at Mr Dimon, saying: 'I've known Jamie for a long time, and for his entire career he's made predictions like this. Fortunately none of them have come true. That's why he's a great banker. He tries to look around the corner. 'We are going to bring the deficit down slowly. This has been a long process, so the goal is to bring it down over the next four years.' He argued that the US was taking in a 'substantial tariff income' that could net the US government as much as $2 trillion, and pointed to plans for a clampdown on prescription drug prices. He said: '[The] president has a prescription drug plan with the pharmaceutical companies that could substantially push down costs for prescription drugs, and that could be another trillion.' Mr Bessent also said he was confident that Donald Trump and the Chinese president, Xi Jinping, would 'iron out' their difficulties in a call soon – following accusations from Mr Trump last week that Beijing had violated a truce on tariffs agreed in May. He said: '[Mr Trump] is going to have a wonderful conversation about the trade negotiations this week with President Xi. That's our expectation.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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One of the most attractive — and sometimes secretive — ways the wealthy donate money could soon get even more popular
A provision in Trump's tax bill could make donor-advised funds an even more popular form of giving. DAFs are especially attractive to the ultrawealthy because of big tax advantages. Some experts told BI they're seeing DAF donations among the wealthy change in the post-Trump era. As President Donald Trump's "big beautiful bill" moves through Congress, a provision hiking taxes on private foundations could make another form of philanthropy even more attractive: donor-advised funds. Donor-advised funds, or DAFs, are accounts where donors can contribute funds, immediately get a tax deduction, and "advise" on where to donate — and they are becoming increasingly popular. As Daniel Heist, a professor at Brigham Young University and a lead researcher on the 2025 National Survey of DAF Donors, put it, "they're growing like crazy." Donors can contribute non-cash assets, like appreciated securities or crypto, to DAFs, and the funds grow over time. BI spoke with academics, DAF sponsors, and nonprofits about why major donors use DAFs, how the tax bill and Trump are changing the calculus, and the risks of the "opaque" form of philanthropy. Sponsoring organizations, which are themselves public charities, operate DAFs. Some of the largest are connected to investment firms like Fidelity, Vanguard, and Schwab, though others include community foundations or religious organizations. Technically, donors don't control the funds in their DAF, but practically speaking, they can direct the money to any accredited charity. "As long as you're following the rules of the DAF provider, you should always have those recommendations honored," Mitch Stein, the head of strategy at Chariot, a technology company focused on DAFs, said. Private foundations have to distribute at least 5% of their assets annually for charitable purposes, but DAFs don't have payout requirements. Donors also don't report their gifts to individual organizations on their taxes, and instead report that they gave to the DAF. If Trump's fiscal agenda passes in the Senate (it has already passed in the House of Representatives), it would raise the current 1.39% tax on private foundations' investment incomes. The rate would rise to 10% on foundations worth $5 billion or more, to 5% for those worth between $250 and $5 billion, and to 2.8% for those worth between $50 million and $250 million. It wouldn't change for foundations worth less than $50 million. "There already was a substantial amount of momentum toward donor-advised funds, and a bill like this would only magnify that," Brian Mittendorf, a professor at Ohio State University who has studied DAFs, told BI. Though people across net worths use DAFs — Heist called them a common "mid-range philanthropic tool" — they're particularly attractive to the rich. The 2025 survey of DAF donors found that of 2,100 respondents, who were surveyed between July to September 2024, 96% had a net worth of more than $1 million. "I definitely see a trend away from private foundations," Heist said. Rebecca Moffett, the president of Vanguard Charitable, a prominent DAF provider, said she's seeing the same pattern. The main draw has to do with taxes, according to data and the experts. In the 2025 survey, 62% of donors said tax advantages were a strong motivation for opening a DAF account. Jeffrey Correa, Senior Director of US philanthropy at the International Rescue Committee, told BI that there's been an "explosion" of major donors giving through DAFs. The ability to contribute non-cash assets is also a big factor. Donating appreciated assets lets the donor avoid paying capital gains taxes (in the 2025 survey, 51% of respondents said reducing capital gains taxes was a big consideration). Convenience is another benefit, experts said, since DAFs are more streamlined and cheap than private foundations. Then there's the question of privacy, beyond how DAF donations show up on tax filings. Donors can choose varying levels of anonymity when donating to recipient nonprofits. Only 4% of donors in the 2025 survey opted to be totally anonymous to the recipient organizations, most commonly to avoid public recognition or solicitation. Just 24% said they wanted to avoid scrutiny. Generally, the experts BI spoke with said they don't see confidentiality as the primary appeal of DAFs. Moffett and Correa said they haven't seen more major donors opt for anonymity or express concerns about confidentiality. Most of those BI spoke to were enthusiastic about DAFs, but some flagged risks. Mittendorf and Helen Flannery, an associate fellow at the Institute for Policy Studies, found through a study that DAFs distribute grants to politically engaged organizations 1.7 times more than other funders. "They can be great conduits for dark money because they're completely opaque," Flannery said, adding that the public doesn't always know where donors' DAF funds go. Risks aside, the wealthy seem as interested as ever in using DAFs — and in turn slowly eroding the private foundations that once defined the philanthropic world. Have a tip or something to share about your giving? Contact this reporter via email at atecotzky@ or Signal at alicetecotzky.05. Use a personal email address and a nonwork device; here's our guide to sharing information securely. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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German minister: Services must be considered in tariff row with US
The European Union wants to include services in the tariff dispute with the United States to persuade US President Donald Trump to relent, German Foreign Minister Johann Wadephul said on Sunday. "We want to focus not only on the exchange of goods and products but also on services. And if you look at the whole spectrum, then the exchange between the United States of America and the European Union is quite balanced," Wadephul explained on German public broadcaster ZDF. "And if you take that into account, I believe we have good conditions to reach a reasonable conclusion." The chairman of the Trade Committee in the European Parliament, Bernd Lange, had also hinted at this. The EU has a trade deficit with the US in services, Lange pointed out. This is mainly due to the high demand in Europe for the offerings of US digital companies like Google and Meta. Trump justifies his tariff policy by stating that the US has a trade deficit in goods with the EU. Trump recently also announced a doubling of tariffs on aluminium and steel imports to 50%. A spokesman for the European Commission threatened countermeasures over the weekend.
