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Top stories today:
- U.S., China agree to 90-day tariff reduction (30%/10%)
- Trump to sign most-favored nation EO on drug pricing at 9 AM ET
- OpenAI, Microsoft said to reducing Microsoftās stake
- Appleās 2027 lineup said to include foldable, curved iPhones
- U.S. businesses with OpenAI subscriptions surge to 32.4%
0. Data and calendar
All values as of 6 AM ET / 3 AM PT, other than S&P500 and NASDAQ close (4 PM ET / 1 PM PT).
All times are ET.
Listen to our AI-generated podcast summarizing todayās newsletter (beware of hallucinations):
1. U.S., China agree to 90-day tariff reduction (30%/10%), S&P futures +3%
āWe are in agreement that neither side wants to decouple,ā Treasury Secy. Scott Bessent said in Geneva on Mon.
Tariff cuts donāt apply to sectoral duties imposed on all U.S. trading partners.
Donāt apply to the tariffs imposed on China during the 1st Trump admin.
An acceptable goal for both sides and the estimated timeline to achieve it remain unclear.
The new rates on China will halve the average effective tariff rate to 10.4%, according to Bloomberg Economics
Potentially hitting GDP by 1.5% and raising core PCE by 0.9% over a period of 2-3 years, according to Bloombergās analysis.
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3. Trump to sign most-favored nation EO on drug pricing at 9 AM ET
Vowed to cut drug prices to up to 80% in the U.S.
Drugmakers tumbled following Trumpās announcement on social media.
Novo Nordisk fell as much as 9% in early trading on Mon.
Pharma R&D IRR has already been falling over the past years, and this EO may make things worse
Biopharma IRR reached 5.9% in 2024, the 2nd year of growth in 15 years of analysis, per Deloitte.
High R&D costs, averaging $2.23B per asset in 2024, is an existing challenge.
Industry profits allow for investment in R&D to develop new therapies, so it is essential that this industry thrives.
4. OpenAI, Microsoft said to reducing Microsoftās stake in OpenAI's NewCo, allowing for potential IPO
Representational image generated using OpenAIās ChatGPT.
