Tech tax deal comes closer

Last Week in the City provides a round-up of the market movements and the global investing outlook for the week ending 2 July 2021.

| 4 min read

Last Week in the City

A global tax deal took a step closer after OECD negotiators had backed a proposed minimum corporate tax rate of at least 15%. The move is aimed at technology giants. The recovery trade is still intact, as markets anticipate strong US jobs numbers, but inflation worries persist.

The FTSE 100 rose +0.2% over the week and the FTSE 250 was up +0.5% by mid-session on Friday.

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Half-year market update: In this episode, hear our Chief Global Strategist and Chief Investment Officer discuss the current investment landscape.

Investing themes


Boris Johnson expected to lift nearly all restrictions on 19 July with plans to be published soon, reports suggested. It was reported that more than 20 countries – including France, Italy and Austria – could be added to the “green list” this month allowing travellers not to quarantine on return. A final decision is expected on 12 July.


US job growth likely picked up in June as companies, desperate to boost production and services amid booming demand, raised wages and offered incentives to lure millions of reluctant unemployed Americans back to work. The figures are due out later on Friday.

Peak stimulus and peak growth rates? For now, the Fed still has the confidence of the market as it moves towards a more cautious approach. But the bull market rests on it continuing to be in control of the narrative and events.


Swedish fashion giant H&M saw its sales slump in China after it became the target of a Chinese boycott. H&M was among several brands that raised concerns over alleged human rights abuses against Uyghur Muslims in China's Xinjiang province. Its statement led Chinese celebrities to cut ties with the brand and e-commerce platforms to drop H&M. Nevertheless, its global business returned to profit as the impact of the pandemic eased.

China will cautiously celebrate 100 years of the Communist Party. This week saw the 100th anniversary of the Chinese Communist Party. There will be a day of centrally-led celebrations, with fireworks and a Presidential speech.

Mining and commodities

Oil prices inched lower after OPEC+ ministers delayed a meeting on output policy as the United Arab Emirates balked at a plan to add back 2 million barrels per day (bpd) in the second half of the year. Prior to the postponement, US oil futures closed at their highest since October 2018.


Does economic nationalism mean a ‘Splinternet’ is inevitable? A digital divide is slowly being erected between East and West. As mistrust over security and trade define the relationship between Washington and Beijing, is this the end of the World Wide Web?

The stock market value of Facebook topped $1 trillion for the first time after the social media giant won a court victory against US regulators. A federal court dismissed two lawsuits, from the Federal Trade Commission (FTC) and a coalition of states, boosting its shares. Facebook is the last of the "big five" tech companies to hit this valuation milestone.

Officials from 130 countries have agreed to overhaul the global tax system to ensure big companies "pay a fair share" in the countries in which they operate. The Organisation for Economic Co-operation and Development (OECD) said negotiators had backed a proposed minimum corporate tax rate of at least 15%. US Treasury Secretary Janet Yellen said: "Today is an historic day for economic diplomacy." The move is aimed at big tech which has been used to a global system to pay tax in jurisdictions with low rates.

Sir Richard Branson will fly to the edge of space in a Virgin Galactic craft on 11 July, or very soon after. The Unity rocket plane has been under development in the US for the better part of two decades. The vehicle can climb to an altitude of 90km (295,000ft), giving those on board a few minutes of weightlessness and a view of the curvature of the Earth. Garry White argues humanity’s colonisation of space is about to take-off.


US drugs giant Johnson & Johnson will pay $230m to settle claims it fuelled an opioid addiction crisis in New York State. The company did not admit liability or wrongdoing in settling with the state. The payment removes it from a trial due to begin on Tuesday, in which several large opioid makers and distributors are defendants.

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Tech tax deal comes closer

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