Through Letters and Warnings, Trump Increases Pressure to Reach Trade Agreements

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For months, July 9 has been circled on the calendar as the deadline for several countries—including the European Union, India, Canada, the United Kingdom, and Vietnam—to reach a trade agreement with the U.S. So far, only the last two have secured deals: the United Kingdom maintains base tariffs of 10%, and Vietnam obtained a reduced rate of 20%, while China has signed a trade truce. Talks with the EU, India, and Canada remain ongoing.

If the pending agreements are not finalized by tomorrow, the next step from the Trump administration is clear: it will issue formal notifications, in the form of letters, signaling the implementation of new tariffs effective August 1. In fact, in a shift in strategy, Trump has already announced that several such letters have been sent to countries where negotiations are stalling. “Among the 14 letters sent, two key trading partners stand out: Japan, which accounts for 4.5% of U.S. imports, and South Korea, with 4%. Both countries will face a 25% tariff. In most cases, the proposed tariffs are very similar to those introduced on Liberation Day, and a new period of dialogue will open until August 1—a deadline the president described as ‘not 100% firm,’ allowing for additional flexibility. Finally, it is worth noting that several of the countries affected by the letters have served as routes for China to reroute exports to the U.S., such as Thailand and Laos,” summarize analysts at Banca March.

Still, amid this trade realignment, the U.S. financial market remains firm: the S&P 500 is headed for its third consecutive monthly gain. “Global financial markets are navigating a week of heightened trade tension, political sensitivity, and mixed macroeconomic signals, with the United States at the center of a tariff realignment with global implications. Statements by Treasury Secretary Scott Bessent have set the tone, with repeated assertions about the U.S. returning to a regime of non-inflationary economic growth, accompanied by new rounds of multilateral and bilateral trade agreements. The Trump administration is preparing to impose tariffs starting August 1 that could revert to the peak levels of April 2 if negotiations with trade partners fail, triggering a chain reaction of adjustments, multilateral criticism, and regulatory uncertainty,” said Felipe Mendoza, financial markets analyst at ATFX LATAM.

In his view, the U.S. appears determined to consolidate a new protectionist cycle. “The tariff letters have already begun to be sent—as Donald Trump himself announced—to dozens of countries in an effort to strengthen the U.S. position in trade negotiations. Bessent confirmed that a series of agreement announcements is expected over the next 48 hours, while also stating that the trade deal with Vietnam is already finalized in principle, establishing a reciprocal tariff of 20%. Meanwhile, talks continue with the EU over a possible extension to avoid sanctions, while threats remain in place for a 17% tariff on European food exports,” he added.

Negotiations on the Table

Assessments of how these trade talks are progressing abound. For instance, Muzinich & Co highlights that U.S.–China relations appear to be in a relatively strong phase compared to recent history. “Last week, the United States lifted export restrictions on Chinese chip design software companies and ethane producers. In exchange, Beijing made concessions in the rare earth sector, signaling further goodwill between both sides. Additionally, China’s Caixin manufacturing index—the country’s leading private-sector and export-oriented business indicator—returned to expansion territory, reaching 50.4 in June. This far exceeded expectations of 49.3 and was a sharp rebound from May’s 48.3, suggesting a recovery in Chinese export activity,” they note.

Regarding Europe, they observe that headlines point to progress toward easing transatlantic trade tensions. “The European Union has shown a willingness to accept a trade agreement with the United States that includes a universal 10% tariff on a broad range of its exports. However, the EU is seeking concessions in return—specifically, pressure for quotas and exemptions that would effectively reduce the U.S. 25% tariff on EU auto and auto parts exports, as well as the 50% tariff on steel and aluminum,” they state.

Philippe Waechter, chief economist at Ostrum AM (an affiliate of Natixis IM), notes that although the 90-day extension expires July 9, Washington has already indicated that 25% tariffs on Japan and South Korea will begin August 1. “Announcements will be staggered through August 1, depending on how negotiations proceed. This hardline strategy was thought to be off the table after the financial market warnings around April 2 and due to America’s large funding needs. However, Trump is returning to it. And one can understand the reason behind this obstinacy,” he adds.

Beyond the Theater

Despite the political theater surrounding these tariff negotiations, David Kohal, chief economist at Julius Baer, believes the threat of higher tariffs remains—even though Trump extended the deadline from July 9 to August 1. This creates hurdles for U.S. investment and adds uncertainty around inflation.

In his view, the ongoing threat of higher tariffs heightens the risk of stagflation in the U.S. and puts pressure on Europe to boost domestic demand to counter challenges in global trade. “These new tariff threats—on top of the 10% base tariff, the 25% auto tariff, and the 50% tariffs on steel and aluminum already in place—serve as a reminder that the trade dispute remains unresolved, and the potential to disrupt U.S. supply chains and corporate investments may grow. Meanwhile, companies outside the U.S. are struggling in an increasingly hostile global environment,” says Kohal.

George Curtis, portfolio manager at TwentyFour Asset Management (Vontobel), believes that trade agreements are complex and difficult to negotiate, and that U.S. trade partners may not be sufficiently incentivized to concede to American demands.

“We believe President Trump will aim to negotiate toward a 10% baseline tariff, but the path to that outcome could be complicated, and the risk is that tariffs will end up higher, not lower—especially if the U.S. finds that other countries aren’t playing along. Ultimately, we expect Trump will outline the framework of a few deals in the coming weeks, but also impose new reciprocal tariffs on countries he views as negotiating unfairly. This is a tactic we’ve seen several times in recent months; however, we don’t necessarily believe markets will react strongly, assuming in the end it will de-escalate,” says Curtis.

Stirring the Tariffs

While the outcome of these negotiations remains to be seen, international asset managers agree that the most relevant factor continues to be the impact of this uncertainty on markets and growth prospects—for both the U.S. and the global economy.

“A global trade war and shifting political alliances could slow growth, fuel inflation, and raise the risk of recession. On the other hand, markets may react positively to announcements of trade talks. Four possible scenarios have emerged: a trade confrontation characterized by high tariffs and protectionist measures; major agreements, which would be the most favorable; a return of great powers; and assertive nationalism. Negotiations are ongoing, but given the complexity and number of trade partners involved, a quick resolution appears unlikely,” Capital Group states in its weekly analysis.

Meanwhile, Curtis of TwentyFour AM (Vontobel) believes that now that the Spending Act is known, the biggest short-term risk for Treasuries is headline news on tariffs and economic data. In his view, the U.S. economy is slowing, labor data will soften, but a recession is unlikely.

“So far, inflation figures have been favorable for cuts, as core inflation has exceeded forecasts for four straight months, but we don’t believe the Fed will act before tariff levels are set and it is confident that second-round effects have not been passed on to prices (unless job growth slows significantly). Deficits will continue to weigh on Treasuries in the coming years, as the government offers the market a new net supply of $2 trillion per year,” Curtis adds.

According to Ebury analysts, tariff-related news is expected to trigger market moves this week. However, they point out that, for now, markets are taking this risk calmly, assuming last-minute agreements or another extension will be announced, as Treasury Secretary Bessent has hinted. Their weekly analysis also notes that last week’s strong U.S. jobs report has temporarily halted the dollar’s slide and eliminated the chance of a Fed rate cut in July.

Less Tied to the U.S.

Another reflection from investment firms is the growing awareness that the global economy may, in the medium term, become less dependent on the United States and more diversified. As Waechter explains, since the time of Ronald Reagan, the global economic cycle has depended on U.S. household consumption, which represents 70% of U.S. GDP—the highest share by far among developed countries. As a result, many national economic cycles have become reliant on American consumer behavior.

“The American trap closes when, suddenly, countries have to pay a tariff to keep exporting to the U.S. To continue doing business with the U.S.—which is essential for almost every country’s economic cycle—nations accept being penalized by this tax. This leads to wealth transfers to the United States. The surge in customs duties collected by the U.S. Treasury proves it. This strategy, though not collectively efficient, also reveals the rest of the world’s inability to be self-sufficient. The U.S. market—so large and attractive for so long—is now ensnaring the rest of the world,” argues Waechter, chief economist at Ostrum AM.

A second conclusion is that the U.S. economy may be the one most affected by Trump’s tariffs. “If tariffs from the Trump administration are implemented—along with any retaliation from U.S. trade partners—it will lead to a supply shock in the U.S. and a demand shock elsewhere. The severity of these shocks will depend on the outcome of current trade talks and legal challenges. But it seems clear that the world’s two largest economies—China and the U.S.—will experience slower-than-expected growth compared to the beginning of the year, and the consequences will be felt globally, regardless of the final trade agreements,” say analysts at T. Rowe Price.

In their view, the U.S. faces downside risks to its growth outlook, even with the suspension of reciprocal tariffs with China and other partners. “Companies are facing higher input costs, which will compress profit margins and could force some to cut back on capital spending. Tariffs on consumer goods are likely to reduce real purchasing power and dampen household spending, which accounts for more than 70% of U.S. GDP. Any further downward pressure on the U.S. dollar could also activate upside inflation risks,” T. Rowe Price concludes.

JP Morgan Chase Launches a New Geopolitical Advisory Service: the CfG

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Already in his 2024 Letter to Shareholders, JPMorgan Chase CEO Jamie Dimon wrote, “Our greatest risk is geopolitical risk.” Global events have since confirmed his view, and the U.S. bank has introduced its new JPMorgan Chase Center for Geopolitics (CfG), an advisory service for clients that will leverage the firm’s network, expertise, and resources to successfully navigate “the increasingly complex global business landscape,” according to official company information.

The CfG will be led by Derek Chollet, one of Washington’s foremost foreign policy experts, and will be supported by both internal and external geopolitical and business advisors.

“In today’s world, business leaders must contend with rising global competition, combined with unprecedented interconnection, disruptive technological forces, persistent economic uncertainty, and a proliferation of geopolitical crises,” stated Jamie Dimon.

“The CfG will help our clients meet this moment by providing strategic insight, proven expertise, and data-driven analysis that support them in identifying opportunities and navigating the challenges of a shifting global economy and rapidly changing world,” he added.

The bank’s new center will work across the firm to bring together a broad team of experts to advise clients on how to anticipate and respond to the major geopolitical trends and events reshaping the global landscape.

Among the topics it will address are: the rise of artificial intelligence, the reconfiguration of global trade and supply chains, U.S.–China relations, and the evolving dynamics in Europe and the Middle East. In addition to publishing regular reports with timely analysis and insights, the CfG will take part in events and organize in-person sessions and webinars with clients, the bank said in a statement.

“By working with clients every day, our team has a unique vantage point on how global economic uncertainty is forcing business leaders to reassess their short- and long-term strategies, evaluate risks, and seize opportunities,” explained Derek Chollet, head of the CfG, who over three decades has held key roles at the Pentagon, the State Department, the White House, Congress, and several leading think tanks. “Harnessing the full power of JPMorgan Chase as a leading global financial institution uniquely positions us to help clients make informed decisions that enhance their competitive and commercial edge and create shareholder value,” the expert added.

The new advisory service’s inaugural reports cover topics such as the Middle East and its “new chessboard”; the “era of global rearmament and the U.S. defense industrial base”; and “Russia–Ukraine and the future of Europe.”

Inflation, Market Crash, and Collapse: These Are the Concerns of the Mexican Investor

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The start of the second half of the year brings with it a complex outlook for the world of investments amid an unstable global context. The global survey by Natixis Investment Managers reveals how Mexican investors are responding to an environment of high inflation and growing economic uncertainty, and which factors concern them most as they make decisions aimed not only at preserving their wealth but also growing it.

After 15 years of low interest rates, high returns, and relatively steady performance, individual investors around the world are now worried about how the current period of instability may affect their long-term investment goals, with corresponding effects on decision-making and financial planning.

In the face of ongoing uncertainty, the survey—conducted among individual investors with more than $100,000 in invested assets—found that three-quarters (73%) now prioritize safety over performance in their investments, while 72% are concerned that markets will become more volatile in the future.

Inflation, Market Crash, and Collapse

In Mexico, the leading investment concern is inflation, cited by 61% of respondents, followed by fears of a market crash (48%) and an economic collapse (44%).

Amid persistent inflation, two-thirds (66%) say they are saving less due to higher everyday expenses. Nearly half (48%) are also concerned that if the “Magnificent Seven” weaken, their portfolios would suffer a significant negative impact, as many Mexican investors have diversified into global investments.

Additionally, one-third of Mexican investors with exposure to global markets want their advisor to connect them with investment opportunities in private markets, viewing it as an alternative amid ongoing volatility.

When asked how they define investment risk, 28% of respondents in Mexico associate it with exposing their assets to market volatility, 21% define it as underperforming the market, while 14% link it to loss of wealth and another 14% to not achieving financial goals.

Furthermore, 55% of respondents in the country described their risk tolerance as moderate, 23% as conservative, and 11% as very conservative. Only 8% identified as aggressive investors, and just 1% as very aggressive.

Mauricio Giordano, Country Manager at Natixis Investment Managers Mexico, commented: “Geopolitical uncertainty, inflation, and rising prices are pushing investors to adjust their performance expectations and carefully analyze how to maximize their opportunities. In times like these, it is vital not to lose sight of long-term investment goals to avoid making decisions based on market noise.”

In this context, Mexican investors are increasingly turning to financial advisors as a way to professionalize their investments and improve returns, in addition to the sense of security that such support provides.

In Mexico, 32% of respondents said their relationship with their primary financial advisor is mostly passive—only involving them in significant decisions. Additionally, 36% said it functions as a partnership, with the advisor participating in most investment decisions. Finally, 26% stated they are in control: their advisor offers recommendations but does not make the decisions.

Individual Investors in Mexico: Key Figures

  • Of the 7,050 investors surveyed in Latin America, 33% were from Mexico (300), with an average age of 46.

  • 46% are Millennials, 30% Generation X, and 24% Baby Boomers. On average, respondents plan to retire at age 63 and expect to live 20 years in retirement.

  • The reported average household income (median) was approximately $239,167 annually.

  • 69% indicated that their wealth comes from employment—that is, working for someone else—while 26% said it comes from business ownership or self-employment. Additionally, 42% cited investments as a source of wealth, and 23% reported receiving an inheritance or financial support from family.

  • On average, respondents have approximately $452,788 accumulated specifically for retirement, across all investment accounts.

EFG Promotes Luis Ferreira to Deputy CEO of the Miami RIA and CIO of the Americas

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Luis Ferreira EFG Miami RIA
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EFG announced in a press release the promotion of Luis Ferreira to Deputy CEO of the Miami RIA and Chief Investment Officer (CIO) for the Americas. He will remain based in Miami and report to Sanjin Mohorovic, CEO of EFG Capital International for Latin America, and Andre Portelli, Global Head of Investments and Client Solutions.

As Deputy CEO of the Miami RIA, Ferreira will work alongside Eduardo Cruz, Managing Director of the unit, in defining the segment’s strategy and objectives, as well as developing the service offering. The Miami RIA’s activities include client advisory, consolidated solutions, third-party distribution, and servicing Latin American clients in the United States.

In his new role, Ferreira will also be responsible for leading the investment solutions teams across the Americas, coordinating work with other EFG offices—including those in Switzerland, the Caribbean, and Panama—and developing an investment strategy focused on Latin American clients, in alignment with EFG’s global leadership.

“We have a multifaceted approach to Latin America to take advantage of the opportunities presented by a region that continues to show growth in wealth creation,” said Sanjin Mohorovic, CEO of EFG for Latin America. “We are confident that Luis will play a key role in executing our strategic plan, enhancing our investment platform, expanding our presence in Brazil and throughout the region, and shaping the next phase of EFG’s growth in Latin America.”

In a post on his personal LinkedIn profile, Mohorovic also stated that Luis Ferreira will contribute to and actively lead business development efforts in Brazil, in partnership with EFG’s Private Banking Heads in Miami, Switzerland, and the Bahamas.

Luis Ferreira has been with EFG for nearly a decade. Since 2019, he has led the Investment Strategy Group at EFG Capital. Previously, he worked for five years at Delta National Bank and Trust Company in New York and six years at Banco Alfa in São Paulo as an equity portfolio manager. He holds an MBA from the Jack Welch Management Institute in the United States.

According to EFG, the appointment is in line with its strategy to expand its presence in Latin America, strengthen its investment platform, and seize opportunities in a region experiencing rapid wealth creation.

Allfunds Appoints Daniel Jesús Alonso New Head of US

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Allfunds new Head of US
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Allfunds has announced the appointment of Daniel Jesús Alonso as the new Head of US. Effective July 9 and based in Miami, Alonso will report to Gianluca Renzini, Chief Commercial Officer, and will play a key role in driving Allfunds’ growth in the offshore markets, while also strengthening its wealth management and product development initiatives.

Daniel joins Allfunds from Morgan Stanley Wealth Management, where he played a fundamental role in expanding the international business (offshore in the U.S.), most recently serving as Director of Product Development in International Wealth Management (IWM). In that position, he led the strategy, development, and distribution of investment products for international clients. Previously, he was Executive Director in Morgan Stanley’s Investment Solutions organization, overseeing the team of international product specialists.

Following this announcement, Gianluca Renzini, Chief Commercial Officer of Allfunds, stated: “We are very pleased to welcome Daniel to our team as we strengthen our presence in key markets. His extensive experience in international wealth management and deep knowledge of the U.S. offshore market make him the ideal leader to drive our growth strategy in the Americas. This appointment reflects our commitment to bringing in top-tier talent to accelerate our expansion in high-growth markets.”

For his part, Daniel Alonso, incoming Head of US at Allfunds, added: “Allfunds stands out in the U.S. offshore market for its ability to offer solutions across both private and public markets in multiple currencies within a single integrated ecosystem. Its focus on innovation and deep understanding of market and product trends create a very attractive opportunity. I am excited to be part of this project and to contribute to the sustained growth of the company and its commitment to the region.”

Extensive Professional Career
With nearly two decades of experience in private banking and international wealth management, the firm believes he brings a deep knowledge of capital markets, alternative products, traditional investment solutions, and advisory services. Early in his career, he worked in capital markets providing sales and trading services to international private banking, middle market, and wealth clients, covering structured products, equities, and fixed income.

Daniel holds a degree in Business Administration from Montclair State University and an MBA from Dowling College. He also holds the CFP® and CIMA® certifications and has passed the FINRA Series 7, 24, 55, and 66 exams, reflecting his broad knowledge in investment management and regulatory requirements.

Apollo Launches Olympus Housing Capital, a New Financing Strategy for Homebuilders in the U.S.

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Apollo Olympus Housing Capital
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The asset manager Apollo Global Management announced the launch of a new subsidiary: Olympus Housing Capital, a new financing strategy for homebuilders. It will focus on providing capital solutions to builders across the United States in order to finance land acquisition and the development necessary to transform approved residential land into finished lots ready for home construction.

The firm also reported that Olympus is led by Chief Executive Officer Andrew Brausa, an industry veteran with more than two decades of experience in residential housing.

The new subsidiary operates at the intersection of several secular trends, including the structural shortage of single-family homes and the growing use of customized private financing solutions by builders.

“This new strategy represents a highly scalable business that is positioned to offer flexible capital solutions in a market with supply shortages and favorable long-term macroeconomic tailwinds,” commented Peter Sinensky and Nancy de Liban, partners at Apollo. “We are delighted to partner with Andrew and leverage his extensive experience and strong track record in the sector,” they added in the statement.

The originations of Olympus are backed by capital from funds managed by Apollo and affiliated balance sheets. The company will target both public and private builders, who increasingly need scalable capital partners to support their growth ambitions and increase the housing supply in the United States.

For his part, Andrew Brausa, Chief Executive Officer of Olympus, said he was “excited to join forces with Apollo to launch Olympus in an environment of strong and growing demand for reliable capital solutions for homebuilders.”

“With a flexible investment mandate and significant operational capabilities, we believe Olympus can deliver value-added services that align with the interests of our clients and the residents of their communities,” he added.

Brausa has more than 20 years of experience in investments. He most recently founded and managed the land financing strategies at Brookfield Asset Management. Previously, he co-founded Domain Real Estate Partners to execute private land financings. He has also managed public market investment portfolios at DW Partners and has held senior investment positions at various global asset managers, such as Jefferies and Citadel, among others.

The “Great and Beautiful” Tax Law Puts Traditional Economics to the Test

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Tax law traditional economy test
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The second half of 2025 promises to be as intense as the first. Analysts expect to begin seeing the initial effects of Donald Trump’s tariff policy (the “customs verdict”), and a new variable is entering the markets: the consequences of the approval of the “Great and Beautiful” tax law in the United States.

With both legislative chambers under pressure and in record time, Trump secured the passage of a document exceeding 800 pages that, among other things, raises the debt ceiling to $5 trillion. He achieved this with simple majorities and without negotiating with the Democrats—thus avoiding the dreaded institutional gridlock—thanks to the fact that his electoral victory granted him control of Congress for the first time in years.

Along the way, new developments emerged, including Elon Musk’s announcement of launching a new political party in response to a law he claims will lead the country to bankruptcy.

The list of measures in the law is long, but notably, it extends the tax cuts for high-net-worth individuals first approved during Trump’s previous administration (since 2017), which were set to expire this year. The new budget increases funding for immigration enforcement while cutting healthcare and social assistance programs.

Growth Booster or Fiscal Collapse: Traditional Economics Put to the Test

While Trump celebrates a major victory and a new wave of economic growth in the United States, the Congressional Budget Office estimates that the tax package will add $3.3 trillion to the deficit over ten years.

Both the tax cuts and increased spending will have to be financed with debt. Traditional economics predicts that such borrowing will push interest rates higher, offsetting the benefits of lower tax rates.

But, according to The Wall Street Journal, the U.S. president has an answer for that: breaking the link between the budget deficit and interest rates. In recent weeks, he has stepped up pressure on Federal Reserve Chairman Jerome Powell to lower rates—or step aside for someone who will.

In a note on the U.S. fiscal deficit, asset manager DWS notes that, according to theory, once interest rates exceed economic growth, federal debt grows faster than the economy—unless offset by a sustained primary surplus.

“This highlights the risks that U.S. debt dynamics could become unstable,” argues Christian Scherrmann, U.S. economist at DWS: “Wharton’s analysis identifies a critical debt-to-GDP threshold of approximately 200% and suggests that, under recent political and macroeconomic conditions, the U.S. has an estimated 20-year window to implement corrective measures—provided market conditions remain favorable overall.”

Tariffs and Another Critical Week for Currency Markets

Trump’s hectic agenda continues this week with full theatrical flair: on Wednesday, July 9, the 90-day pause in U.S. reciprocal tariffs ends. Starting then, higher rates could apply to all countries without a trade agreement.

This is happening as markets still struggle to gauge the effects of Washington’s new trade policy on global flows, causing widespread investor risk aversion. As a result, investment portfolios have suffered costly miscalculations, as noted by Julius Baer CEO Yves Bonzon:

“The first half of 2025 will go down as one of the most challenging periods for navigating markets. In short, we were well positioned until April 8, after which we hedged the wrong risk at the margin: we protected against U.S. equity risk instead of currency risk in the U.S. dollar.”

Indeed, 2025 has marked the worst start to the year for the dollar since 1973: “On the dollar front, the damage seems done, but we still struggle to find bullish investors in the greenback. This creates fertile ground for short-term violent countertrend rallies, and we are prepared to use any temporary strengthening of the dollar to further reduce our exposure,” Bonzon concluded.

Warren Buffett Donates a Record $6 Billion to Foundations

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CC-BY-SA-2.0, FlickrWarren Buffett (Mark Mathisian)

Investor Warren Buffett, 94, has just made his largest annual donation since 2006, transferring $6 billion in Berkshire Hathaway Class B shares to five foundations, CNN reported on Monday.

The majority of the donation — about 9.43 million shares — is designated for the Bill & Melinda Gates Foundation Trust, while the rest is divided among the Susan Thompson Buffett Foundation and three family foundations: Sherwood, Howard G. Buffett, and NoVo.

With this transfer, Buffett has now donated over $60 billion in total, reaffirming his strategy of giving away the majority of his wealth — currently estimated at $152 billion — to philanthropic causes.

Moreover, this is a strategic contribution: instead of personally selling the shares, he donates them directly as part of a gradual plan that preserves his voting rights. In fact, despite the donation, he still holds approximately 13.8% of Berkshire’s shares, a company he has led since 1965. The conglomerate, valued at $1.05 trillion, owns nearly 200 companies, including the auto insurer Geico and the BNSF railway company, as well as dozens of stocks such as Apple and American Express.

This new milestone coincides with his upcoming step down as CEO of Berkshire Hathaway — after nearly six decades at the helm — and embodies his philosophy that “wealth should be used to create impact,” reinforced by his formal pledge to donate 99.5% of his remaining estate to philanthropy after his death.

The TACO Effect Drives the Nasdaq 100 Roller Coaster

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In the opinion of Mobeen Tahir, Director of Macroeconomic Research & Tactical Solutions at WisdomTree, this has been a year of acronyms in the financial markets.

“Everything started with MAGA: Make America Great Again. Occasionally, some have given it a satirical twist with MAGA: Make America Go Away, or MEGA: Make Europe Great Again. In fact, this year, the largest investment flows into European rather than U.S. assets have often accompanied this satirical view. In this list, of course, one must include DOGE: the Department of Government Efficiency. And, more recently, TACO,” notes Tahir.

According to him, this last term has been coined by Financial Times contributor Robert Armstrong, and it means Trump Always Chickens Out. And the acronym does not refer to Mexico, although that country does have some ties to it, but rather describes President Trump’s pattern of making bold political announcements, such as imposing tariffs or threatening the U.S. Federal Reserve, only to later backtrack and soften. For the WisdomTree expert, this has, of course, translated into significant market volatility.

“For Nasdaq 100 investors, TACO has meant a roller coaster, as can be seen in the chart below. For those inclined to trade tactically around these sharp market swings, there have been many opportunities to take positions in one direction or the other,” points out Tahir.

Nasdaq 100 Timeline
The chart highlights a selection of notable days when President Trump made hardline announcements (in red) and subsequently backtracked on those positions. “The typical reaction of the Nasdaq 100 has been negative in response to hardline announcements and positive after the subsequent reversals,” emphasizes Tahir. In his opinion, these are the most important moments of the year:

February 1: Trump signs an executive order imposing tariffs on imports from Mexico, Canada, and China. The Nasdaq 100 falls.

February 3: Trump announces a 30-day pause on his tariff threat against Mexico and Canada. The Nasdaq 100 reacts positively.

February 13: Trump announces plans for reciprocal tariffs. This is followed by a series of tariff threats against numerous countries. The Nasdaq plunges.

April 2: Liberation Day: reciprocal tariffs are announced. The Nasdaq 100 suffers a sharp drop.

April 9: A 90-day pause on reciprocal tariffs is announced. The Nasdaq experiences a strong rebound.

April 21: Trump threatens to fire Federal Reserve Chairman Jerome Powell.

April 22: Trump withdraws his threat to fire Jerome Powell.

May 12: The U.S. and China agree to a 90-day suspension of high retaliatory tariffs.

May 23: Trump threatens the European Union (EU) with 50% tariffs and threatens Apple with a 25% tariff on its products unless they are made in the U.S.

May 26: EU tariffs are delayed until July.

“One could argue that no one can predict what will come next regarding tariff announcements. But the real question is whether the TACO effect is still alive. Are there any interesting opportunities left for investors? One hypothesis is that the TACO effect may have ended because the markets have become immune to new and bold announcements from President Trump, knowing they will eventually be reversed or at least softened. While the opposite hypothesis is that political uncertainty is greater than ever,” notes Tahir.

His main conclusion is that the Nasdaq 100, often considered a proxy for the U.S. technology sector, has been greatly influenced by President Trump’s policy measures. “Regardless of whether investors support TACO trading or not, political uncertainty is likely to remain high. And if ultimately the focus shifts away from tariffs, perhaps corporate fundamentals such as earnings and economic data like inflation, labor market strength, and GDP will return to the forefront,” argues the expert.

For Tahir, perhaps then more traditional acronyms like FOMO (Fear of Missing Out), TINA (There Is No Alternative), and RINO (Recession in Name Only) will become relevant again. “In any case, something will continue to attract investors and will keep driving the Nasdaq 100, one way or another,” he concludes.

The Energy Transition: Driver of GSS Bond Issuance Also in Emerging Markets

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Green, social, sustainability, and sustainability-linked bonds (GSS) are a relatively young asset class, established with the first green bond transactions just over a decade ago. In emerging markets, the outlook for this asset class remains solid, with the energy transition being the driver that has pushed their issuance over the past decade.

According to the latest report prepared by IFC and Amundi, global GSS bond issuance reached an all-time high of more than $1 trillion in 2024 in gross terms, 3% more than the previous year. However, the share of this asset class over total fixed income issuances declined to 2.2% in 2024, compared to 2.5% the previous year. These figures remain well above the 0.6% levels of 2018.

The report data show that, in emerging markets, GSS bond sales fell by 14% year-on-year. “Much of this decline is explained by lower issuance from China, as local investors opted for conventional bonds in the domestic market,” it explains in its conclusions. Additionally, it indicates that another factor behind the market’s retreat was a 23% contraction in global fixed income issuance in emerging markets outside China, amid weaker economic growth in Asia and Europe.

Despite this, the conclusions state that GSS bond penetration exceeded 5% in emerging markets excluding China, a record and ahead of the rates observed in the Asian giant and in developed markets.

Regarding pricing, the so-called green premium or greenium (a yield discount for GSS bond issuers) was cut by more than half, down to an estimated 1.2 basis points in 2024 from 2.5 bps in 2023, according to Amundi calculations. “In emerging markets, meanwhile, the greenium effectively disappeared in 2024, as supply caught up with demand for this type of asset,” they note.

Growth Drivers
At the time of drafting this report (April 2025), the global economy is facing high levels of uncertainty, making short-term forecasts for GSS bond issuance in emerging markets difficult. That said, the underlying market factors are clear, such as a likely rebound in new issuance to refinance around $330 billion in bonds approaching maturity over the next three years.

On the other hand, there are three factors that will likely limit new GSS bond sales: weaker global economic growth, recent regulatory changes in Europe, and a declining investor sentiment regarding environmental, social, and governance issues.

According to the report, over the longer term, the outlook for GSS bonds in emerging markets remains solid. “It is likely that in the coming years annual investments in clean energy that provide greater efficiency and supply security will double. This growth will likely be supported by an increasingly competitive renewable energy sector and by the ambitious commitments of multilateral institutions,” the report explains.

Increasing Diversification
Global cumulative GSS bond issuance between 2018 and 2024 reached approximately $5.1 trillion. During this period, issuers from emerging markets contributed around $800 billion or 16%. According to the report, “a key driver behind this growth is the energy transition from carbon-based generation to alternative, cleaner energy forms or technologies.”

In fact, clean energy investments in emerging markets have surged more than 70% since 2018, and China alone has experienced a 170% increase. Investor appetite has also intensified notably: sustainable funds reached $3.6 trillion in assets under management in 2024—up from $1.4 trillion in 2018—and fixed income allocations within investment portfolios have increased to 22%. Additionally, multilateral institutions channeled $238 billion in climate financing to emerging markets between 2016 and 2022, according to the OECD.

“The GSS bond market is undergoing significant diversification. Although green bonds have long dominated emerging markets’ GSS bond issuance, there is a growing shift toward sustainability bonds. This trend is pronounced among multilateral institutions and, more broadly, among issuers outside China who seek the flexibility of sustainability bonds to finance both environmental and social projects,” explained Yerlan Syzdykov, Global Head of Emerging Markets at Amundi.

The report observes that, since the end of the COVID-19 pandemic, demand for healthcare financing has subsequently contracted, leading to a stabilization in social bond sales. “This asset class represented 6% of total GSS bond issuance in emerging markets between 2022 and 2024. In contrast, sustainability-linked bonds experienced a sharp decline. This may reflect increasing criticism of their design flaws and weak penalty structures that do not effectively incentivize issuers to meet the sustainability targets set out in the terms of the assets,” the document concludes.