Key Takeaways
- The Treasury Department has expanded its no-tax-on-tips deduction to include digital content creators, a significant policy shift that could offer tax relief to a rapidly growing sector.
- Sanofi's (SNY) experimental eczema drug, amlitelimab, achieved all primary and key secondary endpoints in its late-stage COAST 1 trial, demonstrating statistically significant and clinically meaningful improvements in skin clearance and disease severity.
- UBS has upgraded aerospace giant Airbus (AIR) from Neutral to Buy, raising its price target to EUR 220 from EUR 180, signaling increased confidence in the company's outlook.
- European economic indicators offered a mixed view, with the Eurozone HCOB Construction PMI rising slightly to 46.7 in August from 44.7, while Germany's GDP is forecast for a modest 0.1% growth in 2025, and Sweden's Riksbank highlighted a weak domestic economy.
- Currency hedging costs have seen another increase as markets anticipate upcoming US jobs data, indicating a cautious sentiment among investors.
A significant policy change from the Treasury Department now includes digital content creators among the occupations eligible for the no-tax-on-tips deduction, as reported by Business Insider. This move, part of the "One Big Beautiful Bill Act," allows for a deduction of up to $25,000 for qualified tips and is set to be in effect from 2025 through 2028. The preliminary list of eligible jobs also encompasses a wide range of service sector roles, from hospitality to personal appearance and wellness.
In corporate news, Sanofi (SNY) announced positive results from the late-stage COAST 1 trial for its eczema drug candidate, amlitelimab. The drug met all primary and key secondary endpoints, showing significant efficacy in improving skin clearance and disease severity in adults and adolescents with moderate-to-severe atopic dermatitis. The trial also indicated that amlitelimab was well-tolerated with no new safety concerns, and its potential for dosing as infrequently as four times per year could offer a differentiated treatment option.
Aerospace manufacturer Airbus (AIR) received a boost as UBS upgraded its rating from Neutral to Buy, increasing its price target to EUR 220 from EUR 180. This upgrade reflects analyst confidence in potential supply chain improvements and long-term operating leverage for the company.
European economic data presented a mixed outlook. The Eurozone HCOB Construction PMI saw a slight improvement in August, rising to 46.7 from a previous 44.7, though it remains in contraction territory. Individually, France's PMI saw a notable jump to 46.7 from 39.7, while Italy's declined slightly to 47.7 from 48.3, and Germany's edged down to 46.0 from 46.3.
Meanwhile, the Kiel Institute for the World Economy (IfW) forecasts that Germany's GDP will grow by a modest 0.1% in 2025, with projections for 1.3% growth in 2026 and 1.2% in 2027. Unemployment in Germany is expected to fall to 5.8% by 2027 from 6.3% this year. In Sweden, Riksbank Deputy Governor Per Jansson commented on a weak domestic economy and a sluggish recovery, although he noted that high summer inflation appears to be temporary, with August core inflation showing "a little bit of good news."
Further market movements include a 9% decline in Volvo Car (VOLCARB) August sales. Additionally, currency hedging costs have risen again, ahead of the release of crucial US jobs data, suggesting market participants are bracing for potential volatility. Users also reported issues with Google (GOOGL) services, according to Downdetector. In geopolitical energy news, Russia and China are set to decide on the funding for the Power of Siberia 2 pipeline in 2026.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.