Tax Reduction Bill Passes with Narrow Margin and Its Implications
The Passage of the Tax Reduction Bill
The tax reduction bill has finally been passed. On Thursday morning, the U.S. House of Representatives passed the Trump-pushed super bill by a narrow 215-vote to 214-vote margin. This bill is significant as it almost covers Trump's full-term policy. For U.S. House of Representatives Speaker Johnson, it was a high-risk political gamble that ended in a victory by a hair's breadth. Only two Republicans voted against it, and another president of the Free Party chose to abstain.
What the Bill Includes
The bill covers a wide range of issues:
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Tax Reduction Continuation: It continues the large-scale tax reduction implemented during Trump's first term in 2017.
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Defense and Border Budget Increase: Significantly improves the national defense, border, and expulsion budget. Increasing national defense is a long-standing Republican claim, and border and expulsion budget was an important commitment during Trump's election.
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Medical Subsidies and Other Provisions: Imposes more strict work requirements for medical subsidies, cancels green energy tax incentives, and exempts popular voters from tax and overtime income.
Behind-the-Scenes and Aftermath
The Republican Party raised the debt to over $40 million for this bill. There were some funny incidents during the vote, like a New York State Senator missing the vote due to not inserting the card in time while in Arizona. After the bill passed, Trump celebrated on Truth Social. However, the Senate has signaled its intention to modify multiple core provisions in the bill, which may cause a strong rebound in the House of Representatives. Party leaders in the Senate stated that there are many details to be discussed in the tax code, while the House of Representatives warned against changing the results they fought for. Johnson called on the Senate to make minimal changes as the House of Representatives reached a fragile balance after much hardship.
Legal Compromise and Its Impact
There is a legal compromise in this process. Part of it will be extended by Trump's executive order. For example, the Finance Department asked to speed up the medical supplementary work requirement and cancel the green energy tax. The Republican Party is using the link between the legislature and the two major power agencies to complete the proposal. This way of using administrative orders has increased the possibility of Trump's re-appointment and will speed up the progress of the July bill.
Impact on Investors
For investors, the passing of the tax reduction bill can offset some economic concerns, but it will also exacerbate the deficit and U.S. debt problems. The impact is mixed, depending on the market's main focus. Investors should avoid profit-sensitive trademarks as they are more likely to be suppressed by U.S. debt interest rates. Companies with large capital and low leverage are better as the market is more confident in their wealth and they are less affected by rising interest rates.
Google I.O. Conference: A Strategic Reconstruction
The Significance of the Conference
The Google I.O. conference is not a simple product launch but a rebranding of the Google AI strategy. The main theme is clear: AI is not just a tool or a patch but a second brain in people's lives. Google is using its new - generation Gemini to turn AI into a complete life operating system.
Changes in Search
The most radical change is in search. Google has officially added the AI mode to the search homepage, making it a new search mode rather than a separate small tool. Since the advent of AI, users' searches have become longer and more individualized. The AI mode can handle whole paragraphs, large windows of questions, and even vague needs. For example, when planning a trip, moving, or organizing an event, AI will automatically break down the problem, generate structured result cards, and even prepare a route, list, and recommended videos. Compared with ChatGPT, Google's user experience is better due to more real-time information, more complete business information presentation, and functions like email reminders and payment integration.
Upgrade of Gemini App
The Gemini app is upgraded. Google no longer hides AI in the background command but turns it into an active, continuous companion intelligent body. It can not only take orders but also proactively fix things. For example, it can send reminders, generate questions to check knowledge, and provide explanations or videos for wrong answers. When connected to the calendar, document, or email, it can provide greater help, similar to the effect Apple's intelligence aims to achieve.
Integration with Chrome and Android
Google has also integrated Gemini with the Chrome browser and Android mobile system. In the Chrome browser, Gemini can check and use with users, call websites, fill in forms, compare, find materials, and write reports. On the Android side, Gemini Nono is a lightweight model for handling small tasks on the device, while more complex tasks are handled by the cloud-based Gemini 2.5 Pro.
Canvas Function in Collaboration
In the collaboration scenario, Google introduced the Canvas function, an AI platform that can turn articles into web pages, broadcasts, or information maps. It can organize PDF instruction manuals into drafts and render drafts into web page demos or short video drafts. This ability to directly generate finished products from original materials makes AI not just an assistant but a doer.
Impact on Investment
For investors, this conference shows Google's ambition to make AI ubiquitous in all its products. It combines the attempts of ChatGPT, Apple Intelligence, and Microsoft Co-Pilot AI applications and uses its rich ecosystem to provide a fully covered intelligence experience. The key is whether these applications can offer a better experience. Google is no longer an AI follower but a leader. However, Google's current actions can be easily imitated by other AI companies, and there are also uncertainties in the business model, such as whether it can maintain the same amount of business exposure and advertising revenue after integrating AI into search. Another risk is the possible evolution of AI at any time, and it's unknown if Google can win in a new round of evolution. This conference shows Google's strong response and innovation ability, increasing confidence in the company's successful response, but the current situation is still uncertain, making it difficult to be completely at ease from an investment perspective.
Blockchain and the Financial Market: The Tokenization of Stocks
The Tokenization of Popular U.S. Stocks
Media reported that a group of popular U.S. stocks, including Apple, Tesla, and Inveda, will be traded on the encrypted trading platform Kraken in the form of coins. The Kraken Project has launched over 50 tokenized stocks and ETFs, named X-Docs, which will be deployed on the Solana blockchain. This allows for 24-hour trading of these assets.
Reasons for Tokenization
Besides the 24/7 trading advantage, tokenized stocks provide a cheaper and more convenient way for international investors to enter the U.S. stock market. Overseas investors usually face high fees and slow settlement times when buying U.S. stocks through local brokers. In the future, X-Docs investors can trade these coins on encrypted exchanges outside of Kraken, transfer them to personal encrypted wallets, and use them as collateral for other encrypted currency trading strategies.
Regulatory Considerations and Market Impact
Kraken, a U.S.-headquartered private trading platform with users from over 190 countries, does not open the X-Docs plan to U.S. users to avoid regulatory pressure and seize the overseas market. This will attract more investors to the U.S. stock investment camp and expand Kraken's overseas business. Tokenized stocks are not new; in 2021, BN launched similar products but was forced to stop due to regulatory issues. Kraken is now taking the lead and claims to be actively communicating with multinationals to ensure legality. As the regulatory system becomes clearer, tokenized financial assets are expected to become mainstream.
May PMI Data and Unemployment Fund Situation
PMI Data Analysis
The PMI data released by S&P in May shows that the U.S. economy is warming up, but inflation pressure is increasing again. The comprehensive PMI index rose from 40.6 in April to 52.1 in May, better than expected. The service industry and manufacturing industry both showed growth, mainly due to domestic demand recovery. However, there are hidden problems. Overseas orders have declined for two consecutive months, especially the biggest decline since the pandemic outbreak. In response to future supply shortages, the manufacturing industry has started stockpiling, leading to rising purchasing activities and storage increases. The supply chain delivery time has extended, and prices are also a concern. The average price of U.S. goods and services and the market price of the manufacturing industry have risen to new highs. In terms of employment, companies are more cautious about labor costs, and employment data has fallen in May. Overall, companies are in a state of gain-and-loss due to future uncertainties.
Unemployment Fund Situation
The good news is that the U.S. initial jobless claims data released today shows that U.S. layoffs are still at a historical low. Last week's initial claims were 22.7 million, slightly lower than expected and better than the previous week. The overall initial claims remain between 20.5 million and 24.3 million, with no significant increase. The number of people receiving unemployment benefits has risen, indicating that it will be more difficult for the unemployed to find jobs. The labor market is still warming up, which may cause some concerns. The market is also paying attention to long-term signals, such as the impact of AI cost reduction on employment, which may bring fluctuations to the market in June and July.
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