REGULATION

Shein warns FTC investigation could result in significant financial penalties

Shein has disclosed that its US operations are under investigation by the Federal Trade Commission (FTC) and warned that the probe could result in significant monetary payments that may materially affect its financial performance. The disclosure was made in documents filed in connection with the fast-fashion retailer's planned Hong Kong IPO, with the FTC confirming it is conducting a consumer protection investigation. The company said it is cooperating with the investigation but did not disclose its subject. The filing comes after Shein shifted its IPO plans to Hong Kong following stalled listing efforts in New York and London, and amid continued regulatory scrutiny of its supply chain and business practices. Shein also revealed it had swung to a quarterly loss, partly due to weaker sales after the US removed the de minimis tariff exemption for low-value imports.

South China Morning Post

WORKFORCE

New trends in accounting salaries revealed

New research from Distinct reveals that salary growth in public accounting is not as straightforward as many professionals expect. Arran Jaiswal, Director at Distinct, said: “The assumption is often that compensation in public accounting progresses steadily year after year.” The analysis of over 400 placements across North America indicates that while starting salaries are competitive, the jump from Associate to Senior roles often yields modest increases. For instance, average salaries for Associates in New York are $105,106, while Seniors earn $108,084. However, significant salary increases are observed at the Manager level, with averages reaching $146,933 in Connecticut. The study also highlights that secondary markets are becoming more competitive, offering salaries that rival traditional hubs, particularly for experienced professionals. Overall, the findings suggest that the largest financial rewards are increasingly linked to leadership and client management skills.

CPA Practice Advisor

ECONOMY

Goods trade deficit narrows in June, but trade still expected to weigh on GDP

The U.S. goods trade deficit narrowed in June as imports declined more sharply than exports, although economists expect trade to remain a drag on second-quarter economic growth. According to the Commerce Department, the goods trade deficit fell 4.2% to $101.5bn in June. Goods imports declined 2.6% to $306.2bn, led by lower purchases of consumer goods, capital goods, automobiles, food, and industrial supplies, while goods exports fell 1.8% to $204.7bn, reaching a five-month low as shipments of industrial supplies, including petroleum, dropped amid lower crude oil prices following the U.S.-Iran ceasefire. Exports of automobiles and consumer goods, however, increased during the month. Despite the narrower deficit, economists said trade is still likely to subtract about one percentage point from second-quarter GDP growth, marking a third consecutive quarter in which net exports have weighed on the economy.

Home prices continue to weaken as housing market slowdown persists

U.S. home prices declined for a third consecutive month in May, according to the S&P Cotality Case-Shiller Home Price Index, as elevated mortgage rates and persistent inflation continued to weigh on housing demand. The national home price index was essentially flat month over month on a seasonally adjusted basis and increased 1.1% from a year earlier. After adjusting for inflation, however, home prices fell 0.3% from April and were down 2.1% year over year. The 20-City Composite Index rose 0.1% month over month and 1.6% annually, while the 10-City Composite Index increased 0.3% from April and 2.4% from a year earlier. Chicago posted the strongest annual home price growth among the 20 major metropolitan areas, with a 6.9% increase, followed by New York (4.2%) and Cleveland (3.1%). Las Vegas recorded the steepest annual decline at 1.9%, with Seattle, Denver, and Tampa also posting losses. S&P Dow Jones Indices said affordability remains a significant challenge, citing 6.5% 30-year mortgage rates and persistent inflation as factors limiting buyer demand and contributing to continued declines in home values after adjusting for inflation.

Advisor Perspectives

TECHNOLOGY

Zuckerberg urges U.S. to speed up AI development and avoid overregulation

Meta Platforms chief executive Mark Zuckerberg has called on U.S. policymakers to accelerate artificial intelligence (AI) development rather than impose restrictions that could slow innovation, arguing that AI's benefits outweigh its risks. He said the current debate around AI is overly pessimistic and urged regulators to minimize delays in reviewing new AI models, warning that even short approval periods could hinder progress in a rapidly evolving industry. Mr. Zuckerberg also argued against restricting access to open-source AI models, including those developed outside the U.S., saying policymakers should instead focus on strengthening America's AI industry and removing barriers to AI-driven innovation. The comments come as Meta significantly increases its investment in AI infrastructure, with plans to spend up to $145bn this year on chips and data centers, ahead of its second-quarter earnings release later this week.

New York Times

CYBERSECURITY

Cyberattacks 'becoming faster and more sophisticated with the use of AI'

Nobuo Miwa, president of Tokyo-based information security service provider S&J, has highlighted the increasing sophistication of cyberattacks, particularly those driven by artificial intelligence, in a recent interview. Major Japanese companies, including Nichirei, Askul, and Asahi Group Holdings, have faced significant disruptions due to such attacks. “Attack programs can be created in the blink of an eye with AI,” Miwa said, noting that Japan's historical lack of cyberattacks has left many companies vulnerable, making them prime targets for cybercriminals. Miwa stressed the importance of identifying potential attack routes and implementing risk mitigation strategies, observing: “Countermeasures vary greatly depending on a company's size and system configuration.” He also mentioned that ransomware attacks often occur late Sunday night or early Monday morning.

The Japan Times Online

LEGAL

eBay pays couple $56m for its role in cockroach harassment campaign

eBay has agreed to pay $55.7m to settle a civil lawsuit brought by e-commerce bloggers Ina and David Steiner, over a coordinated harassment campaign launched after the couple published critical coverage of the retailer. The settlement includes $48.7m in compensation for the Steiners, $6m for charitable organisations and a $1m donation from former chief executive Devin Wenig to a free speech charity in Ina Steiner's name. The campaign involved threatening messages, disturbing deliveries including live cockroaches, a funeral wreath and a pig's head mask, as well as surveillance and vandalism by former eBay employees. eBay, which pleaded guilty to criminal charges in 2023 and paid a $3m penalty, said the conduct was "wrong, reprehensible and should never have happened", adding that all employees involved were dismissed and acknowledging the inappropriate tone of internal communications.

CORPORATE

Apple tops $5tn valuation for first time

On Tuesday, Apple briefly became only the second company to surpass a $5tn market capitalization, with its stock rising as much as 1.3% as investors sought the relative safety of the iPhone maker amid a sharp sell-off in AI and semiconductor stocks. The milestone came a day after Apple overtook Nvidia to reclaim its position as the world's most valuable publicly traded company for the first time since May 2025. Apple's stock has gained about 25% this year, outperforming many technology peers as investors have favored its more measured approach to AI spending over the aggressive capital investment plans announced by rivals including Alphabet, Microsoft, Amazon, and Meta. The company is also beginning to shed its reputation as an AI laggard, with positive early feedback on its revamped Siri assistant ahead of a broader rollout later this year, while investors now await Apple's quarterly earnings later this week.

Financial Times

Coca-Cola raises FY outlook after World Cup boosts sales

Coca-Cola has raised its full-year guidance after reporting better-than-expected second-quarter results, with revenue rising 7% to $13.38bn and adjusted earnings of 97 cents per share, ahead of analysts' forecasts. The company now expects comparable earnings per share growth of 9%-10%, up from 8%-9%, and organic revenue growth of around 5%. The drinks maker said strong consumer demand, supported by its FIFA World Cup marketing campaign, drove 5% global volume growth, with Coca-Cola volumes increasing 5% and Powerade volumes rising 8%. Net income increased to $4.43bn from $3.81bn a year earlier, while shares rose more than 7% following the results.

OUTLOOK

U.S. consumer confidence declines for third straight month

U.S. consumer confidence fell for a third consecutive month in July, as Americans became more pessimistic about current business conditions and the labor market, according to The Conference Board. The Consumer Confidence Index declined 1.4 points to 90.8, while the Present Situation Index, which measures views on current business and labor market conditions, fell 3.6 points to 114.9. The Expectations Index was unchanged at 74.7, remaining below the threshold that typically signals concern about future economic conditions. Consumers were less likely to describe business conditions as "good," and perceptions of job availability also weakened, with fewer respondents saying jobs were plentiful. The Conference Board said expectations for business conditions over the next six months deteriorated further, although income expectations remained relatively positive. Survey responses also showed increased concern about jobs, unemployment, and grocery prices, while references to geopolitical tensions eased slightly during the survey period.

CRYPTO

Lawmakers renew bipartisan push to close crypto tax loophole

A bipartisan group of U.S. lawmakers is renewing efforts to eliminate a tax loophole that allows cryptocurrency investors to claim tax deductions on investment losses while immediately repurchasing the same digital assets, a practice that is prohibited for stocks and other traditional securities under existing wash sale rules. Rep. Jodey Arrington (R-TX) has introduced the Applying Existing Tax Anti-Abuse Rules to Digital Assets Act, which would extend wash sale rules to cryptocurrencies such as bitcoin and ether. The proposal follows similar efforts by the Biden administration and congressional Democrats, with the Treasury Department previously estimating the change could generate nearly $24bn in additional federal revenue over the next decade. Supporters, including Rep. Ron Estes (R-KS), argue the legislation would create greater consistency by treating digital assets more like other financial investments. Current tax law classifies cryptocurrencies held directly as property, rather than securities, allowing investors to sell at a loss, immediately repurchase the same asset, and still claim a tax deduction.

INVESTMENT

FIFA explores $20bn commercial venture and potential stake sale

FIFA is exploring the sale of a minority stake in a new commercial entity valued at approximately $20bn, with the goal of raising more than $4bn from investors. The proposed venture would consolidate FIFA's commercial rights, including broadcasting, sponsorship, ticketing, and licensing across men's, women's, and youth soccer. FIFA said the proceeds would be distributed to its 211 member associations, while the organization would retain control over competitions, match calendars, and sporting decisions. The governing body is working with JPMorgan and advisory firm OpenEconomics on the proposal, with Thrive Capital, led by Joshua Kushner, expected to head the investor group through its Thrive Eternal holding company. The plan remains subject to approval by a majority of FIFA's member associations. The proposal has drawn immediate criticism from UEFA, which argued that football's governance and future should not be commercialized through outside investment.