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U.S. CFOs have been advised to prepare for persistently high borrowing costs and financial volatility in 2027, despite Democrats gaining control of both chambers of Congress in the midterm elections. EY-Parthenon executives have warned that rising government deficits, inflation uncertainty, strong capital demand, and political instability could sustain pressure on interest rates. Finance leaders are encouraged to stress-test investments, review debt maturities, diversify funding sources, and preserve balance-sheet flexibility. Political gridlock could also increase credit restrictions, short-term borrowing costs, and cash flow risks for government contractors. Meanwhile, growing political opposition to AI infrastructure and data center development could raise financing and regulatory costs, particularly amid concerns about electricity prices. Experts recommend applying conservative investment assumptions, prioritizing projects with measurable productivity gains, and accounting for infrastructure and workforce costs to maintain financial resilience and support sustainable growth.

 

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The U.S. trade deficit has narrowed by 0.7% to $105bn in September, beating economists' expectations of $107.9bn, as stronger goods exports helped offset rising imports. Commerce Department data showed exports increasing 1.9% to a four-month high, driven by capital goods shipments, while imports rose 1.2%. Imports of capital goods, including computers, semiconductors, and telecommunications equipment, increased by $11.6bn to a record high, reflecting substantial investment in artificial intelligence infrastructure. Meanwhile, industrial supply imports fell by $3.7bn, partly due to reduced crude oil shipments, and services exports reached a new record. Despite the narrower headline deficit, the inflation-adjusted merchandise trade gap widened to $119.5bn, its highest level since March 2025. The U.S. goods trade deficit with Canada also decreased as businesses accelerated shipments ahead of tariffs, highlighting the continuing influence of trade policy and technology investment on international trade flows.

 

Bloomberg

Reuters

Wall Street Journal

The U.S. services sector has recorded slower growth in October, with the Institute for Supply Management (ISM) Purchasing Managers' Index declining to 54.5 from 54.9 in September, slightly below economists' expectations of 54.8. New orders moderated to 55.9 from 59.8, while persistent supply chain disruptions, higher energy costs, and import tariffs continued to pressure businesses. The supplier deliveries index rose to 56.7, indicating further delays, while the prices paid index eased marginally to 73.0, signaling continued inflationary pressures. Services employment improved modestly, with the employment index increasing to 51.4 from 50.1. Despite sustained economic expansion, elevated inflation and weakening household purchasing power could constrain consumer spending. The Federal Reserve has maintained interest rates at 3.75%–4.00%, with economists anticipating a December increase. Meanwhile, October's employment report is expected to show 65,000 additional jobs and an unchanged unemployment rate of 4.2%.

 

Reuters

U.S. private sector employment has increased by 86,000 jobs in October, exceeding economists' expectations of 75,000 and matching September's downwardly revised figure, according to payroll processor ADP. Job growth was led by trade, transportation, and utilities, which added 39,000 positions, followed by education and health services with 28,000, and leisure and hospitality with 19,000. However, professional and business services lost 27,000 jobs, while natural resources and mining shed 8,000. Wage growth remained positive, with workers changing jobs receiving a 4.8% annual increase in base pay, compared with 3% for those remaining with their employers. Overall base pay rose 3.2%, while gross earnings increased 4.7%. Hiring gains were recorded across businesses of all sizes, signaling continued labor market resilience. Economists now anticipate the government's October employment report will show 59,000 additional jobs, following September's increase of 29,000.

 

Wall Street Journal

CNBC

Fox News

Reuters

Women are increasingly reaching the highest levels of business leadership, and enterprises report growing benefits from gender equality and diversity, yet gaps in the management pipeline and a decline in the implementation of enterprise initiatives could make these gains harder to sustain, according to Women in Business and Management: Scaling Success, a new report by the International Labour Organization (ILO). Nearly three quarters (74.8%) of enterprises reported having a gender equality and diversity policy or equivalent in place in 2025, but the share of enterprises implementing gender equality and diversity initiatives fell from 37.4% in 2018 to 26.5% in 2025. The decline included measures that enterprises themselves identified as among the most effective, including maternity leave and support programs and equal pay initiatives. “Gender equality is a fundamental right, and the evidence is clear that it is also a powerful driver of sustainable enterprises and economic growth. The priority now is to turn policies and commitments into concrete, measurable progress,” said ILO Director-General Gilbert F. Houngbo.

 

ILO

Lockheed Martin has agreed to pay $29.5m to settle claims from President Donald Trump's administration regarding alleged discrimination against white workers in its diversity and equity bonus program. The settlement includes $22m to the U.S. government for failing to meet anti-discrimination requirements and $7.5m to over 1,000 affected employees. Lockheed Martin denied the allegations but said it “agreed to resolve this matter with the Department of Justice and the Equal Employment Opportunity Commission (EEOC) to avoid the distraction and expense of prolonged litigation.” Tim Booher, a former vice president at Lockheed Martin, filed complaints that precipitated the investigation and will receive $4.4m under whistleblower provisions. EEOC Commissioner Andrea Lucas said: “Title VII protects every worker from employment discrimination on the basis of race - and that protection does not yield when discriminatory decisions are framed as diversity initiatives.”

 

U.S. News

Kraft Heinz has announced the sale of its North American coffee business, including Maxwell House and Gevalia, to private equity firm One Rock Capital Partners in a deal valuing the division at $650m. The transaction, expected to complete in mid-2027, will see Kraft Heinz retain a 30% minority stake and generate approximately $500m in post-tax proceeds, which will be used to reduce debt. The firm's announcement came alongside its third-quarter earnings; revenue declined 2% to $6.12bn, ahead of analysts’ expectations of $6.09bn, while net profit fell to $544m from $615m a year earlier. Adjusted earnings per share reached 53 cents, exceeding forecasts of 42 cents. North American sales declined 3.4%, while international developed markets fell 5.6%, partially offset by 14% growth in emerging markets.

 

Bloomberg

CNBC

Reuters

Wall Street Journal

American International Group (AIG) has withdrawn its previous expectation of low- to mid-teens premium growth in 2026, citing intensifying competition, declining insurance rates, and increased market capacity across several business lines. The decision follows third-quarter results showing a 63% increase in net income to $844m, supported by a 42% rise in investment income to $1.1bn. However, adjusted after-tax income declined 11% to $1.09bn, while underwriting income fell 29% to $564m and the combined ratio deteriorated to 91.3% from 86.8%. General insurance net premiums written increased 7% to $6.65bn, despite catastrophe-related losses rising to $283m from $100m, alongside $40m in additional losses associated with the Middle East conflict. Chief executive Eric Andersen said AIG would prioritize underwriting discipline over premium growth, reducing exposure to large property and casualty accounts while targeting smaller commercial customers. 

 

Business Insurance

McDonald’s has reported a rise in third-quarter net income to $2.49bn, up from $2.28bn a year earlier, as strong international performance offset continued weakness in its U.S. business. Revenue increased 1.1% to $7.16bn, below analysts’ expectations of $7.28bn, while adjusted earnings per share rose to $3.57, exceeding forecasts of $3.38. Global comparable sales grew 1.5%, ahead of expectations for 1.3% growth, although U.S. same-store sales declined 0.2% amid weaker customer traffic. Chief executive Chris Kempczinski highlighted improving domestic trends following increased investment in value promotions, menu innovation, and customer experience. The company has also introduced a new global growth strategy focused on operational improvements, restaurant modernization, and new menu offerings. In September, McDonald’s outlined plans to invest approximately $8.5bn to support franchisees with equipment and operational upgrades, aiming to strengthen competitiveness and regain market share.

 

USA Today

Chicago Tribune

Reuters

Wall Street Journal

Ethan Allen has seen activist investor Douglas Bergeron secure control of its five-member board following a shareholder vote that elected three of his nominees, including Bergeron himself, according to preliminary results. The outcome has resulted in the removal of long-serving chair and chief executive Farooq Kathwari and lead independent director David Sable from the board, although two existing directors have retained their seats. Bergeron, whose investment group holds a 5.2% stake in the U.S. furniture retailer, has argued that a strategic overhaul could restore profitable growth and potentially triple shareholder value within three years, following an 11% decline in the company's share price over the past year. 

 

New York Post

Reuters

Wall Street Journal

Congressional Democrats are preparing a new tax and economic policy agenda after winning control of both the House and Senate in the 2026 midterm elections, with plans to increase tax accountability for wealthy individuals and corporations, reduce household costs, and strengthen health care affordability. Sen. Ron Wyden (D-OR) and Rep. Richard Neal (D-MA) have emphasized fairer taxation, while lawmakers are expected to consider the bipartisan Taxpayer Assistance and Service Act, which includes 65 provisions to modernize IRS services and strengthen oversight of paid tax preparers. However, tax experts at KPMG and Deloitte anticipate limited prospects for sweeping tax reform over the next two years because President Donald Trump remains in office, making targeted legislative adjustments and congressional oversight more likely. Meanwhile, state ballot measures produced mixed results, with California voters appearing to reject a wealth tax, Colorado narrowly supporting a graduated income tax with a top rate of 8.4%, and Florida approving a $250,000 homestead exemption for certain property taxes. The results highlight competing demands for tax relief, fiscal responsibility, and greater taxation of high-income households as Democrats prepare to establish their legislative priorities for 2027.

 

Accounting Today

AICPA has proposed revised ethics guidance to strengthen auditor independence and address potential conflicts of interest in accounting firms operating under alternative practice structures, particularly those involving private-equity investment. The Professional Ethics Executive Committee (PEEC) has approved an exposure draft clarifying how existing independence requirements apply when audit firms operate alongside investor-backed entities. Key proposals include classifying controlling investors as network firms, expanding the individuals subject to independence rules, and prohibiting attest services for businesses over which investors exercise significant influence. The exposure draft is expected to be published later in November, opening a 120-day public consultation. If approved in 2027, the changes would take effect one year after adoption, although firms could implement them earlier.

 

Accounting Today

CPA Practice Advisor

Journal of Accountancy

The Accountant Online

Tax law professor Andrew Leahey has questioned whether the IRS should treat tax preparers who exclusively file refund claims as higher-risk, warning that such screening could unfairly target legitimate taxpayers. A TIGTA report found that more than 38,000 preparers using noncompliant identification numbers filed over 2m returns in 2025, including nearly 12,000 preparers who submitted approximately 95,000 returns seeking almost $600m in refunds. Mr. Leahey argues that high refund rates do not necessarily indicate fraud, particularly among preparers serving lower-income households and wage earners. He recommends that the IRS assess preparers against comparable taxpayer groups, validate fraud indicators using evidence of actual noncompliance, and consider whether enforcement practices disproportionately burden vulnerable taxpayers.

 

Bloomberg Tax

The PCAOB has proposed amendments to its auditing standards to modernize requirements for auditor comfort letters and remove potential barriers to corporate fundraising. The proposed changes to AS 6101 would eliminate the existing 135-day limit on auditors providing negative assurance about changes in selected financial statement items, replacing it with requirements linked to companies' SEC reporting obligations. Under current rules, auditors can be prevented from providing such assurance even when companies are up to date with their regulatory filings, potentially delaying capital-raising activities. The PCAOB said the revisions would better align auditing standards with modern reporting deadlines, support efficient capital formation, and maintain investor protections. Auditors would retain professional discretion over whether to provide negative assurance. The proposals are open for public comment until January 4th 2027.

 

Accounting Today

CPA Practice Advisor

Eurozone inflation has risen to a three-year high of 4% in October, up from 3.8% in September, as surging energy costs continue to put pressure on household spending and increase expectations of further interest rate rises. Energy inflation accelerated to 20.8%, its highest level since January 2023, while core inflation remained unchanged at 2.5% and services inflation edged up to 3.3%. The increase marks the eighth consecutive month that inflation has exceeded the European Central Bank’s 2% target, strengthening expectations of a 0.25 percentage point interest rate increase in December.

 

Euronews

Financlal Times

Italy's 2027 budget will increase taxes ​on financial firms, insurers, energy companies and the gaming sector. The package sets out tax cuts and spending hikes worth €26bn ($28.91bn) in a bid to to lessen the fiscal burden ​for middle earners and the self-employed. Banks will have to contribute more than €5bn to help finance the measures. "There was no opportunity to reach a prior agreement with the financial sector, which I would nevertheless like to thank," Prime Minister Giorgia Meloni said.

 

U.S. News