Key Takeaways
- China imposes strict "case-by-case" export controls on drones and related technologies to the U.S., effective immediately, in a significant escalation of the ongoing tech trade war.
- Eurozone business activity reached an eight-month high in July, with the Composite PMI rising to 52.0, driven by a robust recovery in the services sector.
- Palantir (PLTR) faces scrutiny over tax practices following a report alleging the data giant paid an effective global tax rate of just 1.4% by shifting profits to the U.S.
- The European Union received €1.4 billion in windfall profits from immobilized Russian central bank assets, with 95% of the funds earmarked for Ukraine's defense and recovery.
- UK new car registrations surged 11.7% in July, marking the best performance since 2019, fueled by a 44.5% jump in battery electric vehicle (BEV) sales.
China Escalates Tech War with Drone Export Curbs
In a direct response to recent Washington sanctions, China’s Ministry of Commerce announced it will tighten controls on the export of unmanned aerial vehicles (UAVs) and dual-use components to the United States. The new measures subject drones, targeting lasers, and high-precision inertial measurement equipment to "strict case-by-case scrutiny." Additionally, Beijing has taken punitive measures against six U.S. entities as the two superpowers continue to decouple critical technology supply chains.
Eurozone Services Drive Economic Resilience
The Eurozone economy showed surprising strength in July as the S&P Global Services PMI climbed to 51.7, surpassing estimates and signaling the first expansion in the sector since March. This recovery pushed the Composite PMI to 52.0, up from 50.0 in June, marking the sharpest growth in eight months. While Germany and Spain showed notable improvements, analysts warn that the ongoing conflict in the Middle East continues to cloud the long-term outlook for business confidence and export demand.
Palantir’s Global Tax Strategy Under Fire
A new report from the Centre for International Corporate Tax Accountability and Research (CICTAR) has highlighted the tax practices of Palantir (PLTR). The report alleges that the Florida-based company is shifting profits from its European operations back to the U.S. to minimize its tax burden. Despite securing lucrative public sector contracts, including a £240 million deal with the UK’s Ministry of Defence, Palantir reportedly paid only £2 million in UK corporation tax in 2024, sparking calls for tighter regulation of tech giants.
EU Deploys Russian Asset Profits for Ukraine
The European Commission confirmed the receipt of €1.4 billion in interest generated by immobilized Russian Central Bank assets. This fifth tranche of windfall profits brings the total generated since the assets were frozen to €8 billion. According to the Commission, 95% of these funds will be channeled through the Ukraine Loan Cooperation Mechanism (ULCM) to support the country's macro-financial stability, while the remaining 5% will bolster the European Peace Facility (EPF) for military aid.
UK Automotive Sector Hits Post-Pandemic Peak
The UK’s new car market grew for the eighth consecutive month in July, with 156,571 units registered. Data from the Society of Motor Manufacturers and Traders (SMMT) shows that Battery Electric Vehicles (BEVs) now command a 27.5% market share, driven by heavy discounting and a wider variety of models. However, the industry body noted that EV adoption still lags behind the 33% target mandated by the government's Zero Emission Vehicle (ZEV) framework.
German Engineering Sees Uneven Recovery
The VDMA reported a 21% year-on-year increase in German engineering orders for June, though the headline figure masks a stark divide between domestic and international demand. While foreign orders surged 29%, domestic demand remained stagnant with just 1% growth. For the April-June period, total orders rose 7%, suggesting a stabilization of the sector rather than a full-scale recovery, as supply chain tensions from the Middle East conflict persist.
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.