Good afternoon,

We're taking another close look at the campaign to end quarterly earnings reports, which is finding some serious opposition from investors but also picking up an unlikely ally. Let us know how you feel in today's poll.

Also in this issue:

• US launches USMCA review 🔍
• House votes to give Trump tariff authority 🎁
• Corporate tax collections fall 📉
• How the tax law affects R&D expensing 🧾
• Early agentic AI adopters outpace peers on ROI 💰

Institutional investors, including pension funds, hedge funds, and asset managers, are expected to strongly oppose calls to end quarterly earnings reports. Many rely on frequent disclosures to closely monitor company performance and manage risk. Investors argue that quarterly updates are essential for tracking developments and making informed decisions, especially during volatile periods. However, some international climate-conscious investors are supportive of the shift.

The US has begun the formal review process for the United States-Mexico-Canada Agreement, inviting public comments over the next 45 days. The review will culminate in reports to Congress evaluating the deal's effectiveness and outlining possible changes or the US position on extending the agreement. The process is expected to be contentious, given the current trade climate and the looming 2026 mandatory joint review deadline.

House Republicans have narrowly voted to extend President Donald Trump's authority over tariffs until March 2026, effectively blocking challenges to his global tariff declarations. The measure passed 213-211 after GOP leaders persuaded holdouts by promising to shorten the block's duration in a future bill. Speaker Mike Johnson defended the decision, saying Congress will exercise its authority when appropriate.

The Federal Reserve is expected to cut interest rates by a quarter point Wednesday to support a weakening labor market, marking its first policy shift of the year after tariff-driven inflation concerns kept it on hold. Fresh projections due with the decision are expected to signal one or two more cuts this year, though dissent among policymakers looms. "Every cut is more difficult than the previous cut unless the labor market shows signs of continued deterioration," said Aditya Bhave, senior US economist at Bank of America.

Corporate tax revenue has decreased since the tax law took effect, with Treasury Department data showing only $47.1 billion was collected in the two days before the quarterly estimated tax payment deadline, compared with $75.9 billion a year ago. The law allows companies to accelerate tax deductions for research expenses and equipment purchases.

Consumers are cautiously preparing for the 2025 holiday season, as 25% plan to reduce holiday spending compared to last year, while 46% will keep their budgets steady. Due to ongoing inflation and uncertainty, shoppers are prioritizing essentials and cutting back on discretionary and semi-discretionary purchases. Baby Boomers, in particular, show greater reluctance to shop, and consumers across all income groups are scaling back on non-essential items.

The One Big Beautiful Bill Act reinstates immediate expensing of domestic R&D costs for tax years starting after December 31, 2024, allowing companies to deduct the balance of unamortized R&D costs or spread them over two years. The change provides companies with improved cash flow, reduces reliance on external financing and offers greater flexibility to reinvest in innovation and growth, writes Todd Sutherland, partner at UHY. Sutherland details four strategic considerations for CFOs and tax executives, including cash flow optimization and tax rate management.

Tether has announced ambitious plans to reenter the US market and become the leading stablecoin issuer, aiming to match its international success. The company will introduce a new stablecoin, USAT, in partnership with Cantor Fitzgerald and Anchorage Digital Bank, focusing on instant settlement and lower transaction costs.

Investors are concerned about a possible move from quarterly reporting mandates to semiannual reporting, believing such a move would significantly limit access to timely financial information. Reduced transparency could expose investors to increased risk by delaying news of significant changes in a company's fortunes. Such a change could also provide insiders and large institutional investors, who have more resources and closer access to company management, with an even greater advantage over individual investors if regular disclosures are curtailed.

Disclosure controls are a foundational element of IPO and de-SPAC readiness, writes Hilary Cabodi of Riveron. These controls ensure that information required for Securities and Exchange Commission filings is accurately processed, summarized and reported, supporting the integrity and reliability of financial disclosures. Early prioritization of disclosure controls in the public company preparation process is critical, as they are less complex than other controls but play a crucial role in building trust with investors and regulators, Cabodi writes.

Richard Chambers, a senior advisor at AuditBoard, emphasizes the importance of internal audit's independence from the CFO, advocating for administrative reporting to the CEO and functional reporting to the audit committee. Chambers suggests five safeguards to maintain internal audit's independence, including clear charter language, board documentation, CEO involvement in audit plans, audit committee awareness of risk assessment deviations and transparency about disagreements between the CFO and internal audit.

Agentic AI is quickly gaining traction, with 52% of companies using generative AI also leveraging AI agents, according to a Google Cloud survey. Early adopters -- those dedicating at least half of AI budgets to agentic AI -- are seeing substantial returns on investment. Among these organizations, 88% have realized ROI from at least one generative AI use case, significantly outpacing the 74% seen across all companies.

As baby boomers retire, millennials are increasingly moving into C-suite roles, raising questions about their readiness for executive leadership. Companies are urged to modernize succession planning by spotting leadership potential earlier, designing stretch assignments and normalizing succession as a business continuity strategy. Millennials are advised to proactively build executive readiness by taking on high-risk initiatives, seeking cross-generational mentorship and investing in structured learning.

If you have a minute, please reach out and let us know how we're doing. Tell us if there's content you'd like but aren't seeing, or if you're seeing content that isn't useful or interesting. See a story we should be covering? Send it over! And a huge thank you to those of you who have already reached out.

You can reach us at matt.reitz@futurenet.com.