Breakfast News: Global Stocks Eye Record

Breakfast News: Global Stocks Eye Record

Source: Image Created by Jester AI.

1. Stocks Near Highs Despite Tariff Impact

The MSCI All Country World index is only 0.5% away from making a fresh record high, with Bloomberg analyst estimates expecting a further 11% jump in the coming year, even with ongoing U.S. and China trade concerns and tariff impacts.

• "Many investors may have felt left out and are looking for potential correction in order to deploy the cash": Massimiliano Bondurri, founder of SGMC Capital, mentioned even if we do see global equities take another dip, there's plenty of funds waiting to be deployed.
• A blow to the adage of 'sell in May and go away': The S&P 500 is well placed to enjoy the optimism, following the best May performance in 35 years. June's returns have often lagged behind May, but in each of the six years the index gained more than 5% in May, it was in positive territory for the next 12 months every time.

2. TSMC Shrugs Off Trade Concerns

Taiwan Semiconductor Manufacturing (TSM 2.42%) CEO C.C. Wei reaffirmed a $100 billion investment for manufacturing in the U.S., despite acknowledging some impact from the tariffs.

• "Tariffs can lead to slightly higher prices, and when prices go up, demand may go down": Expressing he hoped the tariff situation would become clearer in coming months, Wei clarified the bulk of the impact would be on importers, with TSMC (as an exporter) not directly in the firing line.
• "AI demand has always been very strong and it's consistently outpacing supply": Orders for high-end chips key for developing AI models have remained resilient for TSMC, providing some reassurance for investors the pace of growth in the sector can be maintained.

3. Illinois Tax Hits DraftKings and FanDuel

Sports-betting stocks including DraftKings (DKNG 1.57%) fell yesterday following news of a new tax legislation law passed in Illinois, which could cost the sector tens of millions in higher fees going forward.

• DraftKings and FanDuel are the only two operators exceeding 20 million wagers annually in Illinois: The new levy will tax sportsbooks at a set rate for the first 20 million wagers, and a higher rate beyond that. This is estimated to increase the effective tax rate from 35% to over 50%.
• A potential $80 million EBITDA hit for DraftKings in 2026: Bank of America (BAC -0.59%) analyst Shaun Kelly estimates this could reduce earnings by 6% next year for DraftKings.

4. EPS Beats Expected for HPE and ASAN

Hewlett Packard (HPE 0.85%) will report quarterly earnings after the market closes, with investors keen to see if there's increased adoption of AI-related product applications, which is a growth focus from last quarter.

• Currently on Hold in Stock Advisor: Asana (ASAN -20.37%) is expected to release results after the closing bell, with revenue due to rise and any news on the successor for retiring CEO Dustin Moskovitz being closely monitored.
• Earnings expected to fall versus the same quarter last year: Rule Breakers recommendation CrowdStrike (CRWD -5.74%) will post results after the market closes. Shareholders will be watching for any additional costs relating to legal disputes from the July 19 outage, along with revenue staying above the $1 billion mark set last quarter.

5. Your Take

CrowdStrike dominates cybersecurity, particularly in endpoint security and managed detection and response. Yet there's still plenty of competition – and there are no sure things in business. If you were the CEO of CrowdStrike for a day and you can eliminate one competitor, who do you eliminate and why? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.