Cover:
-The horse racing industry in the US is facing an existential threat due to the Trump administration's stepped-up immigration enforcement actions. The industry, which is heavily reliant on foreign-born equine workers, is particularly vulnerable to the Trump administration's actions. The Delta Downs raid, which targeted grooms, riders, and stable workers, has affected every aspect of the industry. The Trump administration has declared a national emergency due to an "invasion" of unauthorized migrants, militarized border enforcement, revoked temporary protected status for individuals from countries like Venezuela and Haiti, and stepped up arrests, detentions, and removals of undocumented immigrants.
Interview:
-Qualcomm, a wireless technology company, has been focusing on semiconductor chips since its inception in 1985. The company's president and CEO, Cristiano Amon, stated that while licensing wireless technology remains the largest component of Qualcomm's revenue, its growth engine is now semiconductor chips, which are being used in smart-watches, smart-glasses, and automobiles. Amon's strategy is focused on market diversification and technological innovation. However, Qualcomm faces challenges from U.S. companies, including tariffs announced by President Donald Trump. Despite this, shares have rebounded, and the company has no direct tariff exposure. Qualcomm's diverse supply chain produces around 20% of its chips in the US with partners like Samsung and TSMC.
Tech Trader:
-Netflix has surpassed Disney, Amazon, and Apple in the video streaming market, but is slipping behind Alphabet's YouTube. Netflix reported a 47% surge in earnings per share in Q2, and its share of U.S. viewers remained at 8.3%. However, YouTube's share of U.S. viewers increased to 12.8% from 9.9% a year earlier. Netflix creates much of its own content and relies primarily on subscriptions, while YouTube follows a different model built on user-generated content and advertising. Analysts questioned Netflix's YouTube dilemma during its earnings call, but Netflix co-CEO Ted Sarandos emphasized the company's stable market share despite the proliferation of TV-based streaming services. Both streamers come at viewers in different ways, with Netflix primarily relying on subscription sales and YouTube primarily ad-based.
The Trader:
-The market's tariff-driven rally has reached its limit, prompting investors to consider taking profits or even shorting stocks that have come too far too fast. The S&P 500 has gained 25% since bottoming on April 8, when President Trump began to dial back the most onerous tariffs proposed on Liberation Day. With trade levies no longer threatening to shut down the US economy, markets can focus on tax cuts, deregulation, and solid earnings growth. Now, the tariff troubles may be making a comeback, with Trump proposing new penalties to take effect on Aug. 1, and the Bloomberg Trade Policy Certainty Index has surged to a reading of 5.8, the highest since April 29. Shorting isn't for the faint of heart, as an individual stock can only go to zero, limit losses, and have a cost to borrow stock. Wall Street strategists provide various lists of stocks worth shorting, including stocks with below-average earnings estimates and volatile profit margins.
-Boston Scientific's stock has fallen 3% in the past six months, while the S&P 500 has risen 2.5%. This is a rare pause for the company, which has returned 23% annualized over the past five years, including reinvested dividends. Tariffs haven't helped, and a late May announcement that it will discontinue sales of its Acurate transcatheter aortic valve replacement hurt a bit. Boston Scientific has a long track record of strong growth, with analysts expecting sales to grow by 14.5% annually from 2020 through this year, driven by its cardiovascular segment. In the first quarter, the unit grew 26% year over year to $3.09 billion, helping lift total sales by 21% to $4.66 billion. New devices from Apple and Medtronic could help people track their heart health.
Features:
-The quarterly results of the largest U.S. banks, including JPMorgan, Chase, Bank of America, Citigroup, and Wells Fargo, have shown that the economy is faring better than it seems. Consumers are generally staying on top of their debt, with JPMorgan, Chase, Bank of America, Citigroup, and Wells Fargo all reporting relatively low rates of consumer delinquencies and debt they have written off as unrecoverable. JPMorgan Chief Financial Officer Jeremy Barnum said that consumer credit is primarily about the labor market, making it difficult to see weakness in their portfolio. This optimism may surprise some consumers and business owners, given the Trump administration’s tendency to generate uncertainty around international and domestic policy from the Middle East to Russia and tariffs. This lack of clarity shapes swaths of business and commerce, from the cost of buying groceries to companies' plans for expansion or layoffs.
-High-tech crooks are using artificial intelligence to make fraudulent listings nearly indistinguishable from the real deal on social-media platforms like Facebook, Reddit, TikTok, and WhatsApp. Social-media sales of counterfeit goods are almost certainly in the millions. The volume of goods seized for intellectual property violations in the US more than doubled from fiscal 2020 to 2024, with the total manufacturer's suggested retail price of goods seized for IP violations jumping 95% in 2024 alone. Goods shipped from China and Hong Kong accounted for approximately 90% of the quantity seized. A 2023 Michigan State survey found that more than two-thirds of respondents were deceived into buying counterfeits in the past year, with 68% doing so via Facebook.
Fake sellers have jumped from traditional marketplaces into users' feeds, buying advertising space or setting up profiles like legitimate companies. They also post on dedicated forums devoted to specific items, like medications, or users pool their experiences on dedicated Reddit forums, where they share tips on which vendors are reliable and which deliver high-quality fakes.
Europe:
-ASML stock fell after its downbeat message on growth next year shocked the market, with Wall Street analysts stating that the Dutch chipmaking equipment provider is not cheap enough to consider buying just yet. ASML has a virtual monopoly on lithography machines crucial for manufacturing advanced semiconductors, with key clients including Taiwan Semiconductor Manufacturing (TSM), which reported booming sales as it benefits from demand for artificial-intelligence chips. However, good times for TSMC won't necessarily translate into sales for ASML, at least in the short term. The Taiwanese company has been reluctant to commit to buying ASML's latest generation of extreme ultraviolet (EUV) lithography machines, which can cost around $400 million each. Other potential customers Intel and Samsung Electronics are dealing with problems in their own chip businesses. J.P. Morgan analyst Sandeep Deshpande warned the stock was unlikely to gain significantly until ASML can give further guidance on its 2027 prospects.
Emerging Markets:
-Investors are concerned about President Donald Trump's threat to impose 50% tariffs on imports from Brazil, citing the recent re-election of Luiz Inacio Lula da Silva. Portfolio manager Thierry Larose, portfolio manager for emerging markets local debt at Vontobel asset management, uses Lula's nickname and is cautious on the market. Equity investors agree, with the iShares MSCI Brazil exchange-traded fund selling off 5% since Trump's announcement. Brazilian assets have been on a tear this year, with stocks up by nearly a quarter and the real rising 12% against the dollar. One reason is a low starting point and the expectation that Lula will be out of office after elections in October 2026. Trump's announcement appears to be political manna for the beleaguered leftist veteran, as Brazil has little to fear economically from Washington's wrath. Exports to the U.S. account for less than 2% of gross domestic product, compared to 30% for Mexico. Trump's tariff letter mentioned trade only parenthetical.
Commodities:
-A growing number of states are considering allowing residents to use gold as legal tender instead of US dollars. Texas Governor Greg Abbott signed a bill last month to make gold and silver legal tender for purchases made in the state. The bill also instructed the state comptroller to build a digital payments platform that would allow Texans to store gold deposits and spend them with a debit card. Texas Policy Research Action, a right-leaning think tank, supports the bill. Other states like Florida and Missouri have also enacted similar laws. The idea is to allow people to use money that holds real value. No printing, no inflation. Just gold, silver, and a little modern tech. The dollar has not held its value, especially in the past few years, with inflation remaining elevated and the U.S. dollar declining 7% so far in 2025. Gold, on the other hand, has been steadily gaining in value, with its price up 28% in 2025 and 37% in the past 12 months. A recent study from State Street Global Advisors found that gold's average annualized volatility over the past 30 years was about 15%, meaning its price is likely to be up to 15% above or below its average price for the year on any given day.
Streetwise:
-Garbage stocks have experienced a soft patch in the past two months, with unprofitable U.S. companies of all sizes returning an average of 36% through the first half of this year, much more than profitable companies. However, garbage stocks, specifically those involved in the business of carting off waste, have seen a mid-single-digit percentage drop over the past two months. This is due to a dip in prices for recycled products and renewable fuel credits, as well as the defensive nature of the garbage industry. But investors value these companies for their reliable cash flows, leading to high long-term returns. Ten-year holders of Waste Management and Republic Services have made 462% and 602%, respectively, compared to 253% for the S&P 500. William Blair analyst Trevor Romeo believes that recent stock weakness offers an opportunity to buy the garbage group at an 8% premium to the market, compared to a more typical 15% to 20%.