Core Viewpoint - Morgan Stanley's report indicates that Microsoft's risk-reward profile is attractive due to its leading position in artificial intelligence, robust core business growth, and operational efficiency, supporting a medium to high single-digit total return in the long term [1] Group 1: Financial Performance and Projections - Microsoft is expected to achieve a total return rate of 15%-20% driven by its extensive investments in generative AI and strong operational cost management [2] - The company reported a strong performance in Q3 2025, with Azure achieving a 35% growth rate, surpassing the expected 31% [3] - For Q4 2025, Azure is projected to maintain a growth rate of 34%-35%, contributing significantly to Microsoft's revenue growth [3][4] Group 2: Azure Cloud Services - Azure is anticipated to achieve a 35%-36% year-over-year growth in Q4 2025, supported by positive feedback from channel partners and increased AI server production [4] - The demand for Azure remains strong, with 52% of CIOs planning to deploy workloads on the platform, indicating a stable spending intention [4] Group 3: Microsoft 365 Business Cloud - Microsoft 365 is expected to see approximately 15% year-over-year growth in Q4 2025, driven by average revenue per user [5] - The Microsoft 365 Copilot tool is gaining traction, with 72% of CIOs planning to use it in the next 12 months, indicating a growing adoption rate [5][6] Group 4: Security Business - Microsoft's security business is projected to grow by 9.8% in enterprise security spending, significantly outpacing overall software spending growth [7] - The demand for security solutions is driven by the increasing attack surface and regulatory compliance requirements, positioning Microsoft as a preferred choice for integrated security tools [7]

Group 1 - The core viewpoint of the GIC's annual report indicates an increase in the five-year annualized return rate from 4.4% to 6.1%, reflecting a strategic shift towards U.S. investments and a focus on artificial intelligence [1] - The report highlights a rise in U.S. investment proportion from 44% to 49%, while the Asia-Pacific investment share decreased from 28% to 24%, and Europe, the Middle East, and Africa remained stable at 20% [1] - The allocation to equities increased from 46% to 51%, while fixed investments decreased from 32% to 26%, and asset investments rose from 22% to 23% [1] Group 2 - The CEO emphasizes the need for vigilance in response to unprecedented uncertainties, including fragmented global trade systems, AI advancements, and climate change [1] - The Chief Investment Officer notes that despite the shift away from the Asia-Pacific region, there are still investment opportunities, particularly in Japan, India, and China, with GIC participating as a cornerstone investor in recent IPOs in Hong Kong [1] - GIC acknowledges China's shift towards more expansive fiscal and monetary policies, which may accelerate economic growth and boost investor confidence, particularly in the technology and AI sectors [2]

Group 1 - The State Council Information Office held a press conference to discuss the construction of the Hainan Free Trade Port, featuring key officials from various government departments [1] - The Ministry of Public Security provided updates on high-level security measures to ensure the successful completion of the 14th Five-Year Plan [2] - The China Meteorological Administration announced an upcoming press conference to discuss national weather patterns and climate trends for July and August, including flood prevention strategies [3] Group 2 - The 2025 China Internet Conference will take place in Beijing, focusing on cutting-edge technologies such as AI and 5G-A/6G, aiming to explore industrial upgrades driven by AI [4] - The 2025 International Low-Altitude Economy Expo will showcase revolutionary breakthroughs in low-altitude technology, featuring nearly 300 leading global companies [5] Group 3 - A total of 21.6 million shares from five companies will be unlocked today, with a combined market value of 1.422 billion yuan, highlighting significant unlock volumes from companies like Demingli and Fuling Co. [6] - 24 companies reported progress on stock repurchase plans, with notable amounts proposed by companies such as Aoxing Packaging and Zhaoyi Innovation [7] Group 4 - The People's Bank of China will have 520.1 billion yuan in 7-day reverse repos maturing today, indicating ongoing liquidity management in the financial system [8] - Upcoming data releases include the annualized total of existing home sales in the U.S. for June and the weekly EIA crude oil inventory figures [9]

Economic Outlook - The US economy is showing signs of fatigue after years of steady growth, with personal consumption flat and increasing job market difficulties expected before May 2025 [1] - Economic slowdown may be temporary, with potential recovery as tariff-related uncertainties are resolved, and the government likely to act to prevent excessive economic slowdown ahead of the 2026 midterm elections [1] - The market does not currently expect significant inflation increases during Trump's potential second term, with the 10-year breakeven inflation rate at 2.3% [1] Investment Strategy - Schroders' asset allocation is influenced by the long-term impact of Trump's policies, favoring high-quality short-duration bonds and select emerging market high-yield local currency bonds [2] - A large but diversified short position in the US dollar is maintained, anticipating continued dollar depreciation, especially if Trump influences the next Federal Reserve chair [2] - Assets directly benefiting from inflation, such as gold mining stocks, are favored, alongside themes related to a commodity renaissance [2] Market Opportunities - The impact of Trump's policies on the overall US stock market is nuanced, presenting unique investment opportunities [3] - The banking sector is expected to benefit from regulatory rollbacks, including reduced regulatory burdens and capital requirement adjustments [3] - The development and application of artificial intelligence (AI) continue to drive profitability growth in major US tech companies, with significant earnings forecast adjustments in the tech and financial sectors [3] European Market Insights - Despite a pullback in European stock performance relative to US stocks, the MSCI Europe Index remains 17% higher than the S&P 500 when measured in USD [4] - European industrial sector earnings have significantly increased over the past six months, contrasting with stagnant earnings in the US industrial sector [4] - Schroders maintains a positive outlook on the European market, particularly in the industrial sector and mid-cap stocks, while strategically increasing alternative income sources to enhance overall portfolio performance [4]

Core Insights - TSMC reported June revenue of NT$263.71 billion, a decrease of 17.7% month-over-month but an increase of 26.9% year-over-year [1] - For the first half of the year, TSMC's revenue reached NT$1,773.046 billion, a 40.0% increase compared to the same period last year [1] - Q2 revenue was NT$933.796 billion (approximately US$31.95 billion), up 38.6% year-over-year, exceeding company guidance and market expectations [1] - Analysts had predicted Q2 revenue of NT$927.831 billion, while JPMorgan expected US$29.95 billion, with a quarter-over-quarter growth of 17% [1] - Strong demand for 3nm and 5nm processes, along with urgent orders for older process nodes, contributed to the revenue growth despite significant appreciation of the New Taiwan Dollar [1] - TSMC's gross margin for Q2 is expected to remain at 57.9% [1] Company Outlook - TSMC's CEO, C.C. Wei, indicated that while U.S. tariffs have had some impact, demand for AI remains strong and continues to exceed supply [2] - The company forecasts a mid-teens percentage growth in revenue for 2025 [1][2] - TSMC expects full-year revenue growth in USD to be close to the mid-20% range (24%-26%) [2] - The company plans to hold an earnings call on July 17, focusing on order outlook for the second half, capital expenditure plans for 2026, and progress on 2nm process technology [2] - TSMC benefits from the AI boom as the largest chip foundry, producing high-end processors for companies like NVIDIA and AMD [2] - The company announced plans to invest an additional US$100 billion in the U.S., following a previous commitment of US$65 billion for three factories [2]

Group 1 - Morgan Asset Management estimates that the uncertainty from the tariff war will slow down U.S. economic growth in the second half of this year, but the "Inflation Reduction Act" will provide some support, and inflation is expected to decline to the Federal Reserve's 2% target by the end of next year [1] - The recent trade agreement between the U.S. and Vietnam has provided greater certainty for business planning, but investors should focus on industry-specific tariffs, such as those affecting pharmaceuticals from the EU and automobiles from Japan and South Korea, which may persist after a potential Trump 2.0 administration [1] - The fiscal expansion and regulatory easing from the "Inflation Reduction Act" are expected to take effect later this year and continue to drive U.S. economic growth into next year, providing a positive catalyst for the stock market [1] Group 2 - The AI sector has shown strong recent performance, reflecting market recognition that the increasing prevalence of AI will significantly enhance efficiency, suppress prices, and stimulate consumption [2] - Investment opportunities are gradually shifting towards companies that can effectively apply AI, as AI transitions from a single theme to a tool for improving corporate performance across various industries [2] - Given the current policy and geopolitical uncertainties, investors are advised to diversify across different markets and sectors, with Chinese stocks playing an important role in global asset allocation [2]

Market Overview - The Hang Seng Index closed at 23,916, down 0.64% for the day and up 19.22% year-to-date[4] - The Hang Seng China Enterprises Index fell 0.45% to 8,609, with a year-to-date increase of 18.10%[4] - The Hang Seng Tech Index decreased by 0.33% to 5,216, with a year-to-date rise of 16.74%[4] US Market Performance - The Dow Jones Industrial Average rose by 0.77% to 44,829, with a year-to-date increase of 5.37%[4] - The S&P 500 gained 0.83% to close at 6,279, up 6.76% year-to-date[4] - The Nasdaq Composite increased by 1.02% to 20,601, with a year-to-date rise of 6.68%[4] Japanese Market Insights - The Nikkei 225 index slightly increased by 0.06% to 39,811, while the Topix index remained flat[12] - Investors remain optimistic about the market outlook, but caution is advised as the Nikkei approaches 40,000 points[12] Sector Highlights - Southbound capital saw a net inflow of 6.683 billion HKD on July 4[11] - Biopharmaceutical stocks showed strong performance, with Huahao Zhongtian Pharmaceuticals surging over 40%[11] - Semiconductor stocks rallied after the US lifted export restrictions on chip design software to China, with SMIC rising 1.5%[11] Notable Stock Movements - Major tech stocks like Meituan and Alibaba fell by 1.6% and 1% respectively, while Kuaishou and Baidu gained over 1%[11] - In the insurance sector, AIA Group dropped over 4%, while banking stocks like Guangzhou Rural Commercial Bank rose over 6%[11]

Group 1 - BlackRock's investment research indicates that despite market uncertainties, U.S. stocks remain the best allocation in the current "risk-on" environment, and investors should not prematurely dismiss the "American exceptionalism" narrative [1] - The S&P 500 index has returned over 5% this year but still lags behind the Stoxx Europe 600 index by nearly 7%, which has benefited from expectations of more fiscal stimulus in Europe [1] - BlackRock forecasts a 6% year-on-year growth in U.S. corporate earnings for Q2, compared to approximately 2% for Europe, with Q1 U.S. corporate earnings growth reaching 14% [2] Group 2 - BlackRock's global chief investment strategist Wei Li emphasizes that the underlying resilience, vitality, and innovative potential of the U.S. corporate sector remain unmatched [2] - Wei Li also notes that U.S. Treasury attractiveness is lower than U.S. stocks due to potential inflation increases from Trump's trade policies, suggesting that investor expectations for Fed rate cuts may be overly optimistic [2] - The ongoing debate in Congress regarding tax reform could exacerbate the already high U.S. debt burden, putting additional pressure on long-term U.S. Treasuries and diminishing their reliability as a portfolio hedge [2] Group 3 - Li recommends that U.S. investors consider hedging currency risks when allocating to European bonds, as this strategy can provide higher yields than domestic markets [3]

Group 1 - The US tariff policy and other adverse factors pose significant challenges to chemical exporters in the Gulf Cooperation Council (GCC) region, which consists of six Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE [1] - The Gulf Petrochemicals and Chemicals Association (GPCA) emphasizes the importance of enhancing cooperation with Asian markets, particularly China, as GCC chemical producers have joint ventures in China, South Korea, Malaysia, and Singapore, processing approximately 2.7 million barrels of crude oil daily and operating over 23 million tons of downstream petrochemical capacity annually [1] - Despite the challenges posed by US tariffs, there are opportunities for GCC chemical exporters, as a 10% baseline tariff could increase the prices of GCC chemical products in the US market, particularly affecting high-volume, price-sensitive products like urea, paraxylene (PX), and polyethylene terephthalate (PET) [1] Group 2 - In 2023, Asia accounted for over half of the total exports from the GCC region, with China, India, and Turkey being the primary markets. If China reduces imports from the US, GCC can fill this gap, provided they act quickly to capture market share and diversify trade partners [1] - The GCC region's chemical producers have a competitive advantage over those relying on naphtha due to fluctuating oil prices, and there is a strong emphasis on optimizing energy usage and focusing on high-value projects [1][2] - GCC chemical companies are shifting investments towards specialty elastomers, crude oil-derived chemicals, and downstream sectors such as packaging and electric vehicle materials, with a utilization rate of approximately 90%, significantly higher than most global peers [2] Group 3 - Supply chain resilience has become a key advantage for GCC chemical producers, who must predict, adapt, and seize opportunities arising from geopolitical conflicts and disruptions [2] - Four strategies have been proposed to address supply chain challenges: flexibility in export routes, transparency from production to end-user, establishing regional buffer stocks in key import markets, and utilizing digital risk forecasting [2] - The use of AI, blockchain, and IoT tools is transforming supply chain management from reactive to predictive, while diversified sourcing and strategic inventory reduce reliance on a single region [2] Group 4 - GCC countries will continue to leverage their cost advantage in natural gas while also committing to energy transition, aiming to adjust 25% to 50% of their energy structure to renewable sources by 2030 [3] - Significant investments are being made in carbon capture, utilization, and storage (CCUS), with the region capturing 4.4 million tons of CO2 annually, accounting for 10% of global CCUS capacity [3] - Hydrogen production is another focus of the GCC's energy transition, with ambitious targets set by Oman, UAE, and Saudi Arabia for annual hydrogen production by 2030 and 2031 [3]

Core Insights - Morgan Stanley indicates that OpenAI, supported by Microsoft, may utilize Google's Tensor Processing Units (TPUs) for its AI inference tasks, marking a significant endorsement of Google's hardware technology [1] - The use of Google's TPUs signifies a diversification of OpenAI's suppliers, which previously relied solely on NVIDIA's chips for training and inference calculations [1][2] - This partnership is expected to accelerate the growth of Google Cloud's business and enhance market confidence in Google's AI chip capabilities [1] Company and Industry Analysis - OpenAI is recognized as one of the most notable TPU customers, alongside Apple, Safe Superintelligence, and Cohere, highlighting Google's decade-long development of AI infrastructure [2] - Despite not being able to access Google's most advanced TPUs, OpenAI's choice to collaborate with Google underscores the latter's leading position in the broader Application-Specific Integrated Circuit (ASIC) ecosystem [2] - The decision to use Google's TPUs may be influenced by the limited supply of NVIDIA GPUs due to high demand, which could negatively impact Amazon's AWS and its custom Trainium chips [2] - OpenAI's collaboration with Google allows it to run AI workloads across major cloud service providers, including Google Cloud, Microsoft Azure, Oracle, and CoreWeave, with Amazon being a notable absence [2]