Your Portfolios in Brief
Founded in 2012 in Boston, DraftKings is a major player in online sports betting and iGaming. The company operates an integrated platform that includes sports betting (Sportsbook), daily fantasy (DFS), and online casinos. Present in several U.S. states, as well as in Ontario, DraftKings stands out with a very comprehensive live offer: in-game betting, performance bets, and parlays. The company is focusing on the depth of its product and tighter management of promotions to increase the value of each customer.
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Highlights in 2024–2025
• Q2 2025 financial results: revenues of about $1.51B USD, up 37% from last year, and adjusted EBITDA of $301M USD, a historical high.
• Guidance maintained for 2025: DraftKings still targets between $6.2B and $6.4B USD in revenues and $800M to $900M USD in adjusted EBITDA, a sign of confidence in-expected performance in the second half, driven by the NFL season.
• Product innovation: growth is fuelled by the increase in live betting, the focus on performance bets and advanced parlays. The integration of Simplebet and Sports IQ Analytics has enriched the real-time offer and improved the speed of odds adjustments.
• Commercial discipline: the company is reducing customer acquisition costs, better targeting promotions and benefiting from a better balance between Sportsbook and iGaming activities.
• Regulatory and tax context:
– In Maryland, the mobile tax rose to 20%.
– In Illinois, DraftKings has charged since September 1, 2025, a fixed fee of $USD 0.50 per bet to offset the new tax structure.
– Political pressure is intensifying around performance bets: some states, including Ohio, are considering limiting or banning them.
• Related activities: Jackpocket, a DraftKings subsidiary active in online lottery, suspended operations in Texas and New Mexico in early 2025, reminding that the regulatory framework remains fragmented in the United States.
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Why This Stock is One to Watch
• Leading position in a market that is legalizing and growing rapidly, with a live offer that attracts and retains users.
• Clear scale effect: more available markets mean longer sessions, better retention and higher ARPU, which supports profitability.
• Short-term catalysts: the NFL season, which remains a major growth driver for DraftKings.
• Disciplined management: more targeted promotions and the ability to transfer part of the new tax burdens to clients.
• Ability to innovate: the integration of specialized technology tools improves the experience and increases monetization per player.
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What Analysts Say
Research firms remain optimistic despite the stock’s volatility. Several analysts maintain a Buy recommendation, with targets ranging between $53 and $USD 55. The consensus reflects confidence in revenue growth and EBITDA improvement, even though tax and regulatory issues remain to be monitored.
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Conclusion: A Strategic Position in Our Portfolios
At Pratte Portfolio Management, we see DraftKings as a well-positioned leader in a rapidly expanding market. Record Q2 results, combined with solid forecasts and targeted investments in innovation, demonstrate the company’s ability to turn growth into profitability.
Certainly, heavier taxation and discussions about performance bets create a volatile environment. But we believe these pullback periods offer opportunities to accumulate a stock whose revenue and margin trajectory remains robust.
In short, DraftKings combines growth, discipline and innovation, and represents for us a strategic position that we maintain — and that we strengthen during pullbacks.
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Markets in Brief
Monday
• S&P 500: +0.47% at 6,615.28 (record)
• Nasdaq: +0.94% at 22,348.75 (record)
• Dow Jones: +0.11% at 45,883.45
• S&P/TSX (Toronto): +0.50% at 29,431.02
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Canadian Dollar
The loonie ended the session at 72.44 US¢, a slight increase.
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Macro & Monetary Policy
Markets are strongly betting on a 25-basis point cut by the Fed on Wednesday. The question is whether it will be a one-off move or the beginning of an easing cycle that could continue into the fall.
Bond yields remain stable, with the U.S. 10-year moving around 4.04%.
Attention is centred on Jerome Powell’s speech and on Fed members’ projections, which will indicate whether the central bank still prioritizes the fight against inflation or if the priority shifts to the labour market, which is showing signs of weakness.
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Stocks in Brief
• Tesla (TSLA) +3.62% — the stock jumped after the announcement of about $1B USD in stock purchases by Elon Musk, interpreted as a strong signal of confidence.
• Alphabet (GOOGL) +4.49% — crossed the $3T USD market capitalization threshold, joining the club of tech giants.
• Oracle (ORCL) +3.42% — benefited from the US TikTok deal, the company already hosting the platform’s data on its servers.
• CoreWeave +7.60% — jumped after unveiling details of a contract worth more than $6B USD tied to Nvidia.
• Nvidia (NVDA) ~neutral — held back by an antitrust investigation in China.
• StubHub — IPO expected this week, closely watched by the market.
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Sector Performance
• United States (S&P 500): Technology and Communication Services dominated the session, driven by AI and megacaps. Defensive sectors were quieter ahead of the Fed.
• Canada (S&P/TSX): Energy led the advance, supporting the Toronto market.
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Tuesday
• S&P 500: −0.13% at 6,606.76
• Nasdaq: −0.07% at 22,333.96
• Dow Jones: −0.27% at 45,757.90
• S&P/TSX (Toronto): −0.39% at 29,317.93
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Canadian Dollar
The loonie fell to 72.3 US¢.
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Macro & Monetary Policy
Markets consolidated after several records, awaiting the Fed’s decision on Wednesday. A 25-basis point cut is considered a given by investors, which would mark the first cut since December. Attention is focused on the dot plot and the economic projections: how many cuts by the end of 2025 — one, two, or more?
In the background, August retail sales surprised to the upside (+0.6%), confirming consumer resilience despite the high cost of credit. 30-year mortgage rates also fell to 6.39%, stimulating refinancing demand.
The Fed must therefore juggle between a labour market that is normalizing, inflation that remains above 2%, and a tense political climate after the confirmation of Governor Stephen Miran.
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Stocks in Brief
• Nvidia (NVDA) −2.33% — decline after China banned its companies from buying certain Nvidia chips, for competition reasons.
• Microsoft (MSFT) −1.2% — profit taking after a sequence of gains.
• Alphabet (GOOGL) −0.9% — modest pullback after recently surpassing $USD 3 trillion in market capitalization.
• Palantir (PLTR) −1.4% — correction in the wake of the broader move in tech.
• Oracle (ORCL) +1.5% — gained ground after being confirmed as a key partner in the US TikTok deal.
• Lyft (LYFT) +12.5% — sharp jump thanks to an announced partnership with Waymo (Alphabet) to deploy autonomous vehicles in Nashville.
• Baidu (BIDU) +7.5% — strong rebound thanks to positive comments on its AI efforts and investments in its own chips.
• StubHub — set the price of its IPO at $23.50, which should raise about $800M USD.
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Sector Performance
• United States (S&P 500): technology weighed, dragged down by Nvidia and Microsoft. On the other hand, consumer discretionary and communication services were supported by Lyft and Oracle.
• Canada (S&P/TSX): the decline was led by financials and materials, while energy remained more stable.
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Wednesday
• Dow Jones: +0.57% at 46,018.32
• S&P 500: −0.10% at 6,600.35
• Nasdaq Composite: −0.33% at 22,261.33
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Canadian Dollar
• CAD/USD: around USD 0.72 (little intraday variation).
• US 10-year yield: back toward 4.07% (vs 4.03% the day before), after a post-Fed low.
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Macroeconomic and Monetary Analysis
The Fed delivered a 25 bp cut (new range 4.00%–4.25%), largely anticipated. Jerome Powell’s message remains cautious and data-dependent: the goal is to manage risks (labour market slowing, inflation still “a bit high”). Markets neutral in aggregate: rotation toward stocks that benefit from a lower cost of capital, while tech megacaps suffered profit taking. The curve briefly eased before tightening moderately at the end of the session.
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Stocks in Brief
• Nvidia (NVDA): −2.62% — pressures after information on chip purchase restrictions in China.
• Broadcom (AVGO): −3.84% — decline in sympathy with the semi segment.
• Intel (INTC): −1.46%; AMD (AMD): −0.81% — sector weakness in semis.
• Lyft (LYFT): +13.13% — partnership with Waymo for robotaxis in Nashville.
• Uber (UBER): −4.96% — pullback despite robotaxi dynamics at competitors.
• StubHub: timid first session (close USD 22.17 vs USD 23.50 at IPO).
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Sector Performance (S&P 500)
• Leaders: consumer staples, financials, utilities — profiles sensitive to gradual easing of rates.
• Laggards: information technology, semiconductors — profit taking on AI cycle leaders.
• Energy/materials: mixed, in line with moderate rebound in yields and a stable dollar.
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Bank of Canada
The Bank of Canada lowered its key rate by 25 basis points, to 2.50%, continuing an easing cycle begun last summer that has already brought monetary policy from 5.00% to 2.50%. In its message, the Governing Council insisted on the need to “better balance risks”: disinflation is progressing, but the economy remains fragile and exposed to trade disruptions from the United States. In other words, the Bank is moving cautiously and adjusting course meeting by meeting, depending on data.
This decision reflects a clear diagnosis: growth is weakening, the labour market is deteriorating at the margin and core inflation is stabilizing in a more comfortable range. The Bank nevertheless recognizes that costs linked to supply chains and tariffs can still spill over into prices. It will closely monitor the evolution of exports, business investment and household spending, while taking into account the federal fiscal framework — the budget expected on November 4 may influence the trajectory of demand and prices.
Market reaction was consistent with a widely anticipated move: the Canadian dollar slipped slightly around $1.3754/US, while the S&P/TSX rose about 0.3%. For households and businesses, the impact is immediate on variable rates, while fixed rates will follow mainly the bond curve — very sensitive, in the short term, to the Federal Reserve’s decision expected the same day. In real estate, affordability improves marginally, but the rebound will depend on the magnitude of the decline in yields and buyer confidence.
The debate now focuses on what’s next: several economists consider one or two further cuts plausible by year-end, possibly in October and then December, but without a pre-announced trajectory. The message between the lines remains that the Bank is not aiming for a “deep” easing; rather, it seeks a point of balance where inflation continues to anchor while activity avoids a sharper slowdown.
For portfolios, this context argues for disciplined risk management: gradual rate easing support duration and quality assets, but headwinds — trade uncertainty, demand slowdown, political and budget calendar — encourage prioritizing solid balance sheets, predictable cash flow generation and diversification. What to watch next: the October 29 decision, where the Bank of Canada will have to arbitrate between supporting growth and prudence against external shocks.
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The Fed also Lowers its Rates
The U.S. Federal Reserve lowered its key rate by 25 basis points, setting a target range of 4.00% to 4.25%. It is the first cut of the year, justified by downside risks for employment and a gradual slowdown in activity. The vote was nearly unanimous: 11 members supported a 25 bp cut, while Stephen Miran, newly appointed, called for −50 bp. True to his approach, Jerome Powell recalled that the path will remain data-dependent and that the Fed remains independent despite political pressures.
On substance, the message is balanced. Inflation is not yet solidly brought back to 2%, and tariffs can continue to weigh punctually on prices. At the same time, deterioration of labour market signals — slowing job creation, more cautious hiring intentions — argues for gradual easing to avoid a rise in layoffs. The projections (“dot plot”) suggest other possible cuts in 2025, without a predefined calendar: each meeting will be arbitrated in light of core inflation, wages and demand.
On markets, the message is one of measured accommodative bias. U.S. bond yields should remain under pressure, which mechanically supports duration and interest-rate-sensitive segments (listed real estate, utilities, quality credit). Growth stocks benefit from a lower cost of capital, subject to margins holding in a softer macro context. The U.S. dollar could weaken at times when risk appetite returns, but the trend will depend mainly on the growth gap and global sentiment.
For investors in Canada, the Fed’s decision acts as an amplifier of the easing begun by the Bank of Canada. The Canadian curve remains closely correlated with the U.S. curve: an orderly easing cycle in Washington facilitates transmission here via fixed mortgage rates and corporate financing costs. Two asymmetries remain, however: 1) the tariff shock, more immediate for the U.S. economy; 2) a Canadian labour market already more fragile, which could bring Ottawa and the Bank of Canada to adjust their calibration more quickly if demand weakens further.
In short, the Fed is seeking a path of balance: easing without getting carried away. For portfolios, the context remains favourable for quality (solid balance sheets, visibility of cash flows) and for managed duration in fixed income, while remaining selective on more cyclical sectors. Upcoming readings of core inflation, labour trends and the evolution of corporate margins will be decisive by year-end.
Federal funds rate: historical data and FOMC projections
Each point represents the forecast of the federal funds rate by a FOMC member.
Source : Federal Reserve. Data as of Sept. 17, 2026.
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Thursday
• S&P 500: +0.48% at 6,631.96 (new historical record)
• Nasdaq: +0.94% at 22,470.73 (new high)
• Dow Jones: +0.27% at 46,142.42 (historical high)
• Russell 2000: +2.51% at 2,467.70 (closing record, first since November 2021)
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Canadian Dollar
• CAD/USD: USD 0.7231 (declining, weakness of Canadian employment data weighing on the currency)
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Macroeconomic and Monetary Analysis
Thursday’s session confirmed the accommodative turn of the Federal Reserve. After nine months of status quo, the Fed reduced on Wednesday its key rate by 25 basis points, bringing it to a range of 4.0% to 4.25%. This move, anticipated by markets, marks the beginning of a monetary easing cycle of which Fed members foresee two more cuts by the end of 2025.
Investors see it less as a defensive gesture against a recession risk than as a policy of “risk management” aiming to support growth. Indeed, economic data does not point to an imminent contraction: weekly jobless claims fell to 231,000 (vs 240,000 expected), confirming some resilience of the labour market. This dynamic allowed investors to maintain their optimism, supporting risk-taking in markets.
The sharpest reaction was seen on the Russell 2000, small-cap index, which jumped 2.5% to a record. These companies, more dependent on credit, benefit directly from a lower cost of financing. Conversely, the 10-year Treasury yield rose slightly to 4.11% (vs 4.09% the day before), reflecting a balance between growth expectations and inflationary pressures.
This Fed posture does not make unanimity: some, like manager David Tepper, warn that too rapid easing could overheat the economy and reignite inflation, while inflating asset bubbles. But for now, the market favours the idea of a cycle supportive of growth and earnings.
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Stocks in Brief
• Intel (INTC): +22.77% — historic surge, best session since 1987, after announcement of a $5B US investment from Nvidia to co-develop AI chips for PCs and data centres.
• Nvidia (NVDA): +3.49% — benefits from the strategic partnership with Intel, strengthening its central role in AI infrastructure.
• Micron (MU): +5.56%, Marvell (MRVL): +4.58%, Qualcomm (QCOM): +1.74% — the entire semiconductor sector benefited from the spillover effect.
• Alphabet (GOOGL): +1% — benefits from the end of Beijing’s antitrust investigation, removing a major uncertainty on its Android activities in China.
• Bullish (BLSH): +12% — results above expectations for its first post-IPO publication.
• Allstate (ALL): +4.8% — catastrophe losses much lower than analysts’ forecasts.
• Wynn Resorts (WYNN): +2% — price target raised by Stifel, optimism on international gaming revenues.
• Live Nation (LYV): −2.77% — FTC and seven States file suit for anti-competitive practices related to ticket resale via Ticketmaster.
• FactSet (FDS): −6% — forecasts judged disappointing despite revenues above expectations.
• Darden Restaurants (DRI): −7% — earnings slightly below consensus, leading to a marked drop in the stock.
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Sector Performance
• United States (S&P 500):
o Information Technology largely dominates thanks to the surge in semiconductors (Intel, Nvidia, Micron).
o Consumer Discretionary mixed: strong gains for Wynn, but sharp decline for Darden.
o Financials positive, helped by Allstate.
o Energy stable despite the slight rise in bond yields.
• Canada (TSX):
o Moderate advance, driven by technology and precious metals.
o More cyclical sectors remain cautious due to the slowdown in the Canadian labour market.
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Conclusion
The week ends on a particularly positive note, marked by a series of new records on Wall Street. The Federal Reserve’s decision to begin a rate-cutting cycle acted as a catalyst, strengthening risk appetite and driving all indexes higher — from mega-cap technology stocks to small caps more sensitive to financing conditions.
In this context, our portfolios reacted very well to the various economic developments, benefiting both from the rebound of growth stocks tied to innovation and from the defensive positioning that allows us to navigate periods of volatility. September is historically a difficult month for markets, but the solid performance recorded since the beginning of the month illustrates the resilience of our approach and the relevance of our strategic analysis.
We remain disciplined: the environment is still marked by uncertainty — fiscal pressures, trade tensions, inflation still present — but we consider that these episodes also offer entry points to consolidate our positions in quality companies, capable of generating predictable cash flows and adapting to structural changes.
In short, this week validates our conviction that the combination of quality growth, diversification, and rigorous risk management is the best way to create lasting value for our clients, even in a month traditionally known as challenging like September.
