Trump’s crackdown on Big Tech is misguided
Which makes Trump’s continued war against Big Tech all the more mystifying.
Any crackdown on Big Tech firms has the potential to lead to even more job losses and could hamper their ability to keep churning out strong profit growth.
Techs helped prop up market and economy before Covid-19
“From e-commerce to cloud computing and telemedicine to genetic testing and manipulation, the trends that have been in place have only been supported by the pandemic,” Neuman added.
But Tony Bedikian, head of global markets with Citizens Bank, said that tech and social media giants are likely to be at the forefront of a new working-from-home normal.
So the last thing that Trump should want is to propose a major overhaul of how tech companies operate that could lead to a massive plunge in their stocks, especially since the top five tech firms — Microsoft, Apple, Amazon, Alphabet and Facebook — make up more than 20% of the S&P 500’s market value.
That means that any investor who owns a passively managed index fund is, like it or not, making a huge bet on the FAANGs. It will be difficult, if not impossible, for the overall market to keep rallying if tech stocks are lagging.