Secular Change?

Macro Perspectives: Mon 02 Nov 2020

We talked earlier this week about the test of the technical trend line in the S&P 500.

Apple, Amazon and Facebook - if used as a proxy for the broader market - all have similar charts, and despite the earning’s beat on Thursday, price has traded below the diagonal trend line. It’s worth noting, while Twitter looks a bit different,it was down 21% on the day.

So did the Senate hearings this week pour cold water on the big tech trade? Or is a top IN for big tech, and is there a changing of the guard coming?

For those that believe a Trump victory is coming, the big tech regulatory noose looks to be in the cards, which would certainly challenge the lofty multiples these companies have enjoyed.

For those that believe a Biden victory is coming, the global capital that has fueled the lofty multiples in big tech, will likely be moving OUT, and IN to the next big secular trend to be determined by big government "stimulus" allocations.

That is, the “clean energy revolution.” Just as Obama blessed this eras tech giants with gobs of money from the 2009 Recovery Act, Biden would do the same with the Heroes Act - allocating as much as a trillion dollars to clean energy companies, and in the process anointing the winners and future billionaires (if not trillionaires).