Tech the Broker?

Macro Perspectives: Wed 23 Sep 2020

Yesterday we looked at a chart of Apple, as a proxy on the direction of broader stocks and on global risk appetite - infact big tech (Apple, FB, MSFT, AMZN, GOOG) each outperformed the S&P 500 on the day.

Is this money flowing back into the dominant monopolies that have crushed it in the stay-at-home economy? Maybe. The UK put its foot on the economic brakes in the morning, by tightening up some lockdown restrictions, and with cases rising in the U.S., this combination only emboldens the "stay-at-home" bets, which means buy big tech.

Also, something a tech and global investor should find to be encouraging: With all of the rhetoric out of Trump in recent years about regulating big tech, he had an easy one in the crosshairs to prove he meant business - TikTok. However, surprisingly, instead of banning it, as was threatened, he agreed to a bizarre deal.

The takeaway here might be that two powerful American-based/born global companies (Oracle and Walmart) ended up playing mediator between Trump and China. This could be a foreshadowing of how the U.S. and China could get to a place of coexistence again, in a Trump second term. It may take powerful American companies, with big businesses in China, to broker a deal.