An antitrust report by Democratic staffers for the House of Representatives this week sent chills down the spine of investors holding shares of the major U.S. technology and internet companies that have driven the bull market. The report signals the likelihood of heightened regulatory scrutiny over these companies, especially if Democrats win the White House and both chambers of Congress in the November elections in a so-called "blue wave."
Max Gokhman, head of asset allocation at Pacific Life Fund Advisors, joined the "What Goes Up" podcast this week to share his thoughts on this and other market developments. Some highlights of the conversation:
"We've been talking about a 'blue wave' a lot. And I think a blue wave is really going to be a tsunami that drowns the tech giants, because the antitrust findings that have been found by that panel ... are pretty substantial. And it's going to be hard for Amazon, for Apple, for Google to say that their marketplaces really are not infringing on companies. I mean, there's been so much more momentum. And it's also been much more momentum within the public, within the electorate to say, yeah, we have concerns about privacy. Yeah, we are hearing from small businesses who are getting pressured by Amazon. There's a lot of developers who complain about Apple's control of the App Store. So all those things create a very different environment than what we saw in years prior. And so regardless of November's outcome, it just doesn't look good for tech."