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  • Trump VP Supports Big Tech Antitrust Crackdown

    Republican vice presidential candidate J.D. Vance arrives for Day 1 of the Republican National Convention (RNC), at the Fiserv Forum in Milwaukee, Wisconsin, U.S., July 15, 2024. REUTERS/Callaghan O’Hare

    Former U.S. President Donald Trump’s vice presidential pick, J.D. Vance, has openly praised the work of Federal Trade Commission (FTC) Chair Lina Khan, signaling potential support for the agency’s broad antitrust enforcement approach in a second Trump administration.

    Vance, a Republican U.S. senator from Ohio, joined the presidential ticket on Monday at the Republican National Convention in Milwaukee, where Trump was officially nominated as the party’s candidate.

    Vance is among several Republican lawmakers, including U.S. Senator Josh Hawley of Missouri and Florida U.S. Representative Matt Gaetz, who are dubbed “Khanservatives” for aligning with Khan’s perspective that U.S. antitrust law should encompass more than just keeping consumer prices low.

    “She recognized there has to be a broader understanding of how we think about competition in the marketplace,” Vance said at a Washington event in February.

    This stance highlights a division within the conservative movement, between those advocating for shrinking regulatory agencies and those supporting the use of antitrust laws to challenge powerful corporations, especially Big Tech, where there is a concern over perceived censorship of conservatives online.

    Joseph Coniglio, director of antitrust policy at the Information Technology and Innovation Foundation, noted that Vance’s selection as vice president indicates a commitment to this broader antitrust approach.

    Scrutiny of Big Tech is not new for Trump. During his presidency, the FTC and Department of Justice initiated investigations into Meta, Amazon, Apple, and Google over alleged antitrust violations. All four companies were sued and have denied wrongdoing.

    Vance, a Yale-educated lawyer and venture capitalist, has previously worked at Sidley Austin and assisted Trump with fundraising in Silicon Valley. He has also called for breaking up major tech companies, particularly Google, criticizing its monopolistic control of information.

    It remains unclear what specific focus a second Trump administration would adopt. The conservative Heritage Foundation’s Project 2025 policy platform suggests ways to champion conservative causes through antitrust enforcement, while also questioning the continued existence of the FTC.

    Business groups have criticized President Joe Biden’s antitrust enforcers for expanding their focus beyond traditional considerations of price competition to include issues like labor. The U.S. Chamber of Commerce has sued to block the FTC’s recent ban on non-compete agreements for workers.

    At the February event, hosted by Silicon Valley startup incubator Y Combinator, Vance emphasized that his antitrust views include supporting small firms, workers, and the quality of consumer goods. He criticized the notion held by some conservatives that corporate behavior cannot be “tyrannical.”

    “I want people to live good lives in our country,” Vance said. “I don’t really care if the entity that is most threatening to that vision is a private entity or a public entity.

    Source: reuters

  • Wall St Week Ahead: Expected US Rate Cuts Have Investors Looking Beyond Big Tech

     

    NEW YORK, July 12 (Reuters) – Looming U.S. interest rate cuts are presenting investors with a tough choice: stick with the Big Tech stocks that have driven returns for more than a year, or turn to less-loved areas of the market that could benefit from easing monetary policy.

    Owning massive tech and growth companies such as Nvidia (NVDA.O), Microsoft (MSFT.O), and Amazon (AMZN.O) has been a hugely profitable strategy for investors since early 2023, even as the stocks’ market dominance has drawn comparisons to the dot-com bubble of the late 1990s.

    That calculus may start to change following Thursday’s surprisingly cool inflation report, which solidified expectations for a near-term rate cut by the Federal Reserve. Lower rates are seen as beneficial to many corners of the market whose performance has lagged this year, including small-caps, real estate, and economically sensitive areas such as industrials.

    Market action at the end of the week showed a nascent shift may have already begun. The tech-heavy Nasdaq 100 (.NDX) suffered its biggest drop of the year on Thursday, while the small-cap Russell 2000 (.RUT) had its best day of 2024. The Nasdaq 100 has gained about 21% this year, while the Russell 2000 is up just 6%.

    Also on Thursday, the equal-weight S&P 500 (.SPXEW) – a proxy for the average stock in the benchmark index – had its biggest relative gain since 2020 over the S&P 500, which is more heavily influenced by the largest tech and growth stocks. That chipped away at the huge advantage for the S&P 500, which remains up about 18% in 2024 against a 6.7% gain for the equal-weight index.

    “The trade got too one-sided and we’re seeing some reversal of this,” said Walter Todd, chief investment officer at Greenwood Capital.

    Small caps and the equal-weight S&P 500 extended their gains on Friday even as tech stocks rebounded. Investors cautioned that the moves could be a snap-back after the disparity in performance between tech and other market sectors reached extremes. Further, recent periods of market broadening have been short-lived: for example, small caps surged at the end of 2023, when investors believed rate cuts were imminent, only to lag in the following months.

    Source: APNews