Eq: Tech

(New York)

Increasingly, investing in tech companies means you need to go big or go home. What we mean is that large cap tech companies have been outperforming their smaller peers handily. The S&P 500 Information Technology Sector is up about 14% this year, much better than the index’s 3.7% overall gain, but the S&P 600 Information Technology Sector has only gained 9.9%. That means that the largest tech company are significantly outperforming their smaller peers.


FINSUM: This is not a surprise given the overall momentum the FAANGs have had over the last few years. However, given the worries over regulation, it is odd to see they have outperformed smaller rivals very recently.

(New York)

Fidelity appears to be on the verge of making one of the most important adoptions of cryptocurrencies by a major financial player to-date. According to Business Insider, Fidelity has just posted jobs on its site looking to hire people “to help engineer, create, and deploy a Digital Asset exchange to both a public and private cloud”. According to BI, “If Fidelity does launch a crypto exchange offering, it would arguably be among the biggest moves by a large Wall Street firm into the nascent crypto market, which stands at about $350 billion”. Fidelity already allows clients to see their crypto holdings alongside their conventional assets.


FINSUM: It sounds like Fidelity is planning to opening a crypto trading exchange. That would be a very important move to legitimate the asset class.

(Washington)

Over the last few months there were growing fears that the US tech industry, a stock market stalwart, might be poised for a damaging crackdown by regulators. This fear had somewhat subsided in the last few weeks as no new worries had arisen, until now. Treasury Secretary Mnuchin has just now called for an anti-trust review of the US tech industry following a 60 Minutes story on Google’s monopoly power. Mnuchin said the power to do so was not part of his mandate, but that someone in the government needs to be looking at the issue. “These are issues that the Justice Department needs to look at seriously — not for any one company — but obviously as these technology companies have a greater and greater impact on the economy”.


FINSUM: This is a very worryingly development for the tech industry and its investors, but not one we think is unwarranted. We suspect this is going to wound tech stocks, especially if the idea of an anti-trust review gets traction in Washington.

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