The week ahead: Is Big Tech about to face a day of reckoning?

Market Updates

US equity markets have been unsurprisingly volatile in the lead up to the 59th US Presidential Election – set to be held Tuesday, November 3 – with the Dow Jones, Nasdaq and S&P 500 all falling between 4.4-5.95% over the last five trading sessions.

For the week ahead, traders may want to pay particular attention to how divergent US election outcomes may impact key US benchmarks and individual equities – particularly popular US technology stocks.

Democrat Sweep

Should Joe Biden win the Presidential Election and if the Democrats take back control of the Senate, we may see equity markets decline between 2-5% – according to Hightower Advisors via Forbes.

According to national polls, Joe Biden currently leads Trump in the race to become US President; while analysis from FiveThirtyEight suggests that the Democrats will retake the Senate. Betting odds also point to a Biden victory.

Building on that, investor and political strategist Bradley Tusk recently told CNBC that a Democrat sweep will prove to be a ‘day of reckoning for Big Tech’.

As the coming week unfolds, an emphasis on US tech fundamentals may be replaced by broader regulatory concerns, with the DOJ recently launching an anti-trust case against Alphabet. Though currently isolated to Alphabet, Mr Tusk further noted that it’s ‘Unlikely that under democratic control the Justice Department will be satisfied with just going after one company.’

Market perception around the Democrat stance on tech regulation may lead to heightened volatility in key US tech names in the weeks ahead – including Amazon, Alphabet, Facebook, Apple, and Microsoft.

A Trump Victory

Should Donald Trump win the US Presidential Election we may see equity markets rally between 3-5%, according to Hightower Advisors, via Forbes. Trump is often considered a ‘pro business’ and by extension ‘pro markets’ President.

Whatever outcome we see in the US election – Australian markets are likely to be impacted to a degree – given their proclivity to play ‘follow the leader’ with US equities.

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