Markets

On Tuesday, October 20, 2020, the U.S. Department of Justice filed a 64-page lawsuit against Alphabet Inc. (NasdaqGS:GOOG)’s Google division under Section 2 of the Sherman Antitrust Act.

The Complaint aims to “restrain Google LLC (Google) from unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices, and to remedy the effects of this conduct.”

The lawsuit, 15 months in the making, brought by “The United States of America, acting under the direction of the Attorney General of the United States,” was joined by the States of Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas.

Google called the complaint “dubious” and “deeply flawed.”

What’s at stake is Google’s stock market valuation and, to a lesser degree, Apple Inc. (NasdaqGS:AAPL)’s.

Here’s what the Complaint alleges, where the lawsuit might go, and how it could impact big tech…

Believe it or not, last week was a positive week for stocks. It didn’t feel that way, but it was.

The Dow rose 0.1%, the S&P rose 0.2%, and the Nasdaq Composite rose 0.8%.

It was easy to think equities were slipping last week because of waning optimism in the face of virus spikes across 26 U.S. states and across some major cities in Europe, and because two drug giants, Johnson & Johnson (NYSE:JNJ) and Eli Lilly and Co. (NYSE:LLY) had to stop vaccine trials on account of “reactions.”

If that news wasn’t disheartening enough, jobless claims rose unexpectedly, and there was no movement on a stimulus package.

While the “superficial” news and narrative-drivers were apparent as headlines, what was more interesting was what stocks were doing day to day last week – they were churning.

With only 22 days left until the election of maybe a lifetime, equity markets, as nervous as they were, are now almost irrationally exuberant.

And while equities may get tested this week because of everything that’s going on, the tone and tenor of the market is bright and strong.

But, we’ll see how that holds up when third-quarter earnings reports start rolling out…

Here’s what to look forward to last week, and later, I’ll show you

You’ve heard analysts, and financial gurus, and pundits say, “The market just wants to go up,” which makes the market sound like it’s a living, breathing thing and makes its own independent decisions.

Well, it is. The stock market is, in a very real sense, a living, breathing “thing.”

That’s because the market’s made up of traders and investors, and you better believe they make their own decisions, even when those decisions are more dependent than independent, as they are now.

And right now, the market is telling us something, and for your money’s sake, you better listen…

Last week was entirely an illusion.

The week started out well, got better by Wednesday, but fell apart. And what looked like a nasty storm on Thursday seemed to calm itself down by the end of trading Friday.

But the storm hasn’t passed, and if it doesn’t dissipate quickly, meaning by this week or by the end of next week, it could completely obliterate what progress we’ve made.

And, if all hell breaks loose, we could easily be down 20% or more by the end of next week, or sooner.

Here’s how you can prepare no matter what happens…

Don’t worry, be happy.

The roaring tech rally of 2020, courtesy of the Great Lockdown, courtesy of COVID-19, is nothing like the roaring tech rally of 1999 that led to the Tech Wreck of 2000.

At least that’s the investing narrative making the rounds now.

The story is, everywhere comparisons are being made between the irrational exuberance that led to the Nasdaq Composite crashing 50% in 2000 and the tech rally of 2020 where five stocks have led millions of investors up the yellow brick road, is that there is no comparison.

I beg to differ…

This morning the Bureau of Labor Statistics released July payroll numbers. They weren’t even as good as the headline 1.8 million workers added announcement, but that’s another story, which I’ll get to.

The numbers, which all beat consensus estimates, making them appear better, weren’t that good at all.

But that’s not going to stop equity markets from rallying.

Here’s the story behind the headline numbers and why equity markets are headed higher.

One day after the CEOs of Apple, Amazon, Facebook, and Google’s parent Alphabet faced a hostile House Judiciary Antitrust Subcommittee hearing, where they were each questioned about how they got so big, so profitable, and at whose expense, the four mega-cap tech darlings reported blowout second-quarter revenues and profits.

Tim Cook, Apple’s CEO, feigned embarrassment in his address of the company’s earnings, almost apologizing for Apple’s flood of riches as the rest of America and the world suffer the ravages of the coronavirus crisis.

The question is now: Will these giants be allowed to keep on squashing all competition, keep on minting money, see their stock prices keep on rising? Or will political winds blowback their relentless growth and market dominance?

Here’s what they face, what they’re going to do about it, and what’s going to happen to their stock prices.