Wall Street Strategies
Hello! Sign in or Register


Afternoon Note

FTC to Large Tech

By Charles Payne, CEO & Principal Analyst
2/11/2020 1:20 PM

Boeing (BA) announced it received zero new orders in January, sending the stock down seven dollars and bringing the Dow Jones Industrial Average along for the ride.  The news was even more disheartening when Airbus reported 274 new orders.

Interestingly, Boeing shares have been in a stealth rally climbing from $315 on February 3rd to $348 earlier in the session.

This morning a “sell” rating on Facebook (FB) from Pivotal Research seems to have put a chill on the big momentum names.  Meanwhile, save haven sectors, including Utilities and Real Estate, opened at all-time highs and are outpacing the overall market in 2020.

Note: the S&P Tech sector is up 11.0% year to date, 50% in past year and more than 95% over the last three years. 

Expensive Safe Havens

2020

One year

Three years

S&P 500 (SPX)

+4.5%

+24.6%

+43.6%

Real Estate (XLRE)

+6.0%

+18.2%

+30.5%

Utilities (XLU)

+7.0%

+24.2%

+39.5%

This all underscores growing anxiety over where to commitment new money.

We are also keeping an eye on this, which seems to slow the big momentum tech names.

FTC to Examine Past Acquisitions by Large Technology Companies

The Agency issued 6(b) Orders to Alphabet Inc., Amazon.com, Inc., Apple Inc., Facebook, Inc., Google Inc., and Microsoft Corp.

https://www.ftc.gov/news-events/press-releases/2020/02/ftc-examine-past-acquisitions-large-technology-companies

The Federal Trade Commission issued Special Orders to five large technology firms, requiring them to provide information about prior acquisitions not reported to the antitrust agencies under the Hart-Scott-Rodino (HSR) Act. The orders require Alphabet Inc. (including Google), Amazon.com, Inc., Apple Inc., Facebook, Inc., and Microsoft Corp. to provide information and documents on the terms, scope, structure, and purpose of transactions that each company consummated between Jan. 1, 2010 and Dec. 31, 2019.

The Commission issued these orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. The orders will help the FTC deepen its understanding of large technology firms’ acquisition activity, including how these firms report their transactions to the federal antitrust agencies, and whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and therefore do not need to be reported to the antitrust agencies.

Overall, the market resolve is still intact, but after rallying in six of the last seven sessions, there is a need for a clear catalyst(s).

Fed chairman Powell is testifying on capitol hill today and tomorrow, which has taken a little steam out of the market. 

 

 

 

 


Comments
Is BA still a buy?

Richard on 2/11/2020 1:53:51 PM
I think it's†still a buy for long term investor.† CP

Charles Payne on 2/11/2020 1:56:21 PM
 

Add Your Comment


Submitted comments are subject to moderation before posting.


Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Privacy Policy | Terms of Use |
All Rights Reserved.