Beijing’s Crackdown! 🥊

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Beijing’s Crackdown!

Big tech stocks have been in some hot water over the past few months with CEO’s from some of America’s largest tech stocks like Facebook and Google being drilled over their privacy and data collection policies.

Overseas another private public sector standoff is taking place, with the Chinese government placing a major crackdown over Chinese Tech stocks. Beijing has deemed companies like Tencent growing at a pace too fast and a size too large and cracked down on companies like Alibaba over antitrust grounds. The implication comes at a poor time for some of these companies with Alibaba falling another 8% on top of its already brutal decline over the past 2 months. Some investors are even seeing this as the “final low” and think it is time for the bulls to return for Alibaba. At the same time many see this is a major risk, with the magnitude of Beijing’s future actions still being unclear.

Despite this, many of you holding FAANG or (Facebook, Apple, Amazon, Netflix, or Google) may find this as good news. As Daniel Ives of Wedbush explains:  “dynamics will yet again bode well for U.S. tech stocks as the favorable backdrop creates a nirvana set-up for FAANG and the overall U.S. tech sector into 2021”. Moreover, with the Senate likely going to republicans and the Democrats holding the presidency a political gridlock is set to follow suit, meaning crackdowns from the U.S government and U.S tech stocks will likely be slowed, another good sign for the U.S tech industry.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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