Four tech giants whose initials spell out President Donald Trump‘s favorite acronym have sent the stock market soaring to record highs.
Microsoft, Amazon, Google and Apple have driven a bull market – together they account for about 17 percent of the S&P 500 and almost 70 percent of the NASDQS gain this year.
The four tech giants all have market caps larger than $1 trillion.
And the president has taken credit for the boom. A strong economy is central argument for his November re-election campaign.
‘The market is setting a record. We set another record today,’ Trump said in the Oval Office on Tuesday. ‘It will be the 144th time in a three-year period that I’m President.’
‘And we have four trillion-dollar companies. One is Microsoft, one is Apple, one is Google, one is Amazon. So you have Amazon, Google, Apple, and Microsoft. And so, you have an M, you have an A, you have a G, and you have an A. You have MAGA,’ he added.
Four tech giants whose initials spell out President Donald Trump’s favorite acronym have sent the stock market soaring
Trump has been critical of Amazon founder Jeff Bezos, seen together with Microsoft CEO Satya Nadella at a June 2017 meeting at the White House
Trump has better relations with Apple CEO Tim Cook
He held up a sheet of paper showing how the first letters spelled out the initials of his campaign slogan: Make America Great Again.
The president, however, has a tense relationship with Amazon founder Jeff Bezos, who also owns The Washington Post.
Trump routinely criticizes the Post for its coverage of his administration and labels stories he doesn’t like ‘fake news.’
Additionally Bezos is seeking testimony from President Trump and other top administration officials about how the tech giant was shut out of a $10billion military cloud computing contract, according to court documents made public on Monday.
As part of an evidence gathering phase of an appeal on the awarding of the ‘JEDI’ contract to upgrade the US military’s computing networks, Amazon asked a judge to call for depositions of Trump and other administration figures including Defense Secretary Mark Esper and his predecessor, James Mattis.
‘President Trump has unique knowledge about his involvement in the bid process, including private conversations with and instructions to others about the process and the award,’ the filing read.
Amazon has alleged that Trump improperly intervened in the procurement process to deny the company the massive contract in late October.
The president does have better relations with Apple CEO Tim Cook, who he has met with at the White House.
The four stocks – Amazon, Google parent Alphabet, along with Apple and Microsoft – accounted for two-thirds of the S&P 500’s gain so far in 2020, DataTrek Research said in a note on Monday. The index is up 4.4% year-to-date.
Apple and Microsoft also account for 5% of the weight in MSCI’s all-country world index, a closely-watched barometer of global stocks, according to Ned Davis Research. That amounts to a larger market value than 47 of the 48 non-U.S. country markets in the index, all but Japan, according to Ned Davis.
Ivanka Trump and Jared Kushner leave a party at Jeff Bezos’ Washington D.C. home in January after the annual Alfalfa dinner
Google CEO Sundar Pichai – parent company Alphabet is one of the trillion dollar companies Trump touted
Microsoft founder Bill Gates – his company is one of the trillion dollar valued ones
‘It’s just not sustainable,’ said Tim Hayes, chief global investment strategist at Ned Davis Research.
The risk, Hayes said, is ‘that at some point these stocks are no longer going to be propping up the market but instead weighing it down.’
‘And that would happen in the U.S. and then the U.S. would weigh down the global trend,’ Hayes said.
Trump’s praise of the companies comes as US federal regulators are stepping up their investigation of the market dominance of five giant tech companies – the four the president mentioned plus Facebook – demanding detailed information on their acquisitions back to 2010.
The Federal Trade Commission (FTC) has issued orders to Facebook, Amazon, Apple, Microsoft and Google’s parent firm Alphabet.
The FTC, the Justice Department and a House committee have been investigating the conduct of big tech companies and whether they aggressively bought potential rivals to suppress competition and hurt consumers.
Some critics have pointed to Facebook’s acquisition of Instagram and WhatsApp, for example, as deals that should be questioned.
Facebook founder Mark Zuckerberg – his company and the four other tech companies are facing increased scrutiny from federal regulations
The popular messaging services are among some 70 companies that Facebook has acquired over the past 15 years or so, giving it what critics say is massive market power that has enabled it to snuff out competition.
The regulators’ action could fuel expectations that as a result of the investigations, the government may require tech giants to unwind earlier acquisitions and divest companies.
‘This initiative will enable the (FTC) to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition,’ FTC Chairman Joseph Simons said in a statement.
The agency is asking the companies for information and documents on the terms, scope, structure and purpose of acquisitions made between January 1, 2010 and December 31, 2019.
Google faced antitrust scrutiny more than a decade ago over its acquisition of DoubleClick, a competitor in digital advertising.
Apart from the government and congressional investigations, state attorneys general from both political parties are conducting antitrust probes of Google and Facebook.
In the Google investigation, the attorneys general have asked the company for internal documents related to how it sells ads and tracks the behaviour of people who use its search engine and other products.
Spokespeople for the companies could not immediately be reached for comment.
Rep David Cicilline, the chair of the House Judiciary subcommittee on antitrust who is leading the panel’s probe, has said that Congress and antitrust regulators wrongly allowed the big tech companies to regulate themselves, enabling them to operate out of control, dominating the internet and choking off online innovation and entrepreneurship.
He has suggested that legislative changes may be needed, though he has called breaking up the companies a last resort.
‘It is far too common to hear horror stories from startups and other small businesses about how a dominant platform’s abrupt changes have destroyed their business,’ Mr Cicilline said at a hearing last month at which executives from small and medium-sized tech companies testified.
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