Category Archives: Big Tech

Stock markets opened mixed on Wednesday morning, but the Nasdaq Composite (NASDAQINDEX:^IXIC) was an early winner. As of 10:30 a.m. EDT today, the Nasdaq was up 0.75%, while other major market benchmarks were flat to down slightly.

Many investors focused on the big-name tech stocks that reported their results after the bell on Tuesday, many of which helped move the overall market. However, some stocks that have almost nothing to do with technology were actually the biggest winners on the Nasdaq. Below, we'll look more closely at Tilray (NASDAQ:TLRY) and The Chefs' Warehouse (NASDAQ:CHEF) to see why their gains overshadowed Big Tech on Wednesday.

Shares of Tilray jumped 19% Wednesday morning. The marijuana stock reported its first financial results since closing its merger with industry peer Aphria, and investors liked what they saw.

A look at fiscal fourth-quarter numbers makes it clearer why shareholders were so happy. Acquisitions played an instrumental role in pushing net revenue up 25% compared to the year-ago period, with sales of beverages from the SweetWater business it acquired in November 2020 and wellness-related revenue from Manitoba Harvest combining with Aphria's influence on the top line. Moreover, Tilray reversed a year-ago loss with net income of $33.6 million.

Image source: Getty Images.

Tilray has made major moves to get its business headed in the right direction. Cost-saving measures are paying off, and market share has grown steadily. One key marketing move has involved using SweetWater to come out with cross-branded products to promote cannabis brands, such as the new Broken Coast BC Lager that highlights the Broken Coast craft cannabis line of products.

Investors had been concerned about prospects coming into the report, but they seem more confident about the cannabis company's future now. If economic reopening can continue, then it would be an even bigger positive for Tilray.

Elsewhere, shares of The Chefs' Warehouse were up more than 12%. The distributor of gourmet food products reported strong second-quarter results that left investors pleased with what they're seeing from the pandemic recovery.

The bounce Chefs' Warehouse saw was astounding. Sales soared 111% in the second quarter compared to year-ago numbers. The company reversed a massive year-earlier loss, posting modest adjusted earnings of $0.04 per share. CEO Chris Pappas explained that the return of dine-in restaurant options and greater capacity have been instrumental in its comeback, and by June, sales were back in line with pre-pandemic numbers from 2019.

Chefs' Warehouse still indicated some reluctance to suggest that it has fully put its challenges behind it. The food distributor chose not to issue full-year guidance for 2021, saying that it has to know more about not only general economic recovery but also the pace at which large events and travel-related business activity move back toward pre-pandemic levels.

Nevertheless, the gains for Chefs' Warehouse reflect the expectation that its restaurant and food service customers will make a full recovery after a highly challenging period for the food industry. That's positive news for consumers as well as for the company, and Chefs' Warehouse is hopeful that favorable trends will continue throughout 2021 and beyond.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Forget Big Tech! These Were the Real Nasdaq Winners Wednesday. - Motley Fool

In April, the U.S. Supreme Court stripped the Federal Trade Commission of a powerful tool for holding trillion-dollar Big Tech monopolistsGoogle, Amazon, Facebook and Appleaccountable for their outrageous market abuses. In many respects, the agency's ability to secure hefty equitable reliefsuch as restitution or disgorgementin federal court was the one thing preventing these Goliaths from abusing the American people without consequence. Absent new legislation, the public is sure to suffer at the hands of Big Tech. Congress must act to empower the FTC to do its job.

The FTC is the nation's premier consumer-protection agency. Every year, it holds countless bad actors accountable for abuses committed against everyday Americans, ranging from identity theft and fraud to anticompetitive practices in violation of federal antitrust law. The agency has proven to be a particularly effective tool for holding Big Tech accountable for its many misdeeds. While the FTC can, and does, enforce the law through administrative proceedings, it often takes its claims against bad actors directly to court, which can provide quick and effective relief. Many times, the mere threat of FTC action is enough to prevent illegal conduct.

For decades, the FTC has used Section 13(b) of the Federal Trade Commission Act not only to obtain injunctions preventing future unlawful conduct, but also to force companies and individuals to relinquish money they wrongfully obtained from the public. That all changed on April 22, when the Supreme Court issued its long-anticipated decision in AMG Capital Management, LLC v. FTC. In a unanimous opinion authored by Justice Stephen Breyer, the high court ruled that Section 13(b) does not authorize the FTC to seek monetary disgorgement from businesses that engage in abusive practices. While the FTC may still obtain a court order forbidding a company from continuing its bad conduct, the agency must rely on a less efficientand less effectiveadministrative process to recoup money taken as a result of that conduct.

It would be an understatement to say that the Court's decision represents a setback for the FTC's efforts to hold Big Tech accountable for abuses against Americans. Over the past five decades, the FTC had used Section 13(b) to return literally billions of dollars to everyday Americansmoney that seedy companies wrongfully took from unsuspecting consumers. For example, Google and its subsidiary YouTube agreed to a record $170 million settlement in 2019 after the FTC brought an enforcement action in federal court challenging YouTube's practice of illegally collecting personal information from children without their parents' consent. The Supreme Court's elimination of the FTC's authority to seek disgorgement will make recoupments such as this impossible. In fact, even before the Court rendered its decision, companies under investigation by the FTC began refusing to agree to settlements, predicting (correctly) that the FTC would soon lack the ability to obtain court-ordered equitable relief.

Now is not the time to let Big Tech run wild. Whether it was Twitter's decision to block a legitimate news story that risked harming the Biden campaign, Facebook's efforts to shield the founder of Black Lives Matter from embarrassment or Amazon's censorship of books critical of transgender ideology, conservatives are well-acquainted with Big Tech's unfair treatment.

Perhaps the most egregious example, of course, was the coordinated effort of Apple, Google and Amazon to destroy Parler, which progressives feared could provide a platform for independent voices challenging leftist orthodoxy. The Supreme Court's decision will only embolden such bad behavior. Indeed, Big Tech has already begun to leverage the Supreme Court's decision to avoid FTC enforcement entirely. For example, Facebook now argues that the FTC lacks the means to hold it accountable for allegedly maintaining an illegal monopoly through anticompetitive conduct. Until the FTC's power to seek equitable relief in federal court is restored, the American people will lack an effective tool for combating Big Tech's many and growing abuses.

Now is the time for our representatives in Washington to act. As the Supreme Court noted in its AMG Capital Management, LLC decision, Congress has already considered at least one bill that would restore the FTC's ability to make Big Tech pay for the harms it inflicts on everyday Americans. And in recent testimony before the Senate Committee on Commerce, Science and Transportation, the FTC encouraged Congress to introduce similar legislation once again. The American people depend on robust enforcement to hold giants like Google, Facebook, Amazon, Apple and Twitter in check; a toothless FTC simply isn't up to the task.

Congress should send a bill to the president's desk without delay. No one should be above the lawnot even Big Tech.

Mike Davis is president and founder of the Internet Accountability Project. He is a former top attorney for the United States Senate Committee on the Judiciary and previously served in the United States Department of Justice. Davis also clerked for Justice Neil Gorsuch, both on the Tenth Circuit and on the Supreme Court.

The views expressed in this article are the writer's own.

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Congress Must Empower the FTC To Fight Big Tech's Abuses | Opinion - Newsweek

Do you want to make big money from technology stocks?

I mean really big money?

Then write to your congressperson and senators and tell them to support current congressional efforts to break up big technology companies.

No, I havent been smoking any funny stuff.

Yes, I know that Americas biggest tech companies have seen a collective gain of over 5,000% since the great financial crisis.

But history proves that once companies get as big as an Amazon, a Facebook or a Google, their best growth days are behind them.

It also proves that much, much better future gains can be had by letting the individual pieces of these megacompanies operate on their own, free from the logic of conglomeration. Heres why

Most people use the price-to-earnings (P/E) ratio to evaluate a companys valuation.

But P/E is static. It tells us how much youre paying for each dollar of earnings over the last 12 months.

What you really want to know is how fast those earnings are growing relative to the companys valuation.

All else being equal, you always want to buy companies whose earnings are growing faster relative to their valuations than others.

To assess that, we use the PEG ratio.

PEG is a stocks P/E ratio divided by its earnings growth rate. Because the growth rate is the denominator in the ratio, the lower the PEG, the better.

Here are statistics for four companies currently in congressional crosshairs:

Amazon is the only one whose projected PEG ratio wont decline significantly from last year. The other three experienced much faster price growth than their projected earnings growth.

The problem is that investors have front-loaded future earnings so much that the rate of growth of these big boys must slow in the coming years.

Of course, these companies could grow their share prices by innovating as they have done in the past. But thats unlikely.

There are two main reasons other than increasing attention from competition authorities why big companies inevitably produce ever-smaller shareholder gains as time goes by.

Who knows how much money the shareholders of an independent WhatsApp, Waze or AWS would have earned over the last few years?

One indication comes from eBays spinoff of PayPal. Since their breakup in 2015, the price of PayPal has increased by nearly 650%. EBay shares are only up about 150%.

Thats not to say every potential unbundling could produce the same lopsided results.

But I, for one, would love to see what would happen if a captive business unit like AWS or YouTube were free to innovate and create shareholder value as their leaders saw fit.

Kind regards,

Ted BaumanEditor, The Bauman Letter

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For Big Gains, Break Up Big Tech Stocks: AMZN, FB, GOOGL

Law enforcement authorities can also use warrants in other ways. Police have issued warrants to Google for any devices that were near where a crime was committed.

The companies say they sometimes work with law enforcement officials to narrow their requests so the companies turn over only information that is relevant to a case.

Apple said that in the first half of 2020, the latest period available, it received more than 5,850 requests from U.S. authorities for data related to 18,600 accounts. It turned over basic data in 43 percent of those requests and actual content data, such as emails or photos, in 44 percent of requests.

Microsoft said that it received 5,500 requests from U.S. law enforcement over the same period, covering 17,700 accounts, and that it turned over basic data to 54 percent of requests and content to 15 percent of requests.

Google said that it received 39,500 requests in the United States over that period, covering nearly 84,700 accounts, and that it turned over some data in 83 percent of the cases. Google did not break down the percentage of requests in which it turned over basic data versus content, but it said that 39 percent of the requests were subpoenas while half were search warrants.

Facebook said that it received 61,500 requests in the United States over the period, covering 106,100 accounts, and that it turned over some data to 88 percent of the requests. The company said it received 38,850 warrants and complied with 89 percent of them over the period, and 10,250 subpoenas and complied with 85 percent.

In these cases, U.S. authorities include any federal, state or local law enforcement office.

Yes. The companies say they sometimes push back on subpoenas, court orders and warrants if they believe the officials lack appropriate legal authority or if the requests are too broad.

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What Data About You Can the Government Get From Big Tech ...

WASHINGTON, July 27, 2021 /PRNewswire/ --The Media Research Center's Free Speech America (FSA) released its second quarter Big Tech Report Card on Tuesday, grading the big tech companies with a collective "F" in online freedom.

FSA's quarterly report card grades Facebook, Twitter, Amazon, Google, YouTube and Apple based on five categories relating to online freedom: free speech, user transparency, bias, responsiveness to user complaints and fact-checking.

Big Tech performed worse in this quarter's report card, despite appalling scores in Q1 following the widespread censorship of former President Donald Trump.

Facebook led the pack receiving an "F" in nearly every category this quarter, except for "user transparency" in which it received a "D." Twitter, Amazon and Apple each received an overall grade of "F." Google and YouTube each received a "D" in overall online freedom.

The two most impactful censorship cases of this quarter involved the further censoring of former President Donald Trump, and restricting content related to COVID-19.Facebook upheld its Oversight Board ruling on Donald Trump, banning the former president from its platform for 2 years. Facebook also had to reverse its decision to censor content related to the COVID-19 Wuhan lab leak theory after reports emerged that the lab leak theory was being investigated.

FSA also looked at platforms claiming to hold to free speech values: Parler, Rumble, Gab, FreeTalk and CloutHub.Given the relative newness of many of these alternative platforms and the lack of data relating to their moderation of content, MRC's Free Speech America did not assess grades for them this quarter. As more data become available on new platforms, they may be added to future report cards.

The full breakdown of Free Speech America's Q2 report card can be found here.

Free Speech America is a project of the Media Research Center dedicated to recording and exposing bias and censorship by Big Tech. For more information about Free Speech America, visit https://censortrack.org.

SOURCE The Media Research Center

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Big Tech Receives Collective "F" in Online Freedom - Daily Record-News

Media top headlines July 27

In media news today, PolitiFact declares that claim Biden, Harris distrusted COVID vaccine under Trump is 'false,' an ESPN writer says he was troubled by the American flag at the Tokyo Olympics, and Biden calls a reporter a 'pain in the neck' following her question about the vaccine mandate for VA front line workers.

Sen. Marsha Blackburn, R-Tenn., blasted the mainstream media and Big Tech for being in "cahoots" with Democrats in pushing critical race theory in schools in an interview with Fox News.

Blackburn said she and Tennessee parents are concerned that children are being "indoctrinated" by critical race theory, the controversial curriculum that in part teaches students that U.S. institutions are inherently racist.

"I have to tell you that their concern is that there is an angle of indoctrination to this and they want their children to be color blind," Blackburn said. "They want their children to look at people with the content of the persons character, with who said individual is. And they are very concerned that there is a line of approach in CRT curriculums that will say someone is the oppressor, and someone is a victim, because they want children to look at people as friends, as colleagues, and individuals that they can have productive relationships with."

And the media, she said, is in on it. MSNBC and CNN have relentlessly pilloried CRT critics in recent weeks.

MSNBC's Joy Reid has been especially vocal in her shaming of CRT opponents. She invited Manhattan Institute senior fellow and CRT foe Christopher Rufo on her show in June only to repeatedly interrupt and even insult him, while on Twitter she's defended CRT by claiming that U.S. schools are already teaching "a kind of Confederate Race Theory." CNN aired a report this month accusing CRT critics of simply not understanding the concept.

TEACHER CONFRONTS LOUDOUN COUNTY SCHOOL BOARD'S APPARENT PROGRESSIVE AGENDA IN FIERY SPEECH: THIS ISNT OVER'

Media outlets like The Intercept have highlighted CRT critics' skin color, writing it was "mostly white" parents who were fighting back against the curriculum and "storming" school board meetings. But education leaders who spoke with Fox News pushed back on the notion that people of color aren't also concerned about the reductive philosophy.

"I have seen a number of Black parents at school board meetings saying they dont want any part of this," Fox News contributor Deroy Murdock, who has written extensively on CRT, said.

"What we know is that CRT is based on Marxist principles and what we also know is that the Democratic socialists of America of which you have AOC, the Squad, Bernie, they all kind of fall into that Democratic socialist of America group, wing," Blackburn said. "However you want to refer to it."

"They are giddy with the hope that they can use this period of time to push Marxist ideology and Marxist socialistic approaches to issues and problems that we may have in the country," she continued. "Weve also learned that Big Media, Big Tech and the Democrats are all kind of in cahoots when it comes to having their daily talking points and pushing a message."

Blackburn recently joined Sens. Tommy Tuberville, R-Ala., and Marco Rubio, R-Fla., in sending a letter to the National Education Association teachers union demanding more information on the group's pledge to research CRT opponents.

"We are deeply concerned that the NEA, the nation's largest labor union representing over 3 million school faculty, is proposing to fight back against anti-Critical Race Theory (CRT) rhetoric by collecting and publicizing information about opponents of CRT," the letter read.

JOY REID RIPPED FOR CLAIMING STUDENTS LEARN A KIND OF CONFEDERATE RACE THEORY: THIS IS NONSENSE

"We do not want our children to be tracked, we dont want them to be surveilled, we dont want their information to be used," Blackburn told Fox News. "We dont want children to be disadvantaged because they or their family may have one opinion and the teacher another opinion."

Blackburn said she and her colleagues are "quite concerned" and they "absolutely" expect to receive a response.

Her concerns on the subject extend to the federal government.

TheDepartment of Education linked to the radical Abolitionist Teaching Networks "Guide for Racial Justice & Abolitionist Social and Emotional Learning" in anew school handbook,blaming the link on an "error" following swift backlash.

"I think that retractions are received with skepticism," Blackburn said. "Because repeatedly we have seen this administration, whether it is dealing with education and CRT, whether it is dealing with having a truth czar and the media, whether it is dealing with outside budgets and out of control spending, they throw out these trial balloons, and then they come back and retract what we know is that the mainstream media and the NEA they have thrown their full support behind Biden."

PARENTS, ANALYSTS PUSH BACK AS MEDIA QUESTION AND GENERALIZE CRITICAL RACE THEORY OPPONENTS: GO POUND SAND

Blackburn added that teachers unions now appear to have "a hotline right to the White House."

"And there seems to be coordination of their messaging and we have to be sure that parents are going to know that their children are receiving and education based in facts, based on our nations history, and not an education that is based on the wishes of a teachers union or power in control."

But while she may be in the unique political position to lean on education leaders, Blackburn said parents can also make a difference by volunteering in their kids' schools, helping with homework, and staying engaged in what they're learning in class.

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"My hope is that parents will realize that there is no one more important to educating their child than the parents and that the parents are going to be more involved each and every day," she said.

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Sen. Blackburn blasts media, Big Tech and Democrats as being 'in cahoots' on critical race theory - Fox News

LONDONThe U.K.s competition authority is stepping out of the shadow of the European Union, launching a flurry of new cases against big tech companies and becoming a new source of global scrutiny for the industry.

Earlier this month, the British government said it would bolster the Competition and Markets Authority, the countrys longtime competition watchdog, granting it new powers to move more quickly to probe and fix anticompetitive behavior. The move would also strengthen its ability to fine companies and prevent takeovers that might stymie competition.

After the U.K. split from the bloc at the end of last year, meanwhile, the CMA has begun exerting its powers aggressively in a series of high-profile cases. It has targeted Alphabet Inc.s Google, Apple Inc. and Facebook Inc., pursuing competition cases it generally didnt when Britain was an EU member.

The CMAs chief executive, Andrea Coscelli, said that his agency wants to take a leading role in shaping the behavior of powerful tech firms around the world. In a way were coming out of the shadows of the European Commission, he said in an interview, referring to the EUs top antitrust authority.

Mr. Coscelli said he is now free to move independently, speeding up investigations, and that the agency can act within weeks of getting a complaint.

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For Big Tech, Theres a New Sheriff on the Beat - The Wall Street Journal

Good morning and welcome to 10 Things in Tech. If this was forwarded to you, sign up here.

Let's get started.

1. Tesla just had its most profitable quarter yet. Despite supply chain issues complicating car production, the company surpassed Wall Street's expectations and exceeded $1 billion in quarterly profits for the first time. Here are the numbers you should know.

2. Stocks finished at record highs as investors set their sights on Big Tech's earning reports. Dow industrials pushed beyond 35,000 in Monday's record-setting highs as investors prepare for this week's reports from Alphabet, Apple, Microsoft, and Facebook. More on that here.

3. Experts outlined what could be a nightmare scenario for Amazon Web Services. AWS is both at the top of its game and in a crucial transition period as Adam Selipsky takes over for Andy Jassy as CEO. Here's what experts said could be AWS's "doomsday scenario" in this moment of change.

4. Tesla's Full Self-Driving tech is being fooled by the moon, billboards, and Burger King signs. Tesla drivers are posting videos of their cars confusing the moon for a traffic light, or being tricked into stopping at a billboard. See videos of the cars getting bamboozled.

5. That online menu you read by scanning a QR code might still be tracking you. Experts are worried that offline behavior like eating out with friends is turning into a way to track you online. Here's what we know so far.

6. Facebook is letting religious groups charge users $9.99 per month for exclusive content. A US church is using new tools from the social-media platform that let it charge for access to specialized content, like messages from the bishop. Read up on Facebook's partnership with religious groups.

7. Jeff Bezos offered to pay billions if NASA allowed Blue Origin to compete with SpaceX for a moon-lander contract. In an open letter to NASA, Bezos offered to cover $2 billion for the Human Landing System program and criticized NASA's decision to select SpaceX as the sole winner. Get the full rundown here.

8. Crime-tracking app Citizen could pay people to livestream crime scenes and fires. The app is on the market for "field team members" who would get paid $25 to interview witnesses and report "behind police tape" in NYC and Los Angeles. Here's how it'd work.

9. HashiCorp founder Mitchell Hashimoto has left the CTO role at his startup to just be a programmer again. Hashitomo previously served as co-CTO with cofounder Armon Dadgar and before that CEO. He explained to Insider why he pivoted back to hands-on engineering.

10. Biden wants to "win the EV market" a hope that hinges on beating China in a battery arms race. The president plans to spend $174 billion to force the country away from combustion engines, a major play against China, which currently dominates electric-vehicle production. More on Biden's hope for the future of American cars.

Event alert: On Thursday at 12 p.m. ET, attend a free event sponsored by Healthy.io, in which regulators and health tech pioneers will explore new ways to adapt the speed of digital innovation. Register here.

Compiled by Jordan Erb. Tips/comments? Email jerb@insider.com or tweet @JordanParkerErb.

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10 things in tech: Tesla's $1 billion Q2 Big Tech reports AWS's 'nightmare scenario' - Business Insider

CEOs of Apple, Facebook, Amazon and Google testify via video conference during the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law hearing on Online Platforms and Market Power on July 29, 2020, in Washington, D.C.

Photo: Graeme Jennings-Pool/Getty Images

Scholars, legal experts, the media and lawmakers on both sides of the aisle in the United States have serious concerns about the market power of Big Tech, but they are at a loss as to how to frame, measure and get the courts to acknowledge the problem. If bipartisan Congressional leaders are serious about wanting to create new laws to do this, they need to master the underpinnings of the business models the tech giants use.

Bipartisan Congressional leaders have been working fast on new legislation, yet none of the five bills currently proposed adequately addresses the problem. That is understandable, given the fact that Big Tech companies like Google, Facebook and Amazon all derive their power from business models that generate returns that increase nonlinearly and indefinitely, a feat that was inconceivable before the advent of digital technology.

Appropriate legislation requires an understanding of the intricacies that underpin the creation and high velocity execution of these business models and in particular, the connectivity of the parts of the business that create a continuous high-speed feedback loop.

Googles business model, for example, has two cardinal activities: consumer engagement activity (CEA) and advertiser engagement activity (AEA).

These activities continuously reinforce each other at warp speed, while sophisticated tools like deep learning, proprietary algorithms and statistical modeling make refinements as the data flows between them. It is thisclosed loop connectivity that creates the potential for monopolistic power and anti-competitiveness.

The Congressional sponsors of the bills must understand this connectivity in order to have the correct remedies to curb Googles power.

Googles consumer engagement activity has a price of zero to the user. Google will never raise it. So concern about price to the consumer, which Justice Robert Bork focused on, is moot in the Google model. Google gets no monetary revenue from its CEA.

It does, however, get another kind of enormous benefit: non-monetary revenue in the form of cumulative data and consumer experience, which is processed at clock speed by deep learning tools to sharpen the effectiveness of advertising on its site. Google can, in turn, increase prices to advertisers for ad space that is more precisely targeted at consumers.

The higher the rate of growth for Googles advertising revenues, the greater the inflow of cash at an extremely high gross margin. This cash strengthens the companys already powerful innovation and experimentation engine. It allows Google to outbid others in making acquisitions and to recruit and retain the most advanced talent.

No legacy company can come close to Googles cumulative data on the consumer experience or to the cumulative learning incorporated in its algorithms via the continuous flow of data and machine learning tools. Only equally powerful business models of equally big tech companies like Amazon can compete effectively with Google.

It is this continuously increasing differential that must be dealt with to stop Big Tech companies from being monopolistic and anticompetitive.

The integration of digital technology in business models must be recognized as a totally new source of power driving toward monopolistic dominance. In the past, the Judiciary claimed monopoly power by defining market shares in absolute percentage terms and judging what number a company could not exceed. Usually, anything greater than 60% market share was considered unacceptable.

None of the HR bills in itself deals with the integration that is the underpinning of a digital companys market power. Nor do all of them combined.

HR 3843: The Merger Filing Fee Modernization Act of 2021 would be effective in eliminating moves that would prevent entry of what could be a potential powerful competitor. In the case of Google, itshugemarket value andcash hoardsupported early mega acquisitions and prevented entry by other buyers.

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At that time, Googles business model was in the early stages, and YouTube and dozens of other businesses it acquired could have been compelling competitors. The court erred because it did not understand the underpinnings of Googles business model or the potential for its growth to escalate. However, the likes of Google will not depend on such acquisitions going forward, unless equally powerful competitors like Amazon or Apple appear on the scene.

HR 3845: The Ending Platform Monopolies Actdepends on government to decide which lines of business a company can and cannot enter, something government has a poor record in doing. The marketplace should and ultimately does decide. This bill will make litigation an ongoing court activity. We know the court failed in the AT&T divestment case to prevent local companies from entering the lines of business they chose.

Other bills tackle data, merger filing fees and conflicts of interest by platform companies. While these bills can be helpful in a small way, they will not stem the trend toward anti-competitiveness.

To understand how to do this, members of congress should seek help beyond legal and political experts. Business leaders and economists can help them to appreciate the underpinnings of this market power so they can translate the necessary fixes into effective laws.

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Controlling Big Tech: Laws that Ignore Its Business Model Will Fall Short - BRINK

The recent Dow Jones Industrial Average one-day plummet of 900 points didn't stick, but the Nasdaq reversal on Tuesday leading the market lower, and the Dow and S&P 500's first down day in six, came uncomfortably right ahead of big tech earnings.

A recent survey of stock traders with $1 million or more in a brokerage account shows one reason why the bull market quickly resumed and why any single-day decline in stocks, tech or otherwise, may not stop the current bull market run from continuing. Wealthy, veteran investors were a little more bullish coming into third quarter earnings than they were just one quarter ago, and remain convinced in the strength of the U.S. economy and the opportunity to chase profits in the tech sector.

Millionaires describing themselves as bullish rose by 7 percentage points quarter over quarter, from 58% to 65% of investors, according to a survey of self-directed investors from Morgan Stanley's E-Trade Financial. The largest group of millionaires expect gains to be modest, with a little less than half (46%) forecasting a 5% maximum gain. But very few foresee the big drop that bears have feared: only 6% of survey respondents said the markets will fall by 10% or more this quarter.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021.

Brendan McDermid | Reuters

"They are still optimistic that the bull run will continue, but a bit more realistic in expectations, cognizant of where we are and just how far equities markets have rebounded," said Mike Loewengart, managing director, investment strategy at E-Trade.

The E-Trade survey was conducted July 1 to July 9 among 898 self-directed active investors, with results from 157 investors with $1 million or more of investable assets broken out exclusively for CNBC.

The wealthy have an improved outlook on the U.S. economy even as inflation fears persist. The percentage of millionaires who graded the economy an A or B grade this quarter was up 13 percentage points since Q2, rising from a minority 39% last quarter to 52% at the start of Q3. Those who seemed unsure in Q2 (the 44% who graded the economy at a C) have moved into the more bullish camp, with that view falling to 29% of millionaires this quarter. Forty-one percent of millionaires described the current economic period as "expansionary" which was up from 30% who held that view last quarter.

"Optimism has the psychological momentum," said Lew Altfest, CEO of Altfest Personal Wealth Management. But he added that the virus still has the potential to reverse that, evidenced by the Dow's 900-point drop as the delta variant came into focus the CDC is now revising its masking guidance again to be more cautious indoors though he thinks the bigger risk to investor sentiment is that growth is just not as good as current expectations. "The optimism I have shared for a longer period of above-average growth is what we can still have, but the logical situation is sometime next year, less than a year from now, we will be looking at normalized growth and that isn't what people want to hear."

It is the reason that the bond markets have not reacted to Fed discussion of inflation and raising rates by pushing yields higher; in fact, fears of less than stellar economic growth have sent yields down in recent weeks.

Altfest said investors want to believe in the rosy outlook, and the year-over-year comparisons are large given the sudden recession caused by Covid-19, but if economic growth moderates to 2% to 2.5%, "that could be a psychological sobriety" event for investors, especially in light of high U.S. stock market valuations.

"There was a lot of gasoline thrown on the fire from the monetary and fiscal perspective," Loewengart said, and some of it pre-dated the pandemic in the form of the Trump tax cuts and "even that was not moving growth in a big way," he said. "It is important to keep that in mind. Growth remains elusive. We're starting from a low base out of the pandemic and highly accommodative policy, but still it's going to be challenging."

After even the biggest tech names proved vulnerable to temporary selling action in the second quarter, the wealthy rate tech as the third quarter's best bet. Millionaires who say the tech sector is the best opportunity for gains in Q3 increased by 12 percentage points, an increase that came amid lower bond yields and tech's continued strength, acting almost like a proxy for bonds, according to E-Trade.

Forty-six percent of the wealthy investors surveyed by E-Trade picked tech as their top target for gains this quarter, up from 34% in Q2.

"Tech's great appeal in large-cap is delivering earnings rain or shine," Altfest said. "I think tech has always been cyclical in people's minds and for good reason, because people have always gotten hit from high price-to-earnings ratios. But this cycle, from 2008 on, it's not like we just had an IBM ... now we're seeing many growth companies and less competition."

Antitrust scrutiny will remain high and concerns about the power of trillion-dollar technology companies are an issue where many Democrats and Republicans agree. "Somewhere in here these companies are gonna have a cloud over them, but not so much a cloud that people wont be interested," Altfest said.

"We've seen millionaires go back to old favorites," Loewengart said. "We saw value outperform for a while, but when I see stronger performanceof tech later on in Q2, the velocity with which tech bounced back, it drew investors in. ... These are the ones that work," he said. "Look at Apple saying it is increasing production of iPhones. It is tough to ignore from a business fundamentals perspective, to our daily lives."

While tech ranked No. 1 among these wealthy investors in terms of sector appeal and rebounded sharply from last quarter's view, it fell short of a majority view, at 46%. And interest remains among investors for energy which has been a strong value sector year to date.

Energy saw the second-largest increase in interest after tech, rising by six percentage points among millionaires choosing it as their top target, from 23% last quarter to 29% in Q3. Meanwhile, the reopening trade is one millionaires are easing off, with consumer discretionary declining as a focus of this group of investors from 31% last quarter ranking it No. 1 among sectors to 19% this quarter.

"They are taking a more balanced view of where they are seeing opportunities," Loewengart said.

Millionaires are much less likely to believe the market is in a bubble, according to the survey, with respondents describing bubble conditions falling by 11 percentage points quarter over quarter, and notably lower (14% lower) than the broader investor population surveyed by E-Trade.

People are less worried about valuations, and the loudest bears like Jeremy Grantham have been proven wrong, at least for now, but that does not mean the recent belief in a new "Roaring 20s" plays out, according to Altfest. "I myself am feeling less enthusiastic about it, but still think it can happen. But if it doesn't happen, we will be looking back at high P/Es and saying, 'How could you think of this when you could see it was a temporary surge?'"

The equity markets took what Loewengart described as a breather in the second quarter, though early in Q2 it did seem like some investors were expecting the bubble to burst. "We've seen how resilient the markets can be. And that is what's driving this sentiment," he said.

Bubble concerns do remain a majority view. Fifty-six percent of the wealthy said the market is in a bubble or somewhat in a bubble, but that compares to 70% of all investors who hold that view, showing the wealthy to be more confident in market durability.

The inflation concern is real, and it was the top-cited risk to portfolios by wealthy investors in the survey, with 32% of millionaires saying it was their biggest fear. However, that is not leading to a major shift in the way the wealthy are positioning their money in the market.

"There are decidedly less millionaires that the general population making moves based on inflation," Loewengart said. "That's what struck me. It goes along with the view that the economy is recovering and stands to reason that higher rates will eventually accompany this growth."

A minority (30%) of wealthy investors said they are selecting stocks based on rate sensitivity, and smaller percentages said inflation was leading them to move money to real estate investment trusts (19%), cash (18%),Treasury inflation-protected securities (16%), or commodities (15%).

"No doubt inflation is a topic of concern, and in general they see the market is not immune to all the short-term concerns going on, but we see them taking a long-term view of investments," Loewengart said."Investors are generally aligned with Powell and trusting the Fed assessment. We know that they are committed to equities overall, and equities are naturally well-suited to inflation over time."

Altfest thinks the dramatic temporary increases will come down, but longer-term inflation will rise, just "not as absurdly high as it is now."

The bond market is signaling it is not worried about inflation because it does not see major economic growth ahead, and there are warning signs that a downturn in economic expectations could hit stocks, but Altfest says the signs remain mild for now, more so than in the second quarter. A three-percent yield on the 10-year Treasury is still far off and that makes stocks inexpensive relative to history.

"We're still far away from that, but at 3% rates, that is when the bonds really represent to more people real competition to stocks," Altfest said. "At that point, the party for P/E will be over and investors will have to be focusing on the economy and if corporate profits are growing at a reasonable rate."

In this period where optimism remains high and there is a back to "favorites" view from more of the wealthy stock market investors, some recent stock fads and momentum trades are seeing declining interest. While never a majority pick from the millionaires surveyed by E-Trade in recent quarters, respondents indicated some of the recent hot areas of the market are less appealing.

Interest in clean energy stocks dipped quarter over quarter from 46% of these investors to 35%; interest in IPOs declined from 30% to 23%; interest in SPACs declined from 26% to 19%; interest in crypto declined from 27% to 19%.

"What happened with meme stocks is extraordinary, but millionaires are cognizant of what extraordinary means," Loewengart said.

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Why wealthy investors remain bullish on market and tech stocks in particular - CNBC