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Last week the US Senate confirmed the appointment of Lina Kahn as chair of the Federal Trade Commission (FTC). A lawyer and academic known for her antitrust research, Kahn is the youngest ever chair of the department responsible for policing the US’s biggest corporations.

With Kahn at the helm of the FTC, companies hailing from silicon valley could finally be held account for their antitrust and anticompetition practices. The organisations likely to be first to garner Kahn’s attentions are those Big Tech household names that hog much of the media headlines.

composite FTC

The lopsided weighting of the Nasdaq

It is not just headlines that Big Tech hog. They also hog much of the weight of US indices, in particular the Nasdaq100. Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB), Alphabet (NASDAQ: GOOGL, GOOG), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT) make up approximately half of the weight of the Nasdaq100. As such, some argue they are a little too big. All the above examples have operations spanning multiple disparate industries and find it a little too easy to stifle innovation and competition by buying up rivals as they emerge.

Expect a greater level of scrutiny

Khan has already indicated that she plans to apply special scrutiny to the Big Tech players in her role as FTC chair. Support for her security could find cross-party support as her stance on Big Tech was widely known by democrats and republicans alike before her confirmation as FTC chair. If United States Democrats and Republicans can agree on anything, it might be in regard to the need to rein in Big Tech.

Kahn’s scrutiny could extend as far as proposing and bringing forward action to break up some of the Big Tech companies into several smaller, more manageable companies (from a regulatory perspective). If this is a road that Kahn and her team push down, whether eventually successful or not, we can expect a high level of uncertainty and instability in the Nasdaq100. As of writing (Thursday 24/06), the Nasdaq100 hit a record level above 14,200, largely on the back of the growth experienced in Big Tech. This could be a case of 'the bigger they are, the harder they fall'.


The first major event on the agenda

One of the first events the FTC will be scrutinising during Kahn tenure is the acquisition of MGM Studios by Amazon. Typically, the FTC would share responsibility with the Department of Justice to review the proposed Amazon-MGM merger. However, it is said that the FTC lobbied for the right to examine this merger as it already has an open investigation into Amazon’s antitrust practices.

It appears that Kahn has already begun to apply her special level of scrutiny to the Big Tech behemoths. However, as it stands, the market is yet to react to Kahn's appointment. In fact, Big Tech have never been more popular with investors (MSFT recently joined Apple in the $2 Trillion club), while the Nasdaq is hitting fresh intraday records every other day.

Fed keeps rates near zero, Tech CEOs testify

Fed's Chairman Jerome Powell has a clear message: They will not step off the gas when it regards stimulus. He stated in the previous Fed meeting, "We are not thinking about thinking about raising rates." Today? "We are not thinking about thinking about THINKING ABOUT raising rates." The Federal Reserve left rates unchanged, fluctuating from 0 to 0.25%.

NASDAQ in Blue, Gold in Orange, Dollar Index in Teal

Fed will continue to leave all support lines open, including bond-buying, low-interest rates, and dollar swaps for the foreseeable future. However, Chairman Powell states that the fed "[has not] looked at buying equities" and that they "[the fed] aims to ensure a strong recovery and to limit the damage." The Fed plans to keep on propping up the economy, no matter the implications/effects on the economy.

Jerome Powell also praised the banks stating they "have been a source of strength in this crisis" and that "banks are well-capitalized and strong." The conference drew minimal but expected moves from the market—gold slightly up while downwards pressure was placed on the dollar against major pairs. Equity markets edge sharply higher with the NASDAQ finishing at.

While the Fed battles with the Coronavirus, tech CEO's battle congress

While Chairman Powell spoke, a battle at Capitol hill (virtually) was ensuing against Congress and the CEO's of the 4 of the biggest tech companies: Google, Amazon, Facebook, and Apple. As they have grown to a collective market cap of just under 5 trillion dollars, they all have faced increased scrutiny regarding their market power and anti-trust issues. 

Mark Zuckerberg of Facebook on the top Left, Jeff Bezos of Amazon on the top right, Sundar Pichai of Google on the bottom left, Tim Cook of Apple on the bottom right


CEO Jeff Bezos has been taking most of the brunt from congress as comments from the subcommittee grills him about anti-competitive practices on Amazon. With Bezos being the only CEO of the four that has not been to a congressional hearing, he has been relatively flustered with the questions, with Bloomberg Technology Reporter Spencer Soper stating that he is "clearly rattled, stammering quite a bit under tough questioning."


It is not Mark Zuckerberg's first rodeo dealing with congress; he has testified previously, usually when Facebook attracts a lot of heat re: Cambridge Analytica scandal. He got scrutinized over their acquisition of Instagram, saying that they bullied the Instagram founders by showing them a product they were going to release called "Facebook Camera" if they did not sell the business to them. This continues with Snapchat, bullying CEO Even Speigel that he [Zuckrberg) would try to destroy the app if Speigel did not sell to Facebook. Mark Zuckerberg's response essentially states that Facebook copied a lot of competitors' features. 


Google's CEO Sundar Pichai is fending questions regarding the grip Google has on their users' online lives as they control much of the Search, Email, Video, and Directions space. So far, Pichai has been the most defensive, using techniques to redirect questions and answering half questions. However, this seems to be enough for congress as they don't seem to be pushing hard on Pichai.


Apple's CEO Tim Cook got away with three and a half hours into the testimony, only being questioned about the App Store once. However, post recess, they continued to grill Cook about the accepting and rejecting of apps. However, it seems like congress is clutching on straws with no footing to substantiate the claim that Apple is engaging in unfair practices. They are struggling to shake Tim Cook. This is compared to Amazon's CEO Jeff Bezos, who has been repeatedly flustered with the questions thrown at him. 

 There is a lot of going on this week, which means a lot of volatility in the markets—trade safe, Trade Cautiously.