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Uncle Sam Comes for Big Tech

What do Facebook Inc. (NADSAQ:FB), Alphabet Inc. (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL) have in common?

Every one of these tech companies dominate our connected lives. As of last night, they’ve also officially attracted the ire of the Feds.

We just learned the Justice Department is opening an antitrust investigation into the country’s biggest tech players to try and figure out if these firms are breaking the law to squash competitors.

“The new antitrust inquiry under Attorney General William Barr could ratchet up the already considerable regulatory pressures facing the top U.S. tech firms,” The Wall Street Journal Reports. “The review is designed to go above and beyond recent plans for scrutinizing the tech sector that were crafted by the department and the Federal Trade Commission.”

Most of these stocks are set to open lower this morning following the news. But not by much. Aside from a little after-market volatility, it appears traders aren’t too concerned about the latest threat to Silicon Valley’s dominance just yet.

I’ll keep you posted as the story develops.

Speaking of tech stocks, one of the sector’s biggest comeback stories of the year just crushed earnings expectations.

Snap Inc. (NYSE:SNAP) is having a surprisingly good year. The stock has jumped an eye-popping 170% so far this year. And after last night’s earnings report, shares are set to gap higher by more than 10% this morning.

SNAP dominated analyst estimates, posting a smaller than expected loss and hitting a daily active user count of 203 million for the quarter. SNAP is also starting to improve its margins, CNBC notes, reporting gross margins of 46% compared to 30% a year prior.

Here’s the beautiful rally few saw coming this year:

SNAP

When I alerted you to this trade in early April, SNAP was perfectly consolidating its gains, giving you an amazing opportunity to jump onboard this red-hot stock for a trade that I predicted could potentially mature into one of the biggest comebacks of the year.

Enjoy the gains!

Meanwhile, some important geopolitical stories have slipped through the cracks while we’ve frantically attempted to cover the market’s biggest earnings movers.

For starters, a tense situation involving the U.S., Iran, China and oil is getting more confusing by the day.

Here’s a quick and dirty attempt to lay out the important details:

China is storing quite a bit of Iranian crude in what are called bonded tanks, according to Bloomberg. The oil hasn’t passed customs and it’s not in circulation. The issue here is China would be breaking sanctions if it were buying oil from Iran.

But it’s apparently a different question altogether when it’s just being stored by another country. It’s just… sitting there.

“This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions,” Bloomberg reports. “While it remains out of circulation for now, its presence is looming over the market.”

Is China breaking international laws? Regulators have no idea. It could be classified as still being in transit. Also, it’s unclear how much oil China is keeping out of circulation. While it doesn’t look like the oil is being used now, if it goes into circulation, that much “illegal” crude could impact oil prices.

Finally, how much would it cost to buy your online privacy?

Amazon.com (NASDAQ:AMZN) thinks a cool $10 online credit will do the trick.

The king of e-commerce just ran a Prime Day promotion that gave $10 to anyone who let the Amazon Assistant tool snoop through their online data, reports Reuters. In case you aren’t familiar with it, the Amazon Assistant helps shoppers compare Amazon’s offerings with other online retailers.

Despite this obvious privacy invasion, the assistant feature has already been downloaded more than 7 million times. Of course, consumers then receive the promised money-saving functionality (and ten bucks) by letting Amazon track everything they do online and send that data back to Jeff Bezos’ minions.

I’m going to go out on a limb and say that saving a few dollars on a box set of Game of Thrones isn’t worth your online privacy. But that’s just not the world we live in anymore. These days, everyone’s giving away the keys to their data for likes, retweets, and free junk.

This reminds me of an old bit of wisdom that has popped up again during the rise of social media: If you’re not paying for it, you’re the product.

Stay vigilant!

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

View More By Greg Guenthner