BIg tech may face post-electIon headwInds — no matter who wIns 23%

— Some investors are betting the technology and communications stocks that drove a massive rebound in US markets this year will face a tougher slog in coming months, no matter whether Republican President Donald Trump or Democratic challenger Joe Biden wins.

Betting against big technology has been a risky proposition over the last decade, as stocks like Amazon, Google and Netflix have shot higher at the expense of so-called value and cyclical stocks such as banks and energy companies.

Recently, however, some fund managers say they are growing alarmed by what they see as a consensus in Washington to tighten regulations, and prospects that another large stimulus bill would bolster a rotation out of tech and into other sectors including economically-sensitive value stocks.

“There will be a shift and it is starting, but it will take time,” said Max Gokhman, head of asset allocation at Pacific

Life Fund Advisors, which cut its exposure to large-cap tech in September to neutral from overweight. Should Biden win as polls suggest, technology companies could face higher tax rates and tax-motivated selling as well as increased regulation, investors said.

Both Trump and Biden have criticised large tech companies but stopped short of explicitly calling for them to be broken up. Trump has said “there is something going on in terms of monopoly” when asked about big tech firms.

Hedge fund manager David Einhorn of Greenlight Capital, a longtime tech bear, told clients in a letter this week that tech stocks were in the middle of an “enormous bubble” that popped when the S&P 500 hit its record high on September 2.

“It has become more difficult for mega-cap tech to surprise on the upside,” analysts at UBS Global Wealth Management said in a note. —

Of S&P 500’s weight made up by Apple, Microsoft, Amazon, Facebook and Alphabet