Happy halfway day, Subscribers!
U.S. tech stocks have been showing increasing signs of fatigue so far this year. Per the below Executive Order from Donald Trump, they may soon come under even greater downside pressure.
The United States will use all necessary legal instruments, including the Committee on Foreign Investment in the United States (CFIUS), to restrict PRC-affiliated persons from investing in United States technology, critical infrastructure, healthcare, agriculture, energy, raw materials, or other strategic sectors… This may include imposing sanctions under the International Emergency Economic Powers Act (IEEPA) through the blocking of assets or through other actions.
- Trump Executive Order, “America First Investment Policy”, 2/21/25
The reason this might matter “bigly” is because there is a belief — one I agree with — that China has been buying U.S. large- and meg-cap stocks with its trade surpluses. This is as opposed to using its trade windfalls to accumulate U.S. Treasury bonds, as it formerly did.