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THE FUTURE OF THE U.S. ECONOMY CAN NOT BE TECH
In today's @Markets newsletter, I wrote about why, despite what we're seeing in stocks, it doesn't make sense to talk about a transition to some new economy driven by tech companies https://www.bloomberg.com/news/newsletters/2020-05-14/five-things-you-need-to-know-to-start-your-day?sref=vuYGislZ
In today's @Markets newsletter, I wrote about why, despite what we're seeing in stocks, it doesn't make sense to talk about a transition to some new economy driven by tech companies https://www.bloomberg.com/news/newsletters/2020-05-14/five-things-you-need-to-know-to-start-your-day?sref=vuYGislZ
The problem is, tech companies need non-tech companies to sell to. All your Twilio's, and Slacks, DataDogs, DocuSigns need customers. But how are the customers doing?
Here are some charts of other industries.
Banks:
Here are some charts of other industries.
Banks:
Energy
Real estate
On a real economy basis, even in a place like San Francisco, probably one of the most tech industry dominated places in the world, food prep employes way more people than computers/math/engineering https://www.bls.gov/regions/west/news-release/occupationalemploymentandwages_sanfrancisco.htm
While the current crisis is certainly causing some behavioral consumption shifts that benefit certain tech players. There's almost certainly a behavioral shift among investors, who want to stay exposed to stocks, but in a safe way. This captures it well https://twitter.com/FerroTV/status/1260866135433641985
If you're anxious as hell about the current situation (and who isn't?) and you want to be in the market, then a lot of these tech companies probably have years of growth ahead of them and pristine balance sheets and some may benefit short term from the life upheaval.
So people are piling in. But they still can't be the future of the U.S. economy (or any economy), because they're all dependent on the non-tech world thriving as well
