The U.S. Department of Justice is proposing to break Google (GOOG) up. The stock is not falling by much, however, since investors do not expect a final decision for a few years.
A breakup would weaken Google. If the firm divests its Android operating system and Chrome browser, Google could lose its influence in the mobile and desktop markets, respectively.
Investors may preempt the impact of the DOJ hurting Google’s advertising business. Hold stocks like Applovin (APP) and Trade Desk (TTD). Both companies broke out to new highs. Markets are already expecting those ad platforms to benefit from a weakened Google.
Fed Cut Too Much
The Fed released minutes from its two-day policy meeting on Wednesday. Although most Fed officials supported a 50 basis point cut, some members disagreed. They wanted a 25 bps cut. Bond markets agree. Yields increased sharply after the BLS posted strong job growth in September. Income investors should continue to avoid the 20+ Year Treasury Bond ETF (TLT) and the 7-10 Year Bond ETF (IEF). TLT stock peaked at nearly $102 to close at $94.45, where it has strong support at the 200-day simple moving average.
Stock markets will react to this morning’s September Consumer Price Index report. Though inflation excluding food and energy is still high, the Fed may easily adjust its 2.0% target upward.