Welcome the thoughts on the market. I'm Michael Zesas, head of Public Policy Research and Municipal Strategy for Morgan Stanley. Along with my colleagues bringing you a variety of perspectives, I'll be talking about the intersection between U.S. public policy and

financial markets. It's Wednesday, November 18th at 11 a.m. in New York.

In the U.S. Senate this week, there was another round of hearings on the role of tech companies,

particularly social media, and the role of political discourse.

It reminds investors that Washington DC is increasingly interested in the question of potential regulation of tech companies,

a particularly important question given that the sector has been a key market and economic driver for years.

But while investors should expect plenty of noise around tech regulation and maybe some meaningful regulation in the fullness of time, we don't think that this will happen between now and the next midterm elections in 2022.

Probably the most important reason for this, we simply don't think Congress is ready to agree on tech regulations.

Policymakers generally agree on the challenges posed by tech, namely size, privacy, and how information

is disseminated.

But they don't agree on the solution. This week's hearings, for example, highlighted that both parties support amending laws that protect social media companies from lawsuits regarding their content, but towards different ends.

Republicans want more content left on these platforms,

Democrats want it more moderated. But there's also more mundane reasons to think

major tech regulation won't happen in the next two years. For example, even if Democrats are able to win both seats in the Georgia

runoff elections and hence achieve the slimmest of Senate majorities with 50 seats, they have

other legislative priorities, namely health care and infrastructure expansion.

These are two big legislative processes and could easily consume the entire agenda until the

2022 midterms.

So for investors, the takeaway is this.

For now, keep tech in your portfolio despite the regulatory risk.

That's the view of Mike Wilson and our equity strategy team which is keeping the

sector equal weight in its recommendations and it's also the view of our US internet analyst Brian Nowak

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