Don't forget these global bond investors

Hint: I'm not talking about governments or their forex reserves

Remember in the first Trump Administration when policymakers spent lots of time talking about multinational companies’ giant cash hoards that were supposedly “trapped overseas”? (But managed out of Nevada?)

While they’re smaller than they used to be, BigTech companies still have them.

Changes in tax law were supposed to encourage companies to “bring back… profits”, whatever that would entail. The cash was already invested in US markets, so it wasn’t clear what policy makers would’ve accomplished with a complete so-called repatriation.

And a quick look at the seven biggest BigTech companies’ latest annual financial reports shows that they still have big portfolios of marketable securities on their balance sheets. (Or had them. Some are from last year.)

This is purely speculative and maybe a little dumb, but it could be worth considering: What would a multinational company do in response to a massive policy change for a key segment of its supply chain? Like, say, 145% tariffs?

Would it need to raise liquidity fast, to pay for the speedy movement of inventory to a less-tariffed country? And if it did, what’s the easiest thing to sell in a portfolio of liquid marketable securities? Would that be Treasuries?

To be fair, just one big tech seller probably wouldn’t move the market all that much.

While Microsoft’s 2017-level Treasuries holdings would’ve put it within the 20 biggest holders of US debt if it was a foreign government, its portfolio isn’t that big anymore.

Apple, which seems the most exposed to supply-chain destabilization, has a government-debt stockpile totaling just $16bn, within the range of a single Treasury auction.

But if the full Mag 7 was a country, it would hold roughly $135bn in US government debt, which would put it above Saudi Arabia in the list of foreign holders. And there are surely many other companies with global supply chains and cash invested in Treasuries. So it’s at least worth noting the potential for corporate selling as experts watch Asian and European financial flows and exchange rates.