(Washington)

Goldman Sachs thinks the Dollar might be in a for big surprise. On top of his grumbling about the Fed not lowering rates quickly enough, President Trump has been tweeting about the unfair advantage that other countries have in lowering their value against the Dollar. Trump apparently wants a weak Dollar to help the US compete more effectively in the global economy. Accordingly, Goldman Sachs think there is a good chance that Trump uses some special tool to intervene and weaken the currency, such as through the Treasury department.

FINSUM: This is not as unprecedented as it sounds. Even Powell has said the Treasury is the traditional power in charge of exchange rate policy. This would likely have a big impact on markets.

(Washington)

After the “trade truce” at the G20 it was looking more like the US and China may get a trade deal done soon. However, news out recently says otherwise, as China has not boosted its purchases of US agricultural products. Such a move was a key tenet of the agreement Trump apparently struck with Xi at the G20, but Beijing has not followed through on the promise. Trump complained publicly about this yesterday, but China denies they ever made such an agreement.

FINSUM: This seems small and petty but it is precisely not the direction that one would like these talks to be headed in.

(Washington)

Jay Clayton came out punching for the SEC’s new Best Interest Rule this week. The rule has faced a lot of criticism from all sides, but was finally approved internally. Now, Clayton is combatting critics. In particular, the SEC chairman is defending the harshest criticism of the rule—that it does not define “best interest”. Clayton argues that using a principles-based framework, which relies on a contextual definition of best interest depending on the situation in question, is a well-trod regulatory path and one that is superior to creating a definition for every scenario.

FINSUM: We don’t love this rule, but we agree with Clayton on this point. Having a highly defined rule leaves it more vulnerable to loopholes. With the current contextual structure, one has to worry whether their behavior could be considered “best interest” depending on an amorphous standard. It seems like a better way to keep bad actors in line.

(New York)

Are you looking for a good dividend stock? Well, we have one for you. How about a stock that has risen 27% this year yet still has a 4% dividend yield and a very solid business? If that sounds good, take a look at Prudential Financial. The company is an asset manager and insurance provider, and has solid growth and financials and seeks to be financially prudent. “We believe in a very consistent and regular dividend that will be aligned with our earnings growth, says the CFO. The company has expected earnings growth of 8% this year.

FINSUM: Prudential is a pretty sleepy name, but there is nothing boring about a 4% dividend combined with earnings growth and market-beating price appreciation.

(Houston)

We know, we know, you don’t want to hear about oil. No one seems interested in the all-important commodity at the moment, but that is exactly why you might want to pay attention. Oil stocks have had a terrible decade—down 10% while the S&P 500 rose almost 300%, hence the derision they face from investors. Prices are so low that oil now composes just 4.5% of the S&P 500, very near to the lowest ever (in 1999). The big question investors need to be asking themselves is “is this peak pessimism”?

FINSUM: We think oil stocks offer some value right now, but what will be the catalyst to make them rise? A big economic boom seems unlikely at present. Oil missed this cycle and it is still oversupplied. We would stay away.