(San Francisco)

In what would likely come as the biggest IPO in recent memory, Uber says it is planning for a potential IPO in 2019. Parties close to Uber say that its bankers delivered valuation proposals for an IPO in the range of $120 bn. That is an eye-opening figure because it is almost double the company’s valuation from its most recent funding round 2 months ago. There are no guarantees the company will go public next year, but its CEO has said it is aiming for a public debut in the second half of 2019.

FINSUM: We do not think that valuation is out of the question given how much investor anticipation there might be for this IPO. The IPO market has been red-hot, so nothing seems out of reach.

(New York)

BlackRock just reported earnings and the results are not what many expected. Total inflows for the quarter were just $10.6 bn, the lowest since 2016. Interestingly, one of the biggest areas of losses was in passive strategies held by institutional managers, where BlackRock saw $30 bn of withdrawals. The poor results sent BlackRock’s stock to its lowest point since May 2017. BlackRock’s CEO Larry Fink blamed the uncertainty about rates and peak earnings as reasons for the outflows.

FINSUM: What is interesting here is that BlackRock is probably in the best position to keep devouring assets, but even it is having trouble.

(New York)

Retail stocks have come back in a big way since their slump in 2017. The whole sector seems to be having a revival in investors’ minds, but challenges remain. Rising costs pressures, tariff complications, and a looming backlog of inventory all look bleak. Consumer spending this Christmas may also be subdued. With valuations high again, there are still some great undervalued names, according to Barron’s. For instance, take a look at Nike, Tiffany, and Amazon.

FINSUM: We hardly think Amazon is a retail stock with room to run. That said, Nike and Tiffany are much more interesting as value picks.

(New York)

Every time there is a bout of volatility, the financial media, and inevitably a few market analysts, forecast that ETFs may be at the center of the next flare up. Yet for the most part, ETFs have held up very well to periods of turmoil. Despite this solid performance though, the creeping logic that they might have a problem lingers. The Financial Times has just posted an article which argues that just as ETFs have managed to magnify the rise in equities, they will also exacerbate the fall. Since so many assets are now in passive funds, the risk of a herd mentality—with all investors having similar stop-loss orders—leading to a big selloff seems likely. Further, since there are fewer active managers playing the role of contrarians as the market falls, who is going to be there to insulate the market when it begins to tumble?

FINSUM: The ETF structure has proven itself quite resilient so far. We are not saying there won’t be a problem, but we feel like the underlying problem in the next meltdown might not have to do with ETFs themselves, rather it may just be magnified by them.

(New York)

Want to maintain your portfolio’s income, but also afraid of rising rates? Many are, as it is a difficult challenge keep income high but not experience losses. With that in mind, here are a handful of mutual funds which should help do just that. One area to look for diversified income right now is in multi-asset income funds. Some of the best are the American Funds Income Fund of America (AMECX), the Vanguard Wellesley Income (VWINX), the BlackRock Multi-Asset Income (BAICX), the JPMorgan Income Builder (JNBAX), and the Principal Global Diversified Income (PGBAX).

FINSUM: Many of these funds are quite old and have had great performance. Fees are all over the map, but one of the areas where they tend to succeed is in having good performance with lower volatility than the market as a whole.