(New York)

Rockefeller is a storied US name, but not exactly so in wealth management. That may be set to change as a new Rockefeller-branded wealth manager, Rockefeller Capital Management, has just launched with some high profile backing and executives. Industry star Greg Fleming, a former president at Merrill Lynch and former head of wealth and asset management at Morgan Stanley, is leading the young firm, which has its eye on getting $100 bn under management. The firm is backed by a Rockefeller family trust as well as a number of other investors.

FINSUM: The name alone will probably attract capital, but $100 bn is a lofty goal for a brand new wealth manager.

(New York)

So everyone knows that Bitcoin suffered a huge plunge earlier this year. The fall amounted to around 60% at its peak before stabilizing recently. However, what many are not aware of is how much total trading volume fell during the volatility. While stock market losses are often associated with increasing trading, that did not happen with bitcoin. Volume is stuck at about half its peak from December, and touched its lowest level in two years in February. This has many wondering if the currency is waning in popularity.

FINSUM: This piece was interesting to us because it contrasts with what you hear about the explosion in popularity of cryptos.

(Washington)

The markets have been running scared all week. The Dow has lost over a 1,000 points, and much of the concern seems to be centered on global trade. One of the key reasons why is that President Trump is planning to raise tariffs on steel and aluminum. Trump sees trade wars as “good, and easy to win”. This view has investors worried about a disruption to status quo global trading patterns.

FINSUM: So Trump’s quote was not fully reported by most, and actually reads “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win”. Frankly we think the US has gotten the raw end of many trade deals over the last few decades and can throw its weight around much more to get a better deal.

(New York)

All those worried that another bout of volatility is around the corner should definitely pay attention to Goldman’s latest announcement. The bank says stocks may drop 25% this year, but the call has one important caveat—Treasury yields would need to reach 4.5%. Goldman only thinks yields will rise to 3.25% by year-end, but a “stress test” scenario where they rise to 4.5% “would cause a 20 percent to 25 percent decline in equity price”, says Goldman’s research team. Some think stocks will rise until yields reach the 3.5 to 4% range.

FINSUM: Yields are not going to get anywhere close to that level unless the Fed goes crazy with hikes, which we highly doubt. There is a big pool of natural bond buyers in retirement age, and we think that will allow yields to rise only slowly.

(San Francisco)

Apple is set to release, not one, not two, but three new iPhones later this year. Bloomberg describes the phones this way, saying “the largest iPhone ever, an upgraded handset the same size as the current iPhone X and a less expensive model with some of the flagship phone’s key features”. The iPhone X has not sold as well as forecast, and there has been consumer pushback on price, which may have led to the change in lineup. “This is a big deal”, says a venture capitalist and Apple commentator, “When you have a measurable upgrade in screen size, people go to update their phone in droves. We saw that with the iPhone 6, and we think this is setting up to be a similar step up in growth”.

FINSUM: We think this is a smart strategy, but we are surprised that Apple is caving in on pricing.

(Washington)

The SEC appears to be following through with the President’s mandate to lower the regulatory burden across all industries. The regulator is in the middle of easing disclosure requirements on companies. According to the Wall Street Journal, the new changes include “expanding the definition of small reporting companies, refurbishing risk-factor disclosure guidelines and streamlining the requirements for registered debt securities and acquired business disclosures”. Companies may now also secretly file IPO documents.

FINSUM: The US, and especially the financial sector, had, in our opinion, become over-regulated in the last decade, so it is good to see an easing of the burden.

(Beijing)

Something monumental, and very troubling, happened in China his week. The central committee there recommended scrapping the two-term limit for leaders, meaning Xi Jinping will stay in power indefinitely. This has “has put us back 30 years”, said one Chinese commentator close to the situation. One Australian academic comments that “We’ve had so many steps backwards [under Xi] … Media controls have become stricter, internet controls have become stricter. And now one of the few seemingly effective checks on a senior leader’s power — that he can only be in power for two terms — is now just being completely cast aside”.

FINSUM: Even for a country with no elections this seems quite authoritarian. We don’t suspect any immediate fallout, but this could be a slow-building drama.

(New York)

After a lot of talking, the long awaited hypothesis that tax cuts at the federal level would lead to more dividends and buybacks is actually proving true. More than 20% of companies have raised their dividend so far this year, with none cutting them, the first time that has happened since 2011. The hikes are also getting bigger, averaging 14% this year. The downside for the economy is that while tax cuts have also led to buybacks, they have not flowed into increased corporate spending and investment.

FINSUM: This is very good news for shareholders, but it does put a damper on hopes that the tax cuts may spur economic growth through corporate investment.

(Boston)

Advisors beware, your state is likely ramping up regulatory enforcement all around you. While all the focus has been on states making and/or enforcing their own fiduciary rules in the absence of the federal rule, they have also been upping their presence in other areas. For instance, Alabama is now getting involved in disputes between brokers and firms, making sure client assets do not get frozen. Massachusetts is enforcing the federal fiduciary rule, and Nevada is making and seeking to enforce its own best interest rule as well.

FINSUM: Our view on this is that there is a power and leadership vacuum in the federal regulators that has eroded states’ trust, all of which is leading to a more fractured regulatory landscape.

(Washington)

Many advisors may think it is going to take the SEC ages before it actually presents a new fiduciary rule. But that view may need to be shelved, as SEC chairman Jay Clayton has just confirmed that the rule is one of his top priorities. “We’re going to make a big effort to try and bring clarity and harmony to investment advisor [and] broker-dealer standards of conduct … I think it’s something that the market needs. I think it’s something that regulators need”. The SEC still has not confirmed a date for the debut of the rule, but most experts agree it will be this summer.

FINSUM: We think the SEC will debut a new rule, jointly with the DOL, in May or June, with the plan to implement it in spring 2019.