(New York)

The world’s biggest family offices are feeling very bearish. A new study by UBS found that over half of them are expecting a recession and over 40% of them are increasing their cash reserves. 45% are taking steps to mitigate risk. Family offices have struggled in the last year, averaging only a ~5% return; much lower than the 9-13% returns they typically target.

FINSUM: Normally speaking we might think this is a good counter-indicator, but family offices represent so much AUM that they could have a real impact on the market.

(New York)

Peloton went public yesterday, and the results were much less than impressive. In its first day of trading, the company saw its shares fall 11%. The company priced shares at $29, but saw them fall throughout the day. The company produces exercise equipment and classes and has a cult following among its customers. Despite the fall though, in some way the IPO is a big success, at least for the founders of the company. In its last private funding round in 2018, it was valued at $4.15 bn, but opened at $7.7 bn yesterday. That is a much better showing than other recent big IPOs.

FINSUM: This company is losing almost $200m per quarter on revenue of less than $1 bn. It is fortunate it did not fall further given the current environment.

(Washington)

For the last couple of months it has been pretty easy to assume that the new version of the DOL’s fiduciary rule would not have nearly as heavy a hand as the first iteration. Most have thought it would likely sing to the same tune as the SEC’s best interest rule. One of the integral reasons for this view is that the DOL is now under the leadership of Eugene Scalia, son of Antonin Scalia, the former of which is one of the top securities lawyers in the country and long a fierce critic of the fiduciary rule. However, a major new development this week—Scalia says he may have to recuse himself from the whole fiduciary rule process because of federal ethics rules. Scalia was part of the lawsuit that defeated the rule last year, which is the reason for the recusal.

FINSUM: It now seems very likely that Scalia won’t be leading this process, which means it is commensurately more likely the DOL rule 2.0 could be much tougher than expected.

(Washington)

House Speaker Nany Pelosi made big waves yesterday when she announced a formal impeachment inquiry into President Trump, all stemming from the alleged Ukrainian incident. The political implications are one aspect, but what does this mean for the stock market? The answer is that nobody knows. Nixon’s impeachment process saw a big loss in stocks, but it was also the Oil Crisis; while Clinton’s impeachment was quite positive for equities. Each situation was completely unique, as was the market environment at the time.

FINSUM: Our best guess is that this won’t do much to stocks, mostly because there has been so much political theater over the last few years that, for better or worse, this likely just seems to be more of the same for investors.

(New York)

Goldman Sachs just made a highly un-risky and entirely unremarkable call—they contend ecommerce will continue to grow at a good pace. However, within that contention, they also picked three stocks which represent the best way to play that growth. They prefer pure play ecommerce companies, and say that Amazon, Alibaba, and JD.com are the best names to buy in order to benefit from the continued rise of online shopping. According to Goldman, “Pure-play eCommerce companies like Amazon continue to benefit from greater access to consumer data and purchase history that enables not only compelling consumer experiences but also delivers efficiency and competitive benefits”.

FINSUM: These are certainly good ways to play ecommerce, but there are some other good angles too, such as logistics providers or warehousing stocks etc.