(New York)

In a sign of both the changing nature of retail and the epidemic that seems to have gripped the sector, Amazon will very likely surpass Macy’s to become the largest US retailer of clothing this year. The truth is Amazon might already be the largest, but it does not disclose an exact figure. Analysts say clothing could be a $45-$85bn business for Amazon each year, and it is growing its presence quickly. One of the attractions of the segment is that margins in clothing are higher than in electronics or food, which will help fund the company’s other endeavors.

FINSUM: Compare this to Macy’s, which is dramatically cutting back its physical location as it revamps its strategy.

(Washington)

Those close to the investigation report that the Mueller special counsel, or “the probe”, is pushing hard and is close to wrapping up the obstruction of justice element of their investigation. Now, there are reports that Donald Trump will meet and speak to Robert Mueller under oath. Additionally, the Senate Judiciary Committee has requested to speak with Jared Kushner, who Bloomberg reports is spooked and won’t agree to be interviewed. The Senate is now planning to release transcripts of other conversations held during its investigations, conversations which apparently made many potential interviewees fearful of speaking.

FINSUM: Whether you think the investigation is a witch hunt or a warranted inquiry, it appears that the whole situation is building towards a climax.

(San Francisco)

If you were an advisor at Wells Fargo who wanted to move to its independent arm you would face a big barrier—a so-called “tax” on compensation for two years. The tax was faced by brokers who wanted to move to the Wells Fargo Advisors Financial Network, or FiNet. The system is unique among brokers in that it lets brokers go without Wells Fargo totally losing them. However, the two-year tax on compensation was a big barrier. Now, the bank is considering getting rid of the tax so long as advisors sign a two- to three-year contract to stay at FiNet.

FINSUM: This seems a smart move to us as the tide of advisors going independent is only going to grow stronger.

(New York)

Here is an interesting buy. Bill Ackman, found of hedge fund Ackman, has just taken a big stake in Nike (unclear how big). However, the activist investor does not plan to agitate for change, unlike he usually does, because he believes the company is already on the right path. The company is currently changing its strategy from selling its goods at wholesale to a nationwide network of “mediocre retailers” and towards a more consolidated model of selling to only very top stores. It is also trying to be more direct-to-consumer oriented by selling directly through its website.

FINSUM: Nike had been lagging the competition in terms of share price as it seemed to have lost its “cool” edge among the young. It also largely missed out on the athleisure trend. We always maintained it was a good buy and still think so.

(New York)

Many investors are constantly on the look out for the next bubble. Well there is a new one right before their eyes, but many are not seeing it. Leave stocks and bitcoin aside for a moment, and look at private equity. Many say the current market is just like the Dotcom bubble, with valuations way too high and way too much optimism on growth and business models. “It is quite amazing that there is no collective memory that goes beyond five years” say an Oxford professor. Part of the problem is that fundraising has been really strong, which has led to more money flowing into companies, pushing up multiples. The other is the broad availability of debt funding for buyouts, with one industry specialist saying “These are unashamedly incredibly attractive conditions to borrow money. Will that debt be available to buyers in five years’ time? Probably not. Buyout groups are bullish to take the risk in 2018. It’s a ’risk-on’ environment”.

FINSUM: Aside from the reasons cited, the valuation of the stock market is another factor that is pushing up valuations. The sector looks likely to have a reckoning.