(New York)

Walmart did something a lot of conservatives may not like this week—they announced that they would stop selling ammunition for assault weapons. Despite the political turbulence it may cause for the company, it could have a bullish effect on the stock in the long run. The reason why might not be obvious at first glance, but immediately becomes so once you hear it—the ban on assault weapons ammunition will give the company a higher ESG score, which means it may be included in more funds by default, and thus see increased buying.

FINSUM: Whatever your politics on this move, from an investment perspective this could be bullish.

(Washington)

Anyone who has been following the DOL/SEC-fiduciary rule/best interest saga is probably sick of the word “harmonization”. The term is a catch-all for the idea that the two agencies will synchronize their rule-making so there won’t be any grey area or uncertainty for advisors. We doubt that will happen (or even can, given the law of unintended consequences). Yet, a top industry law firm has just weighed on the specific points where harmonization may happen. The first big area to consider is rollovers, as both agencies have in the past claimed it as their own territory. That will likely be an area where harmonization is necessary because of previous guidance issued by both. Electronic disclosures will be another priority area. Additionally, the rules governing defined benefit versus defined contribution plans will also need to be harmonized.

FINSUM: We are slightly doubtful their will be some great harmonization between the DOL and the SEC. So, expect some uncertainty, grey areas, and more business for lawyers.

(Washington)

So one thing is very obvious about Trump’s tweets—they can move markets. However, what is less well-known is that their frequency also has an effect on indexes. So how do markets fare on days when Trump is hammering out tweet after tweet versus days when he only pens a few? The answer is that more is worse. On days where Trump write 35 tweets or more there is a 9 basis point drag on markets versus days where he tweets 5 times or less, where there is a 5 basis point tailwind.

FINSUM: There is not much one can do with this info, but it is an interesting data point. How long before a new “smart beta” product comes out focused on this? Haha.

(New York)

How to defend against this tough equity market? Some say to buy defensive sectors like healthcare and consumer staples. Others buy gold. Ironically, however, the best protection may be to stick with the old 60/40 balanced portfolio. Despite all the market turmoil recently, if you had been holding a 60% SPY and 40% AGG portfolio over the last month you would have had a net return of negative 0.62%, which is pretty good considering how ugly markets were. If you had been holding it for the whole year, you would have a sterling return of 14.45%.

FINSUM: These stats are a testament to old fashioned diversification!

(New York)

September is usually a very poor month for stocks. Investors are generally uptight because of this, but this year tensions are much higher after a brutal August that saw benchmarks fall around 3%, a figure which frankly does not do justice to the turmoil. The Dow actually averages a large decline in September historically, and the month has only had positives returns 36% of the time in the last 100 years. This statement from Barron’s says it all: “If you only owned the S&P 500 in September during every year, a $100 investment starting in 1969 would now be worth just $70.

FINSUM: September is usually bad (which does not really mean anything for this year in itself), but this year could be extra ugly because it may just be more of the same turmoil that has already been occurring.