FINSUM

FINSUM

Email: عنوان البريد الإلكتروني هذا محمي من روبوتات السبام. يجب عليك تفعيل الجافاسكربت لرؤيته.
الإثنين, 01 نيسان/أبريل 2019 13:07

The Fiduciary Rule’s Journey May End Like Marijuana’s

(New York)

The fiduciary rule’s journey has been a seemingly endless saga. Opponents of the rule thought they had finally defeated it when the fifth circuit court ruled against it last year. However, its path is far from over and is showing an interesting parallel: marijuana. Fierce proponents of cannabis legalization have taken a different tact after a federal level push failed—they have gone to the state level. As most will have noticed, marijuana has been legalized in many states as part of a grassroots push for cannabis. The fiduciary rule is now playing out the same way, as new state-level rules have been popping up all over the country, threatening to bring patch work regulation.


FINSUM: One would not naturally think to compare the fiduciary rule and marijuana, but the regulatory path for both is looking quite similar. This would not be a good outcome for broker-dealers.

الإثنين, 01 نيسان/أبريل 2019 13:06

Goldman Sachs Says Gold to Move Higher

(New York)

Gold is an interesting asset class right now. Everyone knows it has been in the doldrums for many years, but with recession fears brewing, and rates falling, the outlook is an interesting one. Goldman Sachs thinks gold is headed higher. Their thesis is that late cycle worries and falling rates will combine to push up the shiny metal. Falling rates will weaken the Dollar, further helping overseas buyers purchase gold.


FINSUM: In general, we like this thesis. However, we think gold would do better if there was more worry about a huge downturn/crisis, which there doesn’t seem to be. Fears right now are about a standard recession, which would help gold, but maybe not be ultra bullish.

الإثنين, 01 نيسان/أبريل 2019 13:04

Recession Watch: Retail Sales Turn Negative

(New York)

In another sign of a weakening economic landscape, new retail sales data was released for February, and it was not pretty. The data didn’t just slow, it actually reversed, with retail sales falling 0.2% month over month in February. The data was a big shock as economists were expecting a gain, especially after a revised 0.7% increase in January. The numbers suggest the economy may be in line for a contraction in Q1, as December also saw a big 1.6% decline in retail sales.


FINSUM: There are a lot of economic indicators looking negative right now. We are still optimistic, but the signs are getting harder to ignore.

الإثنين, 01 نيسان/أبريل 2019 13:01

A Great ETF for Merger Buzz

(New York)

We wanted to write an article about a new fund we discovered in our regular course of business, but that got us excited. One of our gripes with ETFs is that there always seems to be a dearth of ways to express short-term tactical opportunities, or own a fund that does so. That is why we were excited to find a fund in New York Life’s IndexIQ ETF lineup. The fund, the IQ Merger Arbitrage ETF (MNA), seeks to gain capital appreciation by buying companies that have had public takeover announcements. The fund also includes a short on global equities as a partial hedge. Merger arbitrage is a common hedge fund strategy.


FINSUM: This is one of those area where we often wish we had exposure, but don’t have the time to actually enact a strategy, so this IndexIQ fund is very useful. The fund has a 75 basis point expense ratio.

الإثنين, 01 نيسان/أبريل 2019 12:59

Value Stocks Ready for a Resurgence

(New York)

It has been a long time since value stocks had a chance to shine. A LONG time. Growth stocks have handily outperformed their growth cousins, so much so that even some diehard value investors have talked about giving up on the practice. Value stocks took a pounding in March following the Fed’s dovish turn and spreads versus the market’s most expensive stocks are at their widest in 70 years. This means it may be a good time to buy, says Bernstein’s equity research team. If you look away from financial value stocks, the sector did not actually get wounded much last month. The reason why it may be time to buy is two-part: the first is that value stocks tend to outperform when the economy is slowing, but not in outright recession. The second is that high value stock spreads are seen all across the economy, and not just in challenged sectors, which means they are less likely indicative of real challenges and are more likely just a market symptom.


FINSUM: We understand this analysis, but have to disagree. We just don’t think the old precedents for value stocks hold much water at the point. Our view is that as growth slows, investors will buy the stocks with the most growth, not the cheapest ones.

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