(Washington)

So we don’t usually write a story this “editorially” driven, but we wanted to share our view on the new SEC fiduciary rule, and not so much on the rule itself, as the way the SEC is handling it. While we all know the SEC’s new rule came in way less onerous than expected and there are major hurdles to its implementation, we really like the way the SEC is approaching its process. The rule is now open for comment, and listen to SEC chief Clayton’s comments on it, “I am very interested in the comments that come in, whether people think this current proposal fits their current relationships with their clients … I also want to understand, are we doing violence to the investment advisor model in any way? Are we doing violence to the broker-dealer model in any way? People should comment”. Commenting on the broker-dealer model specifically, Clayton said “there are clearly many people for whom that relationship is a more economical model than the investment advisor model”.

FINSUM: Clayton really understands the different considerations for clients and advisors. In our view, these are the most insightful comments we have heard from any wealth management-focused regulator in some time.

(Washington)

The Financial Times has just put out what we think is a very interesting story about the battle going on between President Trump and Amazon. The president has been pushing hard for a regulatory crackdown on Amazon, some say because of Jeff Bezos’ ownership of the Washington Post. But the FT points out that the president needs to tread lightly, as Amazon is a well-liked company and he might not win a popularity campaign against it.

FINSUM: Amazon is apparently the 10th most reputable company in the country. Trump’s approval rating is 43%. Even if Trump is right to try to breakup up some of Amazon’s grip, it seems like a risky campaign.

(New York)

Morgan Stanley is a world leader in wealth management, but its asset management unit has long left something to be desired. It first sold off the arm after the Crisis, but has been building a new one since. The firm currently has $469 bn under management, paltry compared to Goldman Sachs and JP Morgan, both of which has over $1 tn. However, CEO James Gorman says one of his seven year goals is to reach $1 tn. The area is a priority for the firm and according to Gorman “one of the most important growth vehicles we have as a firm right now. I’m very excited about it”.

FINSUM: We imagine there would be a lot of synergistic growth between the wealth and asset management businesses, which would be great for the firm. Additionally, asset management is a capital light business that boosts ROI, which both investors and management love.

(Houston)

Oil has come a long way over the last year, and light years from two years ago. Brent crude is now trading around $80. That has some worried that this big rally might be running out of steam. However, some say it is only in its 2nd or 3rd inning. With that in mind, Barron’s has put out 8 stocks to ride the boom. The big winners seem likely to be the refiners, says Morgan Stanley, who sees oil entering a “golden age”. Some stocks to look at include: Marathon, Phillips 66, Valero Energy, Thai Oil, Repsol SA and more.

FINSUM: Morgan Stanley has done some good analysis of the market, especially looking at future oil supply versus demand, and seems bullish on prices.

(Detroit)

Just when it seemed like trade war ambitions were over for the White House, they are rearing their head again. President Trump has ordered the US Commerce Department to investigate whether the extensive use of foreign parts in the US auto industry is a threat to national security. The mandate he is using for doing so—Section 232 of the Trade Expansion Act, is the same as he used for his tariffs on aluminum and steel last year.

FINSUM: While we do understand the national security considerations, this could hurt both the car industry (because of increased costs) and spark retaliations from trading partners.