(Washington)

Brokers pay attention—a major loophole in the SEC’s best interest rule has just become apparent. One of the industry’s big complaints about the BI rule has been that it seeks to govern the use of the “advisor” title. Well, until now it seems that everyone had missed a key loophole in the rule. When the SEC drafted it, it allowed for dually-registered advisors/B-Ds to call themselves advisors even when they are carrying on brokerage business. 61% of registered reps work at dually-registered firms, meaning this aspect of the rule is mostly a moot point for the majority of advisors. According to Michael Kitces, famed advisor and wealth management commentator, “The rule literally doesn’t apply to most advisers”.

FINSUM: This is one of those bombshell realizations that seems to happen when a new rule is 1,000+ pages long—you miss things.

(New York)

Retirees are looking for dividend stocks that can pay them steadily and over the long term. The higher the yield, the better, but generally one wants stable underlying companies that are not going to spend too high a percentage of cash. With those factors in mind, here are three names to consider: Verizon (4.3% yield), master limited partnership MPLX (6.85%), and mining giant Rio Tinto (~6%).

FINSUM: Verizon seems like a good bet to us, and we expect they might raise the dividend given that it is at an all time low relative to AT&T.

(Washington)

On the surface, the US seems to have a major upper hand in its trade war with China. Simply put, they export a lot more to the US than we do to China, which means that they have more to lose than we. However, looking closer at the imposition of the US’ attest tariffs, a significant weak spot emerges. That weak spot is that the US has become overly reliant on some very niche but important Chinese exports. Mot of these are things people have never heard of, like carbonate esters and fluorine salts, both used for electric car batteries. Nonetheless though, they are very important, and 297 such imports were recently exempted from the US tariffs.

FINSUM: Barite (for oil and gas exploration) and Ibuprofen, are other crucial imports. This is one of the pressure points where China could simply cutoff supply and the US would be in a difficult position.

(New York)

Rates and yields are rising as the Fed hikes and the outlook for the US economy improves. However, that will have a major effect on many stocks, which makes investors nervous. Accordingly, here are five stocks that should thrive in this rising rate period. JP Morgan believes investors should shift out of defensives and into cyclical stocks, like capital goods, financials, auto, and semiconductors. Five stocks to look at are: Applied Materials, BorgWarner, Caterpillar, KeyCorp, Parker-Hannifin.

FINSUM: This is a direct bet that we are not headed toward a bear market and recession. Given the market’s momentum lately, that could be a good change of tact.

(Houston)

The oil market is continuing to thrive and the near-term outlook is strong. WTI oil, the US benchmark is currently trading at over $72 per barrel, while Brent, the world’s benchmark is at $80. The commodity is moving higher as markets are worried it will not be easy for producers to easily offset the losses of production in Venezuela and Iran, meaning supply may be constrained. OPEC generally agrees that when oil gets to $80 or above, it crimps demand.

FINSUM: The near term outlook for oil looks strong because of renewed US sanctions on Iran. However, in the longer term, the trade war seems likely to take a toll on emerging market economies, which will send oil demand and prices sagging.