(New York)

Are you looking for high yielding stocks that also appear to have good upside? Look no further than this handful of picks. Market Watch has picked a group of stocks with solid dividends that are also seeing dividend hikes. This is a key feature to have not only as a way of offsetting any losses from rising rates, but also a means to drive price appreciation. All the names on the list have dividends of over 4% and have seen recent dividend hikes of 10%+. These stocks include CareTrust REIT, Six Flags Entertainment, AbbVie Inc, and Janus Henderson Group.

FINSUM: Dividend hikes have been rarer lately than one would expect given the good spell of earnings we have had. The reason why seems to be the prevalence of buybacks. All of which makes these shares unique.

(Washington)

The US broker community is currently growing increasingly concerned about the SEC’s new “Regulation Best Interest”. On top of anger over the rules governing the use of titles, brokers have become increasingly worried about a part of the SEC rule which essentially mirrors the DOL’s best interest contract exemption (BICE). The problem is that there are rules governing conflicts of interest that are very similar to the DOL’s, such as brokers having to take steps to resolve conflicts, and minimize compensation incentives for certain products. According to one lawyer representing brokerages, “We believe the commission should replace the DOL rule-based preamble provisions on mitigation and elimination of conflicts with a simple principles-based statement”.

FINSUM: When the rule was first debuted, the general industry reaction was positive. However, the more everyone has dug into it, the more stringent the opposition has become.

(New York)

The FT ran an article today looking at the tech meltdown from an angle no one else is, and it is definitely worth paying attention to. Their worry is how ETF issuers are going to be able to offload shares of tech giants quickly enough to match benchmarks. For instance, Facebook lost $120 bn of market cap last week, and it will be difficult to source enough buyers to unload all that stock without roiling the market further. The overall point of the article is that trouble in tech might cause the dreaded “liquidity mismatch” issue in ETFs.

FINSUM: It seems like this problem is already rectified for last week’s fall, but the overarching argument is that any falls in FAANG stock prices are going to be exacerbated by large amounts of forced ETF selling. This could explain why the losses have been so steep.

(Washington)

In what could come as very welcome news for investors across all asset classes, Fed Chief Powell has indicated that the Fed may take a break from hikes for a while. The question is when this pause in hikes will occur, and the Fed is debating this internally. The central is expected to introduce the words “for now” in regards to its plan for near-term hikes, a new phrase that signals conditionality. According to a former Fed economist, “Given that there’s no visible inflation threat -- not in the data and not in the FOMC forecasts -- it makes sense to inject conditionality on future moves”.

FINSUM: We hate analyzing Fed speak, but a pause in hikes seems like a good idea to us. With inflation low, there is no reason for the Fed to forcefully invert the yield curve and cause a recession.

(Washington)

The Trump administration is exploring a new $100 bn tax cut for Americans. The plan, which is designed to potentially bypass Congress, will try to use the Treasury Department’s own power to enact the cut. The core idea of the cut is to allow investors to account for inflation when calculating capital gains. What that effectively means is that investors could walk up their basis in shares as time progresses, minimizing the taxable portion of their gains. The cuts are far from final, as Treasury head Mnuchin says he is not even sure if the Treasury has the authority to do so. Mnuchin commented on the cuts that “We are studying that internally, and we are also studying the economic costs and the impact on growth”.

FINSUM: This cut makes logical sense to us, but there is already backlash in the media that this is a major gift only to America’s wealthy.