(Washington)

After about a thousand steps, the years-long saga of the DOL fiduciary rule is finally over. As of this week, the DOL missed its final deadline to apply for an appeal of its fifth circuit court loss. The DOL had until Wednesday to file for a Supreme Court appeal of the ruling, which vacated the rule back in March. The missed deadline is no surprise, as the Trump-era DOL has completely backtracked from enforcing the rule.

FINSUM: This seems to be the final nail in the coffin. Now it is time to worry about the SEC’s best interest rule, especially with regard to titles.

(Washington)

Brokers rejoice, FINRA is about to makes updating your records simpler and easier. In an effort to reduce the compliance burden and costs, FINRA is reforming its CRD system. The WebCRD interface will see an overhaul, which should make things easier for brokers. According to FINRA president Cook, “The transformation will allow FINRA to develop systems that help firms effectively maintain compliance programs and reduce compliance costs, while continuing to operate and enhance BrokerCheck as an essential tool for investors”.

FINSUM: The update is pretty short on details at the moment, but at least FINRA is trying to reduce the regulatory burden.

(New York)

Income stocks are a tough asset to place right now. On the one hand they have provided steady income since the Crisis, but as rates have risen, they have started to be wounded by losses and their yields no longer look as promising. Only 25% of stocks in the S&P 500 have yields higher than the 10-year Treasury bond. But what about stocks that are still handily out-yielding bonds? The best places to look are in consumer staples (averaging 3.3% yields), real estate (3.4%), telecom (5.4%), and utilities (3.6%).

FINSUM: So you can still get some great yields, but the big risk at the moment is capital losses because of rising rates.

(Houston)

The oil market has had a great year. US oil prices have risen from $45 a year ago to over $70 recently. Big oil producers have successfully worked together to constrain output in an effort to boost prices. However, that condition may be set to change. OPEC has already warned that it may have to increase supply for its member producers, and now the country has a meeting in Vienna next week where that eventuality will likely be decided. One portfolio manager put it this way, saying “OPEC countries will be contemplating production levels that could potentially tip the supply/demand balance currently in place, leaving crude oil pricing susceptible to oversupply”.

FINSUM: We do not think the global cooperation with producers will last, as each wants to boost production as a way of increasing revenue.

(New York)

Rates are rising, and that usually means bad news for income stocks. This time looks no different. Both utilities and real estate have been wounded this year, with both down between 3% and 6% for the year. The sectors are also getting increasingly unfavorable ratings from analysts.

FINSUM: We are pretty worried about losses coming for good income stocks as short-term Treasuries are yielding so much. Additionally, the Fed is sounding more hawkish, which only adds momentum to losses for rate sensitive equities.