(New York)

The DOL’s fiduciary rule may be gone for now, but it is a long way from dead. The rule will be taking a new form in 2019, and even now, its spirit lives on in the form of a number of state-based fiduciary rules. One such is in New Jersey. However, Wall Street is putting up a massive fight to block the rule. Financial Advisor Magazine puts it this way, calling it a Battle Royale and saying it is “pitting the nation’s largest Wall Street and broker-dealer associations against comparatively tiny fiduciary advisor and financial planning associations”.

FINSUM: We think if NJ passed a comprehensive fiduciary rule, it would probably give momentum to not only the DOL, but a number of other states which are working towards this or are on the fence about it.

(New York)

REITs are an interesting sector at the moment. The real estate sector is obviously past peak, and rates are rising, a double whammy for REITs. The initial reaction for many would be “stay away”, however, there is some value to be had. One interesting area is in regional mall REITs, which have actually outperformed the S&P 500 this year. There is a lot of variation in quality between different regional malls, however. In particular, the performance is bifurcating between the very best malls and the rest, with the former thriving, and the rest lagging.

FINSUM: The US has 1,000 malls and some estimates say there is only enough demand to solidly support around 300. The ones that stick around, particularly the top 20, will likely do very well.

(New York)

Here is an interesting fact for investors—municipal bonds tend to hold up well during periods of rising rates. The underlying tax benefits of the bonds mean their demand is well insulated even in such periods. The question is where to commit capital. Well, year-end tax loss selling is creating some interesting opportunities in closed end muni funds, says BlackRock. Some funds are selling at significant discounts to the NAVs, sometimes 10% or more. These funds tend to bounce back in the new year, which is called the “January effect”. The discount to NAV allows one to gain even if the prices of the underlying assets don’t budge.

FINSUM: Closed end muni funds look like a great place for some bargaining hunting until the end of the year.

(Riyadh)

The oil market has been in an extremely rough patch over the last several weeks. Just a couple months ago, many were talking about the return of $100 oil. Suddenly, prices are just half that. The question is where is crude headed next. Well, the Saudis seem committed to keeping it weak, as the Kingdom, which leads OPEC, has just announced that it will not cut production. The catch is that it said it will not do so alone, which keeps the door open to another coordinated OPEC-wide cut, such as happened several months ago.

FINSUM: The big difference between a coordinated cut now and the one from a couple years ago is that the world looks much closer to recession a present, which means demand could flatten or fall even if output lowers. That means producers could lose revenue by cutting (instead of the difference being made up by price gains), which makes a big difference.

(New York)

On the whole retail has had an okay year, certainly much better than the rough period of 2017. Lately though, stocks in the sector have been suffering. Will that change? The good news is that the initial evidence about the performance of the current holiday shopping season looks promising. Black Friday sales were strong this year, which bodes well for seasonal shopping. 165m Americans shopped in-store or online during Thanksgiving weekend, more than surveys forecasted, and the average purchase size was over $300. Department stores seemed to be doing particularly well, as foot traffic was up almost 8% over last year.

FINSUM: We think this is going to be a good holiday season for retailers, but that probably won’t be enough to convince investors that the underlying issues have been resolved.