(New York)

REITs are having an outstanding year. The FTSE Nareit Equity REITs Index is up almost 18% this year, well ahead of the market’s 12% gain. With the direction of rates and yields, it is easy to understand why. The question is which are the best REITs, which is not always easy to answer. Here are five of the best performers so far this year: DFA Real Estate Securities I (DFREX), Neuberger Berman Real Estate (NREAX), Principal Real Estate Securities (PRRAX), Cohen & Steers Real Estate Securities (PRRAX), DWS RREEF Real Estate Securities (RRRAX).

FINSUM: We like REITs right now. They have solid yields (e.g. 3%), and given the likely direction of rates, stand do well in terms of price appreciation.

(Dallas)

If you are looking for for a safe place to earn some yield in munis, look to Texas. Specifically, the Texas Permanent School Fund, a heavy weight in the muni market that backs $80 bn of debt. The fund has a triple A rating from multiple agencies and is one of the safest bets in the market. The bonds average a 1.9% yield, which is quite strong for the muni market, especially considering the average triple A only yields 1.7%.

FINSUM: This seems like a very strong credit, and one with a surprisingly good relative yield.

(Washington)

Given the relative dearth of information about the new DOL and SEC rules, analysis and true insight are hard to come by. However, today we have some interesting and relevant “talk” coming out of those close to the DOL. Evidently Trump’s chief of staff Mick Mulvaney has de facto taken over the rulemaking processes at the DOL. The Trump administration was apparently unhappy with slow progress at the agency, so Mulvaney was put in charge of oversight and has ultimate say on all decisions. Mulvaney took over his chief of staff position in January and took on this role some time since. What this means is that the White House is now more directly in charge of the DOL than ever.

FINSUM: The rumor of this is from Financial Advisor IQ (which is quite reputable), and it completely makes sense given that the DOL suddenly came out with a concrete timeline for the new rule’s release (December). This seems encouraging for those that opposed the initial rule.

(Washington)

The next phase of the US-China trade war is coming, and it looks like it may be even worse. At the beginning both sides focused on levying higher tariffs on more goods, then Trump took the step of limiting China’s access to semiconductors with his ban on Huawei. Now the next phase may be much more specific and potentially damaging for the US—China is likely to limit the US’ access to rare earths used to make all kinds of technology devices. Access to such rare earth elements is one of the biggest US weaknesses in tech and Beijing has the power to block access because the US imports 80% of its rare earths from China.

FINSUM: It is hard to tell how bad this could be. On the one hand, the total US imports of Chinese rare earths are only $160m, but on the other, if there is not another easy source then it could hamstring the businesses that use them.

(Detroit)

Will the robotaxi model come to dominate the car landscape or will the current ownership model persist? Will electric cars come to dominate? These are big questions for the US automotive industry. However, the answer is that it likely won’t matter because Detroit will win either way, especially GM. While Tesla would have no backup plan if electric cars didn’t become mainstream, GM could continue on with its main business line. Further, GM has a valuable self-driving card division, Cruise, which could do very well if robo taxis become the predominant model.

FINSUM: A couple things to note here. Firstly, GM is the cheapest stock in the S&P 500 on an earning basis, so it has a lot of upside. Secondly, we don’t think the robo taxi model will take over as the cost per mile to the end consumer is likely 2-7x the current cost, which means there would need to be massive changes to make it competitive.