(San Francisco)

There is no doubt about it, the FAANG stocks—Facebook, Apple, Amazon, Netflix, and Google—were a huge force is delivering 2017’s great return. But it might be time to remove them from your portfolio, at least as Barron’s argues it. And if not removing them, then at least reducing exposure. The stocks count for a huge portion of many funds, so investors may have more exposure than they realize. The stocks have seen a massive run-up in valuation, but that makes them look increasingly vulnerable. Barron’s also cites the increasing risk of regulation of the sector, which could prove a weight on values.

FINSUM: The tech industry has grown very large and dominant, and seems to have its own cycle versus the rest of the economy, all of which makes it very hard to call a top. There are some dark clouds gathering on the horizon, but nothing looks like it is imminently going to bring the FAANGs down.

(New York)

The comment heard round the world seems to have been eating JP Morgan CEO Jamie Dimon. Several months ago Dimon made the much publicized comment that Bitcoin was “fraud”. The CEO is one of the most respected on Wall Street and the comments have been the bane of the cryptocurrency for some time. However, speaking at a conference yesterday, Dimon said about his statements that “I regret making them”.

FINSUM: The funny part of about this new statement is that it was accompanied by several more veiled expressions of dislike for bitcoin, such as saying he is “not interested in the subject at all”.

(New York)

While logistics companies have understandably done well alongside the rise of ecommerce, FedEx might be poised to deliver something particularly special in the medium term. There are two big reasons why. The first is that the US postal service looks likely to raise its rates, which would make the margin between USPS and UPS/FedEx smaller, giving an edge to the latter. Additionally, FedEx has been investing heavily into upgraded distribution hubs which will give it a speed advantage over UPS. UPS, on the other hand, is just at the beginning of that process, so the recent status quo of UPS having higher margins looks set to end.

FINSUM: We think we might be entering a few golden years for FedEx, as their upgraded speed of delivery, combined with more competitive pricing, will be an “x” factor given the ever growing demand for quick delivery.

(San Francisco)

The tech industry seems to be at the very early stages of a crackdown by regulators. At this point the talk is mostly in media and amongst the public (a few Trump tweets aside), but the push is coming, both on the back of fake news and of anti-trust concerns. Well, there may be a much more immediate threat now. Apple may be facing a near-term regulatory crackdown as its own shareholders are calling for a study into the link between the iPhone and smartphone addiction, especially in children. Apple shareholders Jana Partners and Calstrs are calling for a study to see if the phones are addictive and what negative mental effects they may have on children. Some researchers believe the young have a serious metal health problem related to smartphones, with one academic saying “It’s not an exaggeration to describe iGen as being on the brink of the worst mental-health crisis in decades”.

FINSUM: So Jana and Calstrs, who are calling for this, say it is better to deal with the issue now rather than later and that doing so will provide value to shareholders. If regulations on smartphones actually come to pass, it could change the entire industry.

(Washington)

2017 was a wild year for both the wealth management industry and for its most famous regulation—the fiduciary rule. But what will happen in 2018? The answer is a lot, and not all in the direction some might think. While the DOL rule does feel like it might be on its last legs given the long delay and SEC involvement in developing a new rule, there are some factors which might help it, or at least advance the fiduciary rule cause. For instance, industry buy-in of the rule, especially by big firms, is increasing as they realize it is more profitable to adhere because of higher revenues from fee-based accounts. Additionally, many states are working on their own rules, another factor likely to push federal rule-makers. Finally, the SEC may come out with its own universal rule this year.

FINSUM: We expect it to be another wild ride in the fiduciary saga this year. Our best bet is that the SEC will come close to making a rule this year, but that it will not be implemented until mid 2019.