(Washington)

For the last couple of months it has been pretty easy to assume that the new version of the DOL’s fiduciary rule would not have nearly as heavy a hand as the first iteration. Most have thought it would likely sing to the same tune as the SEC’s best interest rule. One of the integral reasons for this view is that the DOL is now under the leadership of Eugene Scalia, son of Antonin Scalia, the former of which is one of the top securities lawyers in the country and long a fierce critic of the fiduciary rule. However, a major new development this week—Scalia says he may have to recuse himself from the whole fiduciary rule process because of federal ethics rules. Scalia was part of the lawsuit that defeated the rule last year, which is the reason for the recusal.

FINSUM: It now seems very likely that Scalia won’t be leading this process, which means it is commensurately more likely the DOL rule 2.0 could be much tougher than expected.

(Washington)

House Speaker Nany Pelosi made big waves yesterday when she announced a formal impeachment inquiry into President Trump, all stemming from the alleged Ukrainian incident. The political implications are one aspect, but what does this mean for the stock market? The answer is that nobody knows. Nixon’s impeachment process saw a big loss in stocks, but it was also the Oil Crisis; while Clinton’s impeachment was quite positive for equities. Each situation was completely unique, as was the market environment at the time.

FINSUM: Our best guess is that this won’t do much to stocks, mostly because there has been so much political theater over the last few years that, for better or worse, this likely just seems to be more of the same for investors.

(New York)

Goldman Sachs just made a highly un-risky and entirely unremarkable call—they contend ecommerce will continue to grow at a good pace. However, within that contention, they also picked three stocks which represent the best way to play that growth. They prefer pure play ecommerce companies, and say that Amazon, Alibaba, and JD.com are the best names to buy in order to benefit from the continued rise of online shopping. According to Goldman, “Pure-play eCommerce companies like Amazon continue to benefit from greater access to consumer data and purchase history that enables not only compelling consumer experiences but also delivers efficiency and competitive benefits”.

FINSUM: These are certainly good ways to play ecommerce, but there are some other good angles too, such as logistics providers or warehousing stocks etc.

(Washington)

Bernie Sanders is struggling to keep his positon as the third most popular candidate in the Democratic primary. Elizabeth Warren seems to have taken a lot of his platform and delivered it more succinctly and less cantankerously. However, Sanders is trying to one-up her and has just announced his own wealth tax plans. Bernie goes further than Warren with a tax that aims to cut net worth of America’s richest by half in the next decade. Sanders further commented on his plan, saying “billionaires should not exist”.

FINSUM: Whatever you think of this plan, we don’t believe this is ultimately going to help Bernie or the Democrats win the general election, as this is likely just too radical for most Americans.

(New York)

It has been a rough several month stretch for stocks and no one seems to have a clear view on where things are headed. All the same fears dog the market now just as they have all year, but at the same time, there seems to be some bullish indicators. Economic signals have been much better recently, which could support a longer bull market. Additionally, so much bearish sentiment has built up that it seems like the market is poised for a big move higher. Finally, the sideways action of the market seems to point to another move higher. Some think the sideways move over the last several months means that this cycle has seen its peak. On the contrary, though, usually late stage bull markets move higher right before an economic downturn.

FINSUM: The market was flat for over a year right in the middle of the bull market and then took a huge move higher. Same situation?