(New York)

Any investor will already know that Tesla is locked in an interesting and precarious situation. Elon Musk is apparently fixed on taking the company private, which has pushed its share price up, but the effort looks highly vulnerable, which could send things crashing back down. Add into the mix that the SEC is investigating the fact that Musk announced his intentions via Twitter, and you have a dangerous mix. Many are wondering when the SEC might decide if Musk broke the rules with his tweet, but the reality is that it may take some time for a judgment.

FINSUM: In our view the lack of a ruling on Musk’s tweet could mean this whole deal sits in limbo for some time.

(Washington)

The White House has been demanding that special counsel Robert Mueller wrap up his investigation into potential collusion with Russia by September 1st. However, the reality is that Mueller is under no obligation to do so and can continue his closed-door investigation up and through the November 6th elections. Bringing indictments near the election would also not violate Justice Department policy meant to deter using indictments to manipulate elections, according to current and former US officials.

FINSUM: We highly doubt Mueller will acquiesce to ending his investigation in the near-term, which means Trump may escalate the situation. Fireworks seem likely.

(New York)

Market breadth has not been very good this year. In fact, it has generally been terrible. Tech stocks have delivered virtually all the gains. However, one bright spot in this uneven landscape has been healthcare shares, and that seems likely to continue. According to Barron’s, “Positives in the sector include attractive valuations, upward earnings revisions, share buybacks, and policy tailwinds”. Drug price pressure is still a concern for pharma companies, but right now things look strong, with over 90% of companies in the sector beating earnings forecasts.

FINSUM: We will be honest in saying that we do not have much expertise in the sector, but demographics also seem to be a supportive factor for the long-term investor.

(New York)

One the biggest and most conservative asset managers on the street has just put out an ominous warning to investors. Vanguard has just told investors that a near term recession (by 2020) is looking more likely. The asset manager is worried about the flattening yield curve and rising credit risk for sub-investment grade bonds. Vanguard says the odds of a recession in the next six months are 10%, and 30-40% by the end of 2020. The comments are unusual for Vanguard, who has stayed positive on the economy and is usually very conservative in calling markets and the economy.

FINSUM: Our own view is that the chances of a recession by the end of 2020 are much higher than what Vanguard is calling for.

(Washington)

Any advisor will know that the SEC’s new Regulation Best Interest has been under serious fire for the last couple of months. While it initially had a relatively warm reception from industry, brokers have railed against it more recently. Now, state attorney generals are mounting a furious push. The AGs of 17 states have come together to denounce the rule and demand a revision that mirrors the standard laid out in the old DOL rule. Specifically, the groups wants Reg BI to hold broker-dealers to the same standard as RIAs.

FINSUM: The SEC probably won’t do anything about this now, but this sets the stage for a major legal challenge before the rule may actually be implemented.