(Washington)

Attorney General Barr held a press conference this morning as a prelude the to lightly redacted Mueller report that is being released today. Generally speaking, Barr stuck to his previous summary of the report, saying there was nothing that amounted to obstruction of justice or collusion. He did give some further details, however, mentioning that there were ten instances where Mueller highlighted possible obstruction of justice. As a response to the statements, the Democrats, led by Pelosi and Schumer, are calling for Mueller himself to testify as soon as possible.

FINSUM: The political chaos about this report will not abate until the text is released and Congress and the nation hear from Mueller. We think it will happen soon.

(Washington)

The Trump administration has slowly but surely exerted its influence on the SEC. After two and half years, the changes are reaching their zenith. The last Democrat at the SEC is set to step down later this year. He is technically entitled to stay through June 2020, but is likely to leave before the autumn, when he is set head back to academia. The departure will open the door to a more conservative appointment. It would also mean there are only three commissioners left at the SEC, two of whom are Republicans, giving them an advantage in SEC matters.

FINSUM: This could have all sorts of ramifications for policy, including the best interest rule. We expect this may have some significant impacts on the the BI rule plays out.

(New York)

The field for the Democratic nomination for the 2020 presidency could hardly be more crowded. 18 candidates have already declared, and a handful more, including heavyweights like Joe Biden, are expected to announce their candidacy. The big question right now is “who is leading?”. It is hard to answer perfectly, but two proxies—google activity by region, and fundraising, tell an interesting story. So far, it is Bernie Sanders as a clear leader, as he has garnered the most search and media interest and also leads in both self-funding and external fundraising by a wide margin. Kamala Harris has also garnered significant interest and and stands third in total funding. Sanders also leads in another interesting area—the share of small donations as a portion of total donations, a demonstration of a candidate’s total following.

FINSUM: Elizabeth Warren is also in the mix, but just from the early data we still think Bernie is going to be the candidate who faces Trump.

(New York)

Goldman Sachs put out a bearish article today that is calling for the tail end of this bull market. The bank thinks the rest of this year is going to be a dud and that PE multiples will not rise above 17. Therefore, they are suggesting a group of stocks that can thrive in such an environment. Here is a selection of 10 of their 20 choices: Texas Instruments, VeriSign, Gilead Sciences, Abbvie, Amgen, Starbucks, Lam Research, AT&T, Foot Locker, HanesBrands.

FINSUM: Appears like there are a lot of defensive stocks in this basket, which seems like a good plan for a sideways or bearish market.

(San Francisco)

One of the core tenants of US central banking is being shunned by Jay Powell’s Fed. Former central bank leadership had always taken the approach that tight labor markets posed a serious threat for higher inflation. However, Powell is stepping away from that view. Labor markets remain tight, with unemployment very low and strong job creation consistent. Yet, the Fed has completely stepped off the gas pedal on rate hikes, a position that runs counter to previous approaches.

FINSUM: At least in this cycle, the relationship between labor markets and inflation seems to be thoroughly broken. The reality is that no one can give a great answer as to why, but Powell’s policy nonetheless sticks to the idea that the link is severed.