(Houston)

Oil has been in a bear market for about three years. While it has not been consistent and there have been ups and downs, oil prices have been mostly stuck, plagued by oversupply. However, Citi thinks that paradigm is about to disappear, with prices rising to $80 per barrel. Citi says a host of geopolitical risks, including sanctions on Iran, broader Middle East tensions, and North Korea are three issues which will send prices higher.

FINSUM: We aren’t big fans of this prediction. Not so much because we don’t think oil could move higher, but because forecasting political risks is a hopeless exercise. Here is a different view: the OPEC agreement falls apart because the only producer it is helping is the US (which is not in OPEC), sending prices much lower.

(New York)

Despite reaching a much more mature stage of their development, ETFs, overall, are still on a torrid run. But what is next for the all-consuming asset class? Barron’s argues there are a few trends to watch. The first will be an expansion of fixed income ETFs, which have grown considerably, but have much more room to run. Secondly, advisors might have bigger clout in the sector, as RIAs may start converting their own strategies into ETFs. Also, the further hybridizing of passive/active funds may go faster as Vanguard is debuting a new range of very low-cost active ETFs.

FINSUM: Mentally we sort of compare ETFs to the growth of Amazon. The question is where WON’T they head next.

(New York)

Advisors keep your eyes open, FINRA has put out a new warning on what not to do. The regulator says that dually-registered advisors need to be very careful when moving client funds from a brokerage to an advisory account. FINRA explains best, saying “Finra will review situations in which registered representatives recommend a switch from a brokerage account where that switch clearly disadvantages the customer … such as where the registered representative recommended that the customer purchase a securities product subject to a front-end sales charge in a brokerage account and then shortly thereafter recommended that account be transferred to a fee-based account”.

FINSUM: This is sort of a suitability/fiduciary rule hybrid type of enforcement. We thought all advisors should be aware that FINRA is on the lookout for this.

(Washington)

Those hoping for a complete end to the DOL’s fiduciary rule should keep their fingers crossed, as despite political pushback, and success on slowing down the rule, the GOP is still working hard to defeat the rule. The newest chance comes in the form of a rider on the current spending bill which is designed to do away with the rule. Previous attempts at doing so have been heavily opposed by Democrats.

FINSUM: We think this one actually has a better chance of getting through. The reason why is that the tide has definitively turned against the DOL rule, and so Democrats may be more willing to give it up as a trade or concession as part of a spending deal.

(San Francisco)

The risks of regulation on Silicon Valley are rising. Fake news and data leaks have raised the suspicion of media, consumers, and government, and just yesterday Apple’s shareholders called for an investigation into iPhone addiction and mental damage in children. Now, without even a day’s rest, there is a another major probe into Apple. This one is coming out of France and surrounds the allegation that Apple deliberately worsens performance in older phones. The company faces criminal charges for the behavior.

FINSUM: So this could go both ways. If France finds something, it could turn into a global PR nightmare that could really hurt the company. However, we are not sure how much information France will actually have access to, so it may turn out to be nothing.