(Washington)

Investors have been unsure of how the Fed would handle the trade war. Recent minutes from the Fed showed no indication that the central bank was thinking of cutting rates even though the market expects it. However, the silence has finally been broken as Fed chairman Powell announced yesterday that the trade war is on the list of the Fed’s concerns and that the central bank would act to protect the economy from its fallout. In his own words, Powell said the Fed would “act as appropriate to sustain the expansion”.

FINSUM: We took this as a pretty strong affirmation that the Fed is watching the trade war situation closely and is ready to act. Markets liked it.

(New York)

Independent or wirehouse? It is a big decision, especially because it not only means moving firms, but going from being an employee to running one’s own business. Well, to fill the void between those two possibilities, LPL has just launched a new program designed to let advisors half-breakaway. The program lets advisors be independent, but also employees. The new new offering is short on details but follows in the footsteps of Raymond James and Wells Fargo, both of whom have similar opportunities.

FINSUM: This seems like a good option if you are an advisor that wants more flexibility, but does not want the difficulty associated with running your own firm.

(New York)

The big bull market of the last decade is now coming to an end, according to Morgan Stanley. The bank says that the US market cycle has moved into a “downturn” phase for the first time since 2007. The bank says the change in its cyclical indicator adds to “a litany of downside risks we see for the markets”. The bank says the change of phase typically means a bear market is coming. The call on markets came in a report delivered to MS clients on Sunday and follows May’s big 6%+ drop in stocks.

FINSUM: In our view, it is a particularly hard time to make a call on markets. Things do seem to be worsening in the data, but most of the negativity is colored by the trade war, which could conceivably end abruptly. That hint of positivity aside, it seems best to be positioned defensively.

(San Francisco)

All of the last year’s fear of anti-trust regulation seem to be coming true. Tech shares dropped yesterday on news that top US regulators had divvied up jurisdiction of tech giants for a forthcoming probe. The Department of Justice and the Federal Trade Commission, the agencies in charge of anti-trust, have decided who will manage what as they prepare to launch an anti-trust probe into Facebook, Amazon, Google, and Apple. It is still unclear exactly what will be investigated, as well as the scope of the probe. After the market closed, the US House of Representatives also announced its own investigation. The tumble in shares sent Google into a bear market.

FINSUM: This has been looming for some time, but now looks like a reality. This could be the start of some very serious volatility and changes for the FANGs.

(New York)

There has been a lot of speculation about whether there may be rate cuts this year. The Fed has been less than clear about this possibility, mostly indicating it just wants to stay put for the year. The Treasury market has been very vocal, however, with investors clearly indicating they expect rate cuts over the second half of the year. Now JP Morgan is weighing in, saying that the Fed is likely to cut rates twice by the end of the year, a prediction which precisely matches what markets are calling for. The ten-year Treasury yield fell below 2.1% recently.

FINSUM: We think the cut will come as a function of how the trade war plays out. Trump is certainly pushing the Fed’s hand, but we expect the central bank will remain “data dependent”.