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August 26th, 2019

Government eyes new regs for tech, fewer for banks, plus more

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Big tech companies like Google, Facebook and Amazon are being called into question with a new investigation, while big banks may see fewer regulations in the future. Read on to get the details.

Big Tech in a Regulatory Crosshairs – The target on Big Tech’s back continues to grow. Just last month, the U.S. Justice Department announced it was conducting an antitrust review of Alphabet’s Google unit and Facebook. This week, it was reported that a group of state attorney generals are banding together to launch a formal antitrust investigation against a handful of big tech platforms (likely including Google, Facebook, Amazon, and Twitter), which may begin as early as next month. Early reporting shows that the attorney generals involved in the investigation have concerns about the use of personal data by big technology companies, while also looking into whether their business practices constitute monopolistic practices that put consumer privacy and data at risk.1 While none of these criticisms of big technology companies are new, the onslaught of investigations on both the federal and state levels represent uncharted territory for companies whose exponential growth has largely been helped by few regulatory hurdles.

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9 of the Biggest Financial Mistakes You Should Avoid!

Looking toward the remainder of this bull market, many investors may be wondering what to do and how to prepare for what’s next.

See what we believe are the biggest mistakes investors make and how to avoid them with our guide, “9 Retirement Mistakes to Avoid.”

If you have $500,000 or more to invest and want to learn more, click on the link below:

Learn About the 9 Retirement Mistakes to Avoid!2

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Big Banks to See Fewer Regulations Going Forward – While technology companies prepare for more scrutiny, big financial companies may be catching a break. In the aftermath of the 2008 financial crisis, the 2010 Dodd-Frank legislation created a web of new rules designed to prevent big banks from taking too much risk. One such regulation was known as the Volcker Rule, which prevented big banks from making speculative trades using their own capital. The issue many banks took with the rule was how complicated it was in its application, which in turn prevented them from making normal, allowable trades. Under the new changes set to go into effect on January 1, 2020, firms with less than $1 billion in trading assets and liabilities will no longer have to prove to regulators that they are complying with the Volcker rule’s trading restrictions. The biggest banks, like JP Morgan, Bank of America, and Citigroup will not have to demonstrate to regulators that trades made for less than 60 days weren’t for short-term profit.3 Not only will the rule changes ease the compliance burden for many banks, it will also allow them more flexibility in making trades.

Stuck in China: Manufacturers Find It Difficult to Move – Many companies with manufacturing operations in China are finding it difficult to navigate production in the midst of the trade war. Early on, many companies clung to hopes that the trade war would be negotiated quickly, and that production and supply chains would be left largely unscathed. But as the trade war increasingly appears to have no end in sight, companies have been grappling with how to diversify supply chains. Countries like Vietnam are eager to take manufacturing production business from China, but the reality on the ground is that China’s specialized supply chains and factories with U.S.-focused safety certifications are not easy to find. China had a 15-year head-start on other Southeast Asian countries in the quest to become a manufacturing powerhouse, and is also saddled with a population of 1.3 billion that dwarfs most countries eager to compete. Some solution-driven companies have moved pieces of production to other countries, in a strategy known as “China +1.”4

Can Recreational Vehicle (RV) Sales Offer Clues About Business Cycles? About 65% of RVs are made in the Elkhart, Indiana region, which today sports an unemployment rate of about 3% (which is less than the 3.9% national average). Many economists and investors take clues from pocket industries like RV sales, since consumer spending is such a large component of the U.S. economy. That’s why it was concerning for many to see that RV sales to dealers have fallen nearly 20% this year, following a 4.1% decline last year. The key data point is that historically, multiyear declines in RV shipments have preceded recessions (true for the last three).5 Many RV manufacturers believe that consumer demand is on the decline and they’re seeing signs of a top.

We can’t predict or control what is in store for the market, but investors can stay focused on making sure their own actions help guide their investments to succeed. One way to do this is not to fall prey to common investing mistakes.
 
There are common mistakes and habits that can help some investors succeed while others fail. To help you understand some of these mistakes and how to avoid them, we have created the guide, “9 Retirement Mistakes to Avoid.”6
 
In this guide, we provide our thoughts on what we believe are 9 of the biggest retirement mistakes investors should avoid. If you have $500,000 or more to invest and want to learn more, click on the link below:

Disclosure

1 The Wall Street Journal, August 19, 2019. https://www.wsj.com/articles/attorneys-general-to-move-forward-with-antitrust-probe-of-big-tech-11566247753?mod=djem10point

2 ZIM may amend or rescind the free guide offer for any reason and at ZIM’s discretion

3 The Wall Street Journal, August 20, 2019. https://www.wsj.com/articles/regulators-ease-proprietary-trading-compliance-for-biggest-banks-11566311407?mod=djem10point

4 The Wall Street Journal, August 21, 2019. https://www.wsj.com/articles/for-manufacturers-in-china-breaking-up-is-hard-to-do-11566397989?mod=djem10point

5 The Wall Street Journal, August 19, 2019. https://www.wsj.com/articles/one-countys-rv-industry-points-to-recession-around-the-bend-11566207001

6 ZIM may amend or rescind the free guide offer for any reason and at ZIM’s discretion


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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.
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