Markets continue to trade in mixed fashion like a tossed salad. The Dow was up today while the NASDAQ was down. Rumors of trade wars and White House turmoil coupled with spirited debates in Congress are driving the news cycle and adding volatility to stocks. Underlying it all are strong economic and company fundamentals both on a national and global level. At the close the Dow was up 115 at 24,873 on heavier trading volume.
In a bipartisan move the US Senate voted 67 “yea” and 31 “agin” on the first rewrite of the Dodd-frank financial reform bill. The bill will now head to reconciliation and be matched up with a version that has already passed the House. The biggest feature of the bill is to raise the $50 billion asset threshold for what is considered a systemically important bank to $250 billion. It also exempts banks with less than $10 billion in assets from rules banning proprietary trading or the so called “Volker Rule”. Now those smaller “volkers” can start slinging their own hash. Investors are optimistic that the new bill will spark a run in regional bank stocks which will benefit by seeing regulatory costs drop while also freeing up reserves to be loaned out. One regional bank CEO said that under Dodd-Frank, his bank had 32 different audits from 17 different agencies in one year alone and feels the new bill will help change the mix of people in his lobby from mostly regulators to normal customers. He said it will also free up parking spots for customers to use that were once hogged by regulators.
Oil and gas MLP pipeline companies were whacked today after FERC (Federal Energy Regulatory Commission) adopted a rule disallowing these pipelines to take credits for local taxes (or something like that). FERC was following up on a court case which essentially ruled that MLP pipeline operators were double dipping by getting regulated rates and then boosting these by deducting local taxes.