Hearings, the SEC, the Fed, and Earnings: Advisor Briefing for the Week of July 19, 2010

Passage by a Senate last week still controlled by the Democrats of the Dodd/Frank reform bill will be followed this week by President Obama placing his signature on the bill, but Congress itself is holding multiple hearings on everything from oversight of the SEC to bank capital requirements. Fed Chairman Ben Bernanke visits the House and Senate on consecutive days to report on the economy, second quarter corporate earnings season is in full swing, and several reports will give a clearer view of the housing market. However, the biggest news of the week directly affecting advisors of all stripes is likely on Wednesday, July 21, when the SEC is expected to release its long anticipated rules on 12b-1 fees, and news on Form ADV Part 2.

Starting this week, the NAHB releases Monday, July 19, its housing index for July, while President Obama will make remarks about the economy.

On Tuesday, July 20, the Senate Judiciary Committee is scheduled to vote on the nomination of Elena Kagan to the Supreme Court, while the Security and International Trade and Finance Subcommittee holds a hearing on international cooperation to modernize financial regulation. Two retail sales reports are due that day–the ICSC/Goldman Sachs Store Sales Index and the Johnson Redbook index–while we hear about housing starts for June. But the big news for advisors might come out of the Capital Markets subcommittee of the House Financial Services Committee, which holds hearings on oversight of the SEC.

Companies announcing earnings on the 20th include: Bank of New York Mellon (BK); expected to have per-share earnings of $0.54 vs. $0.51 last year; TD Ameritrade’s (AMTD) estimated earnings are $0.28 on sales of $680.13 million versus $0.30 last year; and Morgan Stanley–now the biggest broker/dealer in terms of advisors with 18,100–is expected to report earnings of $0.46 compared to a loss of $1.10 last year; Goldman Sachs (GS) should report earnings per share of $2.20 on $4.93 billion in sales compared with $4.93 in earnings per share on $13.76 billion in revenue last year in the second quarter. State Street is also slated to release its quarterly results.

On Wednesday, July 21, the SEC will hold an open meeting at which it is expected to release rules on 12b-1 fees and discuss changes to Form ADV, Part 2, to include plain-English versions of what RIAs offer clients and disclose their conflicts of interest.