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The Wall Street Journal - 11 October 2017

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WEDNESDAY, OCTOBER 11, 2017 ~ VOL. CCLXX NO. 86
* * * * *
DJIA 22830.68 À 69.61 0.3%
NASDAQ 6587.25 À 0.1%
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10-YR. TREAS. À 8/32 , yield 2.343%
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Business & Finance
P
&G said Peltz lost his bid
for a board seat, but the
investor didn’t admit defeat
and the close vote promises
to keep P&G on the spot. A1
BY SHARON TERLEP
AND DAVID BENOIT
Pfizer and Honeywell unveiled plans to hive off major business units in an effort to sharpen the focus on
their core operations. A1, B1
CINCINNATI—Activist investor Nelson Peltz narrowly
lost his bid to win a board
seat at Procter & Gamble Co.,
but his campaign isn’t going
away, promising to keep pressure on P&G to change.
After waging the largest
and most expensive proxy
fight in U.S. history, P&G said
Tuesday a preliminary vote
tally showed all 11 current directors had been re-elected,
without disclosing the count.
“We will continue to respectfully engage with Nelson
Peltz, whose input we value,”
P&G chief executive David Taylor said after declaring victory
to cheers and a standing ovation from shareholders at the
company’s headquarters. The
two sides spent at least $60
million and crisscrossed the
Wal-Mart plans to open
fewer U.S. stores than it has in
at least 25 years and deepen
its cost-cutting efforts. B1
Stocks were lifted by WalMart and other consumerstaples firms. The Dow rose
69.61 points to 22830.68. B17
Weinstein faced more allegations of sexual assault
and misconduct, including
some involving rape. B1
Driver’s license data for
around 10.9 million Americans were compromised during the Equifax breach. B3
Some big power firms
said they are sticking to their
strategies regardless of environmental-rule rollbacks. B3
Apple is betting on Steven Spielberg for its first
major foray into creating
original video content. B3
An FAA advisory panel
failed to agree on proposals to
identify and track drones. B4
World-Wide
Officials said the wildfires ripping through
Northern California had
left at least 17 people dead,
more than 100 missing and
20,000 evacuated. A1
Catalonia’s leader backed
away from an immediate
declaration of independence
from Spain, slowing a headlong push for secession. A8
JEFF CHIU/ASSOCIATED PRESS
Vanguard took in nearly
$300 billion in the first nine
months, nearly matching its
inflows for all of 2016. B16
The IMF raised its forecast for global economic
growth to 3.6% this year
and 3.7% next year. A8
GOLD $1,290.60 À $8.80
HHHH $4.00
EURO $1.1808
Todd Caughey hugs his daughter Ella as they visit the site of their home destroyed by fires in
Kenwood, Calif. The blazes have left at least 17 people dead and forced tens of thousands to flee.
Deadly California Wildfires
Rip Through Once-Safe Areas
BY ERIN AILWORTH
AND IAN LOVETT
that even urban communities
considered safe for decades are
now vulnerable to wildfires.
State and local officials said
hotter temperatures, longer
fire seasons and development
pushing into wilderness areas
are leading to more destructive
wildfires closer to population
centers.
“These are the fires that
we’re going to be experiencing
into the future,” said Ken Pimlott chief of CAL-FIRE, the
state’s firefighting agency. Mr.
Pimlott expects that at least
one of the fires currently burning will ultimately rank among
SANTA ROSA, Calif.—Fire
officials on Tuesday issued
grim tallies as more than a
dozen wildfires ripped through
Northern California: at least 17
people dead, more than 100
missing, 20,000 evacuated,
115,000 acres charred, and at
least 2,000 homes and businesses destroyed.
The largest fire chewed
more than a mile into the city
of Santa Rosa, destroying entire neighborhoods and signaling a new reality in the state
the 20 most destructive in the
state’s history.
Most of the damage has
been concentrated in Northern
California’s famous wine regions of Sonoma and Napa
counties. In Sonoma County
alone, nine people have been
killed and more than 100 others reported missing. State and
local officials fear the death
toll could keep climbing.
“I’m extremely worried
about it rising,” James Gore, a
Sonoma County supervisor,
said of the death toll. “There
are too many stories of people
Please see FIRES page A4
INSIDE
The NFL will consider requiring all personnel to stand
for the national anthem, a
move that could create a
showdown with players. A3
country to win shareholder
support.
But Mr. Peltz wasn’t admitting defeat and said he disagreed with P&G’s counting of
the ballots. His Trian Fund
Management said it would
wait for the tally to be certified—which with as many as
2.5 billion shares to count and
paper ballots to check, could
take days or weeks.
Far from settling the challenge, the close vote promises
to keep P&G on the spot to
show its big brands can grow.
Even if the company can keep
Mr. Peltz out of the boardroom, P&G’s divided shareholder base will be attuned to
any corporate slip-up or
missed promise, while Mr.
Taylor tries to address the bigPlease see PELTZ page A9
Heard on the Street: Peltz or
not, P&G looks pricey......... B18
Companies Chase
Spinoff Bump
BY MIRIAM GOTTFRIED
AND THOMAS GRYTA
Among corporate executives, spinoffs of divisions
have come in and out of favor
over the years, but with one
group they have been a steady
crowd-pleaser: investors.
Pfizer Inc. and Honeywell
International Inc. on Tuesday
announced plans to hive off
major business units in an effort to sharpen the focus on
their core operations.
The moves served as a reminder that even though such
activity has slowed, handing
businesses to shareholders
remains a popular tool as
company executives, often
besieged by activist investors, find it harder to justify
a vast sweep of businesses
and pivot toward leaner and
more focused operations.
Companies use spinoffs—
the act of turning a unit into a
separate, publicly traded company by issuing newly created
stock—to simplify their operations and shed unrelated businesses while avoiding tax bills
that sales of divisions often
entail. For investors, the appeal of spinoffs lies in their
long history of outperforming
the broader market, particularly in the years immediately
following separation from a
corporate parent.
Including dividends, the
S&P U.S. Spin-Off Index has
outperformed the S&P 500 by
nearly 190 percentage points
over the past decade. The index is composed of companies
Please see SPINOFF page A6
More on Honeywell, Pfizer... B1
Stocks of spun-off companies have outperformed the broader
market in the past 10 years. Total return since Sept. 28, 2007:
S&P U.S.
Spin-off
index
Suspected North Korean
hackers stole military secrets in a breach of Seoul’s
defense data system last
year, officials said. A10
A shift in the timeline
given for the Las Vegas
massacre is fueling questions about the attack. A6
A House panel subpoenaed a research firm that
compiled a dossier of unverified and unflattering information about Trump. A6
S&P 500
index
NFL WEIGHS
NEW RULES
FOR ANTHEM
TAX REFORM
MEANS A RAISE
FOR WORKERS
CATALONIA
BACKS AWAY
FROM SPLIT
U.S. NEWS, A3
OPINION, A19
WORLD NEWS, A8
A Turkish court sentenced
a Wall Street Journal reporter to prison, highlighting the increased targeting
of journalists in Turkey. A11
Ballerina’s Best (And Also Likely)
Excuse: The Dog Ate My Shoes
The Supreme Court dismissed a case on Trump’s order from March barring travel
to the U.S. from six Muslim
majority countries. A4
A sweaty ballet pointe is also an
irresistible canine chew toy; ‘this is mine’
Kenya’s opposition leader
withdrew from a rerun of
the presidential race, saying
the vote wouldn’t be fair. A8
The U.S. men’s soccer
team failed to qualify for a
berth in the 2018 World
Cup in Russia. WSJ.com
CONTENTS
Business News B3,6-7
Crossword.............. A16
Heard on Street. B18
Life & Arts...... A13-15
Management.......... B9
Markets............. B17-18
Opinion.............. A17-19
Property Report... B8
Sports........................ A16
Technology............... B4
U.S. News............. A2-6
Weather................... A16
World News...... A8-11
>
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
YEN 112.45
P&G Claims
Win, but Peltz
Presses On
What’s
News
Four Fed economists face
an inquiry over their ownership stake in a U.K. economic-forecasting firm. A2
WSJ.com
i
i
BY ELLEN BYRON
Olivia Trevino, 12 years old,
woke up on a Tuesday morning
in May and screamed. Her new
$125 pointe shoes were badly
chewed.
The aspiring
ballerina’s black
Labrador ran off
after hearing Olivia’s reaction,
tail between his
legs. “I had fallen
asleep with my
Pointe
pointe shoes on
my nightstand,” Olivia says, describing the crime scene.
The seventh-grader from Cypress, Texas, tried using the
shoes in ballet class the next
day. “I kept falling over,” she
says. “I had to tell my teacher
that my dog ate my pointe
shoes.”
i
Pointe shoes, often handcrafted from leather, satin,
cardboard and cotton, and carrying the hard-won scent of
perspiration, can be an irresistible chew toy to canines.
The expensive and delicate
shoes, which aid
ballerinas
to
dance on the
tips of their
toes, or en
pointe, can be
wrecked with a
bite or two.
shoes
At Grand Jeté
Inc., a dancewear store in St.
Paul, Minn., ballerinas new to
dancing en pointe spend as
long as an hour trying on a
half dozen or so shoes to test
different widths, shank styles
and toe-box shapes. They learn
how to sew on the elastic
Please see POINTE page A12
A Political Scandal
Rocks South Africa
At the center is role of Gupta family in President Zuma’s government
BY GABRIELE STEINHAUSER
JOHANNESBURG—Many South Africans believe the country’s real seat of power is a suburban, 140,000-square-foot compound shielded
by concrete walls and sometimes guarded by
an armored personnel carrier.
The sprawling complex is the home and
headquarters of the Gupta family, who moved
to South Africa from India in the early 1990s
as apartheid was ending and then built a business empire stretching from media to mining.
Their riches and close ties to President Jacob
Zuma have plunged the country into its gravest political crisis since the overthrow of
white-minority rule.
The Guptas are at the center of a corruption
scandal that has entangled international firms
from KPMG LLP to McKinsey & Co. to SAP SE,
amplified calls for Mr. Zuma to resign and has
become a battle line in the race to succeed him
as leader of the African National Congress, the
country’s ruling party since Nelson Mandela.
One party official said last year that one of
the three Gupta brothers who oversee the family business offered him the job of finance
minister at the Gupta compound while Mr.
Zuma’s son was there. An investigation by
South Africa’s ombudsman said President
Zuma and other officials steered government
contracts to Gupta businesses.
In the past five months, a flood of emails
and other documents that appear to have been
obtained from Gupta-controlled companies has
buttressed longstanding suspicions among
many South Africans that the family has used
its connections to Mr. Zuma to help it amass
gigantic financial gains.
“I could not help to wonder whether‚ unbeknown to me‚ democracy and the rule of law
had somehow been suspended,” Pretoria High
Court Judge Hans Fabricius wrote in a ruling
two weeks ago in favor of a bank that wants to
stop doing business with the Guptas.
The judge suggested that South Africa’s fuPlease see GUPTA page A12
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A2 | Wednesday, October 11, 2017
* *****
THE WALL STREET JOURNAL.
U.S. NEWS
Fed Probes Some of Its Economists
The Federal Reserve’s internal watchdog is probing a
group of Fed economists who
also own shares in a U.K. economic-forecasting company, a
person familiar with the matter said.
At issue is whether the
economists’ ownership stakes
in the private firm could have
created a conflict of interest.
The inquiry, by the Fed’s Office of Inspector General, centers on four economists who
have owned shares in Londonbased Now-Casting Economics
Ltd., the person said. The inquiry is at a preliminary stage,
this person said.
Like the Fed, the U.K. company makes short-term economic forecasts using realtime data. It sells that
information to investment
firms, such as hedge funds,
which use it to help make market bets. Having a vested interest in the U.K. company puts
the Fed economists in a position where they could be suspected of a conflict or the appearance that the U.K.
company is selling access to
such information.
The Fed’s code of conduct
says employees “should avoid
any situation that might give
rise to an actual conflict of interest or even the appearance
BROOKS KRAFT/GETTY IMAGES
BY KATY BURNE
Some Fed economists’ ownership stakes in a U.K. forecasting
company could have created a conflict of interest.
of a conflict of interest.”
The OIG was notified of the
matter by a U.S. forecasting
and financial-technology firm,
Economic Alchemy LLC, which
is a defendant in a trademark
dispute with the Fed and NowCasting Economics, legal filings with the U.S. Patent and
Trademark Office show.
In those filings, Economic
Alchemy Chief Executive Giselle Guzman said the “mere
perception” that the Fed economists might have access to
nonpublic monetary-policy information could boost the U.K.
firm at the expense of rivals.
None of the information ex-
hibited by Ms. Guzman
and Economic Alchemy would
indicate the U.K. firm or the
economists have traded on
confidential Fed information.
A spokesman for the Fed’s
OIG declined to comment on
the office’s activities. William
Mason, an OIG investigator,
said he was “unable to talk
about things ongoing, especially an investigative matter.”
In filings, Ms. Guzman said
the OIG acknowledged receiving the complaint and that she
got a call from Mr. Mason, who
had requested a meeting.
A spokesman for the Fed
board of governors said: “Our
practice is to neither confirm
nor deny investigations.” The
Fed didn’t provide any documents in response to a publicrecords request.
Ms. Guzman alleged in the
letter to the OIG that one of
the economists, Domenico Giannone—an assistant vice
president in macroeconomic
and monetary studies at the
Federal Reserve Bank of New
York—is violating conflict-ofinterest rules for federal employees as well as the Fed’s
code of conduct.
Mr. Giannone, 44 years
old and a co-founder of NowCasting Economics, said he
disclosed his “involvement” in
the U.K. firm before joining the
Fed in late 2014. He now owns
30.5% of the U.K. firm, the firm
said. Filings with a U.K. government agency still list him
as a “person with significant
control” in the company.
Mr. Giannone said he resigned as a Now-Casting Economics director in 2014, just
before joining the Fed, and has
complied with conditions on
his employment set by the
New York Fed’s ethics office.
“I do not vote my shares or
participate in the business,” he
said in an email. “Any suggestion that I have acted improperly is false.”
Now-Casting
Economics
CEO Jasper McMahon said Mr.
Giannone “has had no role
whatsoever in the company”
since 2014. The company
didn’t file Mr. Giannone’s resignation notice with the U.K.
government that year, when it
was supposed to. The notice
was filed May 24 of this year, a
delay that Mr. McMahon called
an “inadvertent mistake.”
Consequent filings that
show Mr. Giannone as an active officer as recently as Feb.
10, 2017, also were a mistake,
Mr. McMahon said.
A New York Fed spokeswoman said Mr. Giannone disclosed his “role and interest in
the U.K. company” before
joining. She said a condition of
his Fed employment was that
he not have access to highlevel money-policy decisions
and nonpublic views by Fed officials on the likely future direction of policy making.
Another condition from the
New York Fed, she added, was
that Mr. Giannone “not participate personally and substantially” in any Fed matter that
could financially benefit him
or his company.
Ms. Guzman’s allegations
cite three other Fed economists with shares in the U.K.
firm. The Fed declined to comment on them, and Mr. McMahon said the company has
“taken great care…to avoid any
such conflicts.”
CORRECTIONS AMPLIFICATIONS Artist Builds Fences in New York City
A person who reaches age
70½ during any point in a calendar year and who wants to
convert part of a traditional
IRA to a Roth IRA must first
take his or her required minimum distribution from the
traditional IRA. A Journal Report article on Monday that
looked at using a tax credit for
an electric vehicle in combination with a Roth conversion
incorrectly indicated that the
conversion could be made
without first taking the RMD.
Queen Victoria granted
city status to Belfast in 1888.
The City Hall was erected in
1906. An Off Duty article Saturday about the city in Northern Ireland incorrectly said
that Queen Victoria dedicated
the City Hall in 1906.
ILLINOIS
Sweetened-Drinks Tax
In Chicago Repealed
Lawmakers in Cook County
voted to repeal a penny-an-ounce
sweetened-beverage tax, delivering a big win for the soda industry, which is battling similar measures around the country.
Cook County, which includes
Chicago, implemented the tax
Aug. 2. Board President Toni
Preckwinkle, a Democrat, positioned it as a way to fill a $200
million budget hole and a bid to
wean residents from unhealthy
drinks.
The beverage industry pushed
back, arguing it hurt local businesses and residents. The industry also challenged the portrayal
of the tax as an effort to improve
public health since it also applied
to sugar-free beverages like diet
soda.
—Shayndi Raice
NAVY
Commanding Officers
Removed After Crash
The Navy said the recent fatal collision of the USS John S.
McCain was preventable and the
ship’s two most senior commanding officers were removed
and reassigned due to a loss of
confidence.
Ten sailors were killed in the
early hours of Aug. 21 when the
McCain collided with a civilian
tanker while en route to Singapore. The collision tore a hole in
the left rear side of the American destroyer.
The McCain collision was the
latest in at least four Naval ship
accidents in the past year—including the fatal collision of another Seventh Fleet ship, the
USS Fitzgerald, in June.
—Jake Maxwell Watts
TEXAS
Police: Man Admitted
To Texas Tech Killing
Readers can alert The Wall Street Journal to any errors in news articles by
emailing wsjcontact@wsj.com or by calling 888-410-2667.
THE WALL STREET JOURNAL
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U.S. WATCH
ARCH INSTALLATION: People walk by a sculpture by Chinese activist artist Ai Weiwei, inside the
Washington Square Arch in New York’s Greenwich Village. The piece is part of the artist’s ‘Good
Fences Make Good Neighbors’ installations.
A Texas Tech University student confessed to killing a campus police officer who had been
booking him on a drug possession charge, telling detectives he
had done “something illogical”
and that “he was the one that
shot their friend,” an investigator
said.
In an affidavit released Tuesday, Detective Thomas Bonds of
the Lubbock Police Department
said Hollis Daniels III confessed
to killing Officer Floyd East Jr.
after his recapture Monday
night.
Mr. Daniels, who is from the
San Antonio suburb of Seguin, is
charged with capital murder of a
peace officer and is being held in
the Lubbock County jail on a $5
million bond. Online jail records
don’t indicate whether he has an
attorney who can speak on his
behalf.
—Associated Press
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
* *
Wednesday, October 11, 2017 | A3
U.S. NEWS
Proposal would bar
players from kneeling,
marking a reversal in
the league’s stance
BY MATTHEW FUTTERMAN
AND ANDREW BEATON
The
National
Football
League said it would consider
requiring all of its personnel to
stand for the national anthem,
a move that could defuse a dispute with President Donald
Trump but create a showdown
with players over their right to
protest.
The decision to consider the
change came after weeks of
persistent criticism from the
GOP president about players
protesting during the anthem,
including his call for fans to
boycott games if the demonstrations continue. On Sunday,
Vice President Mike Pence left
an Indianapolis Colts game after members of the San Francisco 49ers took a knee during
the anthem.
The controversy is “threatening to erode the unifying
power of our game,” NFL Commissioner Roger Goodell said in
a memo to league executives on
Tuesday.
Mr. Goodell didn’t release
details of a plan to address the
issue, but he said the league
believes that all players should
stand for the anthem. He also
said the league would suggest
other ways it could support social-justice issues that players
want to champion.
Any change to the NFL’s policy would mark an abrupt reversal after the league presented weeks ago a unified
front in response to Mr.
Trump’s criticism.
The decision to consider an
adjustment reflects the mounting concern among owners that
the controversy could have
long-term financial implications for the country’s most
popular sport.
Some of the protesting players have said they are kneeling
in hopes of calling attention to
racial inequality in the U.S., not
disrespecting the flag or the
anthem.
Green Bay Packers tight end
Martellus Bennett criticized the
commissioner’s proposal. On
Twitter, he wrote: “@nflcommish really bruh? It’s hard trying to play both sides of the
fence when it comes down to
injustice and your money huh?”
The NFL manual on game
operations
says
players
“should” stand during the national anthem. It doesn’t say
they “must” stand, even though
that word is used in numerous
instances in the manual regarding player behavior during
games.
The owners are scheduled to
meet next week in New York. “I
fully expect this to be front and
center on the agenda,” said
league spokesman Joe Lockhart.
The multibillion-dollar business now faces the difficult
challenge of healing fractures
on all fronts. The league is in
an unprecedented high-profile
spat with the president. At the
same time, players and team
owners are increasingly at
odds. And there are divisions
among players and owners
over how to deal with the issue.
The White House applauded
the developments on Tuesday.
“I think we would certainly
support the NFL coming out
and asking players to stand,
just as the president has done,”
said White House press secretary Sarah Huckabee Sanders.
“We’re glad to see the NFL taking positive steps in that direction.”
After Mr. Trump began his
criticism of the league three
KEVIN C. COX/GETTY IMAGES
NFL Eyes Rules During National Anthem
NFL owners are scheduled to meet next week in New York to discuss rules governing conduct during the playing of the anthem.
weeks ago, referring generically
to a player who knelt during
the anthem as a “son of a
bitch,” the NFL and its owners
chose to stand alongside, and
in some cases kneel next to, its
players. Mr. Lockhart, who
served as White House press
secretary when Democrat Bill
Clinton was president, took on
Mr. Trump directly, saying the
league “fundamentally could
not disagree more” with him.
But as fans threatened boycotts and television ratings
failed to bounce back from last
year’s diminished returns, the
league and its owners softened
their stance.
At committee meetings two
weeks ago, numerous owners
complained the league’s aggressive tack toward the White
House was counterproductive.
Dallas Cowboys owner Jerry
Jones, who took a knee with
his players before standing for
the playing of the national anthem in a high-profile primetime game on Sept. 25, said on
Monday that his policy has
been that any player on his
team who declined to stand
wouldn’t play.
Trump Takes Aim at Sports Tax Breaks
BY RICHARD RUBIN
WASHINGTON—President
Donald Trump’s attacks on
protests by some National
Football League players shifted
to tax policy on Tuesday, as
the president floated the possibility of pushing to change
laws that benefit the league.
“Why is the NFL getting
massive tax breaks while at
the same time disrespecting
our Anthem, Flag and Country?” he asked on Twitter.
The comments marked Mr.
Trump’s latest criticism of the
league after some players knelt
rather than stood during the
national anthem recently. The
movement began over a year
ago to protest police actions
toward African-Americans. Mr.
Trump reignited the issue in a
speech last month.
Mr. Trump didn’t say exactly what he had in mind on
taxes. Still, the comments
shine a light on two tax advantages the NFL historically enjoyed: the claiming of nonprofit status, which the league
President comments
again on protests over
police treatment of
African-Americans.
renounced two years ago, and
the issuance by cities and
states of tax-free bonds to pay
for new publicly financed stadiums to host NFL teams,
which continues.
“While the NFL may have
given up its tax-exempt status
a few years ago, it’s been well
documented that billions of
taxpayer dollars continue to
subsidize the construction and
renovation of professional
sports stadiums,” White House
press secretary Sarah Huckabee Sanders said Tuesday.
Many stadium tax subsidies
happen on the state and local
level, but some rely on the
ability to issue municipal
bonds that generate income
exempt from federal taxes.
Ending the tax break for
stadiums has support in Congress. Rep. Steve Russell (R.,
Okla.) and Sen. Cory Booker
(D., N.J.) are the primary sponsors of a bill to prevent tax-exempt bonds from being used to
finance the projects.
In a statement Tuesday, Mr.
Russell said the issuance of
S A K S F I F T H AV E N U E
C E L E B R AT E S
ITALIAN
STYLE
WITH OFF-WHITE
tax-free bonds to pay for stadiums distorts the goal of helping municipalities pay for infrastructure projects.
An Obama administration
proposal to repeal the tax
break for pro sports stadiums
would have raised $542 million over a decade, according
to a Treasury Department estimate in 2016.
The other often-discussed
change that would have a
much narrower fiscal impact
would be removing the ability
for sports leagues to get taxexempt status, akin to some
business trade groups. Reps.
Matt Gaetz (R., Fla.) and Blake
Farenthold (R., Texas) have
proposals to prevent leagues
from claiming exempt status.
—Andrew Beaton
and Eli Stokols
contributed to this article.
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A4 | Wednesday, October 11, 2017
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THE WALL STREET JOURNAL.
U.S. NEWS
Blankenship, convicted
in connection with
deadly mine explosion,
failed to sway justices
BY JESS BRAVIN
AND BRENT KENDALL
WASHINGTON—The
Supreme Court rejected an appeal by a former coal executive
convicted of safety violations
linked to the 2010 explosion at
West Virginia’s Upper Big
Branch mine that killed 29
men.
Don Blankenship, former
chief executive of Massey Energy Co., received a one-year
sentence after his 2015 conviction for conspiring to violate
federal mining-safety regulations, a verdict upheld by a
federal appeals court in Richmond, Va. He was acquitted of
more serious felony counts.
In his appeal, Mr. Blanken-
ship’s attorneys argued the
case “stemmed from a rush to
judgment at the highest levels
of the federal government” and
was marked by “unchecked
abuses of power by prosecutors
intent on securing a conviction
by any means possible.”
They asked the court to
overturn the verdict for several
reasons. Jurors, they said, were
told that to convict they must
find Mr. Blankenship acted
with “reckless disregard” for
safety regulations, but they
weren’t instructed that they
had to find the defendant knew
his conduct was unlawful.
The Justice Department,
urging the Supreme Court to
reject the appeal, said Mr. Blankenship “privately communicated to the Massey employee
in charge of the Upper Big
Branch mine that ‘safety violations were the cost of doing
business’ and that it was
‘cheaper to break the safety
laws and pay the fines than to
CHRIS TILLEY/ASSOCIATED PRESS
Former Coal CEO’s Appeal Turned Down
Former Massey Energy Co. CEO Don Blankenship, left, leaves
court during his 2015 trial in Charleston, W.Va.
spend what would be necessary
to follow the safety laws.’ ”
Gitmo appeal denied
Also on Tuesday, the Supreme Court turned down an
appeal from a Guantanamo Bay
detainee challenging aspects of
the military commission system established after the Sept.
11 terrorist attacks to prosecute aliens for terrorismlinked offenses without affording them constitutional rights.
Ali al-Bahlul, a former com-
munications aide to Osama bin
Laden, has been held at Guantanamo since 2002. He was
convicted of conspiracy in
2008 after a trial he largely
boycotted other than to proclaim his fealty to al Qaeda.
Among other issues, Mr.
Bahlul, who received a life sentence, challenged the military
commission’s power to try him
for conspiracy, which traditionally has been viewed as a
civilian offense rather than a
war crime.
In 2006, the Supreme Court
left that issue unresolved in a
decision striking down President George W. Bush’s order
creating the military commissions. Subsequent legislation
stopped short of providing the
same constitutional guarantees
required in civilian courts.
Apple case
In action from the court’s
business docket, the justices
asked the Trump administration for its views on Apple
Inc.’s bid to dismiss a consumer lawsuit alleging the
company illegally monopolized
the sale of iPhone apps.
The iPhone maker has filed
an appeal asking the justices
to hear the case and rule that
iPhone-app purchasers don’t
have legal standing to proceed
with their claims.
The Supreme Court deferred a decision on whether
to intervene, instead asking
U.S. Solicitor General Noel
Francisco to weigh in first
with the government’s position
on the case.
At issue is a proposed classaction lawsuit alleging consumers pay higher prices for
iPhone apps because Apple
maintains an exclusive marketplace for their sale and
charges a 30% commission to
app developers.
Apple denies it has engaged
in anticompetitive conduct.
Top Court
Dismisses
Case on
Travel Ban
JEFF CHIU/ASSOCIATED PRESS
BY BRENT KENDALL
A mobile-home park in Santa Rosa, Calif., as seen Tuesday, after being hit by a wildfire. Blazes in the state have grown larger and more unpredictable, officials say.
FIRES
Continued from Page One
who got out with nothing but
their pajamas on.”
For more than three decades, Chandra Snyder assumed her Santa Rosa house
safe from wildfires, which she
had seen sweep through more
rural parts of the region from
time to time.
Then at 2:10 a.m. on Monday, she and her husband were
woken by a call from their
adult daughter in another part
of town. A wildfire was closing
in on Santa Rosa. Their neighborhood was filling with smoke
and they evacuated.
By the time the Snyders returned, their home was gone.
“It’s a freaking nightmare,”
Ms. Snyder, 54 years old, said
through tears on Tuesday as
she and her family surveyed
the damage.
Gov. Jerry Brown declared a
state of emergency on Monday,
and on Tuesday Vice President
Mike Pence came to Sacramento and told state officials
that the request for federal assistance had been approved.
By Tuesday afternoon,
around 20,000 people had been
evacuated from fire zones
across the state, according to
fire officials. A fire in Orange
County, south of Los Angeles,
had forced more than 5,000
residents to flee their homes.
In San Francisco, south of
the largest fires, a haze of soot
hung over the city, and a burning smell inundated office
buildings.
The air in Napa County remained thick with smoke on
Tuesday, and ash fell as the
three fires raged near many of
the world’s iconic wineries.
Roadblocks were set up at
several parts of the county and
mobile phone reception and
power remained virtually nonexistent throughout. About
27,000 Pacific Gas & Electric
Co. customers had been left
without power, and the company had also pre-emptively
cut out gas to 26,000 customers, county officials said.
More than 172,000 homes
in the Napa and Santa Rosa
Scorched
Wildfires are burning in many parts of California, including Anaheim
and wine country.
Active fires
detected by
satellite on
Tuesday
afternoon
C A L I F.
Anaheim
5
ORANG E
COUNTY
Santa Ana
405
5 miles
NAPA COUNTY
Windsor
Deer Park
Santa
Rosa
505
Rohnert
Park
Vacaville
SO N O M A
C OU N TY
Napa
80
Fairfield
Petaluma
M ARIN
C OUN TY
680
Novato
Source: USDA Forest Service
metropolitan areas are at risk
from the wildfires raging in
Northern California, with an
estimated cost to rebuild of
$65 billion, according to the
analysis by data provider
CoreLogic Inc.
Vineyards in Napa County
have also been destroyed.
Around 90% of the area’s
grapes had already been harvested, according to the Napa
Valley Vintners Association.
Wineries had assembled crews
to try to pick the remainder of
the harvest.
The Signorello Estate winery was little more than a
smoking pile of rubble on
Tuesday afternoon, with
smoldering and collapsed
tasting rooms sitting abandoned as spouts of flame shot
out of pipes.
Massive wildfires routinely
ravage California—which has a
fire season that typically runs
Wildfires sweeping through
some of California’s most
prized wine regions have damaged at least 15 wineries in
Napa and Sonoma counties,
vintners and industry representatives said Tuesday.
The damage isn’t expected
to permanently cripple the industry, however. While some
winery buildings burned to the
ground, taking with them entire
vintages of wine in tanks and
barrels, the grape vines themselves are resistant to fire and
are expected to survive. And
this year’s harvest in Napa and
Sonoma was nearly complete,
according to vintner associations in both counties.
“It’s been a devastating 24
hours,” said Mike Haney, director of marketing and government relations for Sonoma
County Vintners, an industry
association. “But I think we’ll
survive this.”
Karissa Kruse, president of
Sonoma County Winegrowers,
visited the smoking rubble of
Paradise Ridge Winery. Speaking by phone Tuesday after-
noon, she described half-melted
harvest bins, racks holding
charred barrels and large stainless steel tanks that were still
standing, though the surrounding buildings were gone.
“It’s just kind of spooky, to
be honest,” said Ms. Kruse, who
lost her own home in the fire.
The vines looked fine, she said.
“We have friends who lost
everything they ever owned,” Paradise Ridge co-owner Rene Byck
said. “We can rebuild the winery.
We can make more wine.”
Along with Paradise Ridge’s
own 2017 vintage and much of
its 2016 wine, at least two
other winemakers who stored
their barrels on Paradise Ridge’s
property lost their entire 2016
vintages, Mr. Haney said.
California wine in 2016 represented 57% of the total $59.5
billion in U.S. retail wine
sales. Napa and Sonoma combined represent about 10% of
California wine-grape production
by volume, but these two counties produce the highest-value
wines. Most wines sold in the
U.S. retail for under $8 a bottle.
Sonoma wines sold direct to
the consumer go for an average
of more than $30, and Napa
wines go for more than $60.
—Jennifer Maloney
state’s largest cities north of
San Francisco, with more than
150,000 residents.
The city’s Coffey Park neighborhood, which has stood untouched by fire for decades,
was the hardest hit. Separated
by a six-lane freeway from less
developed areas, residents of
the neighborhood had worried
little about wildfires.
Propelled by winds of over
50 miles per hour, the Tubbs
Fire, which is the largest fire
currently burning in the state,
jumped the freeway early Monday morning and laid waste to
the neighborhood.
Sisters Susan Carol and Alice Plichcik found themselves
at the community center after
deciding to flee their Coffey
Park home around 1 a.m. Monday amid a thick layer of
smoke.
They said they received no
official evacuation order and
lamented the lack of warning.
“We didn’t take any jewelry,
we didn’t take any paperwork,”
Ms. Plichcik said.
Mr. Gore, the 39-year-old
Sonoma County supervisor,
said Coffey Park had been
around as long as he could remember, and had never previously been touched by wildfires.
He said Coffey Park was
now completely gone except
for “chimneys, wheelbarrows
and barbecues,” many of which
ended up in the street after the
propane tanks exploded.
“The places that we know
are dangerous are burning,”
Mr. Gore said. “But the places
that people thought would
never be touched—never in
their wildest nightmares—also
got destroyed. It’s full-court urban and suburban devastation.”
—Alejandro Lazo
contributed to this article.
5 miles
LOS A NG ELES
COUNTY
DISNEYLAND
Vineyards Resist
The Flames
Vallejo
THE WALL STREET JOURNAL.
through the hot fall months.
However, in recent years, fire
officials have said that season
is now yearlong.
Fires have grown larger,
more unpredictable and more
difficult to control, especially
after the state endured a fiveyear drought.
A recent study from the University of California, Merced
found that the fire season in
the western U.S. was more
than 80 days longer, on average, between 2003 and 2012
than it was between 1973 and
1982, because the climate has
grown hotter. Heavy winter
rains, like those in the past
year, only produced more grass
that has allowed fires to spread
in developed areas. Fires have
typically hit sparsely populated
wilderness areas.
In Santa Rosa, residents
were shocked to find themselves in danger in one of the
WASHINGTON—The
Supreme Court is one step closer
to sidestepping a decision on
President Donald Trump’s expiring travel ban, even while
lawsuits on a new version of
the ban move forward.
The high court late Tuesday
dismissed one of two pending
cases on Mr. Trump’s executive
order from March that barred
travel to the U.S. by people
from six Muslim majority
countries. The president said
the ban was needed for national security, while his critics said the prohibition unlawfully targeted people because
of their religion.
The justices, in a two-paragraph order, said the case was
moot because the old six-country ban expired. It was replaced by a new, third version
of the travel ban the president
issued Sept. 24 that focuses on
nationals from eight countries,
including the non-Muslim majority nations of North Korea
and Venezuela.
As part of its dismissal, the
Supreme Court vacated a May
ruling by the Fourth U.S. Circuit Court of Appeals, based in
Richmond, Va., that said the
president’s last travel ban
“drips with religious intolerance” and was likely unconstitutional.
The second pending case at
the Supreme Court is from Hawaii and raises additional legal
questions about the order’s
ban on refugees.
U.S. Talks
Tough on
Encrypted
Data
BY DEL QUENTIN WILBER
The Justice Department
signaled it intends to be more
aggressive in seeking access to
encrypted information from
technology companies, setting
the stage for another round in
the tug of war between privacy and public safety.
Deputy Attorney General
Rod Rosenstein issued the
warning in a speech Tuesday
in Annapolis, Md., saying that
negotiating with technology
companies hasn’t worked.
“Warrant-proof encryption
is not just a law-enforcement
problem,” Mr. Rosenstein said
at a conference at the U.S. Naval Academy. “The public
bears the cost. When our investigations of violent criminal organizations come to a
halt because we cannot access
a phone, even with a court order, lives may be lost.”
Mr. Rosenstein didn’t say
what precise steps the Justice
Department or Trump administration would take.
Steps could include seeking
court orders to compel companies to cooperate or a push for
legislation.
—Tripp Mickle
contributed to this article.
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THE WALL STREET JOURNAL.
The future of wealth since 1818.
Wednesday, October 11, 2017 | A5
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A6 | Wednesday, October 11, 2017
* ***
THE WALL STREET JOURNAL.
U.S. NEWS
Tied
Shooting Timeline Fuels Questions Firm
To Trump
LAS VEGAS—At 9:59 p.m.
on Oct. 1, police said hotel security guard Jesus Campos approached the door of Stephen
Paddock at the Mandalay Bay
Resort and Casino. Paddock,
who had rigged a camera to
see anyone approaching, shot
the guard through the door.
File Gets
Subpoenas
BY BYRON TAU
By Chris Kirkham,
Jim Carlton
and Jon Kamp
physical damage or lost revenue. Many firms lack flood insurance, and some of those
that have flood insurance said
it is inadequate.
“There isn’t a tool yet in the
federal government that is
sized to businesses that are actually very, very small,” said
Robin Keegan, who headed
Louisiana’s economic recovery
efforts following Hurricane Katrina in 2005 and is now director of a nonprofit working on
disaster recovery. Small firms
typically need quick infusions
of cash and help rethinking
their business plans in light of
a disaster, Ms. Keegan said.
Sen. Jim Risch, chairman of
the Senate’s Committee on
Small Business and Entrepreneurship, said he intends to
conduct an audit on the SBA’s
response to hurricanes Harvey,
Irma and Maria. Mr. Risch (R.,
Idaho) said he was impressed
by the number of loans SBA
has been able to disperse, but
he said it is too early to assess
the agency’s performance.
Mr. Risch declined to say
whether SBA should offer
grants or other types of assistance besides loans to businesses dealing with a disaster.
“They are executing in the
lanes they operate in,” Mr.
Risch said. “Should those
lanes be widened or should
they be added to? I’m not
ready to say that yet.”
Others said more aid is
needed. “As far back as Hurricane Katrina, I advocated for
grants to supplement existing
disaster-loan programs, and
I’ll continue to make that
case,” said Rep. Nydia Velázquez (D., N.Y.), ranking
member of the House Small
Business panel.
An SBA spokeswoman said
that “grants are always a topic
of discussion.”
The SBA had been criticized
for delays following Katrina.
The agency is now processing
loan applications in 10 days,
once the application is complete, an agency official said.
The agency said it has processed more than 100,000 applications since Harvey hit.
Rusty Arena, the owner of
Arena Design in Houston, a
screen printing company, is
using $22,000 raised through
a GoFundMe campaign, to help
cover the cost of hauling out
damaged Sheetrock, waterlogged textiles and other debris while he waits for word
on his SBA loan application,
insurance proceeds and other
sources of funding.
The $22,000 “made the difference between us standing
with hands by our sides and
getting some workers in,” said
Mr. Arena.
the spinoff value, he said.
This year, Elliott Management Corp. pushed mining giant BHP PLC to spin off its U.S.
oil-and-gas units into a separate publicly traded company.
BHP said in August it would
seek to unload the unit.
Still, such activity has been
depressed lately, in part as uncertainty over tax policy and
other matters in Washington
has put a damper on overall
deal numbers. After spinoff
volume surged in 2014 and
2015, there have been just 10
such completed deals so far in
2017—on track for the lowest
annual level since Dealogic began tracking the data in 1995.
But investors’ eagerness for
such moves hasn’t diminished,
as the performance of some
recent high-profile spinoffs attests. In many cases, they have
vastly outperformed the
shares of their former parents.
PayPal Holdings Inc.’s
share-price performance has
bested that of eBay Inc. by
more than 30 percentage
points, including dividends,
since the payment firm’s July
2015 spinoff. Similarly, Shares
of Zoetis Inc. have outperformed those of Pfizer by
nearly 60 percentage points,
including dividends, since the
maker of pet medications was
could be worth upward of $10
billion. Pfizer said the consumer unit’s value could “be
more fully realized outside the
company.”
There are notable disappointments among recent
spinoffs. Shares of HP Inc.,
which makes printers and
computers, have outperformed
Hewlett Packard Enterprise, a
provider of IT services, since
the latter was spun off in October 2015. The hope was that
the spinoff would have room
to grow without the profitable,
but declining, printer business
to weigh it down. Shares of HP
Enterprise have risen 56%, including dividends, since then—
versus a 68% gain for shares of
HP.
Activist investor Jana Partners LLC pushed oil-and-gas
services company Oil States
International Inc. to spin off
Civeo Corp., a lodging company for oil-field workers, just
months before a downturn in
energy prices sent Civeo’s
shares tumbling in late 2014.
Shares of News Corp, the
owner of Wall Street Journal
parent company Dow Jones,
have underperformed those of
21st Century Fox Inc.—the
original parent company—
since the two companies split
in June 2013.
There are also plenty of examples of companies with a
wide scope of operations that
continue to prosper, like Amazon.com Inc. and Berkshire
Hathaway Inc.
One group that benefits
whether spinoff activity is
ebbing or flowing, according
to Mr. Cornell of Spin-Off Advisors: the bankers that reap
hefty fees from arranging
deals.
“You get five years of unbundling, then there’s a lot of
merger activity, and bankers
start saying ‘hey this asset
would make a lot of sense for
you.’ ”
—David Benoit
contributed to this article.
JOHN LOCHER/ASSOCIATED PRESS
Six minutes later, Paddock
began firing on the crowd of
concertgoers below, police said.
The sequence represents a
significant shift in the timeline
provided by law-enforcement
officials, who have warned it
could change as the investigation unfolds.
Earlier, officials said Mr.
Campos arrived in the midst
of
Paddock’s
shooting
frenzy. But on Monday, police
said he arrived before Paddock
began the attack on the country music festival.
Debra DeShong, a spokeswoman for MGM Resorts International Inc., which owns the
Mandalay Bay, said in a statement that the company “cannot
be certain about the most recent
timeline that has been communicated publicly” by police and
believes “what is currently being
expressed may not be accurate.”
The new timeline from police, nevertheless, raises a question of whether Paddock might
have been stopped before he
fired on the crowd. Police said
Mr. Campos was shot in the leg
when Paddock fired on him.
The first officers arrived on
the 32nd floor of Mandalay
Bay about 2 minutes after
Paddock stopped shooting, and
about 12 minutes after he
WASHINGTON—A congressional committee has issued
subpoenas targeting a research
firm that compiled a dossier of
unverified and unflattering information about President
Donald Trump.
The subpoenas were recently issued by the House Intelligence Committee to employees at Fusion GPS, which
performs research for political
and corporate clients.
During the 2016 presidential
campaign, Fusion GPS worked
with a former British spy
named Christopher Steele to
compile a 35-page dossier on
Mr. Trump’s alleged ties to
Moscow. The information contained in the dossier remains
unverified and Mr. Trump has
denied having any improper
ties to the Russian government
or Russian business interests.
The existence of the subpoenas was confirmed by an
attorney for Fusion GPS and a
Democratic aide familiar with
the congressional investigation. The subpoenas were first
reported by CNN.
“As we evaluate these subpoenas, we have serious concerns about their legitimacy,”
said Joshua Levy, counsel to
Fusion GPS.
Mr. Levy has previously
said, in response to an earlier
subpoena threat, that his clients would consider invoking
their constitutional right to refuse to give testimony if compelled to appear in front of
Congress.
The issuance of the subpoenas lays bare tensions within
the committee, which is conducting a probe of Russian activity during the 2016 election.
The subpoenas were issued by
Chairman Devin Nunes, a California Republican who stepped
aside from leadership of the
probe in April amid criticism
over how he was running it. The
subpoenas were issued without
the consent of the Democrats
on the committee, according to
the Democratic aide.
A spokesman for Mr. Nunes
declined to comment.
This isn’t the first time that
Fusion GPS, founded by former
Wall Street Journal reporter
Glenn Simpson, has faced a
subpoena threat. The Senate
Judiciary Committee subpoenaed the firm in July but withdrew it after reaching an
agreement with Mr. Simpson
to provide closed-door testimony. Mr. Simpson eventually
gave 10 hours of voluntary testimony to the committee, according to Fusion GPS’s attorney, Mr. Levy.
Mr. Levy said that the firm
wasn’t opposed to cooperating
with Congress and was engaged in negotiations about
testimony when the subpoenas
were issued.
He said Mr. Nunes’s committee was offered the same
terms as other committees.
Congressional subpoenas
are mandatory summonses to
appear before Congress, but
the legislature has had difficulty enforcing them in the
past. Congress typically needs
either assistance from a federal court or the Justice Department to help compel a witness
who
defies
a
congressional subpoena.
A police officer responding to the shooting near the Mandalay Bay resort and casino on the Las Vegas Strip on Sunday.
started, according to police.
Paddock killed 58 people in
a shooting frenzy that also injured nearly 500 others, and
killed himself before police
broke into his suite.
David Hickey, international
president of the Security, Police and Fire Professionals of
America union that represents
the Mandalay guards, said he
met with Mr. Campos in Las
Vegas this week.
Mr. Hickey said Mr. Campos
said he had stayed on the 32nd
floor and immediately called in
what happened to hotel security dispatch, and saved a hotel
engineer from entering the hallway and possibly being shot.
Mr. Hickey said Mr. Campos did exactly what he was
supposed to do and called
him a hero.
Efforts to reach Mr. Campos
were unsuccessful Tuesday.
A person familiar with Mandalay Bay operations said the
casino is going through phone
records and video footage to
check when Mr. Campos called
in that he was shot and what
happened next. The casino
hasn’t yet been able to determine whether the security dispatch immediately called police
or sent other security guards to
respond first, the person said.
Authorities haven’t released
911 records from that night,
citing the open investigation.
Las Vegas Metropolitan Police didn’t respond to multiple
requests for comment on
Tuesday.
Police last week credited Mr.
Campos with distracting Paddock in the midst of the massa-
cre, saying he was shot outside
Paddock’s suite “just moments” before officers arrived,
according to Las Vegas Metropolitan Police Undersheriff
Kevin McMahill. Police previously said they believed Mr.
Campos’s arrival stopped Paddock from firing on the crowd.
Monday, police changed their
account, saying they “learned
Mr. Campos was encountered
by the suspect prior to his
shooting to the outside world,”
said Las Vegas Metropolitan Police Sheriff Joseph Lombardo.
BY RUTH SIMON
AND JOSEPH DE AVILA
Some small-business owners struggling to recover from
this year’s series of brutal hurricanes said the federal government needs to beef up its
response.
Unlike individuals, businesses aren’t eligible for
grants from the Federal Emergency Management Agency.
They can receive disaster-recovery loans, but many entre-
Bruised Businesses
Disaster loan applications filed
with the federal government by
small businesses affected by
hurricanes Harvey and Irma
4,000
3,000
2,000
Declined
Approved
1,000
Pending
0
Harvey
Irma
Note: Data as of Oct. 9.
Source: Small Business Administration
THE WALL STREET JOURNAL.
SPINOFF
Continued from Page One
with market capitalizations of
more than $1 billion that have
been separated out within the
previous four years. Companies leave the index after that
time has passed.
“These companies go from
being redheaded stepchild of
some conglomerate where they
have to go and beg for money
to being able to allocate capital as they choose,” said Joe
Cornell, founding principal of
research firm Spin-Off Advisors LLC.
Spun-off companies also
tend to have management
teams that are better incentivized, Mr. Cornell said. Hedgefund and mutual-fund managers would rather invest in a
specific business than a collection of businesses, and will assign a higher value to a standalone business, he said.
preneurs aren’t interested in
taking on debt after a big
storm, and some don’t qualify
for a loan.
“It’s a shame they can’t do
more for small businesses,”
said R.L. Burdett, a 71-year-old
Houston chiropractor who
didn’t have flood insurance.
Dr. Burdett incurred nearly
$150,000 in damage when 4
feet of water from Hurricane
Harvey this summer swamped
the office he has occupied for
nearly 25 years, soaking chiropractic tables and X-ray and
ultrasound machines. He said
he is reluctant to take on debt
and plans instead to dig into
his savings.
The U.S. Small Business Administration’s disaster-loan
program is the main source of
federal aid for flood-ravaged
entrepreneurs. It allows businesses to borrow up to $2 million to repair or replace damaged property and cover other
disaster losses. But more than
half of the loan applications
are typically rejected, often because they don’t have the cash
flow to support repayments.
The mismatch between federal assistance and small-business needs is one of many
challenges such firms face
when disaster strikes. Small
businesses typically operate
with limited cash reserves,
leaving little cushion to cover
Spinoffs can also help the parent company be valued by investors at a higher multiple of
earnings.
That helps explain why activists often push companies
to break up or spin off one of
their divisions. Hedge fund
Third Point pressured Honeywell to spin off its aerospace
unit in April. On Tuesday, the
industrial heavyweight instead
said it would cleave off about
20% of its revenue by spinning
off its business that makes
thermostats for the home and
a unit that focuses on automobile turbochargers. Together,
analysts estimate the businesses could be worth as much
as $10 billion.
Honeywell Chief Executive
Darius Adamczyk said in an interview Tuesday that taxes
were a key consideration in
the decision to pursue the
spinoffs. The company is open
to acquisition offers for the
units, but any price would
have to exceed its projection of
LEE WILDE/ARENA DESIGN
Small Businesses
Push for More Aid
After Disasters
Arena Design in Houston is using $22,000 from a GoFundMe campaign to help rebuild.
The appeal of spinoffs
lies in their history of
outperforming the
broader market.
spun out of the pharmaceutical
giant in February 2013.
Pfizer now hopes to hand
its shareholders another gift,
announcing Tuesday it is exploring a sale or spinoff of its
consumer-healthcare business,
home to well-known brands
such as Advil and ChapStick.
Analysts estimate the business
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FlexWash™
One machine.
Two washers.
Live beautiful
© 2017 Samsung Electronics America, Inc.
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A8 | Wednesday, October 11, 2017
* ***
THE WALL STREET JOURNAL.
WORLD NEWS
Catalonia Holds Off on Immediate Split
Regional leader has
lawmakers suspend
independence to allow
for talks with Madrid
BARCELONA—Catalonia’s
separatist leader backed away
from an immediate declaration
of independence from Spain
on Tuesday, slowing a headlong push for secession for the
region and potentially drawing
out the tense political standoff
between Catalonia’s government and Madrid.
The move forces the hand of
Prime Minister Mariano Rajoy
to respond to the region’s drive
for independence, which remains on the table and leaves
Spain locked in an institutional
and constitutional crisis.
Catalan President Carles
Puigdemont told the regional
Parliament Tuesday that support for independence in the
Oct. 1 referendum had earned
Catalonia the right to become a
separate state. Mr. Puigdemont
cited that result in declaring
the wealthy Spanish region an
independent republic, but then
handed responsibility to regional lawmakers, asking them
to suspend that declaration
temporarily to allow Catalan
leaders more time to negotiate
a potential secession with the
central government in Madrid.
“The government and I propose that the Parliament suspend the effects of the declaration of independence so that in
DAVID RAMOS/GETTY IMAGES
BY JEANNETTE NEUMANN
Lawmakers applauding Catalan President Carles Puigdemont after his address to the Catalan Parliament in Barcelona on Tuesday.
the following weeks we can
launch talks—without which it’s
impossible to reach an agreement,” Mr. Puigdemont said.
Last week, Mr. Puigdemont
pledged to declare independence, with other members of
his government calling for a
unilateral and immediate split
with Spain. Such a move would
likely have forced Mr. Rajoy to
invoke a constitutional provision—never used before—al-
lowing the central government
in Madrid to seize control of
the region and possibly strip
Mr. Puigdemont and other Catalan leaders of their power.
Mr. Puigdemont’s watereddown statement makes it more
difficult for Mr. Rajoy to respond as aggressively, some
analysts said.
Mr. Puigdemont “has made
a political statement,” said Ignacio Jurado, an analyst with
political-risk consulting firm
Quantio in Madrid, adding
that Mr. Rajoy “can’t act
against what he has said.”
Still, Mr. Rajoy could consider the Catalan leader’s
statement as seditious and invoke some of the powers of
that provision. The prime minister and his government said
the independence referendum—and any decisions
emerging from it—are illegal
because they violate the Spanish constitution’s pledge of an
“indissoluble Spain.” State
prosecutors could also file
charges against Mr. Puigdemont, who has acknowledged
he could be sent to jail for his
secessionist bid.
Mr. Rajoy called an extraordinary cabinet meeting for
Wednesday at 9 a.m. in Madrid and was set to address
Spain’s national Parliament in
the afternoon.
“Dialogue between democrats is done within the law,
respecting the rules of the
game, and not inventing them
at your will,” Spain’s Deputy
Prime Minister Soraya Sáenz
de Santamaría said in televised
remarks after the Catalan
leader spoke.
Around 40% of Catalonia’s
five million eligible voters cast
a ballot in an independence
referendum Catalan officials
held on Oct. 1, and 9 in 10 of
those voted in favor of secession, regional authorities said.
The referendum was plagued
by irregularities, however, and
was boycotted by parties opposing independence. No conclusions can be drawn from an
illegitimate vote, Ms. Sáenz de
Santamaría said.
She said Mr. Rajoy, a conservative, was speaking to
leaders of other parties seek
“maximum consensus” as he
weighs how to respond to the
secessionist push.
Further muddying the waters, after Mr. Puigdemont
spoke, he and other separatist
lawmakers signed a document
declaring Catalonia’s independence from Spain, but the legal
status of the document was uncertain and left other politicians scratching their heads.
“It’s unclear what to grasp onto
when one hears the speech [by
Mr. Puigdemont] and then
reads the manifesto,” said José
Luis Ábalos, a spokesman for
the Sociality Party.
—Marina Force
contributed to this article.
Kenyan Opposition Leader Ends Candidacy France’s
NAIROBI, Kenya—Opposition leader Raila Odinga withdrew from a rerun of Kenya’s
presidential election, saying
the vote wouldn’t be fair and
calling for protests across the
East African nation.
The surprise move on Tuesday casts one of Africa’s biggest economies and most stable
democracies deeper into uncertainty following a decision by
its Supreme Court to annul the
results of the initial poll in August, in which the incumbent
president, Uhuru Kenyatta, was
declared the winner.
The Aug. 31 ruling, a first
for Africa, followed a petition
by Mr. Odinga and his NASA
coalition. The court ordered a
runoff
between
Messrs.
Odinga and Kenyatta to be
held on Oct. 26.
In the weeks since, Mr.
Odinga has raised concerns
that the new date didn’t leave
sufficient time to put in place
safeguards preventing renewed irregularities in the
vote—a charge that he re-
BAZ RATNER/REUTERS
BY MATINA STEVIS-GRIDNEFF
Raila Odinga and his NASA coalition say a rerun of the presidential vote, as a court ordered, won’t be fair.
peated Tuesday. Many analysts
say they believe that Mr.
Odinga, a veteran politician
who lost to Mr. Kenyatta in
2013, was unlikely to win the
repeat vote.
“We believe that all will be
best served by NASA vacating
its presidential candidature,”
Mr. Odinga said.
The 72-year-old said that
instead of holding the vote
this month, parties should be
able to make fresh nominations for candidates, a process
that would likely take several
weeks. He didn’t say whether
he plans to run again for his
own party’s nomination.
“We at NASA have insisted
that the fresh election…be
held to the standard ordered
by the Supreme Court, that is,
in strict conformity with the
constitution and written law,”
Mr. Odinga said. “Instead, the
case for proceeding with the
fresh election on 26 October
without these changes is being
made on the grounds of time
constraints.”
Mr. Kenyatta dismissed Mr.
Odinga’s demand for reopening the nomination period.
“It’s his democratic right to
participate or not. We’re tell-
ing him it’s the right of people
to decide,” Mr. Kenyatta told a
crowd of supporters at a campaign stop in the town of Voi.
His party, the Jubilee coalition, holds a large majority in
Parliament and wants to pass
several emergency electorallaw amendments, one of which
says that if one candidate boycotts a vote, the other automatically wins.
The electoral body, the Independent Electoral and
Boundaries Commission, said
it was trying to determine
what Mr. Odinga’s withdrawal
meant for the planned vote.
“The Commission and the
legal team are meeting and will
communicate way forward,” it
said in a tweet from its verified account on Tuesday.
Some analysts said Mr.
Odinga’s withdrawal puts into
question the Oct. 26 date and
further polarizes an already
divided society.
The decision to annul the
August elections was just the
fourth such ruling world-wide.
Mr. Kenyatta has insisted the
vote must go ahead on Oct. 26.
Global Economic Expansion
Exceeds Forecasts, IMF Says
BY JOSH ZUMBRUN
The world economy’s acceleration this year has been
stronger than earlier estimates, with an upswing under
way across nearly all of the
world’s major economies, the
International Monetary Fund
said ahead of a meeting of the
world’s finance chiefs in
Washington this week.
In its flagship report,
known as the World Economic
Outlook, the IMF raised its
forecast for growth to 3.6%
this year and 3.7% next year,
an acceleration from the 3.2%
growth recorded in 2016.
That is up 0.1 percentage
point in each year from the
most recent round of forecasts, released in July.
The upturn has been heralded by many policy makers
and economists. The IMF
agreed that in the short term,
the global economy has
achieved a degree of momentum that has eluded the world
for many years.
“The current global acceleration is also notable because it is
broad-based—more so than at
any time since the start of this
decade,” said the IMF’s chief
economist, Maurice Obstfeld.
But the organization also
cautioned that recovery from
the financial crisis of 2007-09
remains incomplete, and that
latent risks could return
within a few years.
“Policy makers should seize
the moment: The recovery is
still incomplete in important
respects, and the window for
action the current cyclical upswing offers will not be open
forever,” Mr. Obstfeld said.
It has become clear that
2017 will be a year that bucks
the trend of the past decade, in
which economic forecasters repeatedly started the year optimistic about growth prospects
but then marked them down.
The improvements haven’t
been large, but have been witnessed nearly everywhere, with
increases of 0.1 or 0.2 percentage point in the U.S., eurozone,
Japan and China. Canada’s
growth forecast has notched
up 0.5 point since the July estimate, and other advanced
economies were up 0.3 point.
This year will likely be the
strongest since 2014, with most
major economies strengthening. Enough may strengthen
again in 2018 that it could be
the strongest year for growth
since 2011, according to IMF
projections.
Public
Workers Go
On Strike
BY WILLIAM HOROBIN
PARIS—French leader Emmanuel Macron’s truce with
his country’s unions is showing signs of unraveling less
than six months into his presidency, as public-sector workers took to the streets Tuesday to protest his attempts to
overhaul the sluggish economy.
For the first time in a decade, all nine of France’s public-sector unions called on
their members to strike, shutting down schools and disrupting flights and health services around the country.
The strikes, by unions that
had initially given Mr. Macron
their tacit support, suggest
they won’t stand by his side as
he pursues sweeping changes
that chip away at decades-old
workplace protections many
French see as essential rights.
In his first steps, Mr. Macron in September pushed
through decrees to loosen labor laws, prompting demonstration by private-sector
unions. The backlash against
those measures is gaining momentum after Force Ouvrière,
a main union that until now
chose to stay on the sidelines,
said this month it would join
protests.
Demonstrators in Paris
brandished placards saying
they were “badly paid, distrusted, less secure and fed
up,” and chanted for publicand private-sector workers to
unite their protests. Police
said around 26,000 people attended the march in Paris,
slightly more than the 24,000
counted at protests in September against Mr. Macron’s
changes to labor laws.
“I’m here to protest against
Macron’s general policies,”
said Stéphane Guyon, a university teacher who traveled from
outside the capital.
Mr. Macron wants to retool
the French economy with
more-flexible labor laws and a
leaner state that taxes and
spends less. But with nearly
5.5 million people on the state
payroll, the public sector is a
powerful constituency—one
that has derailed reform efforts by past presidents.
In his campaign, Mr. Macron branded his pro-business
policies as central to a bipartisan economic renewal that
would overcome France’s traditional political and social divisions. But Mr. Macron’s alliance of supporters has proved
fragile as old divides reopen.
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | A9
* * * * *
WORLD NEWS
A New Cold War Grips Arctic Enclave
Unprofitable coal-mining operations have come to symbolize a broader power play between Norway and Russia
BARENTSBURG, Norway—
In this coal-mining town on
the Arctic archipelago of
Svalbard, the school teaches
in Russian, food is priced in
rubles and a large Soviet-era
sign declares: “Our Goal is
Communism.”
But this state-funded slice
of Russia is actually on Norwegian territory, and Oslo
subsidizes a separate coal
mine a few dozen miles away.
Svalbard has an unusual
status that makes it a flashpoint of an escalating faceoff in the Arctic between
Russia and the West.
Norway, a member of the
North Atlantic Treaty Organization, and Russia subsidize
these unprofitable mines to
keep a strategic footprint on
an icy group of islands where
Oslo and Moscow have been
the main players since a 1920
treaty among multiple nations
recognized Norwegian sovereignty but allowed other nations to develop some commercial interests.
But on Thursday, Norway
will decide whether it wants
to continue plowing money
into coal production here, a
move that could weaken its
hold on the islands just as
Russia cements its Arctic
presence with its largest
military buildup there since
the Cold War.
The mines highlight Russian President Vladimir Putin’s focus on projecting
power despite the
cost. Russia continues to use
its military in eastern
Ukraine, despite economic
sanctions that have hobbled
its economy, and is investing
in the defense of other isolated parts of its territory.
“It’s probably not normal
for there to be a loss-making
company on foreign territory,” says Alexander Veselov, the head of the Russian state-owned company,
Arktikugol, that runs the
KNUT EGIL WANG/MOMENT/INSTITUTE FOR THE WALL STREET JOURNAL (3)
BY SARAH MCFARLANE
AND JAMES MARSON
DIGGING IN: Russia operates a coal-mining facility, lower right, in Barentsburg, above right, on the Arctic archipelago of Svalbard. Kurt Even ‘Darris’ Hansen, above left,
works as a coal miner at a Norwegian-operated facility in nearby Longyearbyen. Norway on Thursday is set to announce whether it will continue coal operations in the area.
mine and Barentsburg itself.
“The state thinks that there
are state interests, roots
here,” he said.
Russia and Western countries are jostling for position
in the Arctic as thawing
oceans open up potential
commercial opportunities
and Mr. Putin further asserts
Moscow’s influence abroad.
He says the Arctic is significant for strengthening
Russia’s global position and
economy, citing potentially
huge oil resources. Russia
has upgraded its northern
fleet, conducted large military exercises in the region,
and opened a revamped military base on the archipelago
closest to Svalbard.
U.S. government officials,
including Secretary of Defense Jim Mattis, have raised
concerns over Russia’s
moves and said the U.S.
needs to develop a more-robust Arctic strategy. NATO has described its
lack of maritime resources in
the region as a weakness.
“Svalbard is part of Norway and therefore it’s part of
NATO,” Secretary-General
Jens Stoltenberg said on
Monday. “So, of course, all
the NATO security guarantees
apply to Svalbard. When it
comes to the question of coal
mining, that’s for the Norwegian authorities to decide.”
There is no debate in Russia, officials say, even as its
FROM PAGE ONE
PELTZ
Continued from Page One
ger issues Mr. Peltz threw into
focus—costs, hipper brands
and nimbler management.
Mr. Peltz and Mr. Taylor
shook hands after Tuesday’s
meeting. Mr. Peltz congratulated the CEO. “We’ll talk,” Mr.
Taylor said.
“We’ll talk but we don’t listen,” Mr. Peltz replied. Mr.
Taylor responded, “No, no, no,
that’s not true.”
“At best for them it’s a Pyrrhic victory,” Mr. Peltz said after the meeting. “If they’d gotten me on the board there
would be no short-term pressure.”
P&G shares fell immediately
after the vote news and closed
Tuesday down 50 cents to
$91.62. The stock is up nearly
9% on the year.
Trian is among the few activists to prove it can present
a serious challenge to the biggest blue-chip companies. Historically, the fund has avoided
proxy fights and talked its way
into boardrooms with settlements, more akin to General
Electric Co.’s move Monday to
give Trian a seat on its board.
However, if the initial P&G
tally holds up, it would mark a
second defeat in a major proxy
campaign for Trian, which lost
a similar vote at DuPont Co. in
2015.
DuPont had fended off Mr.
Peltz by likening his style to
“shadow management” and
won the votes of all three big
index funds that had appeared
uneasy with Mr. Peltz’s style.
Since then, Trian has aggressively courted that investor demographic, trotting out executive allies to detail their largely
positive interactions with his
fund at investor meetings.
Trian narrowly lost the DuPont vote, but subsequent
events led some to argue the
fund was right all along. DuPont management missed
numbers it had pledged to hit,
and the company has since
merged with Dow Chemical Co.
in a plan Trian helped design.
Mr. Peltz pointed to DuPont
on Tuesday, saying P&G management now will have to live
up to the promises of progress
and change it made in trying
Counting Ballots
The number of proxy fights among U.S. companies and share
of those that have gone to a vote.
coffers are depleted by weak
oil prices and the international sanctions that followed
its annexation of Crimea.
Svalbard has already
sparked heated exchanges.
Russian Deputy Prime Minister Dmitry Rogozin, who was
banned from Norway after
Russia’s Crimea annexation,
tweeted photos of himself visiting in 2015, drawing Norwegian complaints. In May, Norway angered Russia by hosting
a NATO meeting there.
Russian officials say Norway is using its ownership of
the archipelago to squeeze
operations. The Norwegian
government didn’t comment.
Russia, which started mining here in the 1930s, fo-
cused on Barentsburg
and another settlement
called Pyramiden.
After the Soviet Union
collapsed, Russia’s economy
tanked and this Arctic settlement fell with it. Pyramiden
was abandoned, and by
2006, Barentsburg was on
the edge of collapse.
In 2007, as the Russian
president promoted a more
assertive foreign policy, Mr.
Veselov, a veteran coal executive, was brought in to revive the mining operation.
Russia’s government has
ordered coal production to
slow to stretch reserves out
until 2032, and will then face
a decision similar to Norway’s on whether to invest in
a new mine, Mr. Veselov said.
Per Nilssen, production
manager for Store Norske,
Norway’s state-owned mining company, said time may
be running out for Norway’s
mining operations.
Both countries are turning
to tourism. In Russia’s settlements, visitor numbers have
doubled in the past four
years, and income from tourism stood at $2.4 million last
year, more than from mining.
Norwegian politicians and
academics admit that without a coal mine, their country’s presence will diminish,
in part because tourism is so
seasonal.
—Julian E. Barnes
contributed to this article.
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to persuade investors to vote
against Trian.
For his part, Mr. Taylor said
the proxy battle increased urgency within P&G even as he
insisted the maker of Tide and
Pampers was making progress
in its turnaround efforts after
a decade of market-share
losses and stagnating profits.
“It’s a proxy contest about
ideas,” Mr. Taylor said.
Mr. Peltz, whose Trian has
invested about $3.5 billion in
P&G, argued the company
needs to streamline operations
P&G won the vote
count but remains on
the spot to show its
big brands can grow.
and bring in outside talent.
P&G countered that Mr. Peltz’s
arrival would disrupt a turnaround that is under way.
A large P&G shareholder,
the California State Teachers’
Retirement System, said the
vote sends a message to P&G’s
board and management.
“Nearly 50% of shareholders—
including large traditional passive asset managers—made it
clear that they are looking for
the company to change direction,” the fund said in a statement.
Two top proxy advisers had
recommended that investors
THE WALL STREET JOURNAL.
vote for Mr. Peltz, while P&G’s
three biggest investors—Vanguard Group, State Street
Global Advisors and BlackRock
Inc.—were divided.
Vanguard, the biggest single P&G shareholder with a 7%
stake, voted for P&G management, according to people familiar with the matter.
BlackRock and State Street,
which hold around 10% combined, voted with Trian, these
people added. Some activelymanaged funds at BlackRock
that control a small portion of
shares voted with P&G management, one person said.
Many P&G employees and
retirees rejected the activist’s
challenge—underscoring how
companies’
rank-and-file
workers generally still distrust
Wall Street prescriptions. P&G
management won a big chunk
of employee-owned stock
plans, which controlled about
7.5% of the total vote, the people familiar with it said.
More than 400 people
showed up for the shareholder
meeting at P&G’s Cincinnati
headquarters, filling an auditorium and spilling into two
overflow rooms.
The turnout reflected the
large number of P&G shares
held by retirees and other individuals, many of them living
in Cincinnati. Retail investors
own roughly 40% of the company, compared with an average of 12% at the S&P 500, according to S&P Global Market
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A10 | Wednesday, October 11, 2017
* *
THE WALL STREET JOURNAL.
WORLD NEWS
WORLD WATCH
AUSTRALIA
North Korean leader Kim Jong Un, at center front, attended a tribute to his father and grandfather at their mausoleum in Pyongyang on Sunday.
North Korea Hackers Stole War Plan
Suspected North Korean
hackers stole military secrets,
including a joint U.S.-South
Korean plan detailing how to
eliminate the Pyongyang leadBy Kwanwoo Jun
in Seoul
and Nancy A. Youssef
in Washington
ership in the event of war, in a
breach of Seoul’s defense data
system last year, U.S. and
South Korean officials said.
The hackers broke into the
defense database in September last year and snatched the
trove of classified military
documents, Rhee Cheol-hee, a
member of the ruling Democratic Party, said in an interview with local media published Tuesday.
The documents include a
blueprint known as Operations
Plan 5015, which the U.S. and
South Korea drew up in 2015
in case war broke out with
North Korea, and detailed a
range of joint military procedures that include a so-called
decapitation strike targeting
North Korean dictator Kim
Jong Un and other top leaders
for elimination, Mr. Rhee said
in the interview.
His aides confirmed the
comments, which were made
to the Chosun Ilbo newspaper.
In Washington, two U.S. defense officials acknowledged
the suspected North Korean
hack had occurred. But they
said the U.S. military regularly
updates and revises its operational plans, and the plans
have since been superseded,
the officials said. They said
they didn’t foresee any impact
on potential future military
operations.
Mr. Rhee, a key member of
the South Korean Parliament’s
National Defense Committee,
said the findings were confirmed belatedly by the country’s Defense Ministry. The
committee oversees the ministry, and Mr. Rhee represents
the ruling party on the panel.
Mr. Rhee wasn’t available
Stolen secrets include
a U.S.-South Korean
plan to eliminate the
North Korean leader.
for further comment. The Defense Ministry declined to
comment. The U.S. Embassy in
Seoul said it was aware of the
development and declined to
comment further.
North Korea has denied involvement in previous hacking
attacks on South Korea.
In March, Pyongyang reacted angrily to reports of a
U.S.-South Korean plan for a
decapitation strike, with the
general staff of its army issuing a rare statement warning
it is ready to “mercilessly
smash the enemy’s moves”
with its own special operation
and pre-emptive strike.
South Korea’s Defense Ministry said in May it suspected
North Korea had hacked into
its military network but didn’t
say what data had been taken.
The hackers stole 235 gigabytes of data, 22% of which
have been identified, according to Mr. Rhee, who said he
had been briefed by Defense
Ministry officials. The documents covered classified wartime operational plans, military facilities and power
plants in South Korea, he said.
The development comes
amid heightened tensions over
Pyongyang’s quest to develop
a nuclear-tipped missile capable of hitting U.S. cities. Over
the weekend, President Donald
Trump hinted at military action against North Korea,
tweeting that “only one thing
will work” to rein in the regime’s weapons program.
South Korea’s Joint Chiefs
of Staff office said early
Wednesday that the U.S. flew
two B-1B bombers over the
Korean peninsula Tuesday
night and conducted bombing
drills, in a show of force
against North Korea. At the
same time, the U.S. aircraft
carrier Ronald Reagan was
heading toward the Korean
Peninsula for scheduled maneuvers, a U.S. official said.
Meanwhile, North Korea
was reported by a Russian official to be preparing to test
another missile.
U.S. Firms Tread Carefully on Trade Probe
U.S. business groups praised
the Trump administration’s investigation into China’s trade
By Jacob M.
Schlesinger in
Washington and Eva
Dou in Beijing
practices—but cautioned on
Tuesday that a heavy-handed
probe could backfire, harming
American firms.
The investigation into allegations that China improperly
pressures U.S. high-tech firms
to turn over intellectual property was launched in August
under a little-used Section 301
of U.S. trade law, which gives
the president broad discretion
to penalize a country found to
have employed “unfair” or “discriminatory” trade practices.
“We appreciate the…focus
on these important issues,”
Erin Ennis, senior vice president for the U.S.-China Business Council, told a panel of
government officials chaired
by the U.S. Trade Representative’s office. Speaking at a
public hearing in Washington,
she said an overly aggressive
approach of “simply seeking to
impose penalties or restrict
trade” could end up “inhibiting commercial cooperation
that benefits U.S. companies
and U.S. citizens.”
U.S. officials have said the
investigation could take up to
a year, and that they have yet
to determine what, if any,
sanctions would be imposed.
Representatives of Chinese
business groups told the panel
that complaints about forced
technology transfer were exaggerated and U.S. trade penalties were unwarranted.
“Both U.S. and Chinese
companies can enter into contracts or choose business part-
ners freely and independently,” said Wang Guiqing,
vice president of a Chinese
business group.
“The protection of intellectual property rights and the
business environment in China
have been substantially improved,” said Chen Zhou, vice
president of the China Chamber
of International Commerce.
U.S. business groups have
long raised concerns about
China’s methods for acquiring
intellectual property and have
been generally supportive of
the probe. But few companies
want to go public with those
concerns, for fear of retaliation from Beijing.
That hesitancy is complicating the investigation so far.
Lee Branstetter, an economics
professor at Carnegie Mellon
University said in written
comments that given companies’ risk of “extreme retribution” from Beijing if they assisted publicly with the probe,
the government should consider using subpoenas to compel assistance. “Only if firms
face strong legal penalties for
withholding evidence can they
be compelled to tell the whole
truth,” he wrote.
China Is Charging Ahead in Global Electric-Car Race
SHANGHAI—Watch out
Detroit: A Chinese electriccar revolution is on the way.
China is placing big bets on
a plan to reshape the global
auto industry by replacing
gas-guzzling cars on its streets
with new-energy vehicles.
Ahead of Donald Trump’s
trip to China in November,
the White
House is focused on
holding back
Chinese exports in traditional industries like steel and
aluminum. But that’s a sideshow. A titanic struggle is
under way to control the industries of the future from
robotics to medical equipment and artificial intelligence. In new-energy vehicles, China is firmly in the
driver’s seat.
Its industrial goal is to
leapfrog over foreign car makers in the domestic market,
by far the world’s largest—
and the most important for
General Motors—and become
an export powerhouse. Having
tried and failed to catch up
with Western and Asian makers of traditional vehicles, the
country is throwing everything it has at electric cars.
WU HONG/EPA/SHUTTERSTOCK
CHINA’S WORLD
By Andrew Browne
A charging pole for electric vehicles sits in a parking lot outside an apartment building in Beijing.
Beijing has said it is studying a move to ban gas-powered cars. It has been specific
about who it expects will win
the new battle for China’s eager car buyers: The “Made in
China 2025” blueprint for how
to dominate cutting-edge industries calls for at least 70%
market share for homegrown
plug-in vehicles by 2020.
I
ronically, this strategy is
likely to involve what at
first looks like a breakthrough for foreign auto
makers in China.
Expect an announcement
on 100% foreign-owned electric-car plants in special economic zones, possibly during
Mr. Trump’s visit. Chinese
leaders will trumpet this as
a major concession to Tesla,
among others.
In fact, says Michael
Laske, the China chief executive of Austrian auto consultancy AVL List GmbH, China’s
real aim is to accelerate technology imports to boost what
it calls a “strategic emerging
industry” and attract global
supply chains. “It’s brilliant,”
Mr. Laske says.
Success is by no means ensured. Although electric-car
sales in China are booming,
skeptics note that so far hefty
subsidies have been needed to
persuade consumers to buy.
But we heard similar disbelief about the solar industry, which China now dominates after raising the panels’
performance and using econ-
omies of scale to drive down
the cost of making them.
Recall, too, that Chinese
smartphone brands have
knocked Apple off its pedestal in China.
W
hy would electric
cars be any different? The critical
point, notes Gary Rieschel,
the founder of Qiming Venture Partners, one of China’s
leading private-equity firms,
is that they are dramatically
simpler than regular cars mechanically. The country is the
world’s largest battery maker.
In electric cars, Chinese
state planners see an opportunity to reverse one of their
most frustrating setbacks.
It took Japan and South
Korea 20 years to build a
world-class car industry;
China isn’t there yet after 40
years. Beijing’s initial idea
was to invite a few global
auto makers to form joint
ventures with state firms,
absorb their technology and
then go it alone. But state
car giants have been largely
content to rake in profits
from hookups with the likes
of GM, Ford and Toyota,
which supply most of the designs and technology.
GM develops some models
locally with its Shanghai
partner; other firms have
been much stingier with
technology transfers, not
wishing to hand over their
most valuable secrets.
This is not a mistake that
Beijing intends to repeat. The
Chinese car market has
grown from less than one million in 2000 to 24 million last
year, of which around 350,000
were electric plug-ins.
Spurred by decrees to ramp
up production of electric vehicles and invest in research
and development, the world’s
leading car makers will have
no choice but to shift their
critical know-how to China.
Environmental concerns are
part of China’s overall calculations. That means electric.
China already accounts for
one-third of global car sales,
and its domestic market could
double from here. That’s still
nowhere near U.S. per capita
ownership—one reason electric cars are becoming the
poster child for China’s global
industrial ambitions.
As China goes, so will the
world’s auto industry. Increasingly, its output will be
stamped “Made in China.”
The government is considering new powers to protect critical infrastructure as it confronts
concerns that foreign investment has left communications
and energy assets vulnerable to
terrorism and cyberattacks.
The proposed laws, which include “last resort” powers allowing authorities to intervene in
privately owned businesses if
national security is deemed to
be at risk, come as a government report showed cyberattacks rose by 15% last year.
In one of the most serious incidents, hackers who government cyber experts think are in
China are believed to have carried out an attack on the computer system of an Australian
defense contractor, stealing a
significant amount of data.
Australia escaped the worst
effects of the WannaCry cyberattack in May that infected
more than 300,000 computers
in more than 100 countries. It
was the first in a wave of attacks that include a recent data
breach at the credit agency
Equifax Inc.
Still, cyberattacks there are
increasing in number and sophistication.
—Rob Taylor
SYRIA
Russian War Plane
Crashes After Takeoff
A Russian war plane crashed
shortly after taking off from an
air base in Syria, state news
agency RIA reported, the latest
in a string of accidents sustained by Moscow’s military
there.
The crew was killed on impact, RIA quoted the Russian
Defense Ministry as saying. The
ministry didn’t give a reason for
the crash.
Russia has had several accidents involving its aircraft since
the start of its intervention in
Syria, where it has backed President Bashar al-Assad.
Late last year, two war
planes crashed within weeks of
one another. Both were attempting to land on Russia’s aging aircraft carrier Admiral Kuznetsov.
—Thomas Grove
ISSOUF SANOGO/AGENCE FRANCE-PRESSE/GETTY IMAGES
YONHAP NEWS/NEWSCOM/ZUMA PRESS
Government Weighs
Cybersecurity Laws
POLL POSITION: Liberians in
Monrovia waited to vote in
Tuesday’s presidential election.
UNITED KINGDOM
Trade Deficit in Goods
Widens to a Record
The trade deficit in goods
widened visibly in August to hit
the highest level on record, new
figures showed, signaling that
the hoped-for rebalancing of
the economy toward trade has
yet to materialize.
Britain imported £14.2 billion
(about $18.6 billion) more in
goods than it sold to the rest
of the world, the Office for National Statistics said, a widening of £1.4 billion from the prior
month. This was driven largely
by a drop in the export of fuel
and an increase in imports of
semimanufactured goods and
mechanical machinery.
The figures also showed
that trade between the U.K.
and the rest of the European
Union grew at a healthy pace in
the three months through August.
The data highlight the close
economic links between the
world’s fifth-largest economy
and the 28-country bloc and
the risks if the U.K. fails to
reach a new trade agreement
with the EU post-Brexit.
British Prime Minister Theresa May said on Monday that
the U.K. was developing contingency plans in case there is no
deal.
Goods exports to the EU
grew by more than £1.7 billion
in the three months through
August, the ONS said, but they
were outpaced by imports from
the bloc, which increased by £2
billion. In August, the U.K.’s
goods trade deficit with the EU
widened by nearly £1 billion.
—Wiktor Szary
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
Wednesday, October 11, 2017 | A11
THE WALL STREET JOURNAL.
WORLD NEWS
Journal Reporter Is Sentenced in Turkey
Conviction on terrorist
propaganda charges
highlights increasing
targeting of journalists
BY THOMAS GROVE
A Turkish court sentenced
Wall Street Journal reporter
Ayla Albayrak to two years and
one month in prison Tuesday,
declaring her guilty of engaging in terrorist propaganda in
support of a banned Kurdish
separatist organization through
one of her Journal articles.
The conviction of Ms. Albayrak, who is currently in New
York, highlights the increasing
targeting of journalists in Turkey, where President Recep
Tayyip Erdogan’s government
has gained attention for deteriorating media freedoms.
“This was an unfounded
criminal charge and wildly inappropriate conviction that
wrongly singled out a balanced
Wall Street Journal report,”
said Wall Street Journal Editor
in Chief Gerard Baker. “The
sole purpose of the article was
to provide objective and independent reporting on events in
Turkey, and it succeeded.”
Ms. Albayrak plans to appeal the decision. “Given the
current climate in Turkey, this
appalling decision shouldn’t
have come as a surprise to me,
but it did,” she said.
Turkish
legal
actions
against Ms. Albayrak began after the publication on Aug. 19,
2015, on the Journal’s website
of her article “Urban Warfare
Escalates in Turkey’s KurdishMajority Southeast.” The article and accompanying video
reported on the state of a conflict in Silopi, Turkey, between
Turkish security forces and
the outlawed Kurdistan Workers’ Party, or PKK. It included
interviews with the local
mayor and residents, a Turkish government official, and a
representative of an organiza-
tion Turkey says is the youth
unit of the PKK.
Turkey, the U.S. and the European Union, consider the
PKK a terrorist organization.
In November of the same
year, Ms. Albayrak, who has
dual Finnish and Turkish citizenship, received a written order on her door to visit her local police station in Istanbul
where she was notified she
was under investigation for
spreading terrorist propaganda.
At the police station, she
gave a statement saying the
article accurately reflected the
state of the conflict between
the PKK and the Turkish government. In April 2016, a prosecutor in southeastern Turkey
filed an indictment against
Ms. Albayrak alleging that she
violated antiterror laws.
William Lewis, Dow Jones’s
chief executive officer and
publisher of The Wall Street
Journal, said: “This ruling
against a professional and re-
spected journalist is an affront
to all who are committed to
furthering a free and robust
press. We call on those who
share this commitment to
make their voices heard.
“The notion that our reporter’s commendable and insightful work led to a criminal
‘The international
media is not immune
to the ongoing press
crackdown in Turkey.’
prosecution that has resulted
in this wrongful conviction is
intolerable,” Mr. Lewis said.
“We have stood by Ms. Albayrak’s side for nearly two years
as we have robustly pursued
all available options to defend
this baseless prosecution, and
we will continue to stand with
her as we seek to overturn
this conviction.”
As part of the article she
was convicted for, Ms. Albayrak interviewed a person who
described herself as a member
of the Patriotic Revolutionary
Youth Movement, or YDG-H,
which the Turkish government
says is the youth unit of the
PKK.
Ms. Albayrak said in a
statement included in the
court documents that the original article didn’t include any
praise for the group, but
rather provided a balanced
and objective view of urban
warfare that had gripped areas of Turkey’s predominantly
Kurdish southeast at the time.
“The decision shows the extent to which the authorities
did not want the operations
that were going on in Turkey’s
southeast to be reported on,”
said Ms. Albayrak. “It also
shows yet again, that the international media is not immune to the ongoing press
crackdown in Turkey.”
Court documents filed
against Ms. Albayrak say the
Journal article and video,
which included images of men
and women bearing PKK emblems, provided fodder for 24
Turkish-language
websites
that translated parts of the article. Turkish officials sent a
list of the websites’ articles in
late August to the country’s
Telecommunication Directorate to have them blocked.
Ms. Albayrak and the Journal have said they have no relationship with any of the
Turkish-language
websites
that published only parts of
her article. The Journal said
excerpts published by the
websites were distorted.
Mr. Baker said Ms. Albayrak
embodies The Wall Street
Journal tradition, “spending
years as an intrepid journalist
producing insightful, fair and
impartial coverage from Turkey. We will work tirelessly to
overturn this preposterous
conviction.”
BY MAYUMI NEGISHI
TOKYO—Negligence by the
Japanese government and Tokyo Electric Power Co. caused
the triple meltdowns at the
Fukushima Daiichi nuclearpower plant, a court ruled in
the biggest class-action suit
tied to the March 2011 accident.
The Fukushima District
Court on Tuesday ordered the
government and Tepco to pay
¥498 million ($4.4 million)
plus delinquency charges to
2,907 people who fled radiation that was released into the
air and water after a tsunami
flooded the power plant.
If the government had ordered Tepco to ensure the
plant was ready to withstand a
tsunami wave of 15.7 meters
(51.5 feet), Tepco would have
made sure critical instruments
were waterproof, the ruling
said. “The accident, triggered
by total loss of power, could
have been avoided,” Judge
Hideki Kanazawa said.
The compensation is a fraction of the damages the residents had sought. Still, with
some 30 class-action lawsuits
brought by more than 10,000
affected residents, the ruling is
a sign additional compensation
costs could weigh on the government and Tepco for years.
Tepco has paid more than
¥7.6 trillion ($67 billion) in
compensation to residents affected, and has been struggling to clean up the reactors.
As of September, nearly
55,000 Fukushima residents
were registered as evacuees,
meaning they can’t return
TORU HANAI/REUTERS
Redress Ordered
In Fukushima Case
Japan Prime Minister Shinzo Abe attending a campaign rally in Fukushima, where residents sued over the 2011 reactor meltdowns.
home and haven’t settled permanently elsewhere.
The plaintiffs argued the
government and Tepco failed
to give adequate attention to
studies that said a major tsunami could occur in the area
of the plant. A 2002 study by
the government’s Earthquake
Research Promotion Unit said
there was a 20% chance of a
Critical Data
Connect to the
markets in real time
with a redesigned
data center.
magnitude 8 tsunami-triggering earthquake in the area off
Fukushima within 30 years.
The defendants said the scientific basis for such predictions
was unclear, and even if the calculations were correct, the
chance was too low to require
immediate steps. The government said it wasn’t until after
the accident that it gained the
ability to force Tepco to take
anti-flooding measures. Both argued the compensation already
being paid to displaced people
was adequate.
On March 11, 2011, a tsunami triggered by a quake
flooded the Fukushima Daiichi
plant, knocking out auxiliary
power sources that were supposed to keep the reactors’
cooling systems running.
Three reactors melted down.
“We deeply apologize again
for the disruption and concern
that the Fukushima Daiichi accident caused,” a Tepco
spokesman said. “We will evaluate the ruling and make a decision on how to respond.” The
Ministry of Economy, Trade and
Industry declined to comment.
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THE WALL STREET JOURNAL.
A12 | Wednesday, October 11, 2017
IN DEPTH
No-confidence vote
President Zuma has kept dissension within the ANC over the
scandal under control. He survived a no-confidence vote in
the National Assembly in August. His presidential term runs
out in 2019, and the winner of
December’s vote to lead the
ANC will become the favorite in
the presidential race.
The party’s top two candidates are Cyril Ramaphosa, the
ANC’s deputy president and a
critic of Mr. Zuma, and the president’s ex-wife and political ally,
Nkosazana Dlamini-Zuma. Mr.
Ramaphosa said in April that
“state capture” by business, “if
left unchecked, could well destroy our revolution.”
Atul Gupta, arrived in South
Africa in 1993, months before
the first democratic election
swept away white-minority rule
and the ANC into power.
Mr. Gupta said in a 2011 interview that his father, a businessman in the Indian state of
Uttar Pradesh, believed “Africa
would become the America of
the world.” Atul Gupta started a
computer-hardware distribution
company, called Sahara Computers, and his brothers Ajay
and Rajesh soon followed.
In 2007, Mr. Zuma won the
ANC presidency. Eight months
later, two of his roughly 20 children, Duduzane Zuma and twin
sister Duduzile, then 26, joined
Sahara’s board of directors, according to court documents.
Some outsiders saw the
move as the culmination of a
quest by the Gupta family to
court connections in the party
and convert them into wealth.
Duduzane Zuma didn’t respond to requests for comment,
and Duduzile Zuma couldn’t be
reached. She is no longer a
Gupta company director.
The Guptas landed in the
consciousness of most South Af-
POINTE
Continued from Page One
straps and long ribbons that
keep the shoes on, and they
select toe padding.
Once the dancers have their
new pink-satin shoes in hand,
store owner Ruthena Fink begins her “dog talk,” holding up
a mauled pair donated years
ago by a young, dog-owning
ballerina. There are usually
gasps, she says.
Ms. Fink explains to the
new dancers that their shoes
must be aired out after wearing to keep perspiration from
softening them too much. But,
she warns those with pets,
leaving dance shoes out to dry
puts them at risk.
“Dogs will get after them if
they’re accessible at all,” she
says. “Hang them up high, and
they should be OK, unless your
Brothers Ajay and Atul Gupta with the South African president’s son, Duduzane Gupta, in Johannesburg in 2011.
ricans when a chartered Airbus
SE A330 jet carrying more than
200 guests from India to a family wedding was allowed to land
at an air-force base near Pretoria in 2013.
Police cars escorted the passengers to the wedding venue in
Sun City, a gambling resort. The
landing generated headlines
across the country.
Invited guests included President Zuma and his ex-wife, 18
government ministers, 12 deputy ministers, the leaders of
most South African state-owned
enterprises, and prominent
journalists and businessmen, according to documents that appear to have been obtained
from Gupta-controlled companies and were made public,
President Zuma didn’t attend
the wedding, but the chief executive of KPMG’s unit in South
Africa did—and emailed a
thank-you note to Atul Gupta. “I
have never been to an event like
that and probably will not because it was an event of the millennium,” wrote Moses Kgosana, the KPMG executive.
The thank-you note was
President Zuma has
kept dissension in the
ANC over the scandal
under control.
among more than 100,000
emails, bank statements and
other Gupta-related documents
that surfaced in May. The documents were first reported by
South Africa’s amaBhungane
Centre for Investigative Journalism. The Wall Street Journal
has reviewed some of the documents, and South Africa’s National Prosecuting Authority,
which can bring criminal
charges, has said it is investigating potential wrongdoing detailed in the leaked documents.
The documents also include
an invoice for 30 million rand
($2.2 million) sent by an event
organizer owned by the Gupta
family to another Gupta-owned
company for the wedding. The
invoice showed $17,959 spent
dog can jump really high.”
Donna McCrea, owner of
Standing Ovation Performance
Apparel in Fort Wayne, Ind.,
also raises the “the dog situation” at pointe-shoe fittings.
Even so, every other month
customers report dog-bite
problems, she says: “We have
so many people come in asking
if they can buy just one shoe.”
Danielle Downey, a member
of the corps de ballet for the
Pittsburgh Ballet Theatre, has
lost two custom-made pairs to
Quincy, her Old English sheepdog. The first pair, riddled last
fall with “little puppy teeth
marks,” were already nearly
worn out, she says: “I wanted
to just give them to him as a
chew toy, but I didn’t want to
give him the message that it’s
OK to chew them.”
By December, after a rehearsal for the Pittsburgh Ballet’s performance of the Nutcracker, Quincy nabbed a new
for a fireworks display and
$34,301 for drinks, among other
items.
Other documents show that
money to pay the wedding costs
flowed from a provincial government to a dairy farm for
poor South Africans to various
Gupta-controlled accounts in
Dubai and then back to South
Africa.
KPMG, the auditor of the
Gupta event organizer, has said
it failed to sufficiently question
the origin of the wedding funds,
though its internal review found
no wrongdoing by the firm or
its staff.
South Africa’s auditing regulator and Parliament have said
they are scrutinizing KPMG,
which has said it is cooperating
and launched its own independent review. KPMG declined to
comment for this article.
Mr. Kgosana left KPMG in
2015. He says the firm cleared
his attendance at the wedding
and that it didn’t affect KPMG’s
work for the Guptas.
Later in 2013, the Gupta family launched a 24-hour news
channel, ANN7, expanding their
media properties beyond the
New Age newspaper. Coverage
of President Zuma was usually
positive.
In 2014, a Gupta-controlled
mining company made its debut
on the Johannesburg Stock Exchange with a value of about
$600 million. The government
owned a 3.6% stake in the company.
As of last year, Atul Gupta
was the richest nonwhite South
African, with personal wealth
estimated at more than $750
million, according to South Africa’s Sunday Times newspaper.
At least some of the family’s
financial success came from its
ties to relatives of Mr. Zuma, according to the leaked documents and a report last year by
South Africa’s ombudsman, who
investigates government misconduct.
government agencies and stateowned companies won by
Gupta-controlled companies.
Ajay Gupta tried to ease the
pressure, according to the ombudsman’s report and an affidavit filed with the High Court.
In October 2015, Deputy Finance Minister Mcebisi Jonas
met with Mr. Gupta at the family’s mansion in the Johannesburg suburb of Saxonwold. In
the affidavit, Mr. Jonas said he
was offered the post of finance
minister—and 600 million rand
($44 million).
Mr. Jonas said he was told by
Mr. Gupta that the family
wanted to increase its income
from government contracts to 8
billion rand from 6 billion rand,
according to the affidavit. Mr.
friends what happened. “They
were embarrassingly ugly but I
was hoping no one else would
notice,” she says. “I didn’t want
word to get around that my
dog eats my shoes.”
Hannah Carter, a principal
dancer in the Pittsburgh Ballet,
spends 75 minutes twice a week
sewing elastic straps and pink
satin ribbons to her custom
pointe shoes and darning their
tips. Since acquiring Maggie, a
chocolate Labrador puppy, dog
training is part of the ritual.
“I tell her, “this is mine, it
isn’t yours,’” Ms. Carter says,
giving Maggie a sniff.
After sewing, Ms. Carter
puts her pointe shoes on a
bookshelf about 4 feet off the
ground. Other pairs stay at
work. She says she lost a pair
of pointe shoes at age 14 to her
yellow Labrador. “He got just
the heel of one shoe,” she says.
“But that was enough. They
were gone.”
Dogs could be attracted to
pointe shoes by the owner’s
scent, the flour-based glue and
the textures of leather, cardboard and satin, says Bonnie
Beaver, a veterinary behaviorist and professor at Texas A&M
University’s College of Veterinary Medicine & Biomedical
Sciences in College Station,
Texas. She doubts that training
can help curb the temptation of
a satisfying chew.
“The amount of reward for
doing it may be so great that
it’s hard to overcome,” Dr. Beaver says. It likely won’t hurt
the dog unless they ingest the
long ribbons, which could constrict the intestines, she says.
Eliza Minden, the head of
design for Gaynor Minden Inc.,
says she doubts dogs would
bite her brand of shoes, which
are made of mostly synthetic
materials. Ms. Minden, though,
has heard of problems with
cats and pointe-shoe ribbons.
“They are just shiny and wiggly
enough for a cat to be dazzled,” she says.
Marylou Bodul, owner of
Dance Threadz Dancewear in
Huntington Beach, Calif., says
ballerinas arrive with dogchew troubles once or twice a
week. “I even do a spiel on
dogs during shoe fittings,” she
says, “but dogs still find a
way.”
For the past 35 years, students at the Youth Dance Ensemble in Burnsville, Minn.,
have received dog warnings before their annual Nutcracker
performance and the spring recital. A dancer once confessed
her dog’s transgression—three
or four bites—just before she
was to perform en pointe in
the second act of the Nutcracker.
“The punctures didn’t go
through the shoe,” says Dixie
Rairamo, the group’s director.
“She could still dance.”
3
4
Eskom
Jacob Zuma
5
2
The Gupta brothers
1
6
7
Duduzane Zuma
Mcebisi Jonas
1 Investor and co-owner
of numerous Gupta businesses
2 Zuma's son and Guptas bought
house for president's youngest wife
Mosebenzi Zwane
3 President promoted government officials tied to the Guptas
4 Gupta company paid luxury hotel bill for utility's former
finance chief
5 Utility reduced a fine against coal mine owned
by Guptas and Duduzane Zuma
6 Gupta company paid to fly government minister
and his gospel choir to India
7 Jonas said he was offered bribe and job
of finance minister but refused
Sources: Leaked documents; Public Protector South Africa; affidavit from Mcebisi Jonas
THE WALL STREET JOURNAL.
In August 2015, SAP signed a
contract with a 3-D printing
company managed by Sahara
Systems, leaked documents
show. Sahara was co-owned by
the Guptas and Duduzane Zuma,
the son of South Africa’s president.
The contract promised the
3-D printing company a 10%
commission if Transnet SOC, a
state-owned railroad and port
operator, signed a software contract with SAP for at least $7.3
million by year-end, according
to the leaked documents.
Other documents show SAP
pair that was in the back of Ms.
Downey’s car while she parked
to pick up groceries.
Ms. Downey found the
structure of the shoes still intact. She wore them to her next
rehearsal, telling only a few
paid the printing company last
year almost as much as the contract’s total value. Duduzane
Zuma has denied any wrongdoing and has said he couldn’t
comment on the authenticity of
the documents. Transnet declined to comment on whether
it signed a contract with SAP.
SAP’s South African unit denied making any kickbacks, but
the statement was removed
from the company’s website. An
SAP spokesman declined to
comment on the removal. SAP
has said it would release before
the end of October the findings
of an internal investigation into
its dealings with the Guptas.
By late 2015, the country’s finance ministry was questioning
some of the lucrative deals with
The Gupta family’s holding
company turned to Bell Pottinger, the public-relations firm
that has represented the wife of
Syrian President Bashar alAssad, authoritarian Belarusian
President Alexander Lukashenko
and Oscar Pistorius, the doubleamputee South African track
star sentenced to prison last
year for murdering his girlfriend.
Leaked documents and a review by an outside law firm
hired by Bell Pottinger show
that the PR firm launched what
it called an “economic emancipation campaign” and led a social-media campaign against
President Zuma’s critics. Bell
Pottinger also wrote speaking
points for ANC officials.
A public-relations trade
group said last month that Bell
Pottinger’s work on behalf of
the Guptas was “likely to inflame racial discord in South Africa and appears to have done
exactly that.” The firm’s U.K.
operations collapsed as other
large clients withdrew their
business from Bell Pottinger.
The firm’s U.K. administrator
declined to comment for this article.
Bell Pottinger dropped the
Guptas in April, citing abusive
and threatening comments
against the public-relations
firm’s staff as public acrimony
about the relationship flared.
The Gupta family’s businesses are reeling from the
scandal. Oakbay Resources &
Energy Ltd. was delisted in July
after firms needed to support
its stock listing walked away
from family-controlled mining
company. The stock had lost
about 70% of its value since the
start of 2017, shriveling the family’s net worth. The Guptas sold
off some mining and media
holdings last month.
The family has said selling
the assets would help it focus
on clearing the Gupta name
from “unfounded media allegations.”
On Monday, 20 Gupta-owned
companies won a temporary reprieve in court to stop the
South African unit of India’s
Bank of Baroda from closing
company bank accounts. All the
accounts used by Gupta businesses at other banks in the
country have already been
closed.
If the court upholds its original ruling that Bank of Baroda
can close the Gupta bank accounts, the companies would essentially be cut off from South
Africa’s financial system and
unable to pay employees.
Here are some of the Gupta family's links to people
close to President Jacob Zuma, as detailed in leaked
documents, a government report and court records.
Everyone below has denied wrongdoing.
Company co-owners
Dogs are attracted by the
owner’s scent, and the textures
of leather, cardboard and satin.
Public-relations help
Well-Connected
GRAND JETE
Continued from Page One
ture as the liberal democracy
and free-market economy conceived of by Mr. Mandela is at
risk because of the Gupta family’s political influence. The
judge wrote: “Could it be possible that the future‚ so bright in
1994‚ was now only history?”
Mr. Zuma, who became president in 2009, has repeatedly
denied any wrongdoing and
pledged to establish a commission to investigate business influence on government.
A lawyer for the Guptas said
they declined to comment, and
a spokesman didn’t respond to
questions. The family has previously denied wrongdoing and
said they are victims of an attack by the country’s established, mostly white-owned
businesses. Atul Gupta, who
leads the Gupta businesses, has
said “there is no authenticity”
to the leaked documents, without being more specific.
Among the companies that
have been drawn into the scandal, the U.K. operations of one
of Europe’s largest public-relations firms, Bell Pottinger, collapsed in mid-September after
revelations that it tried to discredit rivals of Mr. Zuma as defenders of “white monopoly
capitalism” and “economic
apartheid.” Bell Pottinger was
hired by the Gupta holding company, Oakbay Investments.
SAP, the German software
maker, and U.S.-based consulting firm McKinsey have put employees on leave and launched
internal investigations of their
dealings with Gupta-linked companies. Last month, KPMG
cleared out its top management
in South Africa after concluding
it fell short of its own standards
during the 15 years it audited
Gupta firms.
GALLO IMAGES/CITY PRESS/MUNTU VILAKAZI/GETTY IMAGES
GUPTA
Jonas said he refused the job offer and money.
As the deputy finance minister was about to leave, Mr.
Gupta tried one more time, according to Mr. Jonas. “If I had a
bag that could carry R600,000
then I could get that amount
there and then,” Mr. Jonas recalled Mr. Gupta saying. Mr. Jonas couldn’t be reached to comment for this article.
The lawyer for the Guptas
says Ajay Gupta never met with
Mr. Jonas. Duduzane Zuma, the
president’s son, has said he arranged the meeting, but no
bribe was offered.
In December 2015, President
Zuma replaced respected Finance Minister Nhlanhla Nene
with an untested lawmaker. The
move sent the rand down nearly
10% before President Zuma replaced the new finance minister.
Mr. Jonas went public with
his bribe allegations in March
2016. They were denied by the
Guptas and the president’s political allies, but the rand sank
again, a sign of growing discomfort with the family’s political
influence. Newspapers published articles about their connections almost every day.
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | A12A
NY
* * * *
GREATER NEW YORK
New Jersey Candidates Face Off
Guadagno and Murphy
duel on taxes, pensions
in their first debate as
the Nov. 7 vote nears
BY KATE KING
BY MARA GAY
JULIO CORTEZ/PRESS POOL
NEWARK—The Democratic
and Republican nominees for
governor of New Jersey clashed
over property taxes, public pensions and national politics in
their first debate Tuesday night,
one month before the Nov. 7
election.
Democrat Phil Murphy, a former Goldman Sachs executive
who hasn’t held elected office,
repeatedly sought to link his opponent, Republican nominee
Kim Guadagno, to the unpopular
administration of outgoing Gov.
Chris Christie, who is prevented
by term limits from running for
re-election.
Ms. Guadagno, who has
served as Mr. Christie’s lieutenant governor since 2010, said
Mr. Murphy would raise taxes if
elected.
Mr. Murphy attacked Ms.
Guadagno and the Christie administration for favoring big
business and the wealthy over
school funding. “They have chosen to give out tax incentives to
large corporations in our state,”
he said. “All of that has come at
the expense of the middle class.”
He pledged to fully fund the
state’s public schools, which he
New Jersey governor hopefuls Phil Murphy and Kim Guadagno at the debate Tuesday night at the New Jersey Performing Arts Center.
said were underfunded by $9
billion during Mr. Christie’s administration.
Ms. Guadagno fought back,
asserting that her opponent’s
platform would come at the expense of the state’s nine million
residents. “Phil Murphy has no
plan for lowering property
taxes,” Ms. Guadagno said.
“That $9 billion is coming from
you if Phil Murphy is elected
governor.”
Mr. Murphy has campaigned
on a progressive platform that
includes increasing state funding for public pensions and
schools, community college and
transportation projects.
Ms. Guadagno has pledged to
reduce property taxes for New
Jersey residents by implementing a “circuit breaker” that
would cap the school portion of
residents’ property tax bills at
5% of their household income.
In discussing benefits for
public employees, Mr. Murphy
reiterated his promise to fully
fund the state’s annual contributions to the pension system “as
fast as possible.”
Ms. Guadagno said that
pledge was unrealistic given the
state’s budget constraints.
“What I will do as governor is
talk about it honestly and
openly,” she said about the
state’s pension challenges.
The candidates disagreed on
how to handle President Donald
Trump’s immigration policy, including his decision to end the
Deferred Action for Childhood
Arrivals program. Ms. Guadagno
said she would urge Congress to
pass legislation “to fix the problem once and for all,” but said
she would ultimately follow federal law.
Mr. Murphy said he would
seek to protect these immigrants even if Congress doesn’t
act before the program expires.
“We will stand up to this president if need be. We will be a
sanctuary—not just city—but
state,” he said.
Both candidates said they
would loosen restrictions on
marijuana, although Ms. Guadagno said she would support
only decriminalization and an
expansion of the state’s medical
marijuana program. Mr. Murphy
supports full legalization.
Mr. Murphy is outpacing his
Republican opponent in the
polls and with fundraising. A
poll published Oct. 3 by Monmouth University found Mr.
Murphy with a 14-point lead
among likely New Jersey voters,
although nearly half of the respondents had no opinion about
either candidate.
‘Micro-School’ Aims to Transform Education
BESS ADLER FOR THE WALL STREET JOURNAL
BY LESLIE BRODY
On the hip second floor of a
commercial building in Manhattan sits the city’s newest
private “micro-school.” With
only 24 students, it has big
ambitions to transform American education.
The Union Square middle
school opened this fall as a
laboratory for AltSchool, a
startup that creates software
to let children learn at their
own pace. Its six full-time
teachers meet regularly with
engineers to develop the online
platform. One goal: Selling it to
public and private schools nationwide this year.
“In a sense we’re guinea
pigs,” said Michelle Byron,
whose 11-year-old son Paul
likes that AltSchool lets him
zip ahead in math. “Would I
have liked it to be farther
along when we found it? Sure,
but we’re working for the
greater good.”
Launched in 2013 in San
Francisco, AltSchool has seven
lab schools and has raised
more than $170 million in venture capital. It is part of a
“personalized learning” movement that has fans and skeptics. Supporters say it helps
children become self-directed
and persistent, which will help
them in a modern workplace.
Critics say that hype about the
approach has run ahead of any
extensive research showing it
works.
AltSchool officials describe
their digital platform as a master organizer. Students can tap
into customized “playlists” of
assignments tailored to their
particular goals. They click
through quizzes for instant
feedback. A “portrait” stores
evidence of their skills and social-emotional progress.
The Union Square site has
the laid-back vibe of an industrial-chic office, with high ceilings, painted exposed pipes
and clear walls. Devin Vodicka,
the company’s chief impact officer, compares traditional
Hopefuls
Spar in
Mayoral
Debate
Students prepared for classes at their Union Square middle school. They learn at their own pace using software created by AltSchool.
schools to a train: Students get
on for the ride but have no say
about its speed or path. He
sees AltSchool as letting students steer a car while obeying
rules of the road.
“Our role is going to shift
away from making the trains
run on time to equipping your
child to drive their own learning,” he said. The destination
isn’t wholly up to the student,
however: Mr. Vodicka expects
eighth-graders to leave with
the skills outlined by the Common Core, a set of academic
expectations adopted by most
states.
Students get leeway to pursue interests. In a unit on the
ancient Silk Road, for example,
some students cooked dishes
from countries along the trade
routes while others performed
their own play about a hunchback in “One Thousand and
One Nights.”
Skeptics of ‘’personalized
learning’’ say that when stu-
dents get too much autonomy,
many don’t tackle work that is
challenging enough or ordered
in an effective sequence, and
they end up with troubling
gaps in knowledge.
Benjamin Riley, founder of
Deans for Impact, a group of
education school deans, said it
is hard to provide enough sophisticated material for this individualized approach. “There
is an unfortunate fantasy that
develops that kids need to be
engaged in these acts of creativity some great percentage
of the time,” Mr. Riley said.
“Maybe, but only if those activities are actually stimulating
thinking that matters.”
AltSchool opened in Union
Square this fall with tuition of
$37,500. It has four sites in the
San Francisco area, plus elementary schools in Brooklyn
Heights and the East Village.
About one-quarter of its 400
students overall get financial
Please see MICRO page A12B
Math Lesson: Write
Down Your Goals
At the start of math class
at AltSchool Union Square one
recent morning, a teacher asked
every student to write down a
personal “academic goal” and a
“habit goal” for the period.
For Simona Freed, age 10,
the latter was to be more organized. “I’d like to get better at
long division,” she added.
“That’s not my natural talent.”
In keeping with the middle
school’s progressive bent, a
dozen children in grades five,
six and seven sat in the same
room, working at their own levels. By the window overlooking
14th Street’s bustle, two of the
more advanced students converted fractions into decimals.
In a corner, a teacher encouraged two boys who needed ex-
tra help, using colored blocks as
visual aids to add easy fractions. They used a common
curriculum called Singapore
Math.
Cameras peeking discreetly
from the walls videotape every
class so teachers can analyze
how to do better. Students
spend about 25% of the school
day on computers, at times
looking at video clips about
concepts that confuse them.
Teachers often break classes
into small teams and circulate,
working with some children
one-on-one.
Instead of report cards with
A to F grades or numerical
ones, students get ongoing
data on milestones they have
accomplished.
“We’re your co-pilots here,’’
humanities teacher Jaqi Garcia
tells students. “We can shape
the journey together.”
—Leslie Brody
Mayor Bill de Blasio faced
his challengers in the New York
City mayoral race on the debate stage for the first time
Tuesday night, defending his
record against a Republican
and a renegade insurgent who
has drawn comparisons to
President Donald J. Trump.
Mr. de Blasio said the city
had flourished on his watch.
And he drew a contrast between his liberal policies and
the views of his opponents, Republican Nicole Malliotakis and
independent Bo Dietl, who have
said they voted for Mr. Trump.
“My two opponents are
right-wing Republicans who
voted for Donald Trump. “I’m a
progressive,” said Mr. de Blasio, a Democrat, going on to
list his accomplishments.
“We have a city that is now
the safest city in America. Our
graduation rates are up, our
test scores are up,” he said.
The event, at Symphony
Space on Manhattan’s Upper
West Side, offered a rare
chance to see Mr. de Blasio’s
record challenged in what has
been a sleepy election season.
The debate was fiery at
times, with Ms. Malliotakis, a
state Assemblywoman from
Staten Island, attacking the
mayor’s handling of homelessness and his management of
the city. The number of people
living in shelters rose to a peak
of more than 60,000 late last
year, according to city data.
“He has turned homelessness into a business,” Ms. Malliotakis said, noting the city
spends millions every year to
shelter people in hotels.
Mr. de Blasio said the city
was working to build shelters.
He responded to some of the
toughest criticism during the
debate by underscoring what
he considers to be his signature accomplishments, a decline in overall serious crimes,
and an initiative to expand prekindergarten.
Ms. Malliotakis also criticized Mr. de Blasio’s approach
to the city’s ailing subway system, which is largely under
New York Gov. Andrew
Cuomo’s control. Ms. Malliotakis said the mayor mishandled
the relationship with Mr.
Cuomo, a fellow Democrat.
“Are you afraid of Governor
Cuomo?” she asked, drawing
cheers from the crowd.
“I am very comfortable taking on the governor when he’s
doing something wrong that’s
going to hurt New York City,”
Mr. de Blasio said.
Mr. Dietl, a former New York
Police Department detective
who failed to secure a major
party nomination is running on
the “Dump the Mayor” line. At
one point, asked about a Daily
News report showing he owed
nearly $500,000 in New York
state taxes, Mr. Dietl seemed to
direct his anger toward the
moderator who asked the question, NY1 political reporter
Grace Rauh.
“There is no problem with
my taxes,” he said. “That’s another way that you’re trying to
take me down. What’d you
make last year? I made $1.8
million.”
The mayor is likely to cruise
to victory in a city where Democrats outnumber Republicans
by more than 6 to 1.
OYSTER PERPETUAL
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A12B | Wednesday, October 11, 2017
NY
* ***
THE WALL STREET JOURNAL.
GREATER NEW YORK
METRO MONEY | By Anne Kadet
It’s always
wonderful to
see someone
who is great
at his job. For
years, one of
my favorite examples was Pedro Morales, the second-shift
waiter at the Cobble Hill Coffee Shop in Brooklyn.
No matter how nuts the
place got, Mr. Morales was
smiling and calm, handling
the crush with aplomb. He always remembered how you
took your coffee. When he
vanished this summer, the
place wasn’t the same.
I was thrilled, then, when
a fellow fan told me she’d
spotted Mr. Morales at a new
coffee shop in the Midwood
section of Brooklyn. He’d
opened his own restaurant!
It’s a risky move. According to Crain’s New York Business, the number of coffee
shops and diners in the city
has declined over the past 25
years from more than 1,000
to fewer than 400.
Last week, I ventured
down to Mr. Morales’s AVP
Coffee Shop for lunch. The
place has just 24 seats. There
were the usual framed prints,
plum-colored booths and
mints by the register. He had
four two-dollar bills taped to
the wall for luck.
MICRO
Continued from page A12A
aid.
The company has drawn
high-profile funders such as
Facebook Inc. Chief Executive
Officer Mark Zuckerberg and
Laurene Powell Jobs, widow of
Apple Inc. co-founder Steve
Jobs. Teachers can get shares
as part of their compensation
package. Officials said the
company subsidizes the lab
schools, which aren’t expected
to turn profits.
Parents praised the per-
STEVE REMICH FOR THE WALL STREET JOURNAL
An Exemplary Waiter Strikes Out on His Own
Waiter Pedro Morales took a gamble and opened a small coffee shop in Brooklyn’s Midwood section.
clean, friendly,” said Christopher Martinez, finishing a
fried chicken platter. He
works in the area and has
made AVP his new lunch
spot.
And I wasn’t the only one
who’d made the schlep from
brownstone Brooklyn. Debbie
and Joe Ruiz, who were regulars at the Cobble Hill Cof-
fee Shop, said they followed
Mr. Morales to his new
place. “I have cheesecake,
and Peter decorates it with
whipped cream and cherries,” said Ms. Ruiz. “He
knows that’s how I like it.”
Mr. Morales, who is 43
years old and supports his
wife and two-year-old twins,
grew up in the Puebla state
sonal focus and community
spirit at the Union Square site,
which aims to expand to 100
children. Meredith Gould, a
sixth-grader, said its small size
was a relief after a public
school class that had 34 students. “I get a lot of attention
for what I need,” she said.
A science class for a dozen
children, however, showed limitations. After a teacher asked
them to research hurricanes,
they opened Chromebooks to
make slideshows. Several simply typed information from
Wikipedia. One fifth-grader who
had trouble spelling didn’t attempt to write “dangerous” or
“mosquito” correctly, knowing a
spell-check function would fix
his errors. A spokeswoman said
that for new students, “transitioning to this way of learning
involves some acclimation.”
AltSchool hasn’t had an independent evaluation of academic
outcomes, and it is too new to
be accredited in New York.
Larry Cuban, a Stanford University education professor
emeritus who visited AltSchool
in California, said it benefited
from wonderful teachers and
selective admissions. But he
questioned how well the platform would work in larger environments.
City Students Gain on Advanced Placement Tests
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Re p o r t
nez cooking in the back.
“I’m happy, but a little bit
tired,” he added.
New York City Hospitality
consultant Demetrios Kafchitsas said there is a reason you
don’t see many coffee shops
opening these days: They’re
expensive to run.
Compared to the increasingly popular “fast casual”
spots with their buffet-style
service and limited menus,
coffee shops—with their table service and extensive
menus—incur higher rent,
food and labor costs, he said.
AVP can make a go of it,
Mr. Kafchitsas said, but only
given high volume. Factoring
in $4,000 rent and food costs
of 25%, the restaurant will
need to generate $10,000 in
sales a week—roughly 130
meals a day.
“It’s an admirable story,”
he said. “Good luck to those
two guys!”
Mr. Morales said that six
weeks in, he’s serving about
50 meals a day. He’s covering
the bills, but so far there is
nothing left for him or Mr.
Martinez.
“Every week we improve,”
he says. “Not crazy, crazy,
but little by little. Hopefully
it keeps going.”
“It seems good,” said my
lunch companion, scanning
the menu. “All the things
people want at the diner. ”
Indeed, the menu was delightfully straightforward.
There is a chop steak dinner
($11.95) and a Caesar salad
($8.25). Desserts include rice
pudding and Jell-O.
“It’s a nice little spot,
OUT TODAY
MEET THE
GOLDEN
GIRL OF
‘GOTHAM’ &
‘DEADPOOL’
in Mexico, harvesting greens,
tomatoes and pumpkins. He
moved to New York City in
1992 and got his first job as a
delivery man at a West Side
diner.
It’s been coffee shops ever
since, working at joints all
over Manhattan including the
Silver Star Restaurant on the
East Side and Manatus in the
West Village, typically earning $500 to $800 a week.
Mr. Morales arrived at the
Cobble Hill Coffee Shop in
2012, where he worked 12hour days and earned $1,000
a week—enough to start saving. Last year, he and Rene
Martinez, the short-order
cook working the same shift,
decided to team up and open
their own spot.
Their diner, a former Mexican restaurant, is right off
the Avenue P stop on the F
line, between a vape shop
and a smartphone repair
store. A modest renovation
cost $35,000; the rent is
$4,000 a month.
It is, however, a 90-minute
commute from his home in
the Corona section of Queens.
Seven days a week, Mr. Morales wakes at 4:30 a.m. to
open the restaurant by 7 a.m.
He’s hired zero help. 14 hours
a day, it’s just him waiting tables in front and Mr. Marti-
The number of New York City
public school students taking Advanced Placement exams—and
passing them—continues to rise.
The city Department of Education released data Tuesday
showing that more than 49,000
district and charter students
took at least one AP exam this
year, and almost 26,000 passed
at least one.
Mayor Bill de Blasio has
pushed to expand AP offerings.
Supporters say the AP program exposes students to challenging academics, and at some
colleges students can save
money by getting credits for
high scores. Skeptics say the
rigor of the courses varies
among schools, and the program’s expansion spurs some
poorly prepared students to take
AP classes and flounder.
About 33% of city students
take at least one AP exam during high school, almost double
the percentage a decade ago.
Among students who started
ninth grade in 2013, about 40%
of Asian students passed at
least one AP exam in high
anne.kadet@wsj.com
school, along with 29% of white
students, 14% of Hispanic students and 7% of black students.
—Leslie Brody
GREATER NEW YORK WATCH
NEW YORK
Ex-Accountant Sent
To Prison for Theft
A former accountant was
sentenced Tuesday to up to 15
years in prison for stealing more
than a million dollars from the
estates of two women who fled
Nazi Germany before World War
II.
Richard Doren, 51 years old,
will have to repay the more than
$1.7 million that he stole, according to the conditions of a deal
arranged in June and September,
when he pleaded guilty to grand
larceny charges.
According to prosecutors, Mr.
Doren for 20 years worked for
and eventually managed an accounting practice in Midtown
Manhattan, where he was assigned the task of searching for
the two deceased women’s next
of kin. Both clients had no children and many of their relatives
had died in the Holocaust.
Prosecutors said Mr. Doren
pocketed money he was supposed to be disbursing to the
relatives of the two women.
Then, while he was out on bail,
Mr. Doren swindled a plastic surgeon out of more than
$500,000, prosecutors said.
Prosecutors said Mr. Doren
used the stolen money to pay
for vacations, football games,
hotel stays, restaurant meals,
home improvements and cars.
Mr. Doren, wearing a khaki
prison uniform, declined to speak
during the hearing in Manhattan
Supreme Court. His lawyer also
declined to comment.
—Thomas MacMillan
NEW JERSEY
Former Mayor
Accused of Stealing
A former Spotswood mayor
stole money from a scholarship
fund named for an emergency
responder killed in the line of
duty and used it to gamble in
Atlantic City, authorities say.
Middlesex County prosecutors say Nicholas Poliseno
turned himself in Tuesday. The
39-year-old is charged with
theft. It wasn’t known if he retained an attorney.
Authorities say Mr. Poliseno
stole the money in June 2016
from the Hinal Patel Scholarship
Fund, which annually awards a
scholarship to a Spotswood High
School student.
The 22-year-old emergency
medical technician was killed in
July 2015 when the ambulance
she was riding in was stuck by a
car.
—Associated Press
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | A13
LIFE&ARTS
THE MACARTHUR AWARDS
The ‘Genius Grant’ Winners
WHEN TOLD THAT THEY’VE BEEN selected for the
MacArthur Fellows Program, “genius grant” winners are
given a phone number to use for a variety of reasons—including if, a little later, they start to think that they
dreamed up the whole thing.
The MacArthur, whose 2017 fellows were announced
Wednesday, scores high in pinch-me points. This year’s 24
winners, who each receive $625,000 over five years to be
spent however they would like, include an opera director
who once staged a performance among rushing commuters
in a train station; a computer scientist who used her own
breast cancer to spur her oncology-data research, and an
anthropologist who has studied artifacts left by undocumented migrants along the U.S.-Mexico border.
—Ellen Gamerman
The anthropologist’s research
is framed around improving
understanding of the migrant
experience along the U.S.Mexico border through a combination of ethnography, archaeology and forensic
science. Mr. León, 40, who
works in the anthropology department at the University of
Michigan in Ann Arbor, has
used archaeologically recovered migrant artifacts to help
tell their story. With the grant,
he plans to continue to stage
exhibits, incorporating footage
from drones that survey migrant remains and document
migration routes in Mexico
and Arizona. A trained archaeologist, he had worked on ruins in Mexico before switching
to contemporary immigration
issues. “Archaeology doesn’t
have to be about the ancient
past,” he said. “It can be about
this morning or last week.”
Kate Orff
The landscape architect is the first
from her profession to receive a
genius grant. In her work, which
includes projects around coastal infrastructure plans and urban-park
design, the 45-year-old New Yorker
searches for ways to integrate cities and their surrounding ecosystems. The grant will help Ms. Orff,
founding partner of the landscapearchitecture and urban-design firm
SCAPE, to pursue ongoing research into reclaiming America’s
endangered bays and wetlands,
with an eye toward reducing dependence on oil and petrochemicals and addressing challenges
posed by factors such as climate
change. “Landscape architecture is
this true hybrid of arts and sciences,” she said. “We are working
with living systems, living organisms, and we’re trying to combine
them with culture.”
JEFF HAHNE/GETTY IMAGES (GIDDENS); JOHN D. AND CATHERINE T. MACARTHUR FOUNDATION (5)
Jason De León
Gabriel Victora
The immunologist researches how antibodies are generated. “When we first
get in contact with a foreign substance
or disease agent, we make antibodies
against these—they’re not very good
but they evolve to become very good
over time,” he said. “We try to understand the process whereby these antibodies get trained to be very good.” Dr.
Victora said his work could further research on vaccines for diseases such
as malaria or HIV, or it could be applied
to, say, a flu vaccine that would last
longer than a year. The 40-year-old
New Yorker was a concert pianist early
in his career but tired of all-day practice sessions and in his mid-20s pursued a master’s degree in immunology.
“Music trains you how to teach yourself things,” he said. “It also gives you
the endurance to just keep trying
things over and over until they work.”
Rhiannon Giddens
In her performances, the Greensboro, N.C., singer, songwriter and instrumentalist attempts to shed light on
black musicians whose history with musical genres including folk and country has largely remained untold.
“The history of American music has been whitewashed
and bowdlerized with imaginary narratives of where this
music comes from,” she said, calling the period between
the emancipation of slaves and the start of the 20th
century a particularly unexplored chapter in music.
Among other things, the grant enables Ms. Giddens, 40,
to pursue a longtime goal of creating a stage work about
an 1898 massacre in Wilmington, N.C. In that episode,
working-class blacks and whites joined in a political party
before white supremacists launched a violent campaign
against black politicians to break up their movement.
Regina Barzilay
The computer scientist at the Massachusetts
Institute of Technology in Cambridge Mass.,
is an expert in computational linguistics and
recently began applying machine learning to
the field of oncology. When Ms. Barzilay, 46,
was diagnosed with breast cancer in 2014,
she was struck by the uncertainty around
her treatment process. “I firmly believe there
is a lot of really important information and
patterns that are hidden in the data of cancer patients,” she said. Imaging and pathology data are “lying around as dead weight”
instead of being used to make more predictions about who is likely to get cancer and
how that cancer should be treated, she said.
Due to funding constraints, Ms. Barzilay had
been furthering this study with her students
on weekends and evenings.
Yuval Sharon
The opera director’s immersive works include a
2013 piece on immigration staged in a bustling
Los Angeles train station, with audience members
listening on headphones to performers scattered
around the terminal. The 37-year-old Los Angeles
resident hopes to make the art form fresh for
younger audiences. Next month, the founder and
artistic director of the production company The
Industry will collaborate with other organizations
to present a new operatic staging of “The War of
the Worlds.” The performance will be presented
inside a Los Angeles concert hall and broadcast
onto the street through repurposed air-raid sirens.
“We’re taking opera outside the hallowed concert
hall and right out into the life of the city,” he said.
For a complete list of winners, go to WSJ.com
ART REVIEW
MOST COLORFUL
COMPANY
THE PHILLIPS COLLECTION
BY KAREN WILKIN
Renoir’s ‘Luncheon of the Boating Party’ (1880–81)
Washington
IN JULY 1923, Duncan Phillips
made his most ambitious acquisition to date for the burgeoning
modern art collection, the Phillips
Memorial Gallery, he had opened
here just 18 months earlier. PierreAuguste Renoir’s “Luncheon of the
Boating Party” (1880-81), bought
from the Durand-Ruel Gallery for a
then astonishing $125,000, was intended as a stellar attraction. Phillips was thrilled by his purchase.
He had been entranced by the
light-struck scene of sporty young
men and flirtatious young women
in fetching summer hats, crowded
around the remains of a winefueled meal, since first encountering it more than a decade before.
It’s easy to understand why. With
its 14 figures, the picture is among
Renoir’s most complex and, at almost six feet wide, one of his largest. It’s also delicious, perfectly
evoking a lazy summer afternoon
from a vanished era, with its
young, attractive people relaxing in
informal groups under a striped
awning, beside the Seine.
Phillips was clearly driven by
enthusiasm—he called the painting
“the masterpiece of Renoir”—but
he was also cannily calling attention to his new museum. Renoir’s
dealer, Paul Durand-Ruel, purchased the painting soon after its
completion, in 1882, and lent it to
the seventh Impressionist exhibition; over the next four decades,
the Durand-Ruel gallery exhibited
it not only in Paris but also in maPlease see RENOIR page A14
THE WALL STREET JOURNAL.
A14 | Wednesday, October 11, 2017
LIFE & ARTS
MY RIDE | By A.J. Baime
A World War II Jeep Survives 75 Years Later
Don Foran, 91, a retired civil engineer and World War II veteran
from Amarillo, Texas, on his 1942
Willys Jeep, as told to A.J. Baime.
In 1944, I was a soldier assigned
to the 687th Field Artillery Battalion. The Army needed Jeep drivers, so I volunteered. The Jeep was
first built for World War II. It had
four-wheel drive and made our
Army mobile in a way it had not
been before. As the saying went at
the time, “It’s as faithful as a dog,
as strong as a mule and as agile as
a goat.” Willys built 362,894 Jeeps.
Ford built them also, but Willys
built the most.
During the collapse of Nazi Germany and after, I drove Jeeps
through the country, at times behind enemy lines on scouting missions. The farm villages had no
towns left. They were utterly destroyed by bombing from the air,
and the cities were even more destroyed. I saw the Dachau prison
camp.
In December 1945, after
the war was over, I drove
a Jeep to deliver documents regarding the
Nazi war crimes trials
for many miles to Munich. The Jeep was an
open vehicle and my
windshield had been
destroyed. It was about
zero degrees, and I got
lost because there were
no signs. But I eventually
found where I was going.
In 1992, I retired and I needed
something to keep me occupied. My
nephew Joe Foran spotted a 1942
Willys Jeep for sale in Gladewater,
Texas. I contacted the owner and
negotiated a price of $1,100. In my
shop in Amarillo, I took that Jeep
apart and put it back together over
the course of about a year and a
half. The Army was very good at
making training manuals so soldiers were able to fix these Jeeps. I
used a training manual to learn
how each part of the Jeep worked.
CLOCKWISE FROM TOP RIGHT: DAN FORAN; DELLA MOYER FOR THE WALL STREET JOURNAL
Don Foran stands with the 1942
Willys Jeep that he restored in his
shop in Amarillo, Texas. Mr. Foran in
Germany during World War II, above.
He drove a Jeep for the U.S. Army
during the war.
I also had it
repainted
Army green.
I drove this
Jeep in local parades in Texas for
years. If anyone
wanted to go for a ride, I was
happy to take him. I am a member
of the VFW Post 430 in Canyon,
Texas. Recently I signed the title
over to the VFW. I have begun to
give away my possessions because
I am 91 and I realize I am not long
for this world. But I still go and
see the Jeep. It sure brings back
memories.
Contact A.J. Baime at
Facebook.com/ajbaime.
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Continued from page A13
jor cities in the U.S. Phillips’s
assertion that the painting’s
“fame is tremendous.…People
will travel thousands of miles
to our house to see it”
proved accurate. “Luncheon
of the Boating Party” is still
one of the most admired and
important works in today’s
Phillips Collection.
Not surprisingly, the
painting has been exhaustively studied, not only for
what it tells us about
Renoir’s approach and his
evolution but as a sociological document—evidence of
the loosening of social strictures in France’s Third Republic that allowed the members of different classes
portrayed in “Luncheon of
the Boating Party” to happily
spend leisure time together.
Now “Renoir and Friends:
Luncheon of the Boating
Party,” at the Phillips Collection, examines the history of
its making, with particular
focus on the cast of characters. Organized by the museum’s chief curator emerita,
Eliza E. Rathbone, the exhibition and its informative catalog introduce us to a fascinating group ranging from
Renoir’s future wife, Aline
Charigot—left foreground,
playing with a little black
dog—to Renoir’s close friend,
the painter/collector/sailboat
designer Gustave Caillebotte,
right foreground, in a sleeveless oarsman’s shirt and
sailor’s “boater.” We also
meet the actresses, intellectuals, writers and members
of the aristocracy who were
Renoir’s friends and supporters, elsewhere in the picture.
Renoir preferred not to
employ professional models,
from choice as well as economic necessity. Somehow,
he persuaded a group of his
admirers to pose on the balcony of the Maison Fournaise, a restaurant and inn on
the banks of the Seine, at
Chatou, where Parisians
could enjoy country life, dine
and rent boats within reach
of the city. What’s more remarkable, Renoir executed
the large canvas en pleinair—out of doors.
At the Phillips, more than
40 works contextualize “Luncheon of the Boating Party”
with some of Renoir’s river
scenes and compositions
prefiguring the Phillips’s
great picture, along with a
COLLECTION OF BRUCE TOLL
RENOIR
Showroom
To advertise: 800-366-3975 or WSJ.com/classifieds
Caillebotte’s ‘Madame Renoir in the Garden at Petit-Gennevilliers’
(1891)
selection of his other portraits of people in the painting, testimony to the depth
of his relationships with
them. Photographs and
works by other artists, notably Edgar Degas, Édouard
Manet and Caillebotte, including portraits of the personages in “Luncheon of the
Boating Party,” offer further
evidence of cross-connections and close relations.
Actresses,
intellectuals, writers,
artists, members of
the aristocracy and
his future wife
Caillebotte’s casual image of
Aline, seated in the garden
of his house, is especially
noteworthy, a miracle of
bold brushwork and unexpected color. Renoir’s more
formal painting of Caillebotte’s “sweetheart” is less
compelling, alas, paling beside his “Portrait of Madame
Renoir” (c. 1885, Philadelphia Museum of Art), a luminous, affectionate image
whose pale, brushy background and confrontational
quality suggest a less cerebral version of Paul Cézanne’s portraits of his wife.
Not everyone in “Luncheon of the Boating Party”
can be identified, despite anecdotal evidence and an annotated photograph. Some
figures may be composites,
and most of the women, as is
typical of Renoir, resemble
Aline, with her snub nose
and round face, no matter
who posed for them. Yet we
learn something about everyone, mostly through comparative works. Perhaps most
interesting, shown with his
back to us, in a citified top
hat, is the art historian and
collector Charles Ephrussi,
Marcel Proust’s friend and
the model for Charles Swann
in “In Search of Lost Time,”
more recently chronicled by
his descendant Edmund de
Waal in “The Hare With Amber Eyes.” Ephrussi owned
that famous bunch of asparagus by Manet. That’s included, too, in the Phillips’s
delightful exhibition.
So is Jean Renoir’s 1936
film “A Day in the Country.”
Based on a Guy de Maupassant story, it brings Jean’s
father’s painting to life.
Make time to watch it.
Renoir and Friends: Luncheon of the Boating Party
The Phillips Collection, through
Jan. 7, 2018
Ms. Wilkin is an independent
curator and critic.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | A15
ROB WILSON
LIFE & ARTS
WORK & FAMILY | By Sue Shellenbarger
Tell the Hard Truth at Work
Companies need candor from their employees, but bosses must make clear
they’re open to bad news and contrary opinions
IT TAKES FINESSE to tell your
boss and colleagues what you really think.
Terra Kunish was wary when a
new chief executive arrived at her
company in 2016 preaching candor
among managers and employees.
Phil Dolci says he promotes honest
feedback at the Stow Co., a Holland, Mich., maker of home-storage products. “You can have a very
difficult conversation with someone and still be compassionate,”
the chief executive says.
Ms. Kunish, a product manager,
waited a few weeks to watch Mr.
Dolci in action. “I needed to know
he wouldn’t throw me under the
bus” for offering criticisms. He
didn’t.
She challenged Mr. Dolci directly after he nixed her proposal
during an executive-team meeting
to include a drill bit with one of
the company’s closet-shelving
products. She asked to see him in
his office after the meeting and
made her case again, citing customer data.
Mr. Dolci says he saw that she
was right, but didn’t agree immediately. “I pushed back and she
stood her ground,” Mr. Dolci says.
He has since promoted her twice,
to brand director. “It’s important
to me that employees have the
courage to disagree with me,” he
says.
Giving candid critiques is essential to solving problems on
the job. It’s an especially hot
topic at tech companies, with
their flattened hierarchies and
ceaseless time pressure. Employees may care deeply about their
team’s results and depend on their
colleagues to do well, but hesitate
to criticize them for fear of sparking conflict, hurting feelings or being seen as a jerk.
Airing disagreements face-toface prods managers and employees to examine their assumptions
and make better decisions, says
Michael Roberto, a management
professor at Bryant University in
Smithfield, R.I., and an expert on
decision-making. “You have to remember you’re on the same team
and you’re trying to strengthen
each other’s argument—not win
the argument,” he says.
Asking permission before offering feedback can be helpful, says
Achim Nowak, a Hollywood, Fla.,
executive coach. “Instead of
pouncing on the person, say, ‘I
have a couple of thoughts I’d like
Rules for Delivering Criticism
DON’T:
1. Be rude,
obnoxious or
aggressive.
2. Belittle, embarrass or scare
people.
3. Criticize colleagues
in public.
4. Shout.
5. Repeat yourself.
6. Try to soften criticism by
prefacing and following it with
insincere praise.
7. Put colleagues on the defensive.
8. Send your criticism via text,
IM or email.
9. Try too hard to be popular.
10. Make it personal, as in, “You’re
sloppy.”
to share with you. Is this a good
time?’ ” he says. Prefacing your remarks with, “I’m sure you’ve
thought about this already,” can
lend humility, Mr. Nowak adds.
Bosses who want honest feedback often have to ask for it, welcome it warmly and listen carefully even when they disagree,
DO:
1. Build a trusting relationship first.
2. Use criticism as a tool for
improvement.
3. Find fault with the
behavior rather than the person.
4. Explain the impact in specific
terms.
5. Invite colleagues to
challenge your
thinking.
6. Show
compassion.
7. Be humble.
8. Stress that you
want to be helpful.
9. Deliver feedback immediately, in person.
10. Ask questions to understand
others’ viewpoint.
says Kim Scott. She is the author
of “Radical Candor,” a best seller
about how to give honest feedback
at work.
Art Karoubas, vice president of
product at HighGround, a Chicago
maker of employee-engagement
software, asks employees every
three months how he can be a
better manager. He listens when
they challenge his plans. “Even if
I’m 100% convinced that my idea
is the best idea, I open it up and
ask, ‘What do you think?’ ” he
says. Then he follows up with
questions.
He listened recently to an employee who objected, saying that
the team was planning to roll out
a new software feature too fast.
That started a conversation on his
team about a broader change the
employee thought was needed to
improve the product, Mr. Karoubas
says. They released the new feature on time, but laid longer-term
plans to make the additional,
broader fix.
Akhila Tadinada, a director in
Redmond, Wash., for Hitachi Vantara, says she invites employees to
challenge everything. She was reluctant to back an engineer’s recent proposal to build an online
marketplace for the company’s industrial applications, saying customers wouldn’t be interested. The
engineer argued that it could be a
helpful innovation. Although she
was still skeptical, she gave him
time to build a prototype and test
it. The completed product was a
big hit with executives at a recent
customer conference.
Avoid turning criticism into a
personal attack, Ms. Scott says.
She recommends following a “situation, behavior, impact” formula: Describe the situation
where the problem behavior occurred, the person’s specific actions and their impact. Instead of
saying, “You’re sloppy,” say,
“You’ve been working nights and
weekends and it’s starting to take
a toll on your ability to catch
mistakes in your logic.”
It’s important to know the person well enough to anticipate his
or her response, Dr. Roberto says.
“You have to determine who can
handle more radically or brutally
candid criticism, and who needs a
gentler approach,” he says.
Ted Devine tries to hire employees who will thrive in the candid
culture at his company, Insureon,
an online small-business insurance
agency in Chicago. “You have to
build one-on-one relationships
with people so they trust you. But
also so you can push them,” says
Mr. Devine, the company’s CEO.
Belen Tokarski, Insureon’s chief
administrative officer, says she enjoys a challenge, but facing Mr. Devine sometimes feels like “walking
right into a fire.” Her team recently missed one of its quarterly
targets because she reassigned a
few employees to closing sales.
“Why did we do that?” Mr. Devine asked. Ms. Tokarski defended her decision, and Mr. Devine told her, “OK, fine. These are
battlefield decisions leaders have
to make.”
But he didn’t pretend to be
happy, he says. When employees
slip up, “I don’t want them expecting me to say, ‘Hey, you
missed your numbers, come on in,
I’m going to buy you a beer,’ ” he
says. “But I want them to give me
bad news. The rule is, don’t surprise me. Talk to me about it so I
know and can try to do something
about it.”
ART
A HOMAGE TO DA VINCI AT AUCTION THIS FALL
RUSSIAN BILLIONAIRE Dmitry
Rybolovlev will try to sell his rare,
rediscovered Leonardo da Vinci
portrait of Christ as “Salvator
Mundi,” or the savior of the world,
for $100 million at Christie’s in
New York next month—a record
asking price for an Old Master at
auction.
The oil painting from around
1500 depicts Christ as a Renaissance man dressed in flowing blue
robes, his left hand cupping a
crystal orb while his right raises a
sign of blessing. The figure’s
brown, curly
ringlets fall
down around his
shoulders, framing a long face
and dimpled
chin.
Less than 20
Da Vinci paintings survive, and
all of the others—including
his iconic “Mona
Lisa”—are in museum collections.
Christie’s intends
to auction off
this example on
Nov. 15 with all
the theatrical
frenzy that its rival Sotheby’s gave
to selling Edvard Munch’s
“Scream” for nearly $120 million a
few years ago. On Tuesday, Christie’s said it intends to market the
work alongside “Sixty Last Sup-
CHRISTIE’S IMAGES LTD. (2)
BY KELLY CROW
‘Sixty Last Suppers,’ above, Andy Warhol’s tribute to Da Vinci’s masterpiece, goes on the block with Da Vinci’s ‘Salvator Mundi,’ below.
pers,” Andy
Warhol’s wallsize silkscreen
homage to another Da Vinci
masterpiece that
the house estimates will sell
separately for
$50 million.
Christie’s
plans to offer
both paintings in
its major contemporary sale
in New York. It’s
an unusual twist
for Da Vinci but one that’s likelier
to put the painting on the radars
of newly wealthy international collectors who generally prefer contemporary art. At the very least,
Christie’s stands to reset Da
Vinci’s $11.5 million auction record. To break Warhol’s record, it
would need to top $105.4 million.
“Da Vinci? He’s the holy grail,”
said Loic Gouzer, Christie’s cochairman of post-war and contemporary art, adding that his team
consigned the Warhol a few
months ago and then approached
the Da Vinci’s owner with the pairing campaign. Christie’s didn’t
name the paintings’ sellers; a
spokesman for Mr. Rybolovlev confirmed the Russian potash magnate’s family trust is selling the Da
Vinci.
Da Vinci painted the portrait
around 1500, and it bounced between European royals for hundreds of years before shoddy
cleaning efforts and over-painting
rendered it almost unrecognizable.
When it surfaced in 1958 at So-
theby’s, it sold as a “school of Da
Vinci” work for only £45. But in
2005 a group of Old Master dealers and a conservator took a closer
look and campaigned for its re-authentication, ultimately winning
validation from museums and Da
Vinci scholars. Six years ago, “Salvator Mundi” made its public debut when it was included in the
artist’s retrospective at London’s
National Gallery.
More recently, the painting
landed at the center of a complex
pricing dispute between Swiss art
dealer Yves Bouvier and his former client, Mr. Rybolovlev. Two
years after the National Gallery
show, Sotheby’s helped the same
Da Vinci dealers who fought for
its rediscovery sell it privately for
$80 million to Mr. Bouvier. He
turned around and sold it to Mr.
Rybolovlev for $127.5 million—a
mark-up that later spurred Mr.
Rybolovlev to sue Mr. Bouvier, alleging fraud. Both men remain enmeshed in criminal court cases in
Europe pegged to the deal. Mr.
Rybolovlev’s family maintains uncontested title to the work and
hopes “the forthcoming auction of
this work will finally bring to an
end a very painful chapter,” according to his spokesman Brian
Cattell.
Mr. Rybolovlev is selling the
picture for far less than he paid
for it in 2013. Ron Soffer, Mr. Bouvier’s lawyer, said he doubts that
the Russian billionaire needs the
money from the sale. “If he is selling a painting by Leonardo da
Vinci in an attempt to score a
point in his case, one can only be
baffled,” Mr. Soffer said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
A16 | Wednesday, October 11, 2017
SPORTS
California’s Breakup With the NFL
As the Rams and Chargers struggle to gain a foothold in Los Angeles, the 49ers also deal with questions about fan support
BY ANDREW BEATON
Carson, Calif.
STUBHUB CENTER is an apt name
for the modest soccer stadiumturned NFL foster home for the Los
Angeles Chargers. The tiny 27,000seat stadium, named for a ticket-resale behemoth, has struggled to fill
up for the country’s most popular
sport.
In the Chargers’ first season
back in L.A. after 56 years in San
Diego, seats are noticeably empty
at kickoff for home games. Many
other seats are often filled by
boisterous traveling fans of visitors like the Kansas City Chiefs.
After a recent game against the
Philadelphia Eagles, Chargers
quarterback Philip Rivers said it
didn’t feel like a home game.
Chargers fans knew that starting over in L.A. wasn’t going to be
easy. “We’ve been moved from a
city in San Diego that appreciated
the team and the players,” said
Chad Smith, a Chargers fan at a
recent game here.
The Chargers aren’t alone in facing questions about their fan support. All four of California’s teams
are struggling with identity crises.
While the Chargers struggle in
the L.A. suburb of Carson, where
they are domiciled until a permanent home is completed in 2020,
the Los Angeles Rams, in their second season back in Southern California, have seen home attendance
fall by more than 20,000 per game
since last season.
In the Bay Area, the San Francisco 49ers offer fans the chance
to wait in traffic, sit in uncomfortably hot seats and watch one of
the worst teams around. The
state’s most promising team on
the field, the Oakland Raiders, is
leaving soon after more than a half
century in California for a glamorous new home in Las Vegas.
“It doesn’t exactly seem like the
Golden State for the NFL right
now,” said Andy Dolich, a former
executive with teams such as the
49ers and Oakland A’s.
If that’s true, it’s a problem for
the country’s most popular sport
when it faces headwinds in the
country’s most populous state. L.A.
in particular has been the area
where the league saw the biggest
room for growth going forward.
But in the early parts of this
football season, startling pictures
featuring swaths of empty seats
have generated attention during
and after Chargers, Rams and 49ers
home games. The teams argue that
the unflattering images aren’t fully
representative of reality.
For example, the Chargers say
the crowds at kickoff don’t reflect
the ultimate size of the crowds,
and the fans may just be on the
concourses. “It is a very L.A.
thing—arriving late has always
Above, a view of the stands during a
Chargers-Dolphins game at StubHub
Center. Right, fans at a Rams game.
been part of the culture here,” said
Mark Tamar, the team’s vice president of fan experience.
Although the StubHub Center can
hold 27,000, the Chargers said they
consider anything above 25,300 a
sellout because they don’t count
some unused seats—such as complimentary tickets for players and
staff and unsold ones set aside for
the Americans with Disabilities
Act—against attendance.
There was a time when raising
doubts about pro football here
would be unthinkable. For much of
the last half century or so, California has been a football paradise.
The Chargers were an AFL powerhouse that became one of the
NFL’s most iconic teams with their
powder-blue jerseys. The 49ers
spent two decades in the 1980s
and 1990s as the league’s model
franchise. And the Raiders—with
legendary coach John Madden,
late owner Al Davis and notoriously fanatical supporters dressed
in silver and black—are as much
part of football lore as pigskin and
the forward pass.
The same isn’t exactly true today. The 49ers have ceded Bay
Area primacy to the NBA’s Golden
State Warriors. The average ticket
price on the secondary market for
49ers home games has dropped
32.5% since they moved to Levi’s
Stadium in 2014, according to
T—B: SEAN M. HAFFEY/GETTY IMAGES; KEITH BIRMINGHAM/SAN GABRIEL VALLEY TRIBUNE/ZUMA PRESS
Jesse Lawrence, founder of TicketIQ, a search engine that aggregates
ticket listings.
Since last year, Rams’ prices have
dropped 10%. On the other end of
the spectrum, because the StubHub
Center is so small, Chargers tickets
on the secondary market cost 70%
more than they did a year ago when
the team played in San Diego.
While the Chargers and Rams
face the challenge of breaking into
a new city, the entrenched 49ers’
questions are different. Their stadium, which opened in 2014, has
been criticized for its location in
Santa Clara, and its design, which
leaves fans on the sunny side of
the stadium with extremely hot
seats. All of this to watch a team
that is 2-19 since the start of the
2016 season. The 49ers have been
working with an architecture firm
for more than a year to study potential improvements to Levi’s Stadium, which includes options to
give fans relief from the heat.
The Chargers and Rams, on the
other hand, still have a few years
until they move into the $2.6 bil-
lion home they plan to share in Inglewood, Calif., where the NFL
hopes to take hold with a premier
venue in one of the country’s biggest markets.
Los Angeles has always been
somewhat of an enigma for the
NFL. The league became richer
than ever over the past two decades without a team in the country’s second-biggest city.
Then after 21 years in St. Louis,
the Rams repatriated to L.A. last
season. The early returns were
positive. Playing in the city’s famous Coliseum, they averaged
84,457 fans in their first season.
But they also went 4-12.
This year, attendance has cratered. Through the Rams’ first
three home games, they have averaged just 59,162 fans per game—
which leaves a vast emptiness in
the NFL’s largest stadium, which
can hold more than 93,000.
The Rams say the attendance
decrease is in part by design. Before the season, they say, they
aimed to sell fewer tickets and improve the in-game experience by
engaging fans more intimately.
“It’s fairly clear the opportunity
we have in Los Angeles is unique,”
said Jamie Reigle, the Rams’ new
executive vice president of business operations, who came over
after a decade with Manchester
United. “That being said, there are
some challenges in the market.”
As Los Angeles sports fans
mulled if they were ready to accept one NFL team, the Chargers
quickly packed up, moved north
and gave the city a second. The
welcome for the Chargers has been
short of a group hug. Los Angeles
Mayor Eric Garcetti said in a recent radio interview that the city
will “embrace any team that
comes” and is “certainly happy to
have the Chargers.” But he added
that L.A. “could have been happy
with just [the Rams] too.”
All of this has prompted questions about whether the team
would actually consider moving
back to San Diego. For now, that
has been quashed, with the team
noting they have already committed tens of millions to their facilities in the L.A. area. “There are no
discussions of returning to San Diego from the league or at the
club,” NFL spokesman Joe Lockhart said last week.
Still, Victor Lopez, owner of El
Pollo Grill near San Diego, hopes
the team does just that.
His restaurant is giving away
free tacos every time the Chargers
lose. Just walk in and say “Spanos
Taco”--a reference to the owners
who moved the team away—and
voilà. The Chargers are 1-4 so far
this season.
Lopez says he has given away
more than a few thousand tacos already. “By far the most successful
promotion I’ve ever had,” he said.
The WSJ Daily Crossword | Edited by Mike Shenk
Weather
Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
40s
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Berlin
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Buenos Aires
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Today
Hi Lo W
63 54 c
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89 78 t
61 41 pc
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63 53 c
68 49 s
99 82 s
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Tomorrow
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UP TO SCRATCH | By Mark Diehl
Across
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7 Washington
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11 Spray in the
pantry
28 Lingerie fabric
31 Humorist
Bombeck
32 Scrubber at the
sink
14 Defense minister
under Begin
35 Org. with a
driving school
program
15 Polynesian catch
36 Gerund, e.g.
17 Like many Scots
37 “Dear Mama”
rapper
18 Place of business
19 Areas for
dressing
20 Hoppy quaffs
21 You can bank on
them
38 “Hey, you there!”
47 Less tasteful,
as a joke
48 You can deal
with it
50 Cape Town
currency
52 Spill over
55 Collectible paper
items
57 One to whom
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for safekeeping
39 Add-___ (extras)
58 Must have now,
to an exec
40 Makeup of the
lunar “seas”
59 Line of trousers
41 Singapore setting
22 Working
42 Larger than life
24 “Brave New
World” drug
44 Cub raiser
26 Called on
46 “___ that the
truth!”
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3 •Mark Twain and
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34
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6 Objective
57
61
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“bye-byes”
60 “I’d love to!”
61 Cruise stop
62 Hunt’s offering,
and what you’ll
find in the
starred answers
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
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29
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8
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City
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Pittsburgh
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Sacramento
St. Louis
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52 40 pc 47 42 r
Atlanta
87 69 sh 85 67 pc
Austin
77 59 pc 86 65 pc
Baltimore
73 58 r
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57 34 pc 54 38 s
Boston
67 51 pc 60 48 s
Burlington
57 40 pc 62 43 s
Charlotte
88 69 pc 83 65 c
Chicago
64 55 r
67 57 c
Cleveland
69 58 r
72 60 c
Dallas
75 56 s
86 65 s
Denver
67 43 s
74 37 s
Detroit
61 53 r
67 57 c
Honolulu
88 76 sh 87 76 r
Houston
82 63 pc 88 69 pc
Indianapolis
67 55 sh 69 56 c
Kansas City
60 46 pc 72 58 s
Las Vegas
87 60 s
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Little Rock
75 51 s
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Los Angeles
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Miami
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Milwaukee
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Minneapolis
61 52 pc 67 52 pc
Nashville
78 53 pc 76 55 pc
New Orleans
87 73 pc 87 72 pc
New York City
72 56 r
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18
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45
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47 Potions prof at
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offerings
48 Repudiate
12 “I’m standing
49 Sport in which
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both competitors
13 Complete whiff
can score
simultaneously
16 View from
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51 Kazakhstan
border sea
20 Name on the
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53 Junior in the Pro
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Fame
23 •Foster, twice
25 Former fort near
Monterey
26 Copperhead’s
delivery
54 Canvas base
56 Prelude to juin
57 Gel-ocity pen
maker
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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | A17
OPINION
Sanctimony Bites Weinstein Dems
One of the
few
successes
of
John
McCain’s 2008
campaign
was a 30-secBUSINESS
ond ad called
WORLD
“Celeb.” It
By Holman W.
interspersed
Jenkins, Jr.
images
of
Paris Hilton
and Britney Spears with Barack Obama and his adoring
crowds. A narrator said: “He’s
the biggest celebrity in the
world, but is he ready to
lead?”
Pundits and political pros
dismissed the spot as off-target
and unconvincing. Mr. McCain
seemed almost embarrassed by
it, claiming his campaign was
just having “fun.”
Yet the implication that Mr.
Obama was a glitzy Hollywood-style confection resonated with voters. Mr. Obama,
just coming off his ecstatic appearance in Berlin, saw his
poll numbers drop noticeably.
His advisers were quoted in
the press acknowledging the
ad’s power.
Which brings us to Harvey
Weinstein. If Hollywood people are anything like normal
people, they should be nearly
as offended by Mr. Weinstein’s presumptions about
them as they are by his alleged bullying of women for
sex. Where does he get off assuming his colleagues can be
so easily manipulated, will so
readily fall in line, just because he cites, as he did in
his recent self-defense, their
shared liberal politics?
How can somebody with his
smarts be so heavy-handed
and obvious as to think he can
mint an instant pass for his
transgressions merely by alluding to his opposition to the
National Rifle Association and
President Trump?
Then again, maybe we’re
missing the real point. Mr.
Weinstein was reminding liberal elites that his trouble is
their trouble, because they
tolerated him for so long.
That’s why this scandal may
have legs.
He was a guest at the
Obama White House 13 times.
He gave hundreds of thousands to the Clintons. In 2016,
he hosted or headlined multiple fundraisers for Mrs. Clinton with people like Leonardo
DiCaprio, Helen Mirren, Julia
Roberts and Sarah Jessica
Parker.
He was coached by Team
Clinton for a campaign appearance on CBS. In turn, he
coached campaign chief Robby
Mook on how to answer the
Bernie Sanders threat.
He’s also a man who the
Los Angeles Times now tells
us was “generally loathed” in
Hollywood. His sexual predations were so well known that
they were the subject of a joke
on “30 Rock.” His behavior, we
now learn, has been the subject of ongoing reporting projects at the New Yorker, New
York magazine and the New
York Times, which finally blew
Mr. Weinstein out of the water
with its 3,500-word account
last week.
His offenses were the “biggest mess” Disney had to deal
with during its 12-year partnership with Mr. Weinstein, a
former executive now tells the
Times. Actresses Ashley Judd
and Rose McGowan, who related their stories to the paper, as well as Lena Dunham,
creator of HBO’s “Girls,” have
been outspoken in the aftermath about Tinsel Town’s history of covering up for Mr.
Weinstein.
Maybe Hollywood
progressives will
tone down their
self-righteousness.
Then there is Meryl Streep,
who worked closely with Mr.
Weinstein, who sang his
praises at the Oscars. She
claims never to have heard
the unsavory stories. Her denunciation of Mr. Weinstein’s
alleged sins this week came
not when the Times story
broke, not when Mr. Weinstein took a leave of absence
from the company he created—but only when his board
(led by his brother) stuck a final fork in him by announcing
his firing.
OK, hypocrisy is a price we
pay for civilization. Politicians
and Hollywood types especially are in the business of
faking sincerity. Yet there is
one thing about which the
Hollywood-progressive nexus
has been perfectly sincere: its
conviction that its choice of
political party is a testament
to its own shining personal
virtue. The Democrats’ celebrity enablers played a key role
in fostering the inordinate
self-righteousness of the modern progressive movement—
which has reached ad absurdum proportions lately with
the violent bullies of the Antifa movement.
The McCain “Celeb” ad, in
retrospect, was a signpost.
Last year the Democrats finally offloaded a big chunk of
working-class and middleclass America, many of whose
residents had been Obama
voters. The Democrats became
the concentrated party of urban blue America, with urban
blue America’s special susceptibility to the self-celebritizing
aspects of social media.
Republicans and conservatives were understandably delighted by Mr. Weinstein’s ludicrous appeal to partisan
solidarity in the midst of his
sexual harassment extremis.
Maybe progressives would like
to come up and watch him
shower later?
Donald Trump, of course,
has been guilty of offenses
against feminism too, though
apparently not like Mr. Weinstein’s. Rather, the real connection is this: Liberal hypocrites like Mr. Weinstein were
a big reason 63 million Americans voted for a conservative
hypocrite like Mr. Trump.
Mr. Trump has his faults,
but an excess of sanctimony
isn’t one. Just maybe when
the Weinstein scandal has run
its course, progressives will
discover the virtue of toning
down their own excessive
claims to righteousness.
A Surprise Victory—and Then What?
We have arrived at an
unusual moment in our
political history. Rarely
POLITICS do both political
parties
& IDEAS
struggle siBy William
multaneously
A. Galston
with deep internal divisions. Often neither does. Victory is the classic salve for
pre-election wounds—or so we
thought before last year.
When a party loses an
election it expects to lose, it
tends to leave things as they
are. When a party loses an
election it expects to win, it
experiences a profound shock
and questions everything
from its institutions and tactics to its most fundamental
assumptions about issues and
voters. By contrast Donald
Trump’s victory has posed a
historically unusual question:
What happens when a political party wins a national election it expected to lose?
By mid-1984, few Democrats expected Walter Mondale to beat Ronald Reagan.
Mr. Mondale’s 18-point defeat
prompted a few young Democrats to plot party renewal
but evoked no wholesale
changes from the party’s leadership. By contrast, when Michael Dukakis blew a huge
mid-June lead over George
H.W. Bush and lost the 1988
presidential election by 7
points, the ensuing rancorous
internal debate was resolved
only when Bill Clinton won his
party’s 1992 nomination and
the election.
In a similar vein, few Republicans were surprised
when John McCain lost to Barack Obama in 2008. By the
fall of that year, the economy
was collapsing, and President
George W. Bush’s job approval
had fallen below 30%. Mr. McCain waged a valiant struggle,
but his defeat didn’t trigger
sustained intraparty debate
about the path forward. Despite the rise of the tea party,
the race for the 2012 Republican nomination was fought on
familiar terrain with predictable results: Mitt Romney,
who had come in second to
Mr. McCain four years earlier,
prevailed.
Many Republicans believed
the weak economic recovery
gave their nominee a good
chance of beating Mr. Obama.
On election night, Mr. Romney and his key advisers
were confident of victory. His
4-point defeat led to the famous “autopsy” commissioned by then-Republican
National Committee chairman Reince Priebus and to a
chaotic 17-candidate scramble
for the 2016 nomination,
with a winner few had predicted when the contest began. As Mr. Trump delivered
his acceptance speech at the
GOP convention, not many
Republicans leaders believed
that he would become president, and their number dwindled further after the release
of the “Access Hollywood”
recording.
On election night, despite
some late-breaking adversity,
Hillary Clinton’s campaign remained confident of victory.
As was the case for Democrats
after 1988 and Republicans after 2012, Mrs. Clinton’s surprise defeat has stirred up intraparty debates that will take
at least one presidential nomination cycle to resolve.
A party surprised by victory is likely to be unprepared to govern. In summer
and fall 2016, Republicans
spent little time developing a
legislative alternative to
ObamaCare, in part because
they anticipated using the
“repeal and replace” slogan
against an expected Clinton
presidency.
The GOP wasn’t
ready to govern, and
Trump only wants to
deepen its divisions.
Mr. Trump’s victory also
called into question business
as usual within the Republican Party, a challenge with
which its surprised leaders
were poorly prepared to cope.
In effect their nominee was
an independent, running under their flag but against
their history. He rejected
long-held party orthodoxy—
on trade, foreign policy, entitlements and much else—
bringing to the fore the
concerns of a portion of the
party’s base that its leadership had long ignored.
In so doing, Mr. Trump underscored the conflicting interests within the Republican
coalition. Business-oriented
Republicans favor free trade,
an open door for low-wage
and high-skill workers, and
tax cuts for corporations financed in part by cuts to Social Security and Medicare—
in each case, contrary to the
preferences of working-class
Republicans. To keep faith
with his base, the president
has plunged into controversy
with fellow Republicans on a
broad front, in the Senate and
even within his administration. For the first time since
1938, a sitting president
threatens to back a purge of
veteran elected officials from
his own party.
Although
the
debate
among Democrats is tinged
with residual bitterness from
the nominating contest, it
concerns means rather than
ends. Most Democrats favor
guaranteed access to health
care for all Americans, for example; the debate between
the backers of single-payer
and those who want to build
on the Affordable Care Act is
about the best route to an
agreed destination.
The differences between
Mr. Trump’s base and the Republican establishment cut
deeper. Populism is one thing,
conservatism quite another.
Conservatives can be, and often are, oriented toward the
future. Think of Ronald Reagan’s optimism, which shaped
a generation of his followers.
Right-wing populists seek to
“make America great again”
by harking back to a past
whose disappearance they lament. Forging unity from
these polar opposites would
challenge subtler minds than
those at either end of Pennsylvania Avenue.
Forgiving Debt Would Hurt Puerto Rico
By John Tamny
Americans. More important, it
would hurt the Puerto Rican
stimates vary about the people by delaying the real,
cost and time required long-term recovery the territo rebuild Puerto Rico tory needs.
after Hurricane Maria. And
the territory’s excessive debt
burden will only make the re- Wiping out creditors
covery more complicated.
would simply enable
Before the hurricane, Puerto
Rico’s finances were in a sorry more dysfunction.
state. The government was already uncertain of how the
territory would pay back exIncreased
government
cessive debt, and it was ex- spending during times of ecopected that Puerto Rico’s cred- nomic hardship slows growth
itors were going to suffer even more by expanding the
some kind of “haircut.” Now government’s role in the alloit’s looking even worse.
cation of goods, services and
President Trump suggested people. By erasing Puerto
during his visit last week that Rico’s debt, Mr. Trump would
erasing the Puerto Rican gov- be handing the territory’s poernment’s debt would free up litical class more money to
scarce dollars to pay for the is- spend inefficiently. Because
land’s reconstruction. But this Puerto Rico’s debt troubles
isn’t the answer. Wiping out were the direct result of poliPuerto Rico’s debt would do a cies that hurt growth, forgivdisservice to the territory’s ing its debt would only free
creditors, many of whom are Puerto Rico’s politicians from
E
having to address the policies
that were suffocating its economy to begin with.
Puerto Rico must instead
focus on strengthening private enterprise to promote
growth. Allowing the government to feel the pain of its
debt would leave politicians
no choice but to adopt progrowth policies, including a
reduction in income taxes
paid by the territory’s highest
earners. At present, Puerto Ricans earning more than
$61,500 a year face a minimum annual levy of $8,430,
plus 33% tax on what they
earn above $61,500. The income tax rate is especially
high considering some of
Puerto Rico’s island neighbors, such as Bermuda, the
Cayman Islands and the Bahamas, have no income tax.
Lowering income taxes
would shrink the penalties incurred by private businesses
and the workers who are most
capable of rebuilding the territory. Lower taxes would also
encourage new businesses to
open and help to grow the
overall economy.
Disasters, whether natural
or man-made, don’t suspend
the basic laws of economics.
The quickest path to recovery
is one that limits the government’s role, but also forces
the state to reverse policies
that were holding the economy down. Wiping out Puerto
Rico’s debt would harm creditors, but even worse, enable
the slow-growth status quo to
continue. If Mr. Trump really
wants to see the economy
turn around in Puerto Rico, he
would do best to exercise
some tough love.
Mr. Tamny is director of
the Center for Economic Freedom at FreedomWorks, editor
of RealClearMarkets and author of “Popular Economics”
(Regnery, 2015).
BOOKSHELF | By Jennifer Siegel
The Origins of
Putin’s Land Grab
Lost Kingdom
By Serhii Plokhy
(Basic, 398 pages, $32)
I
n 988, Vladimir the Great, the Grand Prince of Kyiv
(Kiev), embraced Christianity for himself and for the
realm he had amassed. His domain of Kyivan Rus’
encompassed lands traversing much of modern-day Belarus,
Ukraine and European Russia. One thousand years after the
end of his reign, a latter-day Vladimir—a Putin rather than
a prince—praised him as the “gatherer and protector of the
Russian lands and a prescient statesman who laid the
foundations of a strong, united, centralized state, resulting
in the union of one great family of equal peoples, languages,
cultures, and religions.”
Those gathered lands and peoples lie at the center of
Serhii Plokhy’s sweeping study “Lost Kingdom: The Quest
for Empire and the Making of the Russian Nation.” Mr.
Plokhy, a professor of Ukrainian history at Harvard University, seeks to explain the centrality of the so-called western
provinces to Russian identity. This is not merely an intellectual exercise but one closely linked to contemporary
geostrategic debates. As Mr.
Plokhy writes: “The question
of where Russia begins and
ends, and who constitutes the
Russian people, has
preoccupied Russian thinkers
for centuries.” While his study
gets the reader no closer to a
conclusive answer, it does show
why this question is of such
importance.
Mr. Plokhy traces the
relationship between what
became the Russian state, based
in either Moscow or St.
Petersburg, and the western lands
wherein Russia’s origin myth dwells. From the
1470s, when Ivan III pushed back the last of the Mongol
horde, the legacy of Kyiv was crucial to the legitimacy of the
Russian crown and state. From its inception, Russia relied
on a tripartite loyalty to what was later articulated as
Orthodoxy, autocracy and nationality. Mr. Plokhy makes it
clear that the origins of this triumvirate lie in Kyivan Rus’.
He begins his exploration of Russian identity with Ivan III’s
reconstitution of most of the lands once ruled from Kyiv
and the expansion of the empire by his grandson, Ivan IV,
who added the title of czar and conquered lands to the east
unconnected to the Kyivan principality.
But Ivan IV’s eastern conquests are not of great interest
to Mr. Plokhy. Nor are all of the other vast and varied territories and peoples that were steadily incorporated into the
Russian Empire by rulers from Ivan to the last Russian czar,
Nicholas II, and then reincorporated by the Bolshevik and
Soviet leadership. His gaze rarely strays from Ukraine and,
to a lesser extent, Belarus, with an occasional eye toward the
closely related Polish and Lithuanian lands. While his
subtitle—referring to empire and “the making of the Russian
nation”—might suggest a history of Russian imperialism and
the development of Russian nationalism within a multinational, multi-ethnic context, his subject is in fact the Slavic
Russian empire alone. More specifically, his is a story of
Russian and Ukrainian nationalism and identity—of Great
Russia and Little Russia—in juxtaposition and in concert.
Throughout history, Ukraine’s identity was at
the mercy of Russian leaders, who viewed the
western borderland as a key to their legitimacy.
As Mr. Plokhy relates, Ukrainian national identity was
almost always at the mercy of Russia’s leaders. When it
suited the cause of Russian nationalism and anti-Polish
imperialism in the czarist period, an independent “Little
Russian” identity was encouraged, and its language,
literature and culture were extolled. At other times,
Ukrainian nationality and culture were subordinated and
suppressed, since the development of non-Russian
languages was seen as a threat to the security of the
realm. In the Soviet period, at first, “Ukrainization” and
“Belarusization” were seen as a means of winning over
local cadres to support the Russian-dominated central
Soviet authority. Once Stalin consolidated his position,
however, he pivoted toward a policy that promoted Russification, out of a fear that non-Russian nationalism might be
used by foreign states against the Russian Soviet center.
Russian and Soviet expansion into the western
borderlands was always conveniently couched in terms of
the reunification of medieval Kyivan Rus’. When Catherine
the Great absorbed the purloined lands of partitioned
Poland near the turn of the 19th century, she justified it as
the reunification of the lands settled by Eastern Slavs with the
others ruled from Kyiv centuries before. During World War I,
Romanov war aims included adding the missing portions of
Kyivan Rus’ that Austria had claimed. When Stalin sent the
Red Army into central Poland after the Nazi-Soviet Pact in
1939, it was framed as a step to protect their “blood relatives,
Ukrainians and Belarusians residing in Poland.”
There is never any doubt that Mr. Plokhy sees similar
rhetoric underpinning Mr. Putin’s policies in the “near
abroad.” Through the soft-power methods of the Russian
World Foundation (Russkii mir), an organization that Mr. Putin
established in 2007, and by other efforts, he sought, as he
said, to “unite all who cherish the Russian word and Russian
culture, wherever they may live, in Russia or beyond its
borders.” Then came the 2014 annexation of Crimea,
reattaching what Mr. Putin described as “historically Russian
land.” This was followed by the deliberate destabilization of
the Russian-speaking areas of Ukraine’s east and south and,
not least, the insurrection in the Donbas region along
Russia’s border. It was undertaken, in the words of one of its
local leaders, as “a war for the Russian World.”
The bloody war and gray-zone conflict that followed
might not ultimately accomplish Mr. Putin’s desire of
uniting the Russian World. But it indicates his inclination to
act on historical claims, such as those voiced by Anton
Denikin, a Russian White Army leader whom Mr. Putin has
praised. It was Denikin who said, a century ago: “No Russia,
reactionary or democratic, republican or authoritarian, will
ever allow Ukraine to be torn away. The foolish, baseless,
and externally aggravated quarrel between Muscovite Rus’
and Kyivan Rus’ is our internal quarrel, of no concern to
anyone else, and it will be decided by ourselves.”
Ms. Siegel, a professor of history at The Ohio State
University, is the author of “For Peace and Money: French
and British Finance in the Service of Tsars and Commissars.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
A18 | Wednesday, October 11, 2017
OPINION
W
REVIEW & OUTLOOK
LETTERS TO THE EDITOR
Tax Reform and Deficits
Tax Incentives Often Don’t Work in Long Run
hile you are reading about Donald a meager $39 billion, or 2.5%, while corporate
Trump’s Twitter irruptions, real news taxes fell $3 billion, or 1%. This reflects the
keeps happening. To wit, results for slow-growing U.S. economy, especially in the
the government’s complete fisfirst half of fiscal 2017.
As fiscal 2017 shows,
cal year 2017, which ended on
A typical economic expanSept. 30, prove again that the
sion
throws off 3% or more in
deficits will explode
federal budget will never be
additional revenue each year
without faster growth. as wages and profits rise, and
balanced without faster economic growth.
in the go-go 1980s and 1990s
In news that few noted, the
increases of 5% or more were
Congressional Budget Office reported on Friday common. It’s no coincidence that the federal
that the budget deficit for fiscal 2017 grew for budget deficit closed rapidly as a share of GDP
the second straight year—to $668 billion, an in- during those expansions, even going into surcrease of $82 billion in 2016. That equals 3.5% plus in the 1990s, in contrast to the current exof the national economy, up from 3.2% the year pansion.
before, and it confirms that the deficit progress
All of which ought to inform the debate over
in the early years after Republicans took Con- tax reform. We are now hearing from the same
gress in 2010 has been stanched.
Democratic economists who blessed the blowBut here’s the bigger story: Spending rose out spending of the early Obama years that tax
only 3% overall for the year, according to the reform is a mortal threat to the federal deficit.
CBO gnomes. Federal outlays climbed by some But the real threat is a continuation of the slow
$130 billion to $3.982 trillion. Three percent is economic growth that their economic policies
probably more than most of our readers re- produced. They blame slow growth on “secular
ceived in raises, but by federal standards it’s pe- stagnation,” as if some unchangeable force of
nurious. Some of the big outlays were, as ever, nature is responsible.
for the three giant entitlements—3% for Social
CBO estimates that under current policies
Security, 4% for Medicare, and 2% for Medicaid the U.S. economy will grow by an average of
as the pace of new enrollments slowed under only 1.9% a year. That’s after not reaching even
the Affordable Care Act.
the 3% historical norm in a single year since
The biggest single spending increase was 2005. If that’s as good as the economy can do,
45% for education thanks to an upward revision revenues will continue to trickle in and deficits
of $39 billion in the “estimated net subsidy will climb as far as the eye can see.
costs of loans and loan guarantees issued in
President Trump and the Republicans are
prior years.” In plainer English, the Obama Ad- proposing a tax reform with a goal of lifting
ministration low-balled the costs of nationaliz- growth to 3% or more a year. That’s hardly a faring student loans. Tens of thousands of borrow- fetched goal, and if growth reaches 3% for even
ers are defaulting on their student debt, and the a few years the Treasury will get a windfall of
taxpayer tab is coming due.
new revenue far exceeding current estimates.
But the main reason for the rising 2017 defi- Entitlement reform will still be important to
cit was a mere 1% increase of $47 billion in fed- controlling deficits, but without faster growth
eral revenues. Individual income taxes climbed there is zero chance.
R
An Outrageous Prosecution
ecep Tayyip Erdogan is right when he
There is no evidence Mr. Erdogan initiated
complains that Turkey is threatened by these charges against our reporter. Yet they are
terrorists who kill innocent citizens surely a consequence of the repressive atmoand want to bring down his
sphere he has created in TurTurkey convicts a
government. But when Turkkey, especially after a failed
ish authorities tar innocent
military coup in 2016. The
Journal reporter of
journalists for abetting terTurkish president has taken
promoting terrorism. advantage of the state of
rorism, they confirm to the
world that Turkey’s President
emergency to solidify his hold
has turned his country into an
on power by cracking down on
authoritarian state.
anyone his government doesn’t like.
On Tuesday a Turkish court falsely convicted
This repression is now extending to the forWall Street Journal reporter Ayla Albayrak of eign media, and even beyond Turkey’s borders.
propagandizing on behalf of an outlawed Kurd- In February Deniz Yücel, a reporter for Gerish terror group. The evidence for Ms. Albay- many’s Die Welt, was arrested in Istanbul and
rak’s “crime”: An Aug. 19, 2015, Wall Street remains detained without charges. Amnesty InJournal news story about the bitter fighting in ternational notes Turkey now has more journala remote, Kurdish-majority, Turkish city called ists in jail than any other country.
Silopi that borders Syria and Iraq. Turkish
Ms. Albayrak, a dual Turkish and Finnish naforces fought there with the outlawed PKK, or tional, is now in New York. But that doesn’t
Kurdistan Workers’ Party.
mean the conviction isn’t damaging. The ErdoMs. Albayrak quoted some members of the gan government has already abused Interpol,
Patriotic Revolutionary Youth Group, which the international police network, by issuing
Turkish authorities say is affiliated with the “red notices” to have journalists and critics arPKK. But she also quoted government officials, rested in other countries until they can be exlocal residents and the mayor—and explicitly tradited. In this way a system meant to target
identified the PKK as designated by both An- criminals is turned on good journalists like Ms.
kara and Washington as a terrorist outfit. No- Albayrak and makes it dangerous for them to
where in her balanced dispatch did she praise travel and do their jobs.
either the PKK or the youth group, and everyWhen any local Turkish official can create an
thing she did to report this story as fairly and international incident by freelancing a political
objectively as possible was within the bounds prosecution, it underscores Turkey’s descent
of good journalism and Turkish law.
under Mr. Erdogan and creates unnecessary
The indictment noted that some Turkish-lan- rifts with other countries. Ms. Albayrak plans
guage websites lifted parts of her story and an to appeal, which gives Ankara a path out of this
accompanying video for their own purposes. injustice. But it requires a Turkish judiciary
But they used selective quotes, and none are af- willing to assert itself by standing up for the
filiated with the Journal and none were autho- rule of law and tossing this shameful and disrized by either the Journal or Ms. Albayrak.
honest prosecution.
C
Alien Torts Unlimited
an foreign citizens sue foreign corpora- the law’s limits. Since U.S. courts are more gentions for injuries that occur on foreign erous than those abroad, these groups have
soil in U.S. courts? Remarkably, that’s mostly been hitting up deep-pocketed corporathe question before the Sutions for abuses perpetrated
preme Court, which on Another attempt to pack by foreign officials or governWednesday will consider U.S. courts with foreign ments.
whether to vastly expand the
In Kiobel (2013), Nigerian
liability claims.
jurisdiction of U.S. courts and
plaintiffs sued Royal Dutch
corporate liability.
Shell under the Alien Tort
In Jesner v. Arab Bank,
Statute for abetting the Nige6,000 foreign plaintiffs sued the Jordanian Arab rian government in aggressively shutting down
Bank for injuries perpetrated by Hamas and protests against an oil development. The Suother terrorist groups in Israel. They charge preme Court declined to rule on whether corpothat Arab Bank cleared automatic electronic rations could be held liable under the law but
wire transfers via the U.S.-based CHIPS system decided that the claims were impermissibly exfor foreign terrorists who were later placed on traterritorial because “all the relevant conduct
Treasury’s list of terrorist organizations.
took place outside the United States.”
Plaintiffs are invoking the 1789 Alien Tort
Jesner ought to be rejected on the same
Statute, which was intended to punish piracy grounds, though a Second Circuit of Appeals
and injuries to ambassadors and rarely invoked panel instead dismissed the case by reaffirming
for nearly two centuries. But in 1980 the Su- its Kiobel precedent that “no corporation has
preme Court blundered in holding that U.S. ever been subject to any form of liability
courts could review cases involving foreigners (whether civil, criminal, or otherwise) under
for violations of international norms such as the customary international law of human
torture and war crimes. The ruling prompted rights.” The judges also asked the Supreme
a wave of lawsuits that have strained diplomacy Court to address corporate liability.
and burdened the courts.
Environmental groups are supporting the
In 2004 the Supreme Court partially re- plaintiffs, as are Senators Sheldon Whitehouse
dressed its error by limiting Alien Tort jurisdic- and Lindsey Graham, a pair of tort bar allies
tion to violations of international norms that who claim the Alien Tort Statute is key to stopare “specific, universal, and obligatory.” Under ping the flow of money to terrorists.
its landmark Sosa decision, the High Court adBut if Jesner claims are allowed, any bank
vised judges to take “great caution in adapting anywhere could be sued under the Alien Tort
the law of nations to private rights” and “look Statute. Enforcing sanctions is the job of Treafor legislative guidance before exercising inno- sury and other national regulatory regimes, not
vative authority over substantive law.”
U.S. courts. Accepting the plaintiffs’ claims in
Yet plaintiff lawyers, human-rights groups Jesner would vitiate limits that the Supreme
and environmentalists have continued to test Court has imposed on the law.
I am delighted to see San Jose
Mayor Sam Liccardo’s “Why I’m Not
Bidding for Amazon’s HQ” (op-ed,
Oct. 5). As an economist studying labor and economic development, I find
it discouraging that mayors and civic
boosters so often disregard the evidence and join the rush to throw subsidies at companies looking to locate
a facility. Mr. Liccardo breaks away
from the herd and points out what
economists who study this know: The
factors that really make a difference
in a decision like Amazon’s are the
skill base of the workforce and the
ecosystem of existing businesses. I
would add that all too often jobs and
investments don’t materialize at the
scale initially promised by a business,
and many a business has relocated
(and reaped a new batch of subsidies)
before the locality could realize the
benefits it foresaw.
PROF. CHRIS TILLY
UCLA
Los Angeles
Tax incentives to attract specific
businesses are financial losers and
unfair. I’m amazed granting a specific
corporation what amounts to a different tax rate is even legal. How would
you feel if your neighbors were given
an arbitrary reduction in taxes because they were thinking of moving
out of state? States and cities need to
attract business by creating an overall environment that is enticing,
rather than cleaning up just a corner
of the pig sty. Connecticut is Exhibit
A of how pointless these deals are
when the overall environment is decaying because of a state political
structure that is rotten. Makes me
want to move to San Jose.
KIRK SCHLUP
Woodbury, Conn.
I’m enough of a realist to see that
offering tax breaks in the short term
may prove beneficial over time. Football teams are essentially seasonal
businesses. They may come and go,
but it appears Amazon is planning for
the long term. I say good luck to
whoever attracts Amazon’s new digs.
JOHN TRICKETT
Charleston, Ark.
Price Gouging in Disasters Isn’t Admirable
Price Gouging’ After a Disaster Is
Good for the Public” (op-ed, Oct. 4)
Donald Boudreaux incredibly argues:
“Price hikes let [disaster-affected]
consumers know that fuel is scarcer
than it was. Price hikes prompt consumers to use fuel more judiciously,
buying less gasoline than they would
at a lower price. They take fewer unnecessary trips, diminishing pressure
on supplies.”
People aren’t tanking up in disaster
areas so that they can travel over the
river and through the woods to grandmother’s house. They are doing it to
make trips to get needed supplies, to
help family members and friends often in desperate need of relief and, in
some cases like Hurricane Harvey, to
fuel their boats to make rescues. Normal supply and demand principles
don’t apply in these circumstances.
This is essentially an oligopoly: limited suppliers in a limited geographic
area. Gouging is nothing short of unconscionable oligopolistic behavior.
GORDON DOWNING
Wynnewood, Pa.
of compassion and a sense of community. I guess the smart play would
have been to jack up prices for food,
water and lodging thereby attracting
more supply and encouraging people
not to overuse these scarce resources.
Luckily, we don’t live in a world
where the only course is Econ 101. Nobody should feel good about taking
advantage of others under duress.
JORDAN ETH
Tiburon, Calif.
Does Prof. Boudreaux advocate that
the hospital emergency rooms in Las
Vegas should have raised prices to
whatever the market would bear after
the shooting rampage and only treat
those who pay cash up front?
MICKEY SCHWARTZ, M.D.
Birmingham, Mich.
Prof. Boudreaux points out an important fact that often gets lost in
public debates: As a society we can
manage scarce resources either by
pricing them (give the resources to
those who can afford them) or ration
them (promise them to all, and end up
People on the streets in Las Vegas
with long waits and no guarantee of
offered food and water to first resupply). I take exception with the prosponders and help to the wounded out fessor’s comment that pricing a scarce
resource gets it to those who need it
most. That is simply untrue. Pricing
the scarce resource gets it to those
who value it the most, where value is
the buyer’s need backed up by his or
Your editorial “Trump’s Too-Bigher buying power. And quite underTo-Fail Punt” (Sept. 27) spotlights
standably, a society that values fairthe flawed process for designating
ness above profit maximization often
certain banks and other institutions
balks at that.
as systemically important.
PROF. SUBIMAL CHATTERJEE
Binghamton University, SUNY
That process will be forever flawed
Binghamton, N.Y.
so long as it ignores the marketplace
perceptions that certain elite firms
are “too big to fail.” For it is the
judgment of counterparties that government support stands behind selected players that renders them
In his review Adam Kirsch treats
TBTF in the first instance. This perception gives the TBTFs their funding my book “Freud: The Making of an Illusion” as an unsuccessful attempt to
advantage and other benefits.
deliver the coup de grâce to a weakSurely this marketplace reality is
as measurable as any of the other six ened master (Books, Sept. 30). I beg
to disagree. Assessing substantially
factors that the Financial Stability
new evidence, the book sets forth the
Oversight Council considers. In fact,
counterparty perception is even more circumstances and events that
measurable than the other factors be- caused Freud to gradually abandon
conventional science and medicine in
cause it is based on quantifiable refavor of arbitrary claims and a cult
sults. Legislation is pending in this
of personal authority. This isn’t vinCongress (H.R. 493) that would acdictive polemic but historical analycomplish this. No need to punt as
sis. Doesn’t it deserve to be evaluPresidents Trump and Obama have
ated as such?
done on this issue. A fresh approach
As most scholars acknowledge,
will move the ball down the field.
PROF. CORNELIUS HURLEY Freud’s sexual deeds, worries and reBoston University grets informed his theory to an extraordinary degree. My book, therefore, doesn’t hesitate to set forth
what is known or widely inferred
about those matters. For Mr. Kirsch,
though, the mere suggestion that
Freud seduced his sister-in-law—a
Regarding Michael Enders’s letter
point that is now widely conceded
of Oct. 5 (“Single-Payer Health Care
Is Control Without Choice”): Individ- even by Freudians—attests to my personal “anger” and can therefore be
ual control is an illusion for all but
the top 10% who might be able to af- dismissed out of hand. If Mr. Kirsch
had pondered my book’s actual arguford to buy a private policy or pay
their bills outright. The control rests ment instead of its author’s supposed
mental state, he would have done a
with your employer who makes the
decisions regarding the coverage op- better service to your readers.
FREDERICK CREWS
tions available to you. The employee,
Berkeley, Calif.
outside a union environment, has absolutely no say.
National health care would at least
be under the control of our elected
representatives. Ask any senior if he
or she would trade Medicare for the
open market. A national system
THE WALL STREET JOURNAL
needn’t preclude one’s ability to purchase additional coverage.
People suffer physically and financially due to our system. I’ve seen it.
MICHAEL E. PALUMBO, D.O., FACEP
Winslow, Maine
The Moral Hazard Involved
In the FSOC’s TBTF Policy
My Analysis of Dr. Freud
Is Fair and Well-Supported
What Does Patient Choice
Really Mean for Most of Us?
Pepper ...
And Salt
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | A19
OPINION
By Lawrence B. Lindsey
T
he tax-reform package
now working its way
through Congress is welldesigned and far-reaching. It aims to address the
reasons that the current economic
recovery has been the most anemic
on record. If it becomes law, we can
expect economic growth to accelerate to roughly 3.2% for the next
three to five years, then settle in at
a sustainable pace of around 2.5%.
This is well above current official
expectations for long-term growth
of about 1.9%.
Expect 3.2% growth,
mostly taking the form
of higher real wages. It
happened in the 1960s.
Both history and economics suggest that most of this additional
growth will accrue to workers in
higher real wages. From 1965
through 2010, the economy grew at
an average annual rate of 3.1%. It attained that pace by combining 1.5%
employment growth with 3.2%
growth in the capital stock and a 1.1%
annual rise in total factor productivity. By contrast, the 2.1% average annual growth rate observed from
2011-16 combined the same rapid employment growth with a feeble 1.7%
expansion of the capital stock and total factor productivity of just 0.5%.
Real wages stagnated.
Any growth-oriented policy must
therefore address the problem that,
in the current recovery, capital-formation growth was nearly cut in
half and productivity growth by
more than half. The bill now under
consideration does exactly that by
focusing on incentives to increase
investment in fixed capital. It also
promotes entrepreneurship and
small-business formation—the ultimate driver of productivity growth.
In the current expansion, the pace of
new business creation relative to
business closure paled dramatically
in comparison to the historical
average.
The tax package promotes business investment by establishing expensing—immediate write-off—of
spending on new equipment. That
would bring taxation in line with actual business cash flow. Under current law, businesses must spend
money now and receive deductions
over time. That particularly hurts
new and small businesses, which
generally have the most pressing
cash-flow needs.
Expensing sharply reduces the after-tax cost of buying new equipment. Business investment spending
is the most sensitive part of the
economy to these types of tax
changes. The provisions in the bill
will likely lead to a 7% to 10% increase in business fixed investment,
enough to boost annual economic
growth by at least one percentage
point.
The package also promotes entrepreneurship, the key to productivity
growth. Productivity growth does
not descend magically upon workers
once they get up to speed in their
jobs; it occurs when individuals take
on new jobs better suited to their
skill sets. The signal for this is that
the new job pays more—if it didn’t,
the worker probably wouldn’t take
it. New jobs open up in the economy
when businesses are formed that
create fresh market niches and exploit existing ones more efficiently
CHAD CROWE
Tax Reform Will Give Workers a Raise
than legacy companies.
The proposed legislation favors
these businesses, as well as smaller
businesses in general, by making expensing permanent for them and allowing an interest deduction up to a
capped amount. It also provides a
25% rate on pass-through income
from businesses that are not merely
providers of personal services. Corporate profits would be taxed at
20%, but recall that shareholders are
typically taxed at 15% on dividends.
If corporations pass on their aftertax profits to shareholders, the combined rate would be 32%, higher
than the 25% pass-through rate. The
actual calculation is more complicated, but the new 25% rate provides
at least rough justice for passthroughs.
Some have argued that the economy cannot grow faster than its current rate because the labor market
is at what most economists consider
“full employment.” That misses the
lesson of the current recovery. The
majority of the growth in this expansion has come from adding more
workers—essentially bringing the
unemployed back into the workforce.
That does nothing to enhance productivity. For the economy to grow
at a more rapid rate, we need other
sources of growth—namely productivity and capital formation.
If productivity and capital formation merely return to their normal
historical levels, GDP growth would
rise to 2.6% even with no further reductions in the unemployment rate
and a slow-growing labor force, expanding at a rate of just 0.7% annually. But the entrepreneurship and
capital-formation provisions in the
tax bill are more generous than the
historical norm. One should therefore expect that these factors will
grow more quickly than in the
past—especially in the near term, as
there would be a “catch-up” period
to bring the capital stock more in
line with what it should be under
the new rules. That is why we can
expect growth in the next three to
five years to exceed 3%.
There actually is a historical analogue to the legislation currently under consideration. In 1964 Congress
enacted a tax cut that similarly encouraged capital formation and entrepreneurship. It cut the top personal rate by 21 points. It cut the
corporate rate and introduced accelerated depreciation. The result was
a boom that went on for the rest of
the decade.
When a supply-side tax bill like
this is passed at a time of full employment, labor’s share of the economic pie expands rapidly. That happened after the passage of the 1964
bill, and it will happen again if the
current tax reform becomes law.
Over the next five years, we should
see labor’s share of the economy
rise by four points, from the current
59% to 63%—a growing slice of a
growing pie. It would not be surprising to see real wage increases of 4%
to 5%. By contrast, in the current expansion, real wage growth has been
flat, if not negative.
A rise in real wages would dramatically improve America’s society
as well as its economy. It would lead
to the first sustained decline in income inequality in more than 40
years. The American economy will
finally start working in the interest
of the great middle class and not
simply those at the top. This is an
important piece of legislation to
pass. The country must not miss this
opportunity.
Mr. Lindsey, a former Federal Reserve governor and assistant to
President George W. Bush for economic policy, is president and CEO
of the Lindsey Group.
Lessons From the Sorry History of Steel Protectionism
By Bill Lane
S
o far the Trump administration’s process for evaluating
how to help the U.S. steel industry has been remarkably responsible. On the campaign trail, Donald
Trump promised a smorgasbord of
protectionist measures. This year, in
part because of the administration’s
deregulatory efforts, the economy
has grown faster, jobs have been
created quicker, and the stock market has reached record highs. Yes,
ending America’s participation in
the Trans-Pacific Partnership was a
lost opportunity, but until recently
the renegotiation of the North
American Free Trade Agreement has
been handled constructively. Aside
from new tariffs on Canadian lumber, the protectionist extravaganza
many expected—including me—
hasn’t materialized.
Commerce Secretary Wilbur Ross
and U.S. Trade Representative Robert Lighthizer deserve credit particularly for how they’ve handled steel.
They clearly don’t want to wreck
the economy by starting a trade
war, but at the same time they recognize Mr. Trump still wants big
tariffs on steel imports. It isn’t the
first balancing act performed on an
I-beam during the past 50 years, as
the steel industry has insisted its
unique circumstances demand “special” protections far beyond what
other industries are allowed.
During the late 1960s and early
’70s, steel imports from the European Economic Community (now the
European Union) and Japan were restricted via voluntary restraint
agreements—a nice way of saying
import quotas. To persuade other
countries to not retaliate, the U.S. in
effect exempted them from its trade
laws and rewarded them with a
guaranteed share of a restricted
American steel market. That was a
way to share the premium generated
from the protectionism. Everyone
won except taxpayers, consumers,
and—especially—America’s steel-using manufacturers.
This approach gave way in the
late 1970s to a notion called trigger
price mechanisms. The idea was
that if importers didn’t charge
enough for steel, trade cases would
be expedited. At least with the trigger the remedy was antidumping,
so that countervailing duties went
to the U.S. Treasury, not foreign
producers
But the trigger didn’t provide
enough protection, so quotas were
revisited, this time on a grandiose
scale. In 1984 the U.S. imposed
binding steel quotas—still called
“voluntary”—on 19 countries and
the EEC. Canada was the only major
steel-producing country with the
political clout to resist. The measure was supposed to last five
years. From the steel industry’s
point of view, it worked. There were
shortages, which increased prices.
The steel industry became more
profitable—more so, in fact, than
many of its customers. Some of the
windfall was used to improve the
quality and efficiency of domestic
mills, but much of it was diverted to
foreign steelmakers to keep them
complicit.
By the late 1980s, high steel
prices and quota-induced shortages
were undermining factory efficiency
By Haisam Hassanein
And Wesam Hassanein
I
sraeli-Arab relations have been
warming of late. Last month Bahrain’s King Hamad bin Isa Al Khalifa reportedly urged fellow Arabs to
end their boycott and normalize relations with Israel. In August, the Egyptian government released a letter
from Saudi Crown Prince Mohammed
bin Salman affirming Riyadh’s commitment to the existing arrangements
between Egypt and Israel relating to
the Straits of Tiran—the first public
Saudi acknowledgment of Israel’s
maritime rights in the straits.
Several Arab officials have reportedly met in private with Prime Minister Benjamin Netanyahu and his
defense officials. Israel reportedly
enjoys close security and intelligence
cooperation with Egypt, Jordan and
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Even the Trump team
seems to recognize that
tariffs or quotas would
start a global trade war.
provided much of the political access, but what carried the day was
the hundreds of small metal-bending concerns represented by the
Precision Metalforming Association.
Congress quickly learned that 30
times as many people worked in
factories using steel than in mills
making it—and they were mad.
Most of them seemed to be located
in the same congressional districts
as steelworkers.
After a feisty policy debate, President George H.W. Bush and Congress agreed it was time for a new
steel policy. The quotas were relaxed, then phased out completely in
1992. Steel producers started to rely
on the same trade rules everyone
else did. In 1998 the industry asked
the Clinton administration for comprehensive import relief via the
World Trade Organization’s safeguard provision. It was a strong
case, but Bill Clinton said no. Four
years later, when the steel industry
had a weaker case, George W. Bush
imposed 30% tariffs. Steel users
again pushed back. Eventually the
Bush steel tariffs were challenged in
the WTO and rejected. So they were
ended early.
Given this history, will the Trump
administration impose new steel import restrictions? Today, steel prices
in the U.S. are at a three-year high,
and there is growing demand in
China. The Commerce Department
and trade representative are looking
at options, including aggressive enforcement of existing trade laws and
new quota-like remedies. Fortunately
everyone seems to realize that a
misstep, such as a flagrant imposition of tariffs or quotas, would certainly trigger foreign retaliation
against American farmers, ranchers
and manufacturers.
The strong economy may provide
political space for another option.
Instead of pitting American steel
producers against their American
customers, Mr. Trump could focus
on improving competitiveness for
all. The administration could provide lower taxes, possibly including
tax credits, to help modernize steel
mills and factories alike. Safety and
training programs could be enhanced to help all workers. And a
robust infrastructure program
would both increase steel demand
and improve efficiency for all. What
are the chances this will happen?
Slim, but better than I imagined six
months ago.
Mr. Lane is a retired director of
global governmental affairs at Caterpillar Inc. He was also a leader of
the Coalition of American Steel Using Manufacturers.
How Obama Nudged Arab Leaders Toward Israel
Rupert Murdoch
Executive Chairman, News Corp
Matthew J. Murray
Deputy Editor in Chief
as just-in-time processes gave way
to just-in-case workarounds. Unconcerned, the steel industry demanded five more years of even
tighter quotas.
That launched a political fight
sometimes called the Steel Wars. A
robust coalition of American steel
users—led by Caterpillar, where I
worked—was formed to push for an
end to the quotas. Big companies
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Professional Information Business:
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Ingrid Verschuren, Deputy Head
several Gulf monarchies. Last month
at the United Nations, Egyptian
President Abdel Fattah el-Sisi and
Saudi Foreign Minister Adel Al-Jubeir adopted a soft tone toward the
Israeli-Palestinian conflict and did
not criticize Israel. Mr. Sisi departed
from his written speech and called
on the Palestinian people to accept
Israel and live in peace alongside its
citizens.
For the Arab change of heart, credit
the Obama administration—specifically, its rift with Mr. Netanyahu.
From the perspective of Arab
leaders, that administration supported the wave of political Islamism
that engulfed the region in the Arab
Spring’s aftermath. It also threatened their regimes in unprecedented
ways by abandoning Egypt’s President Hosni Mubarak and slowing
military exports to Saudi Arabia and
Bahrain under the pretext of democratization. Worse, the administration
signed a nuclear deal with Iran that
reintegrated the ayatollahs’ regime
into the international community
while unleashing a wave of destabilization throughout the region.
Mr. Netanyahu’s views aligned
perfectly with those of Arab leaders
on all these issues. All rejected the
administration’s belief that Iran deserves a share of the Gulf’s spoils
and that Arabs must accommodate
He aligned their interests
with Netanyahu’s through
his clumsy handling of
Iran and the Arab Spring.
Tehran. Arab leaders admired Mr.
Netanyahu’s staunch public criticism of Mr. Obama during the nuclear deal negotiations. The editor
in chief of the Saudi-backed website
Al-Arabiya published an article in
March 2015 with the title “President Obama, Listen to Netanyahu
Notable & Quotable: Harvard
Harvard psychologist Steven Pinker
at an Oct. 3 faculty meeting:
The policy of banning students
from private organizations is widely
seen outside Harvard as exemplifying
some of the worst tendencies of elite
universities. It can only contribute to
the impression that universities are
not dispassionate forums for clarifying values or analyzing problems but
institutions determined to impose
their ideology on a diverse population by brute force. . . .
Let me be concrete. Those of us
who engage in argument with intelligent people on the opposite end
of the political spectrum often encounter the objection that the nearconsensus among academic scientists (on climate change, for
example) cannot be trusted. Everybody knows, they say, that university research is distorted by the political agenda of elites trying to
exert control over individual
choices. “No, no,” we insist; “Universities aren’t like that; we openmindedly identify problems and try
to come up with solutions.” A policy that is widely seen by the outside world as repressive virtue-signaling makes our job that much
harder.
on Iran.” Arab leaders share Mr. Netanyahu’s view that Mr. Obama’s
policies, which prioritized democratic reforms over the stability of
their regimes, left social, political
and security vacuums, which radical
Islamists soon filled.
Arab leaders realized they could
learn something from Mr. Netanyahu’s ability to withstand Mr.
Obama’s pressure. He allied with the
U.S. Congress to repulse Mr. Obama’s
efforts to interject himself into internal Israeli politics. Arab leaders decided to ally with Israel in the hope
of successfully navigating the American political system. This summer
leaked emails from Yousef Al Otaiba,
the United Arab Emirates’ ambassador to Washington, revealed a concerted effort to reach out to American Jewish figures in Washington to
help his government establish contacts with Israel. Mr. Sisi has frequently met with American Jewish
organizations in Cairo, Washington
and New York where he assured
them of his commitment to peace
with Israel.
Arab leaders have realized the urgency of engaging Israel directly instead of relying on the U.S. as a meditator. Their sense of urgency stems
from a deep feeling of betrayal by
Mr. Obama. Even with President
Trump in office, the dangers of Iran
and terrorism to the Arab states continue, so that the Arab states see
better relations with Israel as necessary for long-term stability. The Arab
openness to Israel is irreversible. It
is hard to put the genie back into the
bottle.
Haisam Hassanein is a fellow at the
Washington Institute for Near East
Policy. Wesam Hassanein is a master’s
candidate at American University’s
School of International Service.
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THE WALL STREET JOURNAL.
A20 | Wednesday, October 11, 2017
100% OF WHAT YOU GIVE
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RECOVERY IS COMPLETE.
PREPARED FOR THE WORST
When needed, we can activate
UMCOR-trained volunteers who are
prepared to hit the ground running.
Our proactive approach equips and
empowers the people of The United
Methodist Church to go where they’re
needed most, in a way that allows the
greatest help—and that includes areas
that receive little to no media attention.
FOR AS LONG AS IT TAKES
UMCOR operates in a three-stage
process: an emergency stage; a
relief stage to help homeowners
assess damage and stabilize their
homes if possible, while also caring
for their emotional and spiritual
needs; and the long-term recovery
stage—which can last for years.
Long after the initial response
efforts, UMCOR continues to work
toward complete recovery. For
example, over 10 years later, we’re
still working to help those impacted
by Hurricane Katrina.
WHEN DISASTER STRIKES,
UMCOR IS THE LAST TO LEAVE.
For 75 years, UMCOR has served as the hands and feet for the
United Methodist heart and soul—one of the many ways we put beliefs
into action to make real change in the world.
When disasters overwhelm a community’s ability to recover on its own,
The United Methodist Committee on Relief (UMCOR) partners with local
United Methodist churches, as well as local volunteer and government
organizations, to facilitate complete restoration.
But we also believe that spiritual, emotional, and psychological support
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hands work hard to restore structures, they also reach out with love,
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That means 100% of your donations
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You can make a difference today—every dollar offers hope.
Donate today at
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TECHNOLOGY: FAA PANEL SPLIT ON RULES FOR DRONES B4
BUSINESS & FINANCE
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Honeywell Plans Pair of Spinoffs
Conglomerate model
has served investors
well, but new CEO
cites ‘long term’ value
BY THOMAS GRYTA
AND CARA LOMBARDO
Honeywell International
Inc. plans to spin off its home
and transportation businesses
into two new companies by
the end of 2018, a step that
gained approval from activist
investor Third Point.
The plan is the first effort
to streamline the conglomerate under Chief Executive
Darius Adamczyk, who took
the reins in late March. He
launched a monthslong portfolio review of all aspects of
the
company,
including
whether it should remain
whole. The effort received an
extra push in late April when
Third Point asked Honeywell
to spin off its aerospace unit,
an idea it ultimately rejected.
The Morris Plains, N.J.,
company said Tuesday that
the new home business, which
will include residential thermostats and security and fireprotection product distribution,
represents
annual
revenue of $4.5 billion.
The transportation business—a portion of the company’s aerospace unit that
primarily serves the auto industry—would focus on turbocharger technologies and generate annual revenue of $3
billion.
Honeywell booked $39 billion in revenue last year.
In a call with analysts
Tuesday, Mr. Adamczyk said
Honeywell “will focus on
fewer markets and verticals,”
shifting away from consumer
and distribution segments.
“My goal was to scrutinize
and assess each business unit
to derive a portfolio best capable of maximizing shareholder value over the long
term,” he said.
Third Point said it was
pleased with Honeywell’s review and the tighter focus.
“We are supportive of CEO
Darius Adamczyk’s leadership
and confident that his commitment to continuous portfo-
See more at WSJMarkets.com
Flows King
Vanguard Group's assets
under management, B16
lio optimization will further
improve shareholder value,”
the activist investor said.
Honeywell had a string of
successes under previous CEO
Dave Cote, who turned the
company around and boosted
its market value fivefold during his 14-year tenure. His expansion of the company
through acquisitions produced
a conglomerate that makes
everything from jet engines to
thermostats to rubber boots.
Mr. Cote remains Honeywell’s
chairman through April.
Please see CEO page B2
$4 trillion
$4.7 trillion
as of Sept. 30
3
2
1
0
1975 ’80
’90
2000
’10
Source: the company
THE WALL STREET JOURNAL.
Wal-Mart
Openings
Are Fewest
In 25 Years
BY SARAH NASSAUER
AUSTEN HUFFORD
ALWYN SCOTT/REUTERS
AND
One of the newly created companies would be a portion of Honeywell’s aerospace unit, but the conglomerate plans to retain the bulk of that business.
Pfizer Tightens Focus on Prescription Drugs
BY JONATHAN D. ROCKOFF
Pfizer Inc. said Tuesday it
is exploring a sale or spin-off
of its consumer-health business, the company’s latest
move to double down on prescription drugs and a potential
prelude to more deal-making.
The drugmaker left open
the possibility of holding on to
the unit, but Pfizer has been
cutting ties with nonpharmaceutical businesses, as rivals
have pushed to consolidate in
More
Women
Accuse
Weinstein
BY ERICH SCHWARTZEL
More allegations of sexual
assault and misconduct against
disgraced Hollywood producer
Harvey Weinstein surfaced, including some involving rape.
Mr. Weinstein was accused
of rape by three women and
sexual harassment by 10 others
in an article published by the
New Yorker magazine on Tuesday morning. Soon after the
article appeared online, the
New York Times reported that
several more actresses—including Gwyneth Paltrow and
Angelina Jolie—said the mogul
had propositioned or harassed
them at early points in their
careers.
A spokeswoman for Mr.
Weinstein didn’t respond to a
request for comment for this
article. In a statement to the
Please see STUDIO page B2
the $233 billion global consumer-health market.
Pfizer said it would look at
a “full or partial separation”
of the business and make a decision on how to proceed next
year.
“Although there is a strong
connection between Consumer
Healthcare and elements of
our core biopharmaceutical
businesses, it is also distinct
enough from our core business
that there is potential for its
value to be more fully realized
INSIDE
AMAZON WORKS
WHOLE FOODS
INTO THE MIX
BOSS TALK, B9
STUDIO HOPES
A FRANCHISE
IS BORN
MEDIA, B7
outside the company,” Chief
Executive Ian Read said in a
statement.
Proceeds from a sale, which
analysts said could top $10 billion, would give Pfizer more
firepower to deal for prescription-drug companies. Last
year, it bought cancer-drug
developer Medivation for $14
billion.
Pfizer’s consumer-health
business, which sells wellknown brands like Advil pain
medicine, Centrum vitamins
and ChapStick lip balm, generated about $3.4 billion in revenue last year.
The cash flow and steadily
growing sales bolstered earnings in the past few years
when Pfizer was coping with
generic competition for some
of its top-selling products like
the cholesterol drug Lipitor
and pain medicine Lyrica.
The company’s performance has picked up in recent
quarters, as Pfizer has
worked its way through the
bulk of its big patent expiries
and sales have risen for new
drugs like Ibrance breast-cancer pills and the blood-thinner Eliquis.
Shares in Pfizer, which are
up 11% so far this year, were
flat Tuesday, trading at $36.11.
Pfizer has retreated from
the consumer-health market
before. In 2006, Johnson &
Johnson, the No. 2 company in
that market, bought Pfizer’s
legacy consumer-health busiPlease see PFIZER page B2
Wal-Mart Stores Inc. plans
to open fewer U.S. stores than
it has in at least 25 years and
deepen its cost-cutting efforts,
attempting to free up cash for
e-commerce and store improvements in an increasingly
competitive retail environment.
The strategy is central to
Wal-Mart’s plan to fend off
Amazon.com Inc. and a sign
that executives believe the
profitable business based on
cavernous stores that WalMart built rapidly for decades
won’t grow through expansion.
At an investor meeting on
Tuesday at the retailer’s Bentonville, Ark., headquarters, executives said they would open
only about two dozen U.S.
stores in the 2019 fiscal year.
Instead, Wal-Mart will remodel
existing buildings and spend
on its e-commerce infrastructure and services like home
grocery delivery.
Though Wal-Mart’s “supercenters” have long been the
Please see RETAIL page B2
Brick-and-mortar retailers
fear a harsh holiday............ B18
HEARD ON THE STREET | By Stephen Wilmot
Liquor Companies Need to Sober Up
Move over
millennials:
Today’s
smartphoneobsessed
teens, Generation Z, are the consumers of
the future. Worryingly for liquor producers, they are
shaping up to be an antisocial lot.
The U.S. has been a highly
attractive market for most liquor companies. Overall alcohol consumption in the
country rose 15% over the
decade through 2015, even as
it shrank in Germany, France
and the U.K. Population
growth was the primary
driver, but generational effects also helped as American millennials, who are now
in their 20s and 30s, binged
on cocktails and craft beer in
particular.
The world’s largest liquor
companies, London-listed
Diageo and Paris-listed Pernod Ricard, put the U.S.
front and center of their
strategies. Not only does the
market have a more reliable
record of growth than in Europe or emerging markets, it
is also disproportionately lucrative. The U.S. accounts for
less than a third of Diageo’s
sales but almost half its operating profit.
But what if this turns out
to have been a demographic
blip? Millennials, whom demographers define as being
born between 1980 and 1995,
constitute more than 65 million Americans, according to
U.S. Census Bureau data. The
Generation Z cohort, born
from 1995 to 2010, numbers
62.5 million.
U.S. growth in unit liquor
sales will slow to just 0.2%
over the coming decades,
from 1.5% historically, as the
smaller Generation Z replaces millennials as the primary consumers of alcohol,
say analysts at brokerage Berenberg.
Jean Twenge, a professor
of psychology at San Diego
Drinking Problem
Percentage of age group to drink
alcohol within the past month
60%
50
Over 25
55.6%
40
30
20
2002 ’04 ’06 ’08 ’10
Under 21
20.3%
’12
’14
Source: NSDUH 2015
THE WALL STREET JOURNAL.
State University who wrote a
controversial 2006 book on
millennials called “Generation Me,” published an analysis of the latest generation
in August. “iGen: Why Today’s Super-Connected Kids
Are Growing Up Less Rebellious, More Tolerant, Less
Happy—and Completely Unprepared for Adulthood” describes how Americans born
after 1995 are more likely to
stay at home messaging
friends on smartphones than
they are to hang out in person. She argues they are
growing up more slowly than
their predecessors.
A benign consequence of
this generational shift is that
U.S. teenagers on average
drink less than they did a
decade ago. Increased pot
smoking is one reason. This
trend isn’t completely new.
Health-conscious millennials
had already started to imbibe fewer but better-quality
drinks.
But the decline in underage drinking since the advent of smartphones is more
significant. It could signal a
shift in consumer tastes that
companies will need to anticipate and adapt to.
Even as the U.S. packagedfood industry has entered a
period of decline, liquor producers have continued to
take the strength of the U.S.
market for granted. They
may need to plan for a more
sober future.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Wednesday, October 11, 2017
THE WALL STREET JOURNAL.
* ***
INDEX TO BUSINESSES
BUSINESS & FINANCE
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
A-B
F-G
O-P
Ahold Delhaize............B6
Airbnb..........................B4
Airbus........................A12
All-Stars Investment . B4
Amazon.com....................
B1,B3,B4,B6,B9,B17,B18
American Airlines Group
...................................B17
American Electric Power
.....................................B3
Appear Here................B8
Apple......................A4,B3
BB&T............................B2
Bell Pottinger...........A12
Best Buy ................... B18
Facebook......................B9
Fifth Wall Ventures
Management.............B8
Foundry Group ............ B4
General Electric .......... B4
Goldman Sachs Group
...................................B16
Green Street Advisors
.....................................B8
Oakbay Investments A12
Oakbay Resources and
Energy.....................A12
Penn-Florida................B8
Pernod Ricard..............B1
Pfizer ..................... A1,B1
Procter & Gamble
............................. A1,B18
Capital One Financial
...................................B18
CBRE Group.................B8
C-III Capital Partners . B8
Citigroup..............B2,B18
Comcast.................B3,B7
Costco Wholesale.....B17
Cowen........................B17
Craig Realty Group.....B8
Ctrip.com International
.....................................B4
CubeSmart .................. B8
D-E
DBL Partners .............. B4
Deerfield Management
.....................................B3
Dell Technologies........B4
Deutsche Post...........B18
Dewey & LeBoeuf.......B3
DFJ Growth ................. B4
Diageo ......................... B1
Dollar General...........B18
Dollar Tree ................ B18
Eightfold Real Estate.B8
EMC.............................B4
Equifax ......... A10,B3,B17
Extra Space Storage...B8
Hewlett Packard
Enterprise.................B4
Hines ........................... B8
Honeywell International
............................... A1,B1
Hormel Foods............B17
IKEA Systems.............B3
J-K
JPMorgan Chase..B2,B18
KKR..............................B8
Kohl's.........................B18
KPMG..........................A1
Kroger..........................B6
L-M
Life Storage................B8
LNR Partners..............B8
Lotus Capital Partners
.....................................B8
Macerich......................B8
Mack Real Estate Credit
Strategies.................B8
Macy's.......................B18
Mapbox........................B4
Massey Energy...........A4
McKinsey.....................A1
Microsoft.....................B4
Morgan Stanley........B17
N
Netflix..................B7,B18
News Corp...................B3
Nordstrom.................B18
NRG Energy.................B3
Nvidia........................B18
R-S
Regions Financial........B2
Rialto Capital
Management.............B8
SAP..............................A1
Snap.............................B4
SoftBank Group..........B4
Southern ..................... B3
Sprint .......................... B2
Standard Chartered..B16
Symantec .................. B17
Synchrony Financial..B18
T
Target........................B18
The Royalty Exchange
...................................B16
Third Point..................B1
Thrive Capital ............. B4
Time ............................ B7
Tokyo Electric Power
Holdings..................A11
Transnet....................A12
Trian Partners...........B18
Tujia.com.....................B4
U-W
United Continental
Holdings..................B17
U.S. Bancorp ............... B2
Vanguard Group........B16
Verizon Communications
.....................................B2
Wal-Mart Stores
.................B1,B6,B17,B18
Walt Disney................B7
INDEX TO PEOPLE
A
Adamczyk, Darius.......B1
Arnold, Rodney...........B8
Ashraf, Faisal..............B8
B
Bailey, Ross ................ B8
Barton, Dominic..........B9
Bezos, Jeff..................B9
Biggs, Brett.................B2
Boer, Dick....................B6
C
Canavan, John...........B17
Christoffer, Louis........B8
Clancy, Manus.............B8
Craig, Steve.................B8
D
Dell, Michael S............B4
Digenan, Thomas......B18
E-F
Elankumaran, Pradeep
.....................................B6
El-Batrawi, Ramy ..... B16
Fuller, Bryan................B3
G
Gensheimer, Mark......B8
Glenzer, Jeff ............... B2
Grant, James.............B18
Greenspan, Alan ....... B18
Gupta, Atul...............A12
H-I
Heppenstall, Mark....B17
Huerta, Michael..........B4
III, F. William McNabb
...................................B16
K
Katzke, Susan Roth....B2
Klaseus, Vince ............ B7
M-N
McMillon, Doug...........B2
Miller, Trip.................B18
Moorhead, Patrick ...... B4
Moskowitz, Gregg.....B17
Nowak, Brian ............ B17
CEO
Continued from the prior page
Mr. Adamczyk has stressed
that the conglomerate structure has worked well for Honeywell, even as companies are
under pressure to focus on
core competencies.
Honeywell shares are up
24% so far this year, making
the argument against breaking up the company. They
were up less than 0.1% Tuesday at $143.73.
Darius
Adamczyk
says
Honeywell ‘will
focus on fewer
markets and
verticals.’
In retaining the aerospace
business, the company highlighted the attraction of the
sector in general and the fact
that it benefits from other
Honeywell operations. It also
brings a “significant proportion of U.S.-based cash flows”
for Honeywell, which has
much of its cash overseas.
Nicholas Heymann, an analyst with William Blair & Co.,
said the remaining portfolio is
“relatively high-growth businesses. Deutsche Bank analyst
John Inch said the moves put
Honeywell on “an upward
growth trajectory from a
smaller revenue base” and
leave it with billions in capital
PFIZER
Continued from the prior page
ness for $16.6 billion.
Pfizer got back into the
business as a byproduct of its
$68 billion takeover of Wyeth
in 2009, but continued to
tighten its focus on prescription drugs by parting ways
with animal-health and other
noncore units.
The New York-based company also has sat on the sidelines as rivals like Bayer AG,
GlaxoSmithKline PLC and
Sanofi SA did deals to bulk up
their consumer-health businesses. Pfizer now ranks fifth
in the world by market share,
according to Euromonitor International market-research
firm. Glaxo ranks first.
All of the consumer-health
market leaders could have interest in adding Pfizer’s business.
So could Swiss food company Nestlé SA, which has in-
O-R
O'Hurley, John..........B16
Peltz, Nelson.............B18
Rouhana, William.....B16
Since President Donald
Trump’s election, bankers and
investors predicted that probusiness policies would lead
to a surge in corporate borrowing, which would help
bank profits.
Instead, the growth of
loans to companies has
dropped precipitously since
last November—to 2.1% from
8.1%, according to Federal Reserve data.
“Everybody thought we
were about to catch a wave
earlier in the year,” said David Turner, chief financial officer of Regions Financial
Corp., at a conference last
month. “It didn’t happen.”
Companies have grown
more reluctant to borrow after an initial surge of optimism following the election,
said Jeff Glenzer, vice president at the Association for
Financial Professionals, a
group for corporate finance
and treasury professionals.
“All the turmoil and the inability to move policy
through Washington set in,”
he said.
But analysts say the long
slowdown in commercial-loan
growth may simply be a function of the metric returning
to its normal level in recent
decades. Growth in the category ran far above gross-domestic-product growth in the
years following the financial
crisis, a streak that is difficult to maintain for any prolonged period.
The loan-growth metric
will be front and center in
banks’ third-quarter earnings
reports, which start Thursday
with J.P. Morgan Chase &
Co. and Citigroup Inc.
The expected continuation
of solid loan growth helped
push bank stocks higher over
about the past year. The degree to which bank investors
need to rethink that premise
may affect whether the stocks
continue to outperform.
Lending profits at the
banks largely depend on the
dynamic between loan growth
and interest rates. While recent increases in short-term
rates have made floating-rate
commercial loans more lucrative, the benefit has been limited by banks not making
many more loans.
Loan growth “has fallen
short of postelection expectations,” a federal advisory
council of bank executives
said at a September meeting,
according to recently released
minutes. Part of the reason
loan growth has remained
Lending Lag
Bank loans, change
from a year earlier
Commercial and industrial loans
All loans
10%
8
6
4
2
0
2016
’17
Source: Federal Reserve
THE WALL STREET JOURNAL.
sluggish: a limited appetite
from borrowers.
The drop in commerciallending growth has weighed
on broader annual loan
growth at banks, which
stands at 3.2%, down from
7.3% last November.
Bankers have been predicting for months that growth
would pick up. BB&T Corp.
CEO Kelly King said late last
year that there was “a huge
pent-up demand” from commercial clients that wanted to
invest in their businesses after years of holding off.
“They’re driving trucks with
250,000, 300,000 miles,” Mr.
King said.
But other industry observers say the lower growth
rates are likely here to stay.
Even some banks are getting
less optimistic—at least in
the short term. “This may
just be the new normal,” said
Credit Suisse Group AG banking analyst Susan Roth
Katzke.
Analysts have trimmed
earnings expectations for
banks including BB&T and
U.S. Bancorp since the banks
signaled last month that loan
growth has been softer than
expected.
BB&T, for example, said in
July that it expected overall
loans to be up 1% to 3% in the
third quarter compared with
the second quarter. In midSeptember, the bank walked
that back, saying it expected
loan growth to be slightly
down in that period.
BB&T executives are hopeful of a ramp-up in business
borrowing in the longer run,
in particular if a U.S. tax
overhaul happens. Small and
medium-size businesses, Mr.
King said, are still “much
more confident, much more
optimistic.”
S
Salem, Matt................B8
Sandberg, Sheryl ........ B9
Schneider, Lori............B8
Siemens, Rob..............B8
Smith, Matt..............B16
Sotoloff, Peter............B8
Sun, Winnie..............B16
T
Townswick, Don........B17
Twenge, Jean..............B1
W
Wallace, Brendan........B8
Wecker, Jeff..............B16
Weinstein, Harvey B1,B9
Weiss, Keith ............. B17
Wiesel, Elisha...........B16
Wilke, Jeff .................. B9
to fund future expansion.
The company said it could
spend up to $10 billion in
overseas acquisitions in 2018,
while using an additional $5
billion for U.S. deals, share
buybacks and debt repayment.
If U.S. tax reform is passed,
the company expects it could
use the entire $15 billion anywhere globally.
Honeywell on Tuesday
raised the low end of its guidance for earnings per share
guidance by 5 cents to a range
of $7.05 to $7.10. The company, which is scheduled to
report its third-quarter financial results Oct. 20, said it expects earnings of $1.75 a share
on sales of $10.1 billion in the
quarter, up 3% from a year
ago.
Honeywell expects the separations, which won’t require
a shareholder vote, to be taxfree to its shareholders. The
new home business will have
about 13,000 employees, while
the transportation business
will have about 6,500.
Honeywell said Gary Michel
will take over as president
and CEO of its home and
building technologies strategic business group. Mr.
Michel, who previously was a
president at Ingersoll-Rand
PLC, will report to Mr. Adamczyk.
He replaces Terrence Hahn,
who is moving to a leadership
role to help prepare the
homes and ADI Global
Distribution business to be
spun off.
—David Benoit
contributed to this article
All Consuming
Leading shares of the $233 billion
consumer-health market globally
GlaxoSmithKline
3.8%
Johnson
& Johnson
3.5
Bayer
3.3
Sanofi
3.1
Pfizer
BY RACHEL LOUISE ENSIGN
AND CHRISTINA REXRODE
2.5
Source: Euromonitor International
THE WALL STREET JOURNAL.
dicated interest in doing deals
in markets growing faster than
packaged goods like consumer
health.
Meanwhile,
Germany’s
Merck KGaA has said it is considering selling its consumerhealth business, which had
€860 million (about $1 billion)
in net sales last year.
—Allison Prang
contributed to this article.
PATRICK T. FALLON/BLOOMBERG NEWS
C
H-I
Expected Loan Growth Fails to Occur
Wal-Mart has eliminated thousands of corporate and store jobs, increased fees it charges suppliers and demanded lower prices on goods.
RETAIL
Continued from the prior page
most profitable part of its
business, Amazon is grabbing a
larger percentage of sales of
many of the easily shippable
products that line the aisle of
Wal-Mart’s large-format stores.
Now Wal-Mart must find
more ways to pay for the retail
battle.
On Tuesday, it outlined
plans to lower expenses as a
percentage of sales from 21%,
where it stands this fiscal year.
Wal-Mart has started using
zero-based budgeting in some
corporate units and has made
cost cuts as mundane as printing receipts on smaller strips
of paper—a change that has
saved $7 million so far this
year.
“We are not where we want
to be from an expenses standpoint,” Brett Biggs, chief financial officer, told analysts.
Wal-Mart shares climbed
4.5% to $84.13 Tuesday, their
highest close in more than two
years. The stock price is up
22% so far this year.
STUDIO
Continued from the prior page
Times last week, Mr. Weinstein
apologized for how he had “behaved with colleagues in the
past.”
Since allegations of his sexual misconduct were reported
by the Times last week, Mr.
Weinstein has been fired as cochairman of Weinstein Co., the
studio whose executives are
now taking his name off the
credits of coming projects.
Mr. Weinstein’s stature in
Hollywood and political power
circles has meant his downfall
has enveloped celebrities and
Democratic politicians in questions of why claims of his conduct were kept in the dark for
so long. On Tuesday, several
high-profile actors and politicians came forward to denounce the producer.
“The behavior described by
Early last year Wal-Mart
closed more than 150 U.S.
stores,and said it would slow
down on opening new stores.
In the 2017 fiscal year that
ended in January, it opened 111
U.S. stores, down from 216 the
previous year.
The company said it would
open 255 new stores outside
the U.S., with a focus on Mexico and China, during the 2019
fiscal year.
Wal-Mart has already dug in
on expenses, eliminating thousands of corporate and store
jobs, increasing the fees it
charges suppliers to deliver
goods to stores and demanding
lower prices on goods.
Wal-Mart expects to save
$20 million this year by using
slightly smaller plastic shopping bags, Mr. Biggs said.
It will now institute zerobased budgeting—a technique
in which each business expense
must be justified—in many
parts of the business “above
store level,” he said.
Zero-based budgeting is
used more widely in the consumer-products and packagedfoods sectors, though some
other companies, including Vewomen coming forward cannot
be tolerated,” read a statement
from Hillary Clinton, who is
among those who received
campaign contributions from
Mr. Weinstein.
Former President Barack
Obama, who also received contributions from Mr. Weinstein,
issued a statement on Tuesday,
saying: “Any man who demeans and degrades women in
such fashion needs to be condemned and held accountable,
regardless of wealth or status.”
Commonalities among the
accounts emerged as more accusers came forward. Mr.
Weinstein would often ask to
take a business meeting in his
hotel room, they said, according to the accounts in the
Times and the New Yorker, before requesting a massage or
appearing naked. Women who
refused Mr. Weinstein’s advances were told he would
jeopardize their career prospects—and in the case of ac-
rizon Communications Inc.
and Sprint Corp., have deployed the technique.
Wal-Mart has kept sales
growing with improved stores
and online investments, in contrast with retailers that have
struggled to fend off discount
and online rivals.
Wal-Mart’s
e-commerce
plans have become more urgent in the wake of Amazon’s
purchase of Whole Foods Market. The acquisition gave the ecommerce giant a foothold in
the brick-and-mortar supermarket business and became a
larger direct threat to WalMart, the country’s largest
seller of groceries.
Wal-Mart Chief Executive
Doug McMillon said the company plans several ways of delivering groceries to shoppers’
homes, including using employees, contract delivery
workers and third-party services such as Deliv that have
their own teams. Mr. McMillon
added, however, “I believe the
vast majority of grocery shopping will happen in stores for a
long time.”
The retailer has invested
heavily in online grocery
pickup at its stores, when
shoppers order online and pick
up in a store parking lot. Executives said Tuesday that by the
end of this year it will offer the
service at 2,000 U.S. stores,
roughly double the number of
stores where it is currently
available.
tresses Mira Sorvino and Rosanna Arquette, he allegedly
followed through on the
threats, according to the actresses’ accounts.
Representatives for Ms. Sorvino and Ms. Arquette didn’t
respond to requests for comment.
At a news conference in Los
Angeles on Tuesday afternoon,
a former actress and screenwriter, Louisette Geiss, said Mr.
Weinstein pulled her toward
his bathroom and asked her to
watch him masturbate during a
business meeting at the Sundance Film Festival in 2008.
Ms. Geiss said she had
heard the rumors of Mr. Weinstein’s sexual misconduct before meeting him in his hotel
room. Before she went upstairs
with him, she said she asked
him to promise not to touch
her.
Mr. Weinstein offered to put
Ms. Geiss in three movies and
introduce her to other execu-
tives if she would watch him
perform the sexual act, Ms.
Geiss told reporters.
Ms. Geiss’s attorney, Gloria
Allred, said she is asking Mr.
Weinstein to engage in arbitration on Ms. Geiss’s claims,
which have expired under the
Utah statute of limitations.
“Will Mr. Weinstein accept
the offer of a process that is
fair to him and will help to
provide a system of justice to
his accusers?” said Ms. Allred.
“We will have to wait and see.”
On Tuesday evening, remaining members of the Weinstein Co. board issued a statement calling Mr. Weinstein’s
alleged actions “antithetical to
human decency.”
“We are committed to assisting with our full energies in
all criminal or other investigations of these alleged acts,
while pursuing justice for the
victims and a full and independent investigation of our own,”
the members added.
Slowing Growth
Wal-Mart plans to open fewer
than 25 U.S. stores in the next
fiscal year.
350
300
250
200
150
100
50
0
FY ’05
’10
’15
’19
Note: 2018 and 2019 are company estimates
Source: the company
THE WALL STREET JOURNAL.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
Wednesday, October 11, 2017 | B3
THE WALL STREET JOURNAL.
BUSINESS NEWS
Research
Institute
Joins With
Deerfield
Power Firms Hold Their Ground
BY JONATHAN D. ROCKOFF
BY TIMOTHY PUKO
Health-care investment firm
Deerfield Management Co.
has agreed to give $50 million
to the Broad Institute of MIT
and Harvard for biology research, in an unusual partnership between academia and
Wall Street to promote drug
discovery.
Under the agreement, Deerfield will fund some of Broad’s
research projects and in return get an option to build
pharmaceutical
companies
around the programs that
show the most promise, according to Deerfield and Broad
officials.
Early-stage research can be
hit or miss. But the collaboration, which was announced
Tuesday, affords Deerfield the
opportunity to tap into the big
returns that can come to early
investors in promising drug
startups, while modeling a
new way for universities to
fund and capitalize on their
research.
WASHINGTON—Some of
the biggest U.S. power companies said they are pushing
ahead with investments in renewable and gas-fired electricity and are including climate
change as a part of their corporate strategy, regardless of
the Trump administration’s
plans to roll back Obama-era
environmental rules.
President Donald Trump
has pledged to boost the energy industry by cutting regulation, and on Tuesday his administration took one of its
biggest steps yet toward that
goal. The head of the Environmental Protection Agency
signed a proposal to repeal the
first federal limits on carbon
emissions at power plants,
which would vacate the
Obama administration’s cornerstone plan to slow global
warming.
Some sizable power companies, such as American Electric Power Co., NRG Energy
Inc. and Southern Co., said
Tuesday the move will have
only a marginal effect on their
planning. Cheap fuel, improving technology and consumer
demand are creating a market
for cleaner energy that is
largely unaffected by what is
happening in Washington.
But the move has symbolic
and long-term implications.
The Obama-era rules drew fire
from Republicans and their allies in business who saw them
as a prime example of government overreach.
The Trump administration
argues that the Obama rules
weren’t allowed under the
Clean Air Act—an issue that
will likely be argued in court
Broad President Eric Lander
said the partnership would
support research that could
produce treatments for diseases or tackle drugmaking
challenges such as blocking interactions between proteins.
Efforts already covered by a
collaboration with a drug company would be excluded, he
said.
The institute, launched in
2004, brings together doctors
and scientists from the Massachusetts of Technology, Harvard University and its affiliated hospitals to conduct
biomedical research
Deerfield aims to fund five
to 10 projects that could produce new drugs, and invest
more in any new companies
that arise from the work, according to James Flynn, the
firm’s managing partner.
The pact targets a gap in
the drug-discovery process at
a time when genome sequencing, gene editing and other
new advances are spawning an
explosion of insights into the
molecular roots of disease.
Not as many drugs have
emerged from the findings as
expected, as researchers still
have trouble identifying compounds to study further, according to industry and academic
officials.
Drug
companies and venture-capital
firms are reluctant to take a
risk with fledgling programs
and traditionally have jumped
in once a compound is shown
to have promise as a drug, according to the officials.
This gap “calls for academia
to push further than” it has in
developing biological insights
into potential drugs, Dr.
Lander said in an interview.
Deerfield, which has about
$8 billion in assets under
management, invests in publicly traded companies, closely
held startups and seed companies.
A systems error during a
technology test Tuesday inadvertently published scores of erroneous test headlines and articles on Dow Jones Newswires.
Nearly 2,000 dummy headlines and articles that had
been created during training
exercises for reporters and editors learning how to use Dow
Jones’s news-production system were accidentally published between 9:34 a.m. and
9:36 a.m. Eastern time, the
company said.
Dow Jones, a unit of News
Corp, said the items “were
never intended for publication” and regrets that they
were published. The company
said the problem was caused
by an internal technology
glitch and that its systems
hadn’t been infiltrated by
GEORGE FREY/GETTY IMAGES
Power plants cut their carbon
dioxide by 25% between 2005
and 2016, a trend that is likely
to continue, according to the
Edison Electric Institute, an
industry group.
Cheap natural gas from the
shale-drilling boom and moreefficient power plants have
run coal-burning rivals out of
business. Advancements in
wind and solar power, with
help from subsidies, have cut
emissions, too. And confronted
with the risks of climate
change and how governments
might deal with it, power companies now expect the cost of
carbon emissions to rise and
plan on ways to reduce them.
“This will not change our
planning process,” a spokesman at Southern Co. said of
the EPA’s move on Tuesday.
Power Shift
The Trump administration is set to repeal limits on carbon emissions at
power plants, saying they harm businesses, particularly the coal industry.
U.S. electricity generation by source
2.5 million gigawatt hours
.
2.0
1.5
Natural gas
Coal
1.0
Nuclear
0.5
Renewables
Hydroelectric
Other
0
2007 ’08
’09
’10
’11
’12
Source: Energy Department
’13
’14
’15
’16
THE WALL STREET JOURNAL.
Apple Taps Spielberg to Create Video Drivers’
BY JOE FLINT
AND
Data Hit
In Equifax
Hacking
TRIPP MICKLE
Apple Inc. is betting on acclaimed director and producer
Steven Spielberg for its first
major foray into creating original video content.
The tech giant has struck a
deal with Mr. Spielberg’s Amblin Television and Universal
Television, a unit of Comcast
Corp.’s NBCUniversal, to make
new episodes of “Amazing Stories,” a science fiction and horror anthology series that ran
on NBC in the 1980s.
The agreement between Apple, Amblin and Universal Television calls for 10 episodes of
“Amazing Stories.” Mr. Spielberg will likely be an executive
producer for the new version of
the show, which he created,
people familiar with the matter
said.
The budget for “Amazing
Stories” will be significantly
more than $5 million an episode, higher than most broadcast shows but on par with
budgets of high-end shows on
Netflix, HBO and some cable
networks, according to an executive involved in the project.
“Amazing Stories” is the
first show to be greenlit by Apple since it poached Sony
Corp.’s top Hollywood television executives Zack Van Amburg and Jamie Erlicht in June
to help spearhead the tech
Dow Jones Publishes Errant
Headlines in Systems Snafu
BY LUKAS I. ALPERT
for years. Environmentalists
see the rules as crucial to accelerating a shift from carbonbased fuels to renewablepower sources.
Power-plant emissions are
one of the largest sources of
greenhouse gases, and President Barack Obama’s administration targeted them with
limits outlined by the EPA’s
Clean Power Plan in 2015. The
limits were the chief way for
the country to comply with
the Paris accords, a pact
among international governments to slow global warming.
Mr. Trump has now signaled
his intent to reverse the U.S.
position on both.
But a generational shift in
the energy industry was happening long before that tug of
war in federal government.
hackers.
Most of the items published
were marked “TEST” or
“PRACTICE HEADLINE,” but
others were mock stories and
headlines about real companies. One series of headlines
and an article falsely announced that Google was acquiring Apple Inc. for $9 billion. (Apple has a market value
of more than $800 billion.)
The false headlines were removed from the wire as soon
as Dow Jones’s technology
staff realized what had happened, and a review of the
company’s technology protocols is under way, the company
said. “I take today’s inadvertent and erroneous publication
of testing materials extremely
seriously,” William Lewis, chief
executive of Dow Jones and
publisher of The Wall Street
Journal, said in a statement.
BY ANNAMARIA ANDRIOTIS
AND EMILY GLAZER
Steven Spielberg will likely be an executive producer of the 10 ‘Amazing Stories’ episodes.
company’s push into original
programming.
Apple gave the duo, who
helped produce “Breaking Bad,”
a budget of roughly $1 billion
to develop original programming over the next year. They
have also been tasked with
building out a video strategy
that is expected to include a
streaming service that rivals
Netflix Inc., Amazon.com Inc.
and others.
NBC Entertainment President Jennifer Salke said, “We
love being at the forefront of
Apple’s investment in scripted
programming, and can’t think
of a better property than Spielberg’s beloved ‘Amazing Stories’ franchise.” Also involved
in the show as the day-to-day
show runner is Bryan Fuller,
whose credits include NBC’s
“Hannibal.”
Apple declined to comment.
In tapping Mr. Spielberg, Apple landed an internationally
renowned director with broad
appeal whose lengthy list of
credits includes “Jaws,” “Raiders of the Lost Ark,” “E.T.” and
“Schindler’s List.” Amblin Television is headed by Justin
Falvey and Darryl Frank, two
well-regarded executives whose
credits include such critically
acclaimed shows as “The Americans” for FX. Apple is betting
that carving out a space in the
crowded original content field
can help drive subscriptions
across more than one billion
iPhones, iPads, Apple TVs and
other devices world-wide.
BUSINESS WATCH
DEWEY & LEBOEUF
Ex-Executive Avoids
Prison Sentence
A former executive at defunct
law firm Dewey & LeBoeuf LLP
won’t be doing prison time for a
fraud conviction stemming from
the firm’s 2012 collapse.
New York Judge Robert Stolz
on Tuesday sentenced Joel
Sanders, the firm’s onetime chief
financial officer, to complete 750
hours of community service and
pay a $1 million fine over the
next three years. Prosecutors
had asked for the maximum
sentence of between one-and-athird and four years behind bars.
Mr. Sanders’s lawyer had no
comment Tuesday. Manhattan
District Attorney Cyrus Vance Jr.
said the case “demonstrates the
office’s commitment to prosecuting those who sacrifice professional integrity for financial gain.”
—Sara Randazzo
OLIVER BUNIC/BLOOMBERG NEWS
Research funding extended
by Deerfield Management
Power-plant emissions are a significant source of greenhouse gases, and the Obama administration targeted them in 2015.
MARIO ANZUONI/REUTERS
$50M
Big companies stick
to climate strategies
despite EPA move to
ease emission limits
IKEA’s furniture could be sold though other online platforms.
INTER IKEA SYSTEMS
Company Explores
Third-Party Websites
IKEA’s flat-packed furniture
could soon be sold on thirdparty websites.
Inter IKEA Systems BV, the
company that owns the brand
and the franchisees through
which IKEA products are sold, said
it plans to explore “making IKEA
products accessible through other
online platforms than our own.”
The pilot will start next year. The
company said it hasn’t yet decided which online sellers it will
sell through or in which markets.
—Saabira Chaudhuri
Driver’s license data for
around 10.9 million Americans
were compromised during the
breach of Equifax Inc.’s systems,
according to people familiar
with the matter.
The license information was
accessed by hackers who also
took vital personal information,
including Social Security numbers, of potentially 145.5 million
Americans. Not all those people
would have had license information in Equifax’s system.
Separately, Equifax said Tuesday that a file containing 15.2
million U.K. consumer records
was attacked during the company’s hack.
Equifax announced the
breach, which also affected consumers in Canada, on Sept. 7. At
that time, the company said that
“in some instances” U.S. driver’s
license numbers were accessed
but didn’t publicly say how
many.
In recent weeks, Equifax has
told customers, mainly financial
institutions, that the driver’s license information for 10.9 million consumers was accessed,
the people said.
Equifax didn’t immediately
respond to a request for comment.
The disclosure of driver’s license information could give
hackers even more information
to use to try committing fraud.
Although information varies by
state, licenses typically include a
person’s name, date of birth,
home address and personal details such as height and eye
color.
People who had given driver’s
license information to Equifax
were in many cases doing so as
a way of verifying their identity
with the company. This in some
cases happened when consumers
were using a webpage meant to
resolve disputes about credit-report information.
The dispute-resolution page
appears to have been at least
one avenue hackers used to access the company’s systems.
This was done by hackers exploiting a security vulnerability
in software that ran on the dispute portal’s web application.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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B4 | Wednesday, October 11, 2017
THE WALL STREET JOURNAL.
NY
TECHNOLOGY
WSJ.com/Tech
Drone-Rules Debate Splits FAA Panel
Lack of consensus
could slow expansion
of the commercial use
of unmanned aircraft
In a potentially serious setback for expanded commercial-drone operations, a federal advisory panel has failed
to agree on proposals to identify and track unmanned aircraft nationwide.
The committee, which presented its recommendations to
aviation regulators this month,
couldn’t reach consensus on
basic questions regarding categories of drones that should
require such remote monitoring, according to officials.
As a result, officials familiar with the details said, it is
likely to be more difficult for
the Federal Aviation Administration to implement rules acceptable to law-enforcement
agencies, hobbyists who fly
model airplanes and drone
proponents eager to open up
U.S. airspace for more uses.
A majority of the committee did conclude that technology currently exists—or can
be devised relatively quickly—
to deal with one of the most
vexing problems impeding acceptance of small drones
weighing several or dozens of
pounds: detecting and tracing
low-altitude flights that typically occur outside normal
ground-radar coverage.
For significantly larger
drones weighing hundreds or
thousands of pounds and flying at higher altitudes, it is expected to take at least two or
three more years to develop
ANDY CRIPE/THE CORVALLIS GAZETTE-TIMES/ASSOCIATED PRESS
BY ANDY PASZTOR
A majority of the committee concluded that technology exists to trace low-altitude flights outside normal ground-radar coverage.
technical standards for communication links and collisionavoidance technology.
The nonbinding report emphasizing smaller drones,
drafted by members of a panel
comprised of over 70 industry,
labor and law-enforcement experts, hasn’t been made public. But industry officials say
FAA leaders have told panel
members the agency might reconvene the group in a bid to
achieve more-unified results.
In a written statement
Monday, the FAA said it “will
review the advisory committee’s report and its findings
carefully.” A spokesman declined to elaborate.
The split recommendations,
however, represent a setback
for the agency because chief
Michael Huerta recently described the panel as an important building block to end the
regulatory logjam confronting
the agency and industry champions. Calling the recommendations “absolutely critical” to
reaching consensus on significant regulatory matters, Mr.
Huerta told a drone conference last month: “I can’t stress
how important this work is.”
Senior law-enforcement and
national-security officials, including leaders of the Federal
Bureau of Investigation, have
blocked moves to roll out new
commercial-drone
applications, including flying beyond
sight of operators, until acceptable tracking safeguards
are in place. The concerns focus on how to pinpoint and
electronically follow flights,
especially at night or over
populated areas, that might
pose threats to public safety.
U.S. military and antiterrorism officials have stepped up
public warnings about dangers
of drones being used as weapons against Americans. “There
are bad actors out there who
want to use them for nefarious
purposes,” Mr. Huerta said.
One faction of the panel
wants to see practically all
drones subject to tracking requirements. Another segment
wants to exclude most model
airplanes operated by hobby-
ists, a category comprising
about 200,000 vehicles Congress previously fenced off
from new FAA action. Still
other participants favor targeting remote identification
requirements primarily on
larger, more capable models
optimized for longer flights,
autonomous operations or advanced imaging. Roughly
800,000 drones are registered
with the FAA.
The final report was endorsed by about half of the
full group, with the rest either
dissenting or spelling out disagreements with various findings. Typically, the FAA depends on such advisory groups
to sort out disputes before
submitting recommendations.
According to people familiar with the report, panelists
concluded that trajectories of
drones could be monitored
from takeoff to touchdown, either by piggybacking on radio
signals that control drone maneuvers or using a system relying on cellphone signals.
Certain drones would require
the redundancy of both types
of tracking, said an industry
official.
For simpler drones, the solution largely calls for software modifications. Relying on
cellular signals would be more
expensive, complicated and require installation or retrofit of
some type of modem to tap
into existing networks. Under
such circumstances, drone operators would face the expense
of paying for connectivity.
Location, speed, heading
and altitude—accompanied by
information identifying the
operator—could be transmitted to displays available to local police or federal enforcers.
Dell Bets $1 Billion on Internet of Things Efforts
BY RACHAEL KING
Dell Technologies Inc. is
joining the crowded field of
companies wagering big money
on the so-called Internet of
Things, as the computing giant
looks for new avenues of
growth amid a shift in corporate spending to the cloud.
The Round Rock, Texas,
company said Tuesday it
would commit $1 billion over
three years in research and
development to create hardware and software that helps
manage billions of everyday
devices connected to the web.
Once the largest personalcomputer maker, Dell is now
known as much for its corporate products like storage,
servers and security software
following last year’s deal to
buy EMC Corp.
Dell is looking for areas
where it might grow as customers increasingly buy computing and storage over the
web from the likes of Amazon.com Inc.’s Amazon Web
Services and Microsoft Corp.
while spending less on their
own data-center hardware.
Corporate spending on datacenter hardware and software
from Dell, Hewlett Packard
Enterprise Co. and others is
forecast to grow less than 3%
to $178 billion in 2020 from
this year, according to research
firm Gartner Inc. In contrast,
companies are projected to increase spending on cloud infrastructure services by about
double to $70 billion by 2020.
As the cost of sensors in
everything from thermostats
to connected cars continues to
plummet, Dell is betting there
will be an associated boom in
computing hardware and software that sits close to these
devices, known as edge com-
puting.
“We think edge computing
could be 100 times bigger than
the internet as we know it today,” Chief Executive Michael
Dell said in an interview. “That
may sound crazy right now but
give it a few years and I think
that will be more understood.”
It is cheaper and more efficient to process information
coming from sensors closer to
where it originates rather than
sending that data back to the
cloud, said Patrick Moorhead,
president of Moor Insights &
Strategy. An autonomous car or
a robot surgeon needs to pro-
cess information in real-time
and they wouldn’t tolerate delays that occur when processing
information in a remote cloud.
Part of Mr. Dell’s bet is that
corporations will want to keep
control of valuable data. An
auto maker, for example, will
want all that data from autonomous vehicles to be stored on
its own equipment and not on
someone else’s server. That
data serves as a company’s
crown jewels and needs to be
secured, protected and managed, Mr. Dell said.
As mobile carriers begin to
implement fifth-generation
wireless networks, it becomes
easier for edge-computing devices to communicate with one
each other, Mr. Dell said. For
that piece, Dell is counting on
subsidiary VMware’s network
virtualization and security
software called NSX.
Dell will also rely on another subsidiary, Pivotal, as it
targets corporate customers
working in the Internet of
Things. General Electric Co.,
for example, came to Pivotal
to use its software to create
its Predix platform that collects and analyzes data from
industrial machines.
BY TIM HIGGINS
As auto makers and tech giants rush to develop autonomous vehicles, SoftBank Group
Corp. is placing a sizable bet on
a startup that aims to help such
cars find their way.
The Japanese investor, which
has stakes in ride-hailing services, is leading a $164 million investment in Mapbox Inc.,
a startup that provides mapping and location-search technology to a variety of companies including messaging-app
developer Snap Inc. and General Electric Co.
The money comes from SoftBank’s nearly $100 billion techfocused Vision Fund as well as
several venture-capital firms including Foundry Group, DFJ
Growth, DBL Partners and
Thrive Capital. Mapbox said on
Tuesday it would expand its efforts into autonomous cars and
augmented and virtual reality
and will accelerate international
expansion, including in China.
Mapbox says it provides
mapping technology to more
than
900,000
developers, whose apps in turn provide
the aggregate data that power
the company’s maps in realtime. The company collects
data on more than 200 million
miles of roads and terrain each
day, while keeping app users
anonymous.
“Every time people touch us
and use us, the map gets
smarter,” Mapbox Chief Executive Eric Gundersen said. “We
have more connected sensors
on the road today, using Mapbox, than the entire auto industry will have by the end of
2020.”
Mapbox is pitching itself as
an alternative to Alphabet Inc.’s
Google, whose mapping data
powers a number of companies’
apps. Alphabet’s self-driving car
unit, Waymo, emerged out of
Google’s efforts to create detailed maps of the world.
QILAI SHEN/BLOOMBERG NEWS
SoftBank Invests More
In Self-Driving Future
Ctrip.com’s offices in Shanghai. The Chinese travel portal led a $300 million funding round for home-sharing website Tujia.
China’s Tujia Girds to Battle Airbnb
BY LIZA LIN
SHANGHAI—Tujia.com,
China’s largest domestic rival
to online home-rental platform
Airbnb, raised $300 million in
financing, as it bulks up for
battle with its U.S. competitor
and works to tap big-spending
Chinese tourists overseas.
The new funding round,
USD 2,000,000,000
Floating Rate Global Notes
due 2017
- WKN A169LD ISIN US500769GW89 - CUSIP 500769GW8
We would like to announce that the interest
rate for the period of September 29, 2017
to December 29, 2017 has been fixed by the
Calculation Agent at 1.49278 per cent. p.a.
The total interest amount will be USD
7,546,832.22. The interest payment date
will be December 29, 2017.
FRANKFURT AM MAIN,
SEPTEMBER 2017
KFW
which values Tujia at $1.5 billion, was led by China’s largest
travel portal, Ctrip.com International Ltd, and investment
firm All-Stars Investment
Ltd. The home-sharing site
plans to use the money to
boost demand for its high-end
properties at home and expand its listings in popular
Chinese destinations such as
Japan, Taiwan and Thailand,
said Jennifer Lee, its chief
business officer.
The new funding comes as
Airbnb is pushing to build its
presence in China this year. In
March, the company picked a
new Chinese name, promised
to double its investment in the
market and triple its local
workforce in 2017.
Despite its strong global
presence, Airbnb lags behind
Tujia in China, where the latter works with both homeowners and property-management companies.
Founded in 2011, Tujia has
its sights on rising Chinese
travel demand as incomes in
the nation grow. China was
the world’s biggest outbound
travel market last year with
135 million Chinese tourists
spending $261 billion abroad,
according to figures from the
United Nations’ World Tourism Organization.
Just like Airbnb, Tujia connects property owners with
travelers looking for alternatives to hotels. Its website and
mobile app feature 650,000
properties in 345 Chinese cities and more than 1,000 overseas destinations, including
Paris, Seoul, and Phuket Island
in Thailand.
Tujia earns revenue by collecting commissions from
homeowners at an average of
about 10% of accommodation
rates and offers travel packages to its customers online,
Ms. Lee said. The average
nightly room rate booked by
Tujia’s customers in the third
quarter of this year was about
450 yuan ($68), similar to the
cost of a four-star hotel room
in China, although its most expensive booking recently was
15,000 yuan a night, she said.
Tujia was a winner during
the consolidation of China’s
online travel startups last
year, snapping up a smaller rival in June 2016. It also tied
up with larger online travel
agencies such as Ctrip and
Qunar to offer homestays.
Ctrip Executive Chairman
James Liang said in a statement Tuesday that the company made its investment in
Tujia as Chinese consumers
are warming to alternative
short-term accommodations.
Other investors in Tujia’s
fundraising include investment
firms China Renaissance and
Connecticut-based
Glade
Brook Capital.
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | B5
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In a fast-changing world, the Journal’s digital
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B6 | Wednesday, October 11, 2017
THE WALL STREET JOURNAL.
NY
BUSINESS NEWS
Claims Studied
On Packaging
Agriculture Secretary Sonny Perdue, left, criticized the distribution of food stamps to Americans who are able to work.
Food-Stamp Rules Reviewed
BY HEATHER HADDON
AND JACOB BUNGE
Agriculture
Secretary
Sonny Perdue criticized the
distribution of food stamps to
Americans who are able to
work, a stance that could concern food retailers who make
billions of dollars in sales to
the federal program’s beneficiaries.
Speaking at the WSJ Global
Food Forum on Tuesday in
New York, Mr. Perdue said
that relying on food stamps
has become a “lifestyle” for
some able-bodied adults.
“We want the people who
need the help to get it,” said
Mr. Perdue, adding that the
benefit shouldn’t be “the
whole enchilada” of a family’s
food security.
He suggested that enrollment in the program would
fall if individuals who are able
to work are restricted from
using it.
Anti-poverty groups raised
concerns before Mr. Perdue’s
confirmation in April that he
could restrict food-stamp access. They pointed to his tenure as Georgia’s governor,
when his administration tightened access to some povertyreduction programs and monitored
recipients
for
compliance. Critics said such
actions made it harder for
needy families to receive help,
though others said those
moves helped get recipients
back to work.
Congress has held hearings
in the past year, debating if
able-bodied adults can receive
the benefit.
Those discussions will continue as Congress prepares to
decide how to fund the foodstamp program under the reauthorization of the Farm Bill
next year. The Trump administration has called for food
stamp disbursements to be
cut.
Food stamps, known officially as the Supplemental Nutrition Assistance Program,
have become a crucial revenue
stream for big food retailers.
Wal-Mart Stores Inc. and
Kroger Co. are among the major companies that generate
substantial sales from SNAP
recipients. Kroger executives
have said roughly 40% of their
most loyal customers have
been on SNAP at some point
in the past five years.
More than 42 million Americans receive SNAP benefits,
down from nearly 48 million
in 2013. The benefit paid out
nearly $48 billion in the past
fiscal year, at an average of
$125 per recipient.
Turning to the latest round
of talks this week on renegotiating the North American
Free Trade Agreement, Mr.
Perdue said he remained convinced the process would “increase the agricultural opportunities” for U.S. farmers and
ranchers.
CAREERS
CAREERS
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Food and Drug Administration Commissioner Scott Gottlieb said he wants to take a
close look at health claims
that food manufacturers make
on their packaging.
“I want to see the agency
take steps into adjudicating
some of these important
claims,” Dr. Gottlieb said Tuesday at the WSJ Global Food
Forum in New York.
The Trump administration
appointee has postponed
Obama-era food-labeling rules,
pleasing many food manufacturers but angering consumer
groups. Dr. Gottlieb said he remains committed to making
food packaging more informative, but wants to give manufacturers more time to comply.
The physician also said he
is concerned that some food
companies make claims on
their packaging that are motivated more by marketing than
consumer health.
“I’d like to see manufacturers innovate in areas that deliver more health to people,”
he said.
Dr. Gottlieb’s prominence in
the Trump administration has
risen, stoking speculation the
president might pick him to
succeed Tom Price as Health
and Human Services Secretary.
Mr. Price resigned last month
over extensive use of private
jets and military flights.
Asked during the conference on Tuesday whether he
might be a candidate for that
job, Dr. Gottlieb said he wants
to stay at the FDA but will
serve the president in whatever capacity he is asked.
“I think I could best serve
the administration by continuing to be at the FDA,” he said.
Many food manufacturers
have welcomed the Trump administration’s efforts to delay
new nutritional-information
requirements. Labels devised
during the Obama administration seek to add information
to food labels to help consumers make more informed decisions about calories, serving
sizes and added sugars.
Other food companies have
already introduced the new labels, seeking to meet a growing demand from consumers
for more information about
their food. The delay gives big
food manufacturers until January 2020 to add the labels,
an extension of nearly 18
months. Smaller food companies have until January 2021.
Roger Lowe, executive vice
president of strategic communications for the Grocery Man-
FDA’s chief plans
to take a close look at
food manufacturers’
health claims.
ufacturers Association, said
the trade group supported the
delays, but wants the FDA to
define the rules that will guide
the new labels more clearly.
“We are happy with it. We
are now awaiting guidance on
the definitions,” Mr. Lowe said
on the sidelines of the conference. For instance, he said
food makers want to know
what ingredients the government will count as added sugars and fibers.
Dr. Gottlieb said his agency
is also looking at how to define “healthy” and “natural”
more uniformly. The claims
have been the subject of lawsuits. The FDA is also working
to implement a new law governing food safety. The Food
Safety and Modernization Act
will heighten oversight of produce and imported foods, aiming to avert outbreaks of foodborne illnesses.
RICHARD B. LEVINE/LEVINE ROBERTS/NEWSCOM/ZUMA PRESS
GABE PALACIO FOR THE WALL STREET JOURNAL
BY HEATHER HADDON
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Find Your
Future Chief
Advertise Your
Career
Opportunities
Every Wednesday
To place your ad,
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All Rights Reserved.
Grocery-delivery firm Peapod is adding meal kits to its service.
Amazon Worries
Grocery Services
BY HEATHER HADDON
Grocery-delivery companies
are worried Amazon.com Inc.
will sacrifice profits to deprive
them of sales.
“They are one of our first
competitors who doesn’t really
care about making money,”
Thomas Parkinson, co-founder
of Peapod, a pioneering grocery-delivery service owned by
Ahold Delhaize NV, said Tuesday at the WSJ Global Food
Forum in New York. “So that’s
a challenge for us.”
Amazon upended book selling and other retail sectors by
concentrating on market share
over margins. Grocery executives expect the e-commerce
giant’s purchase this summer
of Whole Foods to presage a
similar rush into their business. Amazon sold $1.6 million
in Whole Foods store-branded
beans, cereal and other products online in the month after
taking over the chain.
Pradeep Elankumaran, cofounder and chief executive of
Farmstead, a San Franciscoarea delivery startup, said he
aims to make his company
profitable relatively soon. “We
do have to make money,” the
former Lyft Inc. executive said
in an interview on the sidelines of the conference.
Mr. Elankumaran said
Farmstead has several thousand active users and has received $3 million in venture
funding since its launch. He
said the company is using predictive algorithms to sell a
more limited selection of
products than the tens of
thousands sold at traditional
grocery stores, reducing warehousing costs.
“No one has ever done a
good job in grocery delivery,”
Mr. Elankumaran said. “It’s so
outdated.”
Dick Boer, chief executive
of the Ahold Delhaize chain
that operates grocery stores
across the U.S. and Europe and
bought Peapod in 2001, said
he believes high transport
costs outside densely populated urban areas will cap delivery in the U.S. “Your country is so big,” Mr. Boer said.
“There will be a kind of a limit
on how far you can go with
online delivery models.”
Mr. Parkinson, who took orders by fax when he founded
Peapod in 1989, said that he is
adding meal kits to his product offerings.
He said that Peapod is
working with food makers to
develop meal kits that are less
costly and contain less packaging than those sold by competitors such as Blue Apron
Holdings Inc.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
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Wednesday, October 11, 2017 | B7
MEDIA
‘Trolls’ Animates Dreams of a Franchise
LOS ANGELES—NBCUniversal’s $3.8 billion acquisition
last year of DreamWorks Animation put characters like
Shrek and Felix the Cat under
the Universal Pictures roof.
Now, the Comcast Corp.owned studio’s plan for those
characters is taking shape.
The best case study yet is
“Trolls,” the November 2016
release whose box-office success led executives at Universal to develop the neon-haired
dolls into a Netflix Inc. series,
NBC holiday special, live-entertainment attraction and
theatrical sequel. “Trolls” was
the first DreamWorks title released following the acquisition, and it grossed $350 million at the world-wide box
office.
Now, Universal is hoping
“Trolls” can become that allimportant prize for a Hollywood studio today: a franchise
minting money far beyond the
theater. Box-office volatility
has led studios to invest in departments
that
provide
steadier revenue streams than
ticket sales, whether through
theme-park attractions, consumer products or digital entertainment. Studios’ prioriti-
© 20TH CENTURY FOX FILM/EVERETT COLLECTION
BY ERICH SCHWARTZEL
Universal’s $3.8 billion acquisition of DreamWorks began paying off with the box-office success of ‘Trolls,’ spawning plans for a sequel.
zation of franchises has also
catapulted the value of characters like the Trolls, which can
be dusted off and turned into
sequel-spawning, toy-selling
concepts if they prove a hit
with audiences.
The franchise playbook has
been perfected by Walt Disney Co., which plugs characters into an assembly line that
keeps them in the public consciousness between movie in-
stallments that can seem secondary to the toys and themepark tickets they sell.
Universal, with its Universal
Studios theme parks and corporate cousins like NBC, is in a
better position than nearly
any other major studio to create its own version of the Disney playbook, analysts say.
The studio has nonetheless
had to play catch-up, spending
billions on the DreamWorks
acquisition and expanding its
brand-development division
10-fold in the past two years
to more than 400 employees
across 14 offices. The division
oversees consumer products,
digital products and live entertainment tied to Universal
properties, whether in a “Fast
& Furious” live show or “Jurassic World” videogame.
The efforts are overseen by
president of brand develop-
ment Vince Klaseus, a Disney
veteran hired by Universal in
2014.
Mr. Klaseus was part of the
due diligence team that evaluated the DreamWorks deal,
and he said the “Trolls” production stuck out as a franchise opportunity.
“Trolls’” box-office total, including about $154 million in
the U.S. and Canada, didn’t
break records but it did exceed
expectations.
Now efforts are under way
to keep “Trolls” in the marketplace ahead of a sequel in February 2020.
A “Trolls”-themed holiday
special will air on Comcast’s
NBC network in late November, followed by a 52-episode
Netflix show order premiering
in the first quarter of 2018. A
live attraction “Trollseum” follows later next year and new
“Trolls” digital shorts are being produced by DreamWorks
employees and uploaded to
YouTube once a week.
In many ways, Universal’s
plan for “Trolls” resembles
what former DreamWorks
Chief
Executive
Jeffrey
Katzenberg spent several
years trying to build, with his
own television, digital and
consumer-products arms. But
DreamWorks could never escape investor impatience with
its rocky box-office returns,
and the studio was too small
for its nontheatrical department to pick up the slack.
As studios grow more focused on the franchise model,
only major players will be able
to manage it successfully, said
Craig Moffett, a media analyst
at MoffettNathanson. “It takes
real scale,” he said.
Time Inc. Cuts Circulation, Frequency of Magazines
BY JEFFREY A. TRACHTENBERG
When it comes to the beleaguered print magazine business, Time Inc. is betting that
less is more.
The publisher is cutting back
on the circulation and frequency
of some of its biggest titles, part
of a far-reaching cost-reduction
and restructuring program
meant to ensure the profitability of its core brands.
The company gradually will
reduce the weekly circulation
of its flagship Time magazine
by one-third to 2 million copies. That move is partly a recognition that it isn’t worth it
to keep printing as many pro-
motional copies. It also is
aimed at focusing on a core
audience considered more
valuable to advertisers.
Time Inc. also is reducing the
print frequency of seven titles,
including Sports Illustrated, Entertainment Weekly and Fortune. The move is based, in part,
on its research showing that
consumers have less time for
leaning back with magazines.
The circulation of People en
Español also will be reduced.
“From an advertising perspective, clearly there are some
headwinds in print,” said Brad
Elders, Time Inc.’s chief revenue officer. “What we’re trying
to do is reimagine the way we
produce these products in a
long-term, sustainable way.”
The print cutbacks could be
a drag on the company’s revenue. For example, Mr. Elders
said that Time would have to
reduce its ad rates to reflect
the lower circulation it is guaranteeing.
But Mr. Elders believes the
total cost savings from the entire print restructuring will
more than offset the potential
declines in advertising and
newsstand revenue.
Time Inc. believes that a
better print product will enable it to increase spending
from current advertisers and
attract new marketers, poten-
tially offsetting lower ad rates.
The changes will be effective Jan. 1.
It will focus on a core
audience considered
more valuable to
advertisers.
The continuing challenge for
Time Inc. Chief Executive Rich
Battista—like
his
peers
throughout publishing—is how
to manage a print business that
is in steady decline. He is hop-
ing to inject new growth into
the company with initiatives in
digital video and branded content, but figuring out the most
economical way to run the
print business in coming years
is also a high priority. He continues to believe in its future as
a storytelling and advertising
platform.
Advertising revenue fell 12%
to $374 million for the most
recent quarter ended June 30,
mostly because of a falloff in
print. The print cutbacks are
part of the $400 million costcutting strategy that Time Inc.
disclosed last August.
“Earlier this year we decided
to step back and take a big pic-
ture view of the print landscape,”
Mr. Battista said. “If you were
starting a print business today,
how would you organize it?”
Mr. Battista said the company’s research shows readers
are “okay with fewer issues as
long as the issues have more
inside.”
Sports Illustrated, for example, will publish 27 issues in
2018, including the Swimsuit
edition, down from 38 this
year.
Separately, Time Inc. has
taken its lifestyle publication
Coastal Living off the sale block
after concluding the prices it
was being offered weren’t a reflection of fair value.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B8 | Wednesday, October 11, 2017
THE WALL STREET JOURNAL.
THE PROPERTY REPORT
PLOTS & PLOYS
KKR Dials Up Risk With Fund
Firm makes the most
of Dodd-Frank rules
now under assault by
Trump administration
losses they suffered. Drafters
of the rules believed financial
firms would be less likely to
make bad loans if they were
required to retain 5% of the
securities on their books for
five years.
In the commercial mortgage-securities market there
was an additional twist to the
Dodd-Frank rules. Underwriters would be able to comply
with them if they sold the
riskiest parts of the securities—known in the industry as
the “B pieces”—to firms like
KKR, as long as those buyers
also didn’t hedge or sell them
for at least five years.
Drafters of Dodd-Frank believed such firms would provide an adequate check on
banks and other loan originators because they would provide another layer of underwriting. B-piece buyers also
have additional rights, including the ability to kick shaky
loans out of mortgage pools.
“What we determined was
there was going to be a need
for an increase in capital for
B-piece buyers,” said Matt Salem, who joined KKR in 2015
to help its real-estate unit
start a lending business.
The returns on the B pieces
BY PETER GRANT
KKR & Co. has closed a $1.1
billion fund targeting the riskiest slice of commercial mortgage-backed securities in the
latest sign the Dodd-Frank
regulatory overhaul didn’t
hurt that market as much as
some participants had feared.
The fund comes as the
Treasury Department is proposing sweeping changes to
rules put into effect after the
2008 financial crisis. Some of
the changes would alter
Dodd-Frank’s risk-retention
provisions that played a big
role in the thinking of KKR
and other investment firms
that have raised such targeted
funds.
The private-equity firm began planning the fund about
two years ago, partly to take
advantage of the provisions,
which were designed to protect the mortgage and assetbacked securities markets
from the large crash-related
Staying Power
New issuance of commercial
mortgage-backed securities is on
pace to surpass the total for 2016.
$300 billion
200
100
0
2004 ’06 ’08 ’10 ’12 ’14 ’16
Note: Figure for 2017 is through the third quarter.
Source: Commercial Mortgage Alert
THE WALL STREET JOURNAL.
can be in the 17% range, if
none of the loans in the securitized pool suffer losses. But
if losses are high, B-piece buyers can be completely wiped
out. They suffered most of the
$29 billion in losses on the
$350 billion in commercial
mortgage-backed securities issued in the boom years of
2006 and 2007, according to
debt tracker Trepp LLC.
“They’re not for the faint of
heart,” said Manus Clancy, a
Trepp senior managing director.
The risk-retention rule went
into effect for commercial
mortgage
securities
last
Christmas Eve. Since then, the
KKR fund has been a leader in
the B-piece market, investing
about $225 million in six commercial mortgage-securities
transactions.
Other big market participants include Rialto Capital
Management, Mr. Salem’s former employer; C-III Capital
Partners; LNR Partners; and
Eightfold Real Estate Capital.
In all, about $2 billion of B
pieces are expected to be sold
this year, according to Mr. Salem.
The strength of the B-piece
market is one of the reasons
issuance of commercial mortgage securities in 2017 is expected to top last year’s $77.6
billion.
When the risk-retention
rules went into effect, some
were concerned they would
cause volume this year to fall
sharply, partly because B-piece
buyers would charge so much
to hold the riskiest part for
five years. Instead, the market
improved, even though B-piece
buyers are getting a higher re-
SELF-STORAGE
turn than they were getting
last year, observers said. “The
economics still worked” because buyers of the least risky
portions of the securities have
been willing to accept lower
interest rates than last year,
Mr. Clancy said.
Because those low-risk securities make up such a high
proportion of commercial
mortgage-securities issues,
“that was enough to offset any
loss you were going to have in
the B-piece space,” Mr. Clancy
said.
Risk retention is now under
review as part of the Trump
administration’s efforts to
overhaul
postcrisis
rule
changes that targeted Wall
Street.
A report released by the
Treasury last week agreed
that the skin-in-the-game requirement “can serve as a
complement to other regulatory reforms…to provide
added confidence to investors”
in asset-backed securities.
But the report described
risk retention as “an imprecise
mechanism” and called on regulatory changes to decrease or
eliminate the requirement for
loans that are conservatively
underwritten.
Rents on the Rise
After Hurricanes
Average self-storage rents increased 0.9% in the third quarter
from the same period a year
earlier, partly because of stronger demand from areas affected
recently by hurricanes, according
to data from research firm
Green Street Advisors.
“It is safe to assume that occupancies in hurricane-impacted
markets, although difficult to
measure with precision, are now
nicely higher,” said Green Street.
The boost in demand managed to offset somewhat the
impact of a boom in construction activity that has weighed
on rents in many markets across
the country, especially in Houston before Hurricane Harvey.
CubeSmart recorded average
rent growth of 2.3% in the quarter. Rents in Extra Space Storage Inc. and Public Storage rose
an average of 0.2% and 1.3%, respectively.
Average rents at Life Storage
Inc. fell 1.5%. Life Storage earlier
said it would keep its rate and
leasing incentives unchanged in
Houston and Florida and added
that it already had a strong occupancy rate of about 92% in
Houston before Harvey.
According to SpareFoot.com,
a marketplace for storage facilities across the country, there
had been a spike in demand for
new rentals after the recent hurricanes in affected areas but it
has now petered out.
Customers in storm-battered
areas are likely to keep their
boxes for a longer time than
they initially anticipate, said
Chuck Gordon, chief executive
officer of SpareFoot. That would
benefit places like Houston for
the long term, but not enough
to warrant more development
projects.
—Esther Fung
For Struggling Malls, Chance for a Rebirth
BY ESTHER FUNG
VENTURE CAPITAL
Website for Pop-Ups
Secures Funding
A venture-capital firm that
focuses on real-estate technology is investing in a London
startup that has created an online marketplace for pop-up
stores.
Fifth Wall Ventures, which is
backed by big names in the realestate world like Hines, CBRE
Group Inc. and Macerich Co., has
made a significant investment in
Appear Here, said Brendan Wallace, Fifth Wall’s managing partner. He declined to specify an
amount or how much of a stake
Fifth Wall is taking.
Founded in 2013, Appear
Here has hooked up thousands
of retailers with landlords in
London and other U.K. cities. Its
website includes more than
100,000 brands looking for
space. The company, which enables retailers to sign leases for
days or months, also has expanded to Paris and New York.
Pop-up stores selling seasonal goods like Halloween costumes have existed for years.
But numerous online marketplaces have been launched to
make it easier for tenants and
landlords to find each other.
“We’ve standardized the process, which used to take six
months, and made it take 48
hours,” said Ross Bailey, Appear
Here’s founder and CEO.
—Peter Grant
ONELIFE CHURCH
Neighborhood
shopping
centers battered by store vacancies are finding solace in
churches.
As retailers consolidate and
shrink the number and sizes of
their stores, retail center landlords, especially in weaker
markets, are being forced to
consider a wider range of prospective tenants that might
not fit the conventional retail
mold. Among them: houses of
worship.
“Having a church becomes
an asset because it creates a
mixed-use space,” said Rodney
Arnold, pastor at OneLife
Church, based in Powell, Tenn.
The church leases space both
in Powell Place Shopping Center and at a building near
Knoxville Center Mall in Knoxville.
Until recently, property
owners have turned mainly to
theaters, restaurants, medical
and wellness clinics, and bowling alleys to fill space formerly occupied by retailers
that have been plagued by the
shift to online shopping and
changing consumer tastes.
Churches usually weren’t in
the mix. Shopping center owners prefer tenants that draw
foot traffic on a daily basis
and often consider churches to
be second-tier tenants because
they aren’t typically open all
week. What’s more, if rents
aren’t paid, landlords might
find it harder to evict a church
than another tenant.
But in weaker markets
where vacancies are higher, it
is more difficult for landlords
to find complementary retailers, and churches are becoming palatable options.
“Churches are in the category of secondary uses for retail centers like charter
schools and government offices,” said Lori Schneider, senior managing director at
As stores close, landlords are considering a wider range of tenants, including houses of worship. A OneLife Church in Powell, Tenn.
commercial real-estate firm
Marcus & Millichap. “But depending on the amount of
space they occupy, they could
change the profile of the center.”
According to a Wall Street
Journal analysis of August
2017 data from the Directory
of Major Malls that tracks
about 8,200 retail centers in
the country, at least 111 malls
and open-air centers have a
church in them. Some have
two or more.
The Outlets at Loveland in
Loveland, Colo., has been an
incubator for three churches
and a synagogue. The tenants
are a welcome addition in a
market that is overly saturated with retail space, said its
owner, Craig Realty Group.
At one point, the Outlets,
which has a gross lease area of
330,000 square feet, had been
as much as 45% vacant, after
another 700,000-square-foot
retail center opened in 2005
nearby. “We’re not in the
church business, but we’re in
the business of providing
space for a purpose,” said
Steve Craig, president and
chief executive officer of Craig
Realty Group.
The Outlets started with a
6,000-square-foot lease to a
synagogue in 2008. Three
other churches subsequently
approached the landlord, and
as their churches expanded
they started to lease more
space. In all, the Outlets now
leases a total 34,000 square
feet to the four tenants, which
bring roughly 1,000 people to
the center on the weekends
and about 500 people during
the week, depending on the
time of the year and the
events they hold, said Mr.
Craig.
“We’ve been delighted by
that experience. I’m not saying
that I’d do it for every prop-
erty, but for this it makes a lot
of sense,” he said. The property is about 70% leased.
In Grand Cities Mall in
Grand Forks, N.D., there are
three churches located in the
enclosed mall. The previous
out-of-town owner had neglected the property, and the
mall was bought in 2015 by
Hope Church, which occupies
the west side of the mall. The
three churches, Hope Church,
Thrive Church and Faith Presbyterian Church, have a total
of 1,435 congregants in a given
weekend, estimated Louis
Christoffer, manager at Grand
Cities Mall.
“There have been efforts to
make it more community-focused, including the addition
of an indoor playground,” said
Mr. Christoffer, adding that
there have been other tenants
that have been brought in
since, including a women’s
pregnancy center, a music
school and a lightsaber combat academy.
One advantage in bringing
in a church as a tenant is that
it requires less tenant improvement allowance. Another
plus: Churches don’t place restrictions on landlords such as
prohibiting it from leasing
space to other churches.
But sometimes, there are
other hurdles.
In
Knoxville,
OneLife
Church had eyed space that
had been formerly occupied by
shoe retailer Just For Feet.
But the city had an ordinance
prohibiting business from selling beer within 300 feet of any
church or school, and the
owner of Knoxville Center Mall
worried about the possible
loss of beer permits held by
restaurants on the premises.
The City Council last October approved an amendment
to remove the distance requirement for churches.
BY PETER GRANT
For years Boca Raton, Fla.,
was known by most people as
the retirement town of Jerry
Seinfeld’s parents on the hit
television show.
Now, developers are appealing to a younger crowd. In recent years, they have rolled
out rental housing, retail and
nightlife targeting people who
are more into fine dining than
early-bird specials.
Downtown Boca Raton is
getting its first new luxury hotel in decades. Penn-Florida
Cos., a developer in the state
for three decades, has obtained $318 million in debt financing for a 2 million-squarefoot project that includes a
164-unit Mandarin Oriental
Hotel & Resort.
Penn-Florida secured the financing from Mack Real Estate Credit Strategies, a
three-year-old firm that has
become an active nonbank
lender. These lenders have
been focusing on construction
financing and other riskier
loans that many traditional
banks are reluctant to make.
Penn-Florida’s
project,
named Via Mizner, includes
the planned Mandarin hotel, a
recently completed 366-unit
rental apartment building, 88
condominiums and 60,000
square feet of retail space. The
rental building, which opened
last year, is about 50% leased,
said Mark Gensheimer, chief
executive of Penn-Florida.
Mr. Gensheimer said that
when his company acquired
the site for Via Mizner in 2007
he wasn’t considering a rental
building. But since then, “The
entire country has changed its
perspective on renting versus
owning,” he said. “People that
have the choice of either renting or owning have chose to
rent for the lifestyle.”
The U.S. homeownership
rate hit 63.7% in the second
quarter, the Census Bureau
said. That is well below the
historical average but up
nearly a full percentage point
from a year ago, when it
touched a 50-year low of
62.9%.
Via Mizner’s website lists
studios starting in the $1,639a-month range and three-bedroom units that run as much
as $6,055 a month.
Demand for hotel rooms in
the area has been rising. The
occupancy rate in the Boca Raton/West Palm Beach market
was 74.9% for the first eight
months of the year, up 0.7%
compared with the same period last year, according to
data firm STR Inc. The average
daily rate was $178.23, up
0.8%, the firm said.
But it isn’t as if Morty and
Helen Seinfeld would no longer feel at home in Boca Raton. More than 39% of the
population was over 55 years
old in 2015, roughly the same
as 2010, according to the city’s
website. The country club lifestyle still appeals to many.
HARVEY SMITH
Florida Property Developers Court a Younger Demographic
The apartment building of the Via Mizner project in Boca Raton.
Siemens Group is developing a
139-unit condominium named
Akoya Boca West in a private
club community. About 50% of
the units have sold, said Rob
Siemens, a vice president.
The loan from Mack Real
Estate provided funds to refinance the Via Mizner rental
building, develop the Mandarin hotel and replace a land
loan that had been on the parcel where the condominium is
going to be built. The interestonly floating-rate loan with a
term of close to four years is
designed to give the developer
enough time to stabilize the
project and obtain longer-term
financing.
Penn-Florida selected Mack
partly because principals of
the firm have extensive experience in development and understood the different dimensions of the Via Mizner plan,
said Faisal Ashraf, chief executive of Lotus Capital Partners, which arranged the financing.
Mack Real Estate was
formed by William and Richard Mack, an investment team
that was active in such ventures as private-equity firm
Apollo Real Estate Advisors,
and Peter Sotoloff, who was
head of debt originations for
Blackstone Group LP. The firm
expects to originate close to
$4 billion in loans this year,
Mr. Sotoloff said.
Banks and other traditional
lenders have become more active in making first mortgages
on stabilized properties and
other less-risky assets. But
they have had less of an appetite for construction loans that
pay higher interest rates but
also are more risky, finance
specialists say.
THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | B9
* * * *
MANAGEMENT
An Obsession
With Amazon
Customers
Sandberg
Urges
Diversity as
Imperative
BY VANESSA FUHRMANS
AND KHADEEJA SAFDAR
BY LAURA STEVENS
No matter how hard he
works, Amazon.com Inc.’s
chief executive of worldwide consumer is only the
second most important
“Jeff” at the company.
Still, Jeff Wilke’s supervision now spans many of the
Seattle-based
BOSS
company’s core
TALK
businesses, including retail, operations, technology and its marketplace and
accompanying seller services. Part of the 18-year
Amazon veteran’s role is to
obsess about the wants and
needs of the retailer’s customers.
Near the beginning of his
career there, Mr. Wilke used
his manufacturing expertise to
help create a more efficient
way of running Amazon’s
warehouses that made its twoday Prime shipping service
possible. Mr. Wilke, who graduated with a degree in chemical engineering from Princeton
University and an M.B.A. from
Massachusetts Institute of
Technology, also has molded
the leadership principles that
guide employee behavior.
Now Mr. Wilke is in charge
of integrating Amazon’s new
subsidiary, Whole Foods Market Inc., and its roughly
87,000 employees. He also is
part of the leadership team
working on the company’s
search for a second North
American headquarters.
Wearing his traditional
fourth-quarter flannel shirt,
a nod to the company’s more
than 250,000 warehouse
workers filling holiday orders, Mr. Wilke talked about
Amazon’s plans for Whole
Foods, why it is splitting its
headquarters in two and
what it is like to disagree
with Amazon CEO Jeff Bezos.
Edited excerpts:
The Wall Street Journal: How
do you approach major, company-shifting decisions like
acquiring Whole Foods or
creating a new headquarters?
Mr. Wilke: If the decision is
reversible, we would prefer
that people take a chance.
You can walk through the
door. If you don’t like what
you see on the other side, you
just walk back through and
you’re fine. If it’s not reversible, we spend a lot more
time thinking about those. We
will argue the merits of whatever decision we are making.
WSJ: Amazon encourages
employees to fail big. Tell us
about a big, fall-on-your-face
failure.
Mr. Wilke: When we were deciding whether to do Kindle,
Jeff [Bezos] presented his
idea to the board. I thought
at the time, “We’re a software company that built a retail business. We don’t know
anything about hardware.” I’d
come from companies that
WIQAN ANG FOR THE WALL STREET JOURNAL
Jeff Wilke talks Whole Foods, hunt for
second HQ and working with CEO Bezos
built hardware, so I knew
how complicated it was. I
said, “I don’t think we should
do this.” I predicted that
yields would be hard, that we
might miss our first launch
date, etc. Many of the things
I predicted ultimately happened. But it didn’t matter.
Jeff at the time said, “It’s the
right thing to do for customers.” I disagreed and committed, and I’m very glad I did.
WSJ: What did Mr. Bezos say
to you after?
Mr. Wilke: Once we make a
decision, we just move on.
There are too many opportunities to invent for customers
to keep score. All of us have
been wrong at various times.
WSJ: Whole Foods is known
for a more freewheeling, localized culture. What will
Amazon have to change to
integrate its new subsidiary?
Mr. Wilke: We’ve made a
number of acquisitions over
the years, and we work really
hard to respect the cultures
that have been successful.
There are some ways that we
can help a subsidiary like
Whole Foods with resources,
maybe with ideas, maybe with
some IT services that we’ve
already built. But we don’t
want their culture to change.
WSJ: Amazon’s culture isn’t
for everyone. How do you
suss that out in the hiring
process?
Mr. Wilke: There are lots of
situations where you could
decide to optimize for the
customer or to get ahead of
the competitor. We want to
pay attention to competitors,
but we obsess over customers. If I detect that they are
too focused on competitors,
they probably aren’t going to
be a great fit.
WSJ: Amazon is a retailer, a
cloud-services provider, a film
studio, a device company, a
parcel carrier and a technology giant. An estimated 40%
of U.S. online spending goes
to Amazon. What would you
say to people who say the
company is too big?
Mr. Wilke: In every one of
the businesses that you describe, we have incredible
competition. In world-wide
retail, we’re less than 1%. We
think our job is to keep inventing for customers in each
of these areas, and we hope
that if we continue to invent
well, they’ll choose us to be
one of the folks who wins.
WSJ: What’s the reasoning
behind splitting Amazon’s
headquarters in two?
Mr. Wilke: We have a lot of
people in Seattle. We actually expect to add 2 million
square feet and 6,000 people
in the next 12 months here.
But we think it’s important if
we’re going to continue to
grow, to make sure we have
the space. And it’ll diversify
the opportunity for people
to choose where they would
like to live.
Facebook Inc. Chief Operating Officer Sheryl Sandberg
and other business leaders
warned companies against
complacency in the effort to
advance women in the workplace, arguing that there was a
business imperative for committing to gender diversity.
Ms. Sandberg, at a New York
event hosted by The Wall Street
Journal, in part blamed the “tyranny of low expectations” for
the still-low number of women
in senior leadership roles.
She pointed to new data
from LeanIn.Org—which was
founded by Ms. Sandberg—and
McKinsey & Co. showing that
at companies where one in 10
senior posts is filled by a
woman, 50% of men and 33% of
women believe that’s sufficient.
“This has been happening for
so long, on gender and on race,
that we actually don’t think
more is achievable,” she said.
McKinsey CEO Dominic Barton said he was worried that
slow progress in boosting the
number of women in managerial
ranks would discourage companies from pursuing more ambitious targets. But, he added, the
data showed hope: There was a
difference in the outcomes between companies “who really
went for it and those who did it
in an average way.”
Ms. Sandberg and other executives also condemned the
recently alleged sexual misconduct of Hollywood producer
Harvey Weinstein and those
who had tolerated the behavior.
Such behavior can only be
deterred by “disastrous consequences,” said Ms. Sandberg.
“We cannot tolerate Harvey
Weinstein-like behavior.”
ADVERTISEMENT
Business Real Estate & Services
To advertise: 800-366-3975 or WSJ.com/classifieds
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THE WALL STREET JOURNAL.
B10 | Wednesday, October 11, 2017
NEW HIGHS AND LOWS
The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSE MKT and
Nasdaq Stock Market stocks that hit a new 52-week intraday high or low in the latest session.
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Tuesday, October 10, 2017
Stock
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BlkRkDebtStratFd DSU
BlkRkCapEnIncoFd CII
BlkRkEnhGlbDiv BOE
BlkRkIntlGrInco BGY
BlkRkDurInco Tr BLW
BlkRkSci&Tech BST
Boeing
BA
BoulderGrowth BIF
BrandywineRealty BDN
BrightScholarEduc BEDU
Bristol-Myers
BMY
BroadridgeFinl
BR
BrookfieldMgt
BAM
BrookfieldDTLAPf DTLAp
Brown&Brown
BRO
CBIZ
CBZ
CBRE Group
CBG
CNO Financial
CNO
CSS Industries CSS
CVR Energy
CVI
CalWtrSvc
CWT
Caterpillar
CAT
CharlesRiverLabs CRL
Chemours
CC
ChesapeakeLodging CHSP
Chevron
CVX
ChinaTelecom
CHA
ChinaYuchai
CYD
ChnStrPfInco
RNP
CompassPfdA
CODIpA
ContinentalBldg CBPX
CoreLogic
CLGX
CousinsProperties CUZ
Cummins
CMI
DaqoNewEnergy DQ
DellTechnologies DVMT
Dividend&IncomeFd DNI
EPAM Systems EPAM
EtnVncEqtyInco EOI
ElPasoElectric
EE
EnelChile
ENIC
Envestnet
ENV
ExtendedStayAmer STAY
FB Financial
FBK
FarmlandPtrsPfdB FPIpB
FedAgriMtg C
AGM
FedAgriMtg A
AGM.A
FederatedInvest FII
Ferro
FOE
FibriaCelulose
FBR
FidelityNtlInfo
FIS
Forestar
FOR
Fortive
FTV
GenAmInv
GAM
GeneralCable
BGC
GettyRealty
GTY
GlobalPayments GPN
GramercyProperty GPT
GraphicPkg
GPK
HFF
HF
Harris
HRS
Hexcel
HXL
DR Horton
DHI
IndependenceHldg IHC
IndepRealty
IRT
Ingevity
NGVT
Instructure
INST
IntlFlavors
IFF
19.51
55.43
12.50
66.86
26.13
184.46
87.98
22.29
92.34
52.77
84.09
67.38
87.08
41.73
52.85
34.90
14.29
12.30
55.22
39.00
51.25
95.67
31.01
37.30
114.45
86.31
282270
188.20
11.47
11.85
15.84
13.73
6.65
16.25
25.20
261.06
10.49
17.99
27.96
65.26
82.54
42.43
29.75
49.13
16.90
39.09
24.34
29.91
28.34
41.65
128.29
111.84
55.03
28.20
119.82
53.78
23.63
21.75
25.65
26.78
48.20
9.59
173.15
34.64
79.81
13.13
90.50
14.35
57.75
6.31
54.90
20.88
38.94
27.81
76.22
76.00
31.15
22.82
15.23
94.95
17.30
72.31
36.29
21.75
29.39
100.34
31.22
14.37
41.51
136.63
59.84
41.51
26.71
10.58
67.86
35.60
148.33
0.9
1.4
0.7
0.1
1.0
0.6
0.2
1.6
0.2
1.2
1.0
0.1
0.5
0.3
0.4
1.0
0.9
2.9
0.7
0.9
1.0
2.9
2.3
-0.1
1.7
1.7
0.3
0.3
-0.1
0.3
0.2
0.3
0.8
0.5
0.8
1.0
0.7
0.3
-0.9
1.5
-0.2
0.5
-1.7
0.2
0.6
0.6
0.6
0.3
1.6
1.0
1.0
1.2
0.3
0.6
0.9
4.8
3.0
0.9
0.4
...
1.2
...
0.7
7.7
-0.2
-0.1
0.2
1.0
1.1
1.6
-0.5
1.2
0.8
1.8
2.4
0.7
1.0
0.6
1.9
0.3
2.1
...
0.2
0.2
0.6
0.4
-1.1
0.9
1.1
0.1
0.1
0.1
1.3
0.2
0.2
-1.4
1.3
52-Wk %
Sym Hi/Lo Chg Stock
52.44
InterXion
INXN
23.43
InvestmentTech ITG
26.79
KB Home
KBH
18.63
KKR IncomeOpps KIO
25.42
Kemet
KEM
55.20
Kemper
KMPR
65.60
Kyocera
KYO
18.13
LaQuinta
LQ
17.08
LazardGlblFd
LGI
62.66
Leidos
LDOS
5.67
LibertyASGFd
ASG
121.94
MSCI
MSCI
55.31
MagnaIntl
MGA
123.00
Manpower
MAN
57.02
MarathonPetrol MPC
1094.99
Markel
MKL
146.37
Mastercard
MA
66.38
Maximus
MMS
61.57
Medifast
MED
53.30
MetLife
MET
10.05
MiXTelematics MIXT
20.80
ModineMfg
MOD
16.64
MonmouthRealEst MNR
Moog A
MOG.A 89.37
35.80
NACCO Inds
NC
11.35
NamTaiProperty NTP
94.63
NewOrientalEduc EDU
39.82
NoahHoldings
NOAH
13.70
NorthstarRltyEur NRE
17.80
OasisMidstream OMP
50.82
OilDriAmerica
ODC
56.21
OnAssignment ASGN
79.68
OwensCorning
OC
25.73
Owens-Illinois
OI
23.45
PIMCODynamicCred PCI
31.15
PIMCO DynIncmFd PDI
178.50
ParkerHannifin PH
78.97
PaycomSoftware PAYC
36.78
PebblebrookHotel PEB
70.99
PerkinElmer
PKI
36.51
Pfizer
PFE
41.24
PolyOne
POL
19.46
PrefApartment APTS
86.55
Primerica
PRI
65.54
Prologis
PLD
48.30
PublicServiceEnt PEG
17.55
QuotientTech
QUOT
21.79
RELX
RENX
22.75
RELX
RELX
66.50
RE/MAX
RMAX
118.36
RedHat
RHT
44.95
RingCentral
RNG
184.14
Rockwell
ROK
47.38
Rollins
ROL
78.78
RoyalBkCanada RY
7.44
RoyalBkScotland RBS
126.07
RoyalCaribbean RCL
10.53
RoyceGlbValueTr RGT
112.55
SAP
SAP
60.64
SJW Group
SJW
23.93
SafeBulkersPfdD SBpD
48.85
SensataTech
ST
40.43
Smith&Nephew SNN
SocialCapHed
IPOA.U 10.88
22.33
SpeedwayMotor TRK
79.84
SpiritAeroSys
SPR
131.85
Synnex
SNX
35.87
TAL Education TAL
14.47
TRI Pointe
TPH
78.14
TableauSoftware DATA
39.16
TaiwanSemi
TSM
TeekayOffshrPfB TOOpB 25.25
164.66
TeledyneTech
TDY
38.34
Teradyne
TER
45.93
Terex
TEX
10.71
ThaiFund
TTF
20.00
TierReit
TIER
43.00
Toll Bros
TOL
124.18
ToyotaMotor
TM
22.18
TransportadGas TGS
50.15
TransUnion
TRU
25.99
Tronox
TROX
18.16
TurningPoint
TPB
UMHPropPfdC
UMHpC 27.80
36.62
Unifi
UFI
144.19
UnitedRentals
URI
UrstadtBiddlePfdH UBPpH 26.19
18.80
VirtusGlbMulti
VGI
20.95
Vishay
VSH
112.50
VMware
VMW
37.52
WNS
WNS
84.88
Wal-Mart
WMT
85.55
WestlakeChem WLK
22.50
Workiva
WK
109.05
Wyndham
WYN
68.29
XPO Logistics
XPO
21.89
XeniaHotels
XHR
64.93
Xylem
XYL
50.59
Yirendai
YRD
43.47
YumChina
YUMC
-0.2
0.9
1.6
-0.8
1.8
0.7
2.9
1.6
0.2
0.2
-3.6
0.3
2.2
0.9
0.2
1.3
0.8
0.6
2.4
0.3
3.2
1.5
0.7
0.2
4.1
1.3
2.0
6.2
1.1
1.4
...
0.2
-0.2
1.0
...
0.2
0.1
0.3
1.4
0.4
0.7
0.2
-0.1
1.3
-0.2
1.3
1.7
0.6
0.6
-0.1
1.1
-2.1
-0.3
0.6
1.1
3.2
0.2
0.5
...
1.6
1.3
0.3
4.6
0.2
1.1
0.4
0.3
1.6
0.8
-1.8
0.5
1.0
0.5
1.0
0.8
1.7
...
0.3
2.0
-1.7
0.2
-0.5
2.7
1.1
0.4
-0.7
0.3
-1.0
1.5
-0.1
-0.6
4.5
-0.5
1.8
0.7
1.0
1.2
...
-0.6
-1.1
52-Wk %
Sym Hi/Lo Chg
NYSE lows - 15
5.55 -3.4
AdvantageOil
AAV
12.52 -4.0
AquaVenture
WAAS
10.19 2.3
BrookdaleSrLiving BKD
1.17 -4.1
CobaltIntlEner
CIE
4.62 -4.9
ComstockRscs
CRK
13.02 -0.7
Corts JCPen JBS JBN
53.58 0.8
DaVita
DVA
12.36 -1.3
DeutscheMuniIncmTr KTF
42.27 -1.3
EnvisionHlthcr
EVHC
26.28 -1.5
HCP
HCP
KinderMorganPfdA KMIpA 40.43 -0.2
1.83 -1.6
RiteAid
RAD
102.73 0.8
Smucker
SJM
101.93 -0.2
SpectrumBrands SPB
11.92 -2.7
Yext
YEXT
NYSE Arca highs - 275
ARKIndlInnovation ARKQ
ARKWebx.0ETF ARKW
AdvShDorseyADR AADR
AdvShNewTech FNG
AlphaCloneAltAlpha ALFA
BarcETNFIEnhEur50 FEEU
BarclaysETN FI Enh FLEU
BarcETN+FIEnhGlHY FIGY
S&PVEQTOR
VQT
BluStrTABIGIIsrael ITEQ
BuzzUSSentLdrs BUZ
CSOPChinaCSI300AH HAHA
CambriaGlbMomentum GMOM
ClearSharesOCIO OCIO
ColumbiaEMConsumer ECON
ColumbiaSustIntl ESGN
ColumbiaSustUSEqu ESGS
CS FI LC Grwth FLGE
DiamondHillVal DHVW
DirexAeroBl3
DFEN
DirexCSI300CnABl2 CHAU
DirexDevMktBl3 DZK
DirexEM Bull3
EDC
DirexFTSEEurBull3x EURL
DirexJapanBl3
JPNL
DirexMcBull3
MIDU
DirexS&P500Bl3 SPXL
DirexSemiBl3
SOXL
DirexTechBull3
TECL
Direx iBillionaire IBLN
ETFMG PrimeMob IPAY
ETRACSMnthly2xLev SPLX
FIEnhancedEur50ETN FIEU
FIEnhEurope50ETN FIEE
FidelityDivRising FDRR
FidelityMSCIIT
FTEC
FidelityMomFactor FDMO
FidelityQualFactor FQAL
FT Dow30EW
EDOW
FT DJ SelMicro FDM
FT FinlsAlpDx
FXO
FT IndlsAlpDx
FXR
FT Long/Short FTLS
FT TechAlphaDEX FXL
FT USEquityOpp FPX
FT ValDivFd
FVD
FT ValueLine100 FVL
FlexShMDevMktxUS TLTD
FlexShQualDivDef QDEF
FlexShQualDivDyn QDYN
FlexShQualityDiv QDF
FranklinGlbEquity FLQG
GlbX ChinaConsumer CHIQ
GlbXFTSENordReg GXF
GlbX FTSE SE Asia ASEA
GlbXSciBetaEurope SCID
GlblXSuperDividend SDIV
GSActiveBetaIntlEq GSIE
GSHedgeIndVIP GVIP
GuggBRIC
EEB
GuggBS2025HYCpBd BSJP
GuggChinaAllCap YAO
GuggChinaSC
HAO
GuggChinaTech CQQQ
GuggS&P500EWIndl RGI
GuggS&P500EWTech RYT
GuggS&P500PureGr RPG
GuggIntlMltAst HGI
GuggGlbTimber CUT
GuggS&P500Top50 XLG
GuggS&PGlblWtr CGW
HartfordMultiDvxUS RODM
HartfordMultiGlbSC ROGS
HartfordMultiUSEqu ROUS
IQ CanadaSC
CNDA
IQ50%HdgFTSEEur HFXE
IQ50%HdgFTSEIntl HFXI
IQ50%HdgFTSEJapan HFXJ
IQ HedMacrTrac MCRO
32.80
41.82
57.09
21.85
42.24
130.90
157.84
165.47
152.35
32.03
30.89
32.86
26.76
26.00
28.59
30.22
30.23
203.23
30.38
41.86
27.67
77.72
114.81
37.35
64.64
42.19
40.01
126.56
95.39
31.51
33.59
49.05
134.66
175.70
29.48
47.24
29.51
30.35
20.63
47.14
30.13
38.07
37.61
49.23
64.98
30.06
22.93
67.37
41.97
42.00
42.82
29.78
18.15
24.57
15.91
28.56
22.20
29.28
52.23
37.59
25.16
35.33
30.70
59.71
114.22
138.07
101.67
17.19
30.91
180.68
34.98
28.68
30.67
29.24
18.66
20.13
21.18
21.14
26.34
52-Wk %
Sym Hi/Lo Chg Stock
Stock
...
-0.3
0.4
0.2
0.1
1.2
1.8
0.8
0.2
0.1
0.1
1.0
1.0
0.3
1.0
1.2
0.4
-0.1
0.2
-0.3
2.0
2.4
2.9
3.1
2.1
0.8
0.7
1.9
0.2
-0.6
0.4
0.2
1.4
1.1
0.3
...
0.3
0.3
0.3
0.7
0.5
0.3
0.3
0.1
0.2
0.6
0.3
0.7
0.6
0.3
0.4
0.6
0.7
0.8
0.5
0.4
0.7
1.0
0.2
1.0
0.1
1.1
1.1
1.1
0.1
0.2
0.1
1.2
0.8
0.2
0.3
0.8
0.5
0.1
...
0.8
0.9
0.6
0.1
IQ HedMultStra QAI
IndSelSectorSPDR XLI
InnovatorIBD50Fd FFTY
iShAggrAllocation AOA
iShConsAllocat AOK
iShCoreDivGrowth DGRO
iShGrwthAllocation AOR
iShCoreHiDividend HDV
iShCoreMSCIEmgMk IEMG
iShCoreMSCIEurope IEUR
iShCoreMSCIPacific IPAC
iShModAllocation AOM
iShCoreS&P500ETF IVV
iShCoreS&PMdCp IJH
iShS&PTotlUSStkMkt ITOT
iShCurrHdgMSCICda HEWC
iShCurrHdMSCIJapan HEWJ
iShUSBasicMaterial IYM
iShU.S.Technology IYW
iShEdgeMSCIIntlMom IMTM
iShEdgeMSCIIntVal IVLU
iShEdgeMSCIMinJapn JPMV
iShEdgeMSCIMultif ACWF
iShEdgeMSCIMultInt INTF
iShEdgeMSCIMlIntSC ISCF
iShEuropeETF
IEV
iShGlobal100
IOO
iShIntRtHdgCorpBd LQDH
iShJPX-Nikkei400 JPXN
iShACWILowCarbon CRBN
iShMSCIAustriaCap EWO
iShMSCIBelgiumCap EWK
iShMSCICanadaETF EWC
iShMSCIChinaSC ECNS
iShMSCI EAFE EFA
iShMSCIEmgMarkets EEM
iShMSCIFranceETF EWQ
iShMSCIGermanyETF EWG
52-Wk %
Sym Hi/Lo Chg Stock
30.07 0.1 iShMSCIJapanETF EWJ
72.19 0.2 iShMSCIJapanSC SCJ
32.85 0.1 iShMSCIKLD400Soc DSI
53.99 0.5 iShMSCIKokusaiETF TOK
34.58 0.2 iShMSCINetherlands EWN
32.89 0.4 iShMSCISwedenETF EWD
45.03 0.4 iShMSCIThailandCap THD
87.10 0.6 iShMSCIUK
EWU
55.48 1.0 iShMSCIWorldETF URTH
50.09 1.0 iShMornLCGrowth JKE
57.12 0.8 iShMornLCValue JKF
38.04 0.4 iShRussell1000Gwth IWF
256.77 0.3 iShRussell1000ETF IWB
181.88 0.3 iShRussell3000ETF IWV
58.55 0.2 iShRussellTop200 IWL
25.95 0.6 iShS&P100
OEF
31.22 0.5 iShS&PMC400Growth IJK
98.00 -0.1 iShS&P500Growth IVW
153.24
... iShGlobalTechETF IXN
30.44 1.0 iShGloblFinancials IXG
25.60 0.7 iShGlobalConsDiscr RXI
65.04 0.8 iShGloblIndustrial EXI
29.50 0.3 iShNorthAmerTech IGM
28.31 1.0 iShDowJonesUS IYY
31.29 1.1 iShRussellMCGrowth IWP
47.24 1.1 HancockDevIntl JHMD
89.60 0.5 HancockIndustrials JHMI
96.47 0.1 JPMDivReturnEurope JPEU
61.17 0.7 JPM DivRetGlEq JPGE
113.52 0.5 JPM DivRetIntlEq JPIN
23.67 1.1 KnowldgLdrDevWrld KLDW
21.59 1.3 MatlsSelSectorSPDR XLB
29.19 0.5 NationRiskBaseIntl RBIN
52.90 1.1 NatixisSeeyondIntl MVIN
69.11 0.9 OShFTSEUSQuality OUSA
46.08 1.0 OppGlbESGRevenue ESGF
31.16 1.0 PIMCO DynMultIn MFDX
32.75 0.7 PIMCO DynMultUS MFUS
56.50
74.90
94.46
63.20
31.67
36.37
88.18
35.19
85.09
148.87
101.58
127.27
142.10
151.51
58.54
113.03
206.15
145.83
145.50
67.77
103.39
89.72
159.11
127.88
115.25
29.77
33.39
61.09
60.30
58.51
32.23
58.11
25.26
45.80
30.69
30.26
25.93
26.10
0.7
1.1
0.3
0.3
1.1
1.1
1.7
1.2
0.5
...
0.5
0.1
0.2
0.2
0.3
0.2
0.2
0.1
0.1
0.8
0.4
0.6
...
0.3
0.1
0.7
0.3
1.1
0.8
1.1
0.7
0.1
1.4
0.8
0.4
0.8
0.9
0.1
52-Wk %
Sym Hi/Lo Chg
52.72
24.16
42.00
18.77
32.07
38.17
91.88
51.24
39.62
44.40
33.15
12.95
39.41
38.04
42.88
41.47
46.38
40.27
27.43
45.05
51.69
112.38
66.89
126.08
87.88
115.20
66.58
99.63
108.67
78.53
74.13
121.79
27.86
23.22
51.79
81.28
76.45
PwrShAerospace PPA
PwrShCEF Incm PCEF
PwrShCleantch PZD
PwrShDBBaseMtls DBB
PwrShDynBldg&Con PKB
PwrShDynLCValue PWV
PwrShDynMkt PWC
PwrShDynSemicon PSI
PwrShDynLC Grwth PWB
PwrShDevMkt xUS PXF
PwrShFTSERAFIDevMk PDN
PwrShGlbClEngy PBD
PwrShRussMCGrw PXMG
PwrShRussTop200Val PXLV
PwrShRuss2000EW EQWS
PwrShS&P500HiDiv SPHD
PwrShS&P500LoVol SPLV
PwrShS&P500HiBeta SPHB
PwrShS&PIntlDev IDMO
ProShHdgReplic HDG
ProShS&P500xFin SPXN
ProShrUltraDow30 DDM
ProShrUltraInd UXI
ProShUltMSCIEAFE EFO
ProShUltMSCIEM EET
ProShrUltraJapan EZJ
ProShrUltraQQQ QLD
ProShrUltraS&P SSO
ProShrUlSemi
USD
ProShrUlTech
ROM
ProShUltDow30 UDOW
ProShUltS&P500 UPRO
RenaissanceIPOETF IPO
RenaissanceIntlIPO IPOS
SPDRBloomBarCvSecs CWB
SPDRGlobalDow DGT
SPDRMFSSysGrowth SYG
...
0.4
0.4
0.6
-0.1
0.5
0.5
0.6
0.2
0.7
1.1
0.6
-0.2
0.7
0.9
0.6
0.5
0.2
1.5
0.2
1.0
0.6
0.3
1.6
2.3
1.3
0.1
0.5
1.1
-0.1
1.1
0.7
0.7
1.5
-0.1
0.3
-0.1
Continued on Page B16
Exchange-Traded Portfolios | WSJ.com/ETFresearch
Largest 100 exchange-traded funds, latest session
Tuesday, October 10, 2017
Closing Chg YTD
Symbol Price (%) (%)
ETF
AlerianMLPETF
CnsmrDiscSelSector
CnsStapleSelSector
DBGoldDoubleLgETN
DBGoldDoubleShrt
EnSelectSectorSPDR
FinSelSectorSPDR
GuggS&P500EW
HealthCareSelSect
IndSelSectorSPDR
iShIntermCredBd
iSh1-3YCreditBond
iSh3-7YTreasuryBd
iShCoreMSCIEAFEETF
iShCoreMSCIEmgMk
iShCoreMSCITotInt
iShCoreS&P500ETF
iShCoreS&PMdCp
iShCoreS&PSmCpETF
iShS&PTotlUSStkMkt
iShCoreUSAggBd
iShSelectDividend
iShEdgeMSCIMinEAFE
iShEdgeMSCIMinUSA
iShGoldTr
iShiBoxx$InvGrCpBd
iShiBoxx$HYCpBd
iShJPMUSDEmgBd
iShMBSETF
iShMSCIACWIETF
iShMSCIBrazilCap
iShMSCI EAFE
iShMSCIEAFESC
iShMSCIEmgMarkets
iShMSCIEurozoneETF
iShMSCIJapanETF
iShNasdaqBiotech
iShNatlMuniBdETF
iShRussell1000Gwth
iShRussell1000ETF
iShRussell1000Val
iShRussell2000Gwth
iShRussell2000ETF
iShRussell2000Val
iShRussell3000ETF
iShRussellMid-Cap
iShRussellMCValue
iShS&PMC400Growth
iShS&P500Growth
AMLP
XLY
XLP
DGP
DZZ
XLE
XLF
RSP
XLV
XLI
CIU
CSJ
IEI
IEFA
IEMG
IXUS
IVV
IJH
IJR
ITOT
AGG
DVY
EFAV
USMV
IAU
LQD
HYG
EMB
MBB
ACWI
EWZ
EFA
SCZ
EEM
EZU
EWJ
IBB
MUB
IWF
IWB
IWD
IWO
IWM
IWN
IWV
IWR
IWS
IJK
IVW
11.35
91.34
54.13
25.11
5.47
68.27
26.37
96.39
82.56
71.85
109.94
105.19
123.32
64.74
55.45
61.79
256.34
181.29
74.93
58.43
109.44
94.71
71.77
50.82
12.39
121.13
88.48
115.74
106.91
69.66
42.82
69.10
62.39
46.05
43.55
56.46
339.59
110.78
126.92
141.79
120.01
181.01
149.86
125.56
151.25
199.42
85.71
205.55
145.45
0.09 –9.9
–0.10 12.2
4.7
0.88
1.13 24.8
–0.73 –20.2
0.09 –9.4
0.46 13.4
0.25 11.3
0.23 19.8
0.15 15.5
1.6
–0.05
0.2
...
0.7
0.02
0.97 20.7
0.98 30.6
1.03 22.4
0.26 13.9
9.6
0.31
9.0
0.24
0.24 13.9
1.3
0.01
6.9
0.63
0.93 17.2
0.26 12.4
0.32 11.8
3.4
0.07
2.2
0.08
5.0
0.18
0.5
0.01
0.56 17.7
1.95 28.4
0.95 19.7
1.07 25.2
0.99 31.5
0.90 25.9
0.71 15.6
0.03 28.0
2.4
–0.01
0.07 21.0
0.20 13.9
7.1
0.39
0.06 17.6
0.29 11.1
5.6
0.52
0.25 13.7
0.21 11.5
6.6
0.26
0.20 12.8
0.12 19.4
ETF
Closing Chg YTD
Symbol Price (%) (%)
iShS&P500ValueETF
iShUSPfdStk
iShTIPSBondETF
iSh1-3YTreasuryBd
iSh7-10YTreasuryBd
iSh20+YTreasuryBd
iShRussellMCGrowth
PIMCOEnhShMaturity
PwrShQQQ 1
PwrShS&P500LoVol
PwrShSrLoanPtf
SPDRBloomBarcHYBd
SPDR Gold
SchwabIntEquity
SchwabUS BrdMkt
SchwabUS LC
SPDR DJIA Tr
SPDR S&PMdCpTr
SPDR S&P 500
SPDR S&P Div
TechSelectSector
UtilitiesSelSector
VanEckGoldMiner
VangdInfoTech
VangdSC Val
VangdDivApp
VangdFTSEDevMk
VangdFTSE EM
VangdFTSE Europe
VangdFTSEAWxUS
VangdGrowth
VangdHlthCr
VangdHiDiv
VangdIntermBd
VangdIntrCorpBd
VangdLC
VangdMC
VangdMC Val
VangdREIT
VangdS&P500
VangdST Bond
VangdSTCpBd
VangdSC
VangdTotalBd
VangdTotIntlBd
VangdTotIntlStk
VangdTotalStk
VangdTotlWrld
VangdValue
WisdTrEuropeHdg
WisdTrJapanHdg
IVE
PFF
TIP
SHY
IEF
TLT
IWP
MINT
QQQ
SPLV
BKLN
JNK
GLD
SCHF
SCHB
SCHX
DIA
MDY
SPY
SDY
XLK
XLU
GDX
VGT
VBR
VIG
VEA
VWO
VGK
VEU
VUG
VHT
VYM
BIV
VCIT
VV
VO
VOE
VNQ
VOO
BSV
VCSH
VB
BND
BNDX
VXUS
VTI
VT
VTV
HEDJ
DXJ
109.26
38.40
113.62
84.36
106.28
124.18
114.78
101.72
147.60
46.38
23.20
37.24
122.40
33.75
61.68
60.85
228.26
330.63
254.62
92.32
60.16
54.02
23.57
155.07
129.09
95.45
43.78
44.65
58.74
53.35
134.53
153.71
82.38
84.55
87.94
116.95
148.39
106.39
83.75
233.86
79.77
80.04
142.77
81.77
54.53
55.42
131.24
71.63
101.18
65.25
55.33
0.46
0.21
0.18
0.02
0.04
0.16
0.10
...
0.07
0.45
0.13
0.08
0.26
0.84
0.24
0.25
0.32
0.30
0.26
0.48
0.10
0.97
–0.72
0.06
0.30
0.19
0.92
0.97
1.08
0.93
0.15
0.15
0.55
0.08
0.07
0.23
0.19
0.27
0.30
0.25
0.05
...
0.12
0.05
–0.05
0.87
0.24
0.55
0.34
0.59
0.51
7.8
3.2
0.4
–0.1
1.4
4.2
17.9
0.4
24.6
11.5
–0.7
2.2
11.7
21.9
13.8
14.3
15.6
9.6
13.9
7.9
24.4
11.2
12.7
27.6
6.7
12.1
19.8
24.8
22.5
20.8
20.7
21.3
8.7
1.8
2.6
14.2
12.7
9.5
1.5
13.9
0.4
0.8
10.7
1.2
0.4
20.8
13.8
17.4
8.8
13.7
11.7
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THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | B11
NY
BONDS
Tracking Bond Benchmarks
Global Government Bonds: Mapping Yields
Return on investment and spreads over Treasurys and/or yields paid to investors compared with 52-week
highs and lows for different types of bonds
Yields and spreads over or under U.S. Treasurys on benchmark two-year and 10-year government bonds in
selected other countries; arrows indicate whether the yield rose(s) or fell (t) in the latest session
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
Mortgage-Backed Bloomberg Barclays
Broad Market Bloomberg Barclays
Country/
Coupon (%) Maturity, in years
1.375
2.250
1.520
2.361
1.266
2.052
0.854
1.722
1.948 s
2.841 s
l
1.926
1.863
1.695
43.6
40.6
l
2.830
2.587
2.147
50.0
46.9
42.6
France 2 -0.490 t
10 0.719 t
l
-0.490
-0.560
-0.586
-201.0
-144.0
l
0.720
0.622
Germany 2 -0.691 t
10 0.445 t
l
-0.686
-0.755
l
0.449
Italy 2 -0.083 s
10 2.131 s
l
-0.106
l
2.113
Japan 2 -0.144 t
10 0.059 s
l
-0.139
-0.161
l
0.055
Spain 2 -0.247 s
10 1.689 s
l
0.445 s
1.367 s
l
2.3
Mortgage-Backed
2.850 2.170 3.120
2.750
Australia 2
Ginnie Mae (GNMA) 2.790 2.060 3.090
2.750
10
3.150 2.870 3.520
1163.99
2.4
Fannie mae (FNMA) 2.870 2.220 3.120
0.000
2.670 2.300 3.010
1792.63
2.5
Freddie Mac (FHLMC) 2.880 2.230 3.130
3822.57
8.8 Long term
4.170 4.110 4.710
521.45
566.74
4.1 Double-A-rated
2.610 2.230 2.870
364.71
3.440 3.220 3.870
408.54
392.81
5.4
U.S. Corporate
3.9 Intermediate
2621.04
6.0
715.95
Triple-B-rated
High Yield Bonds Merrill Lynch
7.3
416.84
High Yield Constrained 5.467 5.399 6.858
6.7
2864.47
7.4
378.10
6.2
304.88
5.9
12-22 year
2.386 2.070 3.047
5.8
22-plus year
2.920 2.516 3.622
Global Government J.P. Morgan†
0.8
2.180 1.370 2.190
1.450
Global High Yield Constrained 5.023 5.003 6.450
368.15
EMU§
1.176 0.673 1.363
1.750
U.K. 2
Europe High Yield Constrained 2.255 2.161 3.814
707.27
France
0.890 0.400 1.210
4.250
10
Germany
0.480 0.050 0.620
507.84
10-20 years
20-plus years
4.6 Yankee
0.1
-1.3
Global Government 1.470 1.010 1.560
1293.34
1390.34
1291.40
1433.45
*1282.15
*1278.75
1343.21
1356.13
1356.13
1565.22
1268.98
1356.13
17.2100
20.6520
17.1800
21.4750
£12.9800
17.1200
-191.2
-166.5
-0.086
-159.5
-162.7
-94.0
1.963
1.403
-21.1
-24.8
-31.9
-0.276
-165.7
-0.063 -228.2
-165.9
-113.0
-0.005
-230.6
-178.5
-0.284
-0.343
-0.202
-176.0
-180.4
-105.6
l
1.673
1.537
1.027
-65.2
-68.8
-69.5
l
0.419
0.167
0.209
1.361
0.990
0.932 -97.4
560.04
-1.1
Netherlands
0.620 0.160 0.760
in that same company’s share price.
1.670 1.340 1.790
Investment-grade spreads that tightened the most…
910.49
2.790 2.410 3.090
803.80
-0.3
U.K.
8.8 Emerging Markets ** 5.438 5.279 6.290
Tuesday
12951
Other metals
LBMA Platinum Price PM
*914.0
Platinum,Engelhard industrial
928.0
Platinum,Engelhard fabricated
1028.0
Palladium,Engelhard industrial
946.0
Palladium,Engelhard fabricated
1046.0
Aluminum, LME, $ per metric ton
*2135.0
Copper,Comex spot
3.0455
Iron Ore, 62% Fe CFR China-s
59.1
Shredded Scrap, US Midwest-s,w
316
Steel, HRC USA, FOB Midwest Mill-s
n.a.
Fibers and Textiles
Burlap,10-oz,40-inch NY yd-n,w
Cotton,1 1/16 std lw-mdMphs-u
Cotlook 'A' Index-t
Hides,hvy native steers piece fob-u
Wool,64s,staple,Terr del-u,w
0.6150
0.6895
*78.80
61.000
n.a.
Grains and Feeds
Barley,top-quality Mnpls-u
Bran,wheat middlings, KC-u
Corn,No. 2 yellow,Cent IL-bp,u
Corn gluten feed,Midwest-u,w
Corn gluten meal,Midwest-u,w
Cottonseed meal-u,w
Hominy feed,Cent IL-u,w
Meat-bonemeal,50% pro Mnpls-u,w
Oats,No.2 milling,Mnpls-u
Rice, 5% Broken White, Thailand-l,w
Rice, Long Grain Milled, No. 2 AR-u,w
Sorghum,(Milo) No.2 Gulf-u
SoybeanMeal,Cent IL,rail,ton48%-u
n.a.
69
3.1350
81.1
473.2
230
88
255
2.9550
380.00
24.00
7.7100
313.20
Tuesday
Soybeans,No.1 yllw IL-bp,u
Wheat,Spring14%-pro Mnpls-u
Wheat,No.2 soft red,St.Louis-bp,u
Wheat - Hard - KC (USDA) $ per bu-u
Wheat,No.1soft white,Portld,OR-u
9.2350
7.1750
4.1750
3.6325
5.2063
Food
Beef,carcass equiv. index
choice 1-3,600-900 lbs.-u
select 1-3,600-900 lbs.-u
Broilers,dressed 'A'-u
Broilers, National comp wghtd-u,w
Butter,AA Chicago
Cheddar cheese,bbl,Chicago
Cheddar cheese,blk,Chicago
Milk,Nonfat dry,Chicago lb.
Cocoa,Ivory Coast-w
Coffee,Brazilian,Comp
Coffee,Colombian, NY
Eggs,large white,Chicago-u
Flour,hard winter KC
Hams,17-20 lbs,Mid-US fob-u
Hogs,Iowa-So. Minnesota-u
Pork bellies,12-14 lb MidUS-u
Pork loins,13-19 lb MidUS-u
Steers,Tex.-Okla. Choice-u
Steers,feeder,Okla. City-u,w
174.08
165.79
n.a.
0.8587
2.3250
170.50
175.75
80.50
n.a.
1.2862
1.4859
1.2350
14.50
n.a.
61.64
n.a.
0.8825
n.a.
158.38
Fats and Oils
Corn oil,crude wet/dry mill-u,w
Grease,choice white,Chicago-h
Lard,Chicago-u
Soybean oil,crude;Centl IL-u
Tallow,bleach;Chicago-h
Tallow,edible,Chicago-u
35.5400
0.2750
n.a.
0.3174
0.3025
0.3300
KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; H=Hurley Brokerage; I=Natural Gas Intelligence;
L=livericeindex.com; M=midday; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=Platts-TSI; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. *Data
as of 10/9
Source: WSJ Market Data Group
-106.7
-110.1
-64.5
-100.0
-79.0
Source: Tullett Prebon
1.750 1.140 1.760
2.970 2.630 3.460
-162.2
Corporate Debt
0.420 0.170 0.460
Coins,wholesale $1,000 face-a
Metals
0.312
-0.106
Japan
Tuesday
0.9590
1.0636
2.900
2.860
2.890
2.470
2.500
1.030
2.810
55.500
11.750
-137.0
-151.4
-0.3
Tuesday, October 10, 2017
These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace—
separate from the futures price on an exchange, which reflects what the commodity might be worth in future
months.
Propane,tet,Mont Belvieu-g
Butane,normal,Mont Belvieu-g
NaturalGas,HenryHub-i
NaturalGas,TranscoZone3-i
NaturalGas,TranscoZone6NY-i
NaturalGas,PanhandleEast-i
NaturalGas,Opal-i
NaturalGas,MarcellusNE PA-i
NaturalGas,HaynesvilleN.LA-i
Coal,C.Aplc.,12500Btu,1.2SO2-r,w
Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w
-164.1
-220.7
0.352
287.40
Cash Prices
Energy
2.750
-200.2
84.1
-0.660 -220.3
0.057 -189.6
1.930 1.320 1.960
*Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds
† In local currency § Euro-zone bonds
** EMBI Global Index
Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA spot price
(U.S.$ equivalent)
0.100
0.100
Canada
1.4
Silver, troy oz.
2.200
-0.2
1467.19
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA Gold Price AM
LBMA Gold Price PM
Krugerrand,wholesale-e
Maple Leaf-e
American Eagle-e
Mexican peso-e
Austria crown-e
Austria phil-e
0.050
-0.9
2.1
Gold, per troy oz
0.500
746.53
1638.90
6.8
1.963 1.654 2.618
5.109 4.948 6.448
High Yield 100
U.S Agency
2452.96
7-12 year
5.0
541.16
U.S Agency Bloomberg Barclays
3337.25
1.927 1.668 2.516
10.395 9.584 13.189
8.5 Triple-C-rated
417.15
4.5 Muni Master
1.000
0.000
Spread Under/Over U.S. Treasurys, in basis points
Latest
Prev
Year ago
l
1.8
2773.53
Year ago
l
1953.92
2.570 2.050 2.790
U.S. Corporate Indexes Bloomberg Barclays
Month ago
U.S. 2 1.512 t
10 2.341 t
1985.39
3.1 U.S. Aggregate
1938.49
Yield (%)
Latest(l) 0 20 40 60 80 100 120 Previous
Spread*, in basis points
One-day change
Stock Performance
Close ($)
% chg
Issuer
Symbol Coupon (%)
PepsiCo
PNC Bank NA
Kilroy Realty
Discovery Communications
PEP
PNC
KRC
DISCA
2.000 April 15, ’21
2.450
Nov. 5, ’20
4.250 Aug. 15, ’29
3.450 March 15, ’25
2
43
145
123
–33
–14
–13
–9
n.a.
n.a.
n.a.
n.a.
110.78
136.72
71.70
20.53
0.70
0.82
0.18
–1.44
Hollyfrontier
Teva Pharmaceutical Fin Netherlands III
KeyCorp
Bank of New York Mellon
HFC
TEVA
KEY
BK
5.875
2.200
7.250
2.150
217
145
90
22
–9
–9
–8
–7
n.a.
130
n.a.
32
36.19
15.89
18.65
54.66
0.03
0.76
0.43
0.61
17
13
11
8
n.a.
n.a.
52
90
...
…
115.17
74.71
...
…
1.59
0.55
8
7
7
7
n.a.
112
122
n.a.
69.85
75.18
57.39
...
–1.44
–0.28
–0.92
...
Maturity
Current
April 1, ’26
July 21, ’21
Dec. 15, ’21
Feb. 24, ’20
Last week
…And spreads that widened the most
Commonwealth Bank of Australia
Dominion Energy Gas Holdings
Philip Morris International
CVS Health
CBAAU
D
PM
CVS
5.000 March 19, ’20
2.500 Dec. 15, ’19
2.375 Aug. 17, ’22
3.875 July 20, ’25
47
56
52
90
Walgreens Boots Alliance
Citigroup
CBS
Rogers Communications
WBA
C
CBS
RCICN
4.650
June 1, ’46
4.281 April 24, ’48
2.900 Jan. 15, ’27
5.000 March 15, ’44
152
108
129
129
High-yield issues with the biggest price increases…
Bond Price as % of face value
Current
One-day change
Stock Performance
Close ($)
% chg
Issuer
Symbol
Coupon (%)
K. Hovnanian Enterprises
Imperial Metals
QVC
California Resources
HOV
IIICN
QVCN
CRC
10.000 July 15, ’22
7.000 March 15, ’19
5.450 Aug. 15, ’34
8.000 Dec. 15, ’22
106.750
92.250
99.861
64.000
1.75
1.50
1.36
1.25
103.750
90.250
98.316
63.969
2.24
...
...
10.62
5.66
...
...
1.34
HCA
MEG Energy
Windstream Services
Chesapeake Energy
HCA
MEGCN
WIN
CHK
5.875 March 15, ’22
7.000 March 31, ’24
6.375
Aug. 1, ’23
4.875 April 15, ’22
112.000
86.750
77.000
93.748
1.25
1.25
1.25
1.25
111.032
85.438
76.250
93.500
75.45
...
2.05
3.91
0.19
...
1.49
–6.68
88.750
79.000
98.750
n.a.
1.86
6.36
54.32
...
–1.59
–3.93
0.80
...
60.063
100.000
110.095
105.250
...
3.83
451.89
...
...
3.51
0.13
...
Maturity
Last week
…And with the biggest price decreases
Rite Aid
Community Health Systems
Davita
CNG Holdings
RAD
CYH
DVA
CNGHLD
7.700
6.875
5.000
9.375
Feb. 15, ’27
Feb. 1, ’22
May 1, ’25
May 15, ’20
Fresh Market
Genworth Financial
Equinix
Cascades
TFM
GNW
EQIX
CASCN
9.750
7.700
5.875
5.750
May 1, ’23
June 15, ’20
Jan. 15, ’26
July 15, ’23
86.250 –2.25
75.438
97.688
87.220
–0.94
–0.81
–0.78
–0.75
–0.74
–0.65
–0.53
63.000
97.138
109.500
104.595
*Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-run Treasury; 100 basis points=one percentage pt.; change in spread shown is for Z-spread.
Note: Data are for the most active issue of bonds with maturities of two years or more
Sources: MarketAxess Corporate BondTicker; WSJ Market Data Group
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THE WALL STREET JOURNAL.
B12 | Wednesday, October 11, 2017
BIGGEST 1,000 STOCKS
How to Read the Stock Tables
The following explanations apply to NYSE, NYSE
Arca, NYSE MKT and Nasdaq Stock Market listed
securities. Prices are composite quotations that
include primary market trades as well as trades
reported by Nasdaq OMX BXSM (formerly
Boston), Chicago Stock Exchange, CBOE, National
Stock Exchange, ISE and BATS.
The list comprises the 1,000 largest companies
based on market capitalization.
Underlined quotations are those stocks with
large changes in volume compared with the
issue’s average trading volume.
Boldfaced quotations highlight those issues
whose price changed by 5% or more if their
previous closing price was $2 or higher.
Footnotes:
s-New 52-week high.
t-New 52-week low.
dd-Indicates loss in the most recent four
quarters.
FD-First day of trading.
h-Does not meet continued listing
standards
lf-Late filing
q-Temporary exemption from Nasdaq
requirements.
t-NYSE bankruptcy
v-Trading halted on primary market.
vj-In bankruptcy or receivership or being
reorganized under the Bankruptcy Code,
or securities assumed by such companies.
Stock
Stock
Net
Sym Close Chg
NYSE
s
s
s
s
s
s
s
s
s
ABB
ABB 25.08
AES
AES 11.25
Aflac
AFL 83.62
AGCO
AGCO 74.55
AT&T
T
38.50
AbbottLabs ABT 55.40
AbbVie
ABBV 91.17
Accenture
ACN 137.52
AcuityBrands AYI 168.79
Adient
ADNT 84.21
AdvanceAuto AAP 91.84
AdvSemiEngg ASX
6.32
Aegon
AEG
5.66
AerCap
AER 52.05
Aetna
AET 156.10
AffiliatedMgrs AMG 195.22
AgilentTechs A
66.60
AgnicoEagle AEM 45.95
Agrium
AGU 105.78
AirProducts APD 153.19
AlaskaAir
ALK 80.68
Albemarle
ALB 137.77
Alcoa
AA
46.89
AlexandriaRealEst ARE 121.81
Alibaba
BABA 183.12
Alleghany
Y
543.74
Allegion
ALLE 87.81
Allergan
AGN 207.42
AllianceData ADS 226.59
AllianceBernstein AB
24.85
AlliantEnergy LNT 42.34
Allstate
ALL 93.33
AllyFinancial ALLY 24.48
AlticeUSA
ATUS 26.75
Altria
MO 65.01
AlumofChina ACH 22.63
Ambev
ABEV 6.74
Ameren
AEE 59.86
AmericaMovil AMX 17.43
AmericaMovil A AMOV 17.27
AmCampus ACC 44.75
AEP
AEP 72.39
AmericanExpress AXP 91.89
AmericanFin AFG 105.57
AIG
AIG 61.78
AmerTowerREIT AMT 137.09
AmerWaterWorks AWK 84.07
Amerigas
APU 44.71
Ameriprise AMP 151.25
AmerisourceBrgn ABC 79.55
Ametek
AME 67.16
Amphenol
APH 87.02
AnadarkoPetrol APC 48.41
Andeavor
ANDV 106.33
AB InBev
BUD 124.10
AnnalyCap
NLY 12.06
AnteroMidstream AM
31.51
AnteroResources AR
20.34
Anthem
ANTM 188.64
Aon
AON 147.63
Apache
APA 42.46
ApartmtInv AIV 44.69
ApolloGlobalMgmt APO 30.83
AquaAmerica WTR 34.59
Aramark
ARMK 41.54
0.12
0.05
1.04
-0.50
0.20
0.74
0.39
0.53
-2.36
0.28
0.72
0.06
0.10
-0.04
-2.13
1.10
0.04
-0.35
-0.25
0.45
0.27
1.22
-0.18
0.85
1.03
5.64
0.19
4.48
0.37
-0.05
0.35
0.13
0.12
-0.47
1.44
0.23
0.17
0.71
0.11
0.02
-0.33
0.65
0.20
0.44
...
-0.85
0.86
-0.17
0.62
1.20
0.05
0.47
-0.45
-0.33
1.70
-0.07
-0.22
...
-2.10
0.28
-3.39
-0.06
0.27
0.30
0.12
s
s
s
s
s
s
s
s
s
s
s
Net
Sym Close Chg
ArcelorMittal MT
26.18 -0.09
ArcherDaniels ADM 43.01 0.40
Arconic
ARNC 27.39
...
AristaNetworks ANET 192.82 -0.55
ArrowElec
ARW 82.60 0.60
AstraZeneca AZN 34.63 0.15
Athene
ATH 55.02 0.37
AtmosEnergy ATO 85.89 0.53
Autohome
ATHM 62.08 0.55
Autoliv
ALV 127.37 0.28
AutoZone
AZO 587.57 -4.47
Avalonbay
AVB 178.50 -0.25
Avangrid
AGR 47.88 0.50
AveryDennison AVY 100.79 0.08
AxaltaCoating AXTA 28.76 -0.92
BB&T
BBT 47.71 0.23
BCE
BCE 47.00 0.41
BHPBilliton BHP 41.53 0.42
BHPBilliton BBL 36.77 0.64
BP
BP
38.81 0.35
BRF
BRFS 14.71 0.34
BT Group
BT
18.65 0.03
BWX Tech
BWXT 59.04 -0.29
BakerHughes BHGE 34.97 -0.87
Ball
BLL 42.50 0.44
BancoBilbaoViz BBVA 8.73 0.27
BancodeChile BCH 95.50 2.67
BancoMacro BMA 123.62 2.94
BcoSantChile BSAC 31.00 0.71
BancoSantander SAN 6.82 0.06
BanColombia CIB
44.62 0.05
BankofAmerica BAC 25.93 0.08
BankofMontreal BMO 77.40 0.80
BankNY Mellon BK
54.66 0.33
BkNovaScotia BNS 64.55 0.70
Barclays
BCS 10.11 0.19
Bard CR
BCR 319.98 -1.24
BarrickGold ABX 16.65 -0.05
BaxterIntl
BAX 61.71 0.26
BectonDickinson BDX 196.29 -0.85
Berkley
WRB 67.36 0.11
BerkHathwy A BRK.A 281950950.00
BerkHathwy B BRK.B 188.00 0.57
BerryGlobal BERY 59.10 -0.41
BestBuy
BBY 57.17 -1.87
Bio-RadLab A BIO 222.67 -1.99
Bio-RadLab B BIO.B 222.51 -5.50
BlackKnight BKI
44.50 0.30
BlackRock
BLK 465.49 3.04
BlackstoneGroup BX
33.08 -0.18
BoardwalkPipe BWP 14.87 -0.09
Boeing
BA 260.93 2.54
BorgWarner BWA 51.99 -0.01
BostonProperties BXP 127.10 -0.07
BostonScientific BSX 29.34 0.01
Braskem
BAK 28.59 -0.16
Bristol-Myers BMY 65.13 0.98
BritishAmTob BTI
64.74 1.55
BrixmorProp BRX 18.79 0.10
BroadridgeFinl BR
81.95 -0.16
BrookfieldMgt BAM 42.28 0.22
BrookfieldInfr BIP
42.98
...
Brown&Brown BRO 48.94 0.09
Brown-Forman A BF.A 55.64 0.20
Brown-Forman B BF.B 54.93 0.40
BuckeyePtrs BPL 57.84 -0.57
Bunge
BG
67.84 0.66
BurlingtonStores BURL 92.39 0.43
Stock
s
t
s
Wall Street Journal stock tables reflect composite regular trading as of 4 p.m. and
changes in the closing prices from 4 p.m. the previous day.
Tuesday, October 10, 2017
Stock
Net
Sym Close Chg
CBD Pao
CBD 25.28
s CBRE Group CBG 39.06
CBS A
CBS.A 58.34
CBS B
CBS 57.39
CF Industries CF
34.48
CGI Group
GIB
52.60
CIT Group
CIT
49.35
CMS Energy CMS 47.00
CNA Fin
CNA 50.65
CNOOC
CEO 129.46
CPFLEnergia CPL 17.17
CRH
CRH 36.24
CVS Health CVS 74.71
CabotOil
COG 25.36
CamdenProperty CPT 92.99
CampbellSoup CPB 46.24
CIBC
CM
89.19
CanNtlRlwy CNI
80.75
CanNaturalRes CNQ 33.18
CanPacRlwy CP 165.02
Canon
CAJ 35.10
CapitalOne COF 87.30
CardinalHealth CAH 65.78
Carlisle
CSL 99.73
CarMax
KMX 76.23
Carnival
CCL 67.08
Carnival
CUK 66.90
s Caterpillar
CAT 128.19
Celanese A CE 106.90
Cemex
CX
8.39
CenovusEnergy CVE
9.61
Centene
CNC 96.35
CenterPointEner CNP 29.12
CentraisElBras EBR
6.64
CenturyLink CTL 20.32
s Chemours
CC
54.99
s Chevron
CVX 118.80
ChinaEastrnAir CEA 25.06
ChinaLifeIns LFC 15.41
ChinaMobile CHL 50.83
ChinaPetrol SNP 74.80
ChinaSoAirlines ZNH 34.90
s ChinaTelecom CHA 53.67
ChinaUnicom CHU 14.31
Chipotle
CMG 310.88
Chubb
CB 147.28
ChunghwaTelecom CHT 33.72
Church&Dwight CHD 47.38
Cigna
CI
188.07
CimarexEnergy XEC 114.84
Citigroup
C
75.18
CitizensFin CFG 37.81
Clorox
CLX 129.22
Coach
COH 40.00
Coca-Cola
KO
45.87
Coca-Cola Euro CCE 41.56
Coca-Cola Femsa KOF 73.13
Colgate-Palmolive CL
72.90
ColonyNorthStar CLNS 12.40
Comerica
CMA 76.95
SABESP
SBS 10.61
ConagraBrands CAG 33.72
ConchoRscs CXO 135.08
ConocoPhillips COP 49.19
ConEd
ED
82.40
ConstBrands A STZ 207.96
ConstBrands B STZ.B 208.65
ContinentalRscs CLR 36.92
0.77
0.25
-0.86
-0.53
0.04
0.12
0.56
0.52
0.14
1.98
0.06
0.23
0.41
-0.08
-0.34
0.73
1.20
0.29
0.19
-0.26
0.40
...
0.86
-1.83
0.05
0.63
0.77
1.31
-0.64
-0.24
0.08
-0.87
0.39
0.16
0.22
0.17
1.09
0.22
0.07
0.53
0.34
-0.34
2.45
0.32
6.96
1.23
0.10
0.36
-1.02
-0.90
-0.21
0.50
1.40
0.32
0.46
0.46
-0.38
0.54
-0.08
0.54
-0.20
0.26
0.12
0.28
0.91
-0.23
-0.66
-0.08
s
s
s
s
Net
Sym Close Chg
Cooper
COO 233.97
Corning
GLW 30.03
Coty
COTY 16.81
Credicorp
BAP 202.06
CreditSuisse CS
15.94
CrestwoodEquity CEQP 24.65
CrownCastle CCI 101.59
CrownHoldings CCK 60.40
Cullen/Frost CFR 96.75
Cummins
CMI 172.96
DTE Energy DTE 109.29
DXC Tech
DXC 88.09
Danaher
DHR 87.17
Darden
DRI 79.28
DaVita
DVA 54.32
Deere
DE 128.25
DellTechnologies DVMT 79.08
DelphiAutomotive DLPH 98.62
DeltaAir
DAL 52.70
DeutscheBank DB
16.99
DevonEnergy DVN 36.00
Diageo
DEO 135.20
DigitalRealty DLR 119.76
DiscoverFinSvcs DFS 65.34
Disney
DIS
99.58
DolbyLab
DLB 57.80
DollarGeneral DG
80.94
DominionEner D
77.74
Domino's
DPZ 209.44
Donaldson
DCI
46.04
DouglasEmmett DEI
40.21
Dover
DOV 93.61
DowDuPont DWDP 71.57
DrPepperSnap DPS 88.61
DrReddy'sLab RDY 36.52
DukeEnergy DUK 85.79
DukeRealty DRE 28.90
ENI
E
32.77
EOG Rscs
EOG 96.78
EQT
EQT 62.88
EQT Midstream EQM 76.62
EastmanChem EMN 88.78
Eaton
ETN 77.98
EatonVance EV
50.22
Ecolab
ECL 132.70
Ecopetrol
EC
9.50
EdisonInt
EIX
78.54
EdwardsLife EW 109.95
EmersonElectric EMR 63.42
EnbridgeEnPtrs EEP 16.14
Enbridge
ENB 41.36
Encana
ECA 11.37
EnelAmericas ENIA 10.69
EnelChile
ENIC 6.23
EnelGenChile EOCC 27.37
EnergyTrfrEquity ETE 18.00
EnergyTransfer ETP 18.47
EnLinkMidPtrs ENLK 16.63
Entergy
ETR 79.64
EnterpriseProd EPD 26.50
Equifax
EFX 113.54
EquityLife
ELS 87.57
EquityResdntl EQR 66.40
EssexProp
ESS 258.72
EsteeLauder EL 109.59
EverestRe
RE 224.77
EversourceEner ES
60.66
Exelon
EXC 38.30
ExtraSpaceSt EXR 80.20
ExxonMobil XOM 82.26
FMC
FMC 90.68
FactSet
FDS 177.98
FederalRealty FRT 126.75
FedEx
FDX 220.78
Ferrari
RACE 115.67
FiatChrysler FCAU 17.80
FibriaCelulose FBR 15.20
FidelityNatlFin FNF 34.44
FNFV Group FNFV 18.00
FidelityNtlInfo FIS
94.61
58.com
WUBA 64.41
FirstData
FDC 18.00
FirstRepBank FRC 104.13
FirstEnergy FE
31.59
FleetCorTech FLT 161.55
Fluor
FLR 42.55
FomentoEconMex FMX 94.32
FordMotor
F
12.39
ForestCIty A FCE.A 25.52
Fortis
FTS 36.34
Fortive
FTV 71.92
-2.65
-0.09
0.06
-1.44
0.14
-0.05
-0.53
0.26
1.84
1.22
1.36
-0.32
0.14
-0.46
0.43
-0.39
-0.18
-1.50
0.96
0.12
0.11
1.54
0.80
-0.04
0.01
-0.13
1.76
1.10
3.64
0.01
...
-0.22
-0.11
0.55
-0.09
0.97
-0.12
0.36
0.28
-0.02
0.40
-0.87
0.30
0.32
0.64
0.06
0.99
-0.27
-0.40
0.13
0.24
0.05
0.04
0.10
0.28
0.10
0.13
0.18
0.78
0.10
1.29
0.28
-0.04
1.12
-0.04
-1.25
0.34
0.26
0.18
0.23
-0.08
-0.46
0.64
0.14
0.84
0.06
0.29
0.27
...
0.26
-0.10
0.02
-0.53
0.18
-0.61
-0.04
-0.03
0.05
0.16
0.24
0.02
Stock
s
t
s
s
s
Net
Sym Close Chg
FortBrandsHome FBHS 65.62
Franco-Nevada FNV 79.45
FranklinRscs BEN 44.92
Freeport-McMoRan FCX 14.41
FreseniusMed FMS 47.74
GGP
GGP 21.64
Gallagher
AJG 61.87
Gap
GPS 28.70
Gartner
IT
123.75
Gazit-Globe GZT
9.50
GeneralDynamics GD 212.55
GeneralElec GE
23.36
GeneralMills GIS
50.95
GeneralMotors GM
45.21
GenuineParts GPC 95.52
Gerdau
GGB
3.47
Gildan
GIL 30.77
GlaxoSmithKline GSK 40.78
GlobalPayments GPN 98.52
GoDaddy
GDDY 43.78
Goldcorp
GG
13.30
GoldmanSachs GS 242.60
Graco
GGG 123.93
Grainger
GWW 173.91
GreatPlainsEner GXP 31.40
GpoAvalAcciones AVAL 8.99
GpFinSantandMex BSMX 9.41
GrupoTelevisa TV
23.42
GuidewireSoftware GWRE 78.56
HCA Healthcare HCA 75.45
HCP
HCP 26.44
HDFC Bank HDB 93.60
HP
HPQ 20.57
HSBC
HSBC 50.60
Halliburton HAL 45.03
Hanesbrands HBI 23.79
HarleyDavidson HOG 46.32
Harris
HRS 136.07
HartfordFinl HIG 55.93
HealthcareAmer HTA 29.85
Heico
HEI
89.36
Heico A
HEI.A 76.05
Herbalife
HLF 77.70
Hershey
HSY 109.03
Hess
HES 44.31
HewlettPackard HPE 14.96
Hilton
HLT 69.92
HollyFrontier HFC 36.19
HomeDepot HD 165.16
HondaMotor HMC 30.29
Honeywell
HON 143.31
HormelFoods HRL 31.75
DR Horton
DHI 41.28
HostHotels HST 18.55
HuanengPower HNP 25.34
Hubbell
HUBB 116.02
Humana
HUM 240.49
HuntingtonIngalls HII 234.88
Huntsman
HUN 27.21
HyattHotels H
61.38
ICICI Bank
IBN
8.38
ING Groep
ING 18.71
Invesco
IVZ
36.08
IDEX
IEX 123.06
IllinoisToolWks ITW 151.62
Infosys
INFY 14.76
Ingersoll-Rand IR
91.38
Ingredion
INGR 121.91
ICE
ICE
69.68
InterContinentl IHG 54.23
IBM
IBM 148.50
IntlFlavors
IFF 148.26
IntlPaper
IP
57.64
Interpublic
IPG
20.99
InvitationHomes INVH 22.69
IronMountain IRM 38.80
IsraelChemicals ICL
4.42
ItauUnibanco ITUB 14.13
JPMorganChase JPM 97.13
JacobsEngineering JEC 58.36
JamesHardie JHX 13.83
JanusHenderson JHG 35.01
J&J
JNJ 133.90
JohnsonControls JCI
41.49
JonesLangLaSalle JLL 130.86
JuniperNetworks JNPR 27.31
KAR Auction KAR 47.86
KB Fin
KB
50.72
KKR
KKR 20.25
KT
KT
14.21
KSCitySouthern KSU 104.79
-0.38
-0.04
0.21
0.09
-0.56
0.35
0.27
-0.03
0.26
-0.13
-0.98
-0.07
0.76
-0.12
0.34
0.16
0.15
0.18
0.37
-0.32
-0.08
-0.20
-0.03
-3.69
0.33
0.07
-0.16
-0.06
0.86
0.14
-0.39
0.60
...
1.01
0.10
0.27
0.54
0.19
0.35
-0.09
-0.15
0.35
0.86
1.14
-0.02
0.16
0.26
0.01
-0.55
0.20
-0.29
0.50
0.05
0.16
0.27
-0.11
0.08
-1.06
0.04
-0.20
...
0.24
0.35
-0.07
-0.08
0.07
-0.68
-0.12
0.22
0.16
1.11
1.88
0.61
-0.05
0.27
0.48
0.01
0.29
0.72
-0.02
0.05
0.21
0.45
0.89
2.27
-0.01
0.25
0.79
0.05
0.31
0.63
Stock
s
s
s
s
s
s
s
s
s
s
Net
Sym Close Chg
Kellogg
K
61.47
KeyCorp
KEY 18.65
KeysightTechs KEYS 42.17
KilroyRealty KRC 71.70
KimberlyClark KMB 116.45
KimcoRealty KIM 19.46
KinderMorgan KMI 18.95
Knight-Swift KNX 39.83
Kohl's
KSS 43.26
KoninklijkePhil PHG 41.56
KoreaElcPwr KEP 16.95
Kroger
KR
20.53
Kyocera
KYO 65.27
LATAMAirlines LTM 14.03
L Brands
LB
42.95
LG Display
LPL 13.16
LINE
LN
36.46
L3 Tech
LLL 187.57
LabCpAm
LH 149.48
LambWeston LW
49.04
LasVegasSands LVS 63.36
Lazard
LAZ 45.06
Lear
LEA 172.82
Leggett&Platt LEG 47.97
Leidos
LDOS 62.15
Lennar A
LEN 56.24
Lennar B
LEN.B 47.42
LennoxIntl
LII
181.50
LeucadiaNatl LUK 25.19
Level3Comm LVLT 55.49
LibertyProperty LPT 41.74
EliLilly
LLY
86.16
LincolnNational LNC 75.33
LionsGate A LGF.A 30.57
LionsGate B LGF.B 29.59
LiveNationEnt LYV 42.78
LloydsBanking LYG
3.65
LockheedMartin LMT 317.71
Loews
L
48.95
Lowe's
LOW 81.10
LyondellBasell LYB 98.06
M&T Bank
MTB 163.16
MGM Resorts MGM 30.43
MPLX
MPLX 35.06
MSCI
MSCI 121.92
Macerich
MAC 57.68
MacquarieInfr MIC 72.42
Macy's
M
20.66
MagellanMid MMP 70.52
MagnaIntl
MGA 55.28
Manpower
MAN 122.99
ManulifeFin MFC 20.72
MarathonOil MRO 13.62
MarathonPetrol MPC 56.25
Markel
MKL 1090.70
Marsh&McLennan MMC 83.49
MartinMarietta MLM 205.14
Masco
MAS 38.75
Mastercard MA 145.65
McCormick MKC 97.45
McCormickVtg MKC.V 97.08
McDonalds MCD 160.58
McKesson
MCK 149.41
Medtronic
MDT 77.29
Merck
MRK 64.46
MetLife
MET 53.14
MettlerToledo MTD 652.97
MichaelKors KORS 47.56
MicroFocus MFGP 31.80
MidAmApt MAA 108.52
MitsubishiUFJ MTU 6.49
MizuhoFin
MFG 3.56
MobileTeleSys MBT 10.54
MohawkIndustries MHK 254.83
MolsonCoors A TAP.A 85.78
MolsonCoors B TAP 83.97
Monsanto
MON 119.55
Moody's
MCO 142.14
MorganStanley MS
49.49
Mosaic
MOS 20.92
MotorolaSolutions MSI 89.08
NRG Energy NRG 25.69
NTTDoCoMo DCM 23.11
NVR
NVR 2905.00
NationalGrid NGG 63.08
NatlOilwell
NOV 34.93
NatlRetailProp NNN 41.90
NewOrientalEduc EDU 93.44
NY CmntyBcp NYCB 12.89
NewellBrands NWL 42.69
0.43
0.08
0.41
0.13
0.96
0.30
-0.08
0.15
0.27
0.47
0.05
0.24
1.84
0.31
0.78
-0.52
0.18
-0.12
0.21
0.21
-0.30
0.25
-0.90
-0.30
0.15
0.04
-0.14
-2.61
0.07
0.33
0.19
-0.89
0.63
-0.96
-0.76
-0.07
0.07
0.41
0.39
-0.64
-0.98
1.99
-0.38
-0.16
0.38
0.75
-0.13
0.31
0.02
1.19
1.04
0.54
0.04
0.11
13.57
0.14
-0.79
-0.19
1.10
0.62
-0.63
0.46
1.27
0.36
0.13
0.15
1.02
0.26
0.07
0.18
0.01
0.03
0.11
-1.91
3.44
1.71
-0.10
0.19
0.11
-0.02
-0.02
-0.05
0.30
15.39
0.46
-0.31
-0.01
1.80
0.08
-0.31
Stock
s
s
s
s
s
s
s
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s
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,-------- ./0 0- 12
3 456
36 4. 7-- 7-- 0 44 4 -7,/,
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36 4. "//#, "//#,, 44 4 -7,70,
$ 12
( E
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Net
Sym Close Chg
NewfieldExpln NFX 30.16
NewmontMining NEM 37.90
NextEraEnergy NEE 149.03
NielsenHoldings NLSN 40.18
Nike
NKE 51.53
NiSource
NI
26.35
NobleEnergy NBL 27.54
Nokia
NOK
5.92
NomuraHoldings NMR 5.63
Nordstrom
JWN 43.38
NorfolkSouthern NSC 130.00
NorthropGrumman NOC 293.33
Novartis
NVS 85.74
NovoNordisk NVO 48.83
Nucor
NUE 55.37
NuSTAREnergy NS
39.83
OGE Energy OGE 36.20
ONEOK
OKE 56.02
OccidentalPetrol OXY 64.50
Och-Ziff
OZM 3.36
Olin
OLN 36.05
OmegaHealthcare OHI 31.25
Omnicom
OMC 74.45
Oracle
ORCL 48.21
Orange
ORAN 16.44
OrbitalATK OA 133.58
Orix
IX
81.62
Oshkosh
OSK 84.59
OwensCorning OC
79.48
PG&E
PCG 69.19
PLDT
PHI
32.83
PNC Fin
PNC 136.72
POSCO
PKX 70.72
PPG Ind
PPG 112.38
PPL
PPL 37.85
PVH
PVH 126.04
PackagingCpAm PKG 117.47
PaloAltoNtwks PANW 150.52
ParkHotels PK
28.00
ParkerHannifin PH 177.50
ParsleyEnergy PE
26.90
Pearson
PSO
8.12
PembinaPipeline PBA 34.19
Pentair
PNR 69.95
PepsiCo
PEP 110.78
PerkinElmer PKI
70.88
Perrigo
PRGO 88.05
PetroChina PTR 64.69
PetroleoBrasil PBR 10.47
PetroleoBrasilA PBR.A 10.15
Pfizer
PFE 36.40
PhilipMorris PM 115.17
Phillips66
PSX 93.47
PinnacleFoods PF
56.69
PinnacleWest PNW 85.80
PioneerNatRscs PXD 150.67
PlainsAllAmPipe PAA 21.42
PlainsGP
PAGP 21.82
PolarisIndustries PII 105.50
PostHoldings POST 86.50
Potash
POT 18.98
Praxair
PX 140.62
PrincipalFin PFG 67.50
Procter&Gamble PG
91.62
Progressive PGR 49.37
Prologis
PLD 64.72
PrudentialFin PRU 110.00
Prudential
PUK 48.38
PublicServiceEnt PEG 48.21
PublicStorage PSA 213.02
PulteGroup PHM 26.85
QuestDiag
DGX 90.86
QuintilesIMS Q
96.20
RELX
RENX 21.75
RELX
RELX 22.72
RPM
RPM 51.48
RalphLauren RL
87.22
RaymondJames RJF 86.48
Raytheon
RTN 187.69
RealtyIncome O
56.61
RedHat
RHT 118.35
RegencyCtrs REG 63.57
RegionsFin RF
15.16
ReinsuranceGrp RGA 141.39
RepublicServices RSG 63.38
ResMed
RMD 76.21
RestaurantBrands QSR 65.17
RiceEnergy RICE 27.44
RioTinto
RIO 48.26
RobertHalf RHI 51.37
Rockwell
ROK 182.74
RockwellCollins COL 133.96
RogersComm B RCI
52.65
Rollins
ROL 47.33
RoperTech
ROP 251.76
RoyalBkCanada RY
78.60
RoyalBkScotland RBS
7.43
RoyalCaribbean RCL 124.80
RoyalDutchA RDS.A 61.04
RoyalDutchB RDS.B 62.60
SAP
SAP 112.35
S&P Global SPGI 158.80
SINOPECShanghai SHI
61.27
SK Telecom SKM 25.97
SLGreenRealty SLG 104.49
Salesforce.com CRM 95.39
Net
Sym Close Chg
Stock
0.17
-0.38
1.13
-0.21
0.01
0.44
-0.51
...
-0.04
-0.16
-0.79
-0.53
0.29
-0.38
-0.03
-0.46
0.45
-0.05
0.50
...
-0.42
-0.03
-0.22
0.04
0.20
0.08
0.38
0.50
-0.12
0.54
0.59
1.11
0.92
-0.26
0.42
1.01
0.75
4.10
-0.03
0.17
0.41
-0.07
0.27
-0.05
0.77
0.26
1.04
0.88
0.18
0.24
0.26
1.80
0.15
0.45
0.43
-0.29
0.08
-0.08
1.03
0.05
-0.02
-0.25
0.91
-0.50
-0.08
-0.11
0.94
0.54
0.60
-0.81
-0.30
-0.20
0.41
0.14
0.14
0.15
0.27
0.41
-0.31
0.08
1.28
0.94
0.15
0.33
-0.24
0.07
0.32
0.07
0.19
0.11
-0.53
0.76
0.98
0.30
0.50
0.82
0.23
0.27
0.89
0.77
0.04
-0.37
-0.12
1.12
0.14
-0.88
s
s
t
t
s
s
s
s
s
s
s
s
s
Sanofi
SNY 50.10
Sasol
SSL 28.52
Scana
SCG 49.11
Schlumberger SLB 68.33
SchwabC
SCHW 45.09
SealedAir
SEE 44.78
SemicondctrMfg SMI
6.32
SempraEnergy SRE 113.81
SensataTech ST
48.60
ServiceCorp SCI
34.38
ServiceMaster SERV 47.52
ServiceNow NOW 120.96
ShawComm B SJR 22.99
SherwinWilliams SHW 381.47
ShinhanFin
SHG 44.76
Shopify
SHOP 92.57
SimonProperty SPG 162.91
SmithAO
AOS 60.73
Smith&Nephew SNN 37.81
Smucker
SJM 103.69
Snap
SNAP 14.34
SnapOn
SNA 150.25
SOQUIMICH SQM 58.84
Sony
SNE 36.71
Southern
SO
50.24
SoCopper
SCCO 41.55
SouthwestAirlines LUV 58.01
SpectraEnerPtrs SEP 45.04
SpectrumBrands SPB 102.35
SpiritAeroSys SPR 79.58
Sprint
S
7.14
Square
SQ
31.32
StanleyBlackDck SWK 155.82
StateStreet STT 99.17
Statoil
STO 20.20
Steris
STE 89.90
STMicroelec STM 19.76
Stryker
SYK 144.69
SumitomoMits SMFG 7.77
SunCommunities SUI
88.41
SunLifeFinancial SLF 40.28
SuncorEnergy SU
34.56
SunTrustBanks STI
60.76
SynchronyFin SYF 31.75
Syngenta
SYT 92.04
Sysco
SYY 53.93
TAL Education TAL 34.88
TE Connectivity TEL 86.51
Telus
TU
35.92
Ternium
TX
30.23
TIM Part
TSU 18.51
TJX
TJX 72.25
TableauSoftware DATA 76.23
TaiwanSemi TSM 38.97
TargaResources TRGP 47.66
Target
TGT 57.60
TataMotors TTM 32.27
TechnipFMC FTI
27.27
TeckRscsB
TECK 22.47
TelecomArgentina TEO 31.43
TelecomItalia TI
8.95
TelecomItalia A TI.A
7.18
TeledyneTech TDY 164.44
Teleflex
TFX 240.42
TelefonicaBras VIV 16.28
Telefonica
TEF 10.80
TelekmIndonesia TLK 33.70
Tenaris
TS
27.45
Teradyne
TER 38.33
TevaPharm TEVA 15.89
Textron
TXT 54.40
ThermoFisherSci TMO 192.64
ThomsonReuters TRI
46.06
ThorIndustries THO 128.36
3M
MMM 216.75
Tiffany
TIF
92.87
TimeWarner TWX 103.35
Toll Bros
TOL 42.95
Torchmark
TMK 80.93
Toro
TTC 61.95
TorontoDomBk TD
56.80
Total
TOT 53.91
TotalSystem TSS 67.68
ToyotaMotor TM 124.08
TransCanada TRP 49.47
TransDigm
TDG 266.53
TransUnion TRU 49.86
Travelers
TRV 125.94
TurkcellIletism TKC
8.62
TurquoiseHill TRQ
3.22
Twitter
TWTR 17.41
TylerTech
TYL 176.65
TysonFoods TSN 70.11
UBS Group UBS 17.21
UDR
UDR 38.64
UGI
UGI 46.98
US Foods
USFD 27.06
UltraparPart UGP 24.20
UnderArmour A UAA 16.84
UnderArmour C UA
15.51
Unilever
UN
59.28
Unilever
UL
57.85
UnionPacific UNP 112.63
UnitedContinental UAL 67.72
UnitedMicro UMC 2.58
UPS B
UPS 118.12
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s UnitedRentals URI 141.55
US Bancorp USB 54.23
US Steel
X
24.98
UnitedTech UTX 118.12
UnitedHealth UNH 194.68
UniversalHealthB UHS 106.58
UnumGroup UNM 52.43
VEREIT
VER
8.36
VF
VFC 64.51
Visa
V
107.31
VailResorts MTN 215.80
Vale
VALE 9.82
ValeroEnergy VLO 77.37
Vantiv
VNTV 71.46
VarianMed
VAR 100.40
Vedanta
VEDL 19.89
VeevaSystems VEEV 56.70
Ventas
VTR 63.26
Verizon
VZ
49.14
VistraEnergy VST 18.81
s VMware
VMW 111.79
VornadoRealty VNO 78.93
VoyaFinancial VOYA 40.43
VulcanMaterials VMC 119.01
WABCO
WBC 149.78
WEC Energy WEC 64.51
W.P.Carey
WPC 68.60
Wabtec
WAB 75.03
s Wal-Mart
WMT 84.13
WasteConnections WCN 69.88
WasteMgt
WM 76.74
Waters
WAT 185.01
Watsco
WSO 160.07
Wayfair
W
65.95
WellCareHealth WCG 167.68
WellsFargo WFC 55.61
Welltower
HCN 68.01
WestPharmSvcs WST 94.51
WestarEnergy WR 51.28
WesternGasEquity WGP 40.62
WesternGasPtrs WES 52.15
WesternUnion WU 19.60
s WestlakeChem WLK 84.29
WestpacBanking WBK 25.31
WestRock
WRK 58.97
Weyerhaeuser WY 34.32
WheatonPrecMetals WPM 20.07
Whirlpool
WHR 177.18
Williams
WMB 30.03
WilliamsPartners WPZ 39.41
Wipro
WIT
5.50
WooriBank WF
47.76
s Wyndham
WYN 108.69
s XPO Logistics XPO 67.84
XcelEnergy XEL 47.94
Xerox
XRX 32.71
s Xylem
XYL 64.63
YPF
YPF 22.68
YumBrands YUM 76.18
s YumChina
YUMC 42.51
ZTO Express ZTO 14.34
ZayoGroup ZAYO 34.30
ZimmerBiomet ZBH 118.41
Zoetis
ZTS 63.99
-0.94
0.38
-0.04
-0.51
-1.62
-0.55
0.14
0.01
0.10
0.30
-0.76
0.01
0.24
0.30
0.03
0.01
-1.40
-0.05
0.09
-0.12
-0.06
1.13
-0.02
-1.18
-0.81
0.25
0.29
-0.32
3.60
0.94
-0.05
1.21
-2.38
-2.33
-3.07
0.47
-0.24
0.44
0.29
0.68
-0.15
0.08
-0.43
0.26
0.43
0.20
0.04
-2.78
-0.03
-0.03
...
0.62
0.79
0.64
0.36
0.10
-0.02
0.45
0.18
-0.48
0.76
0.07
0.89
0.26
NASDAQ
s
s
s
s
s
AGNC Invt
AGNC 21.44
Ansys
ANSS 126.18
ASML
ASML 171.18
Abiomed
ABMD 172.18
ActivisionBliz ATVI 61.45
AdobeSystems ADBE 152.15
AkamaiTech AKAM 51.03
AlexionPharm ALXN 143.84
AlignTech
ALGN 188.67
Alkermes
ALKS 51.17
AlnylamPharm ALNY 122.29
Alphabet A GOOGL 987.80
Alphabet C GOOG 972.60
Altaba
AABA 68.93
Amazon.com AMZN 987.20
Amdocs
DOX 65.29
Amerco
UHAL 363.43
AmericanAirlines AAL 53.03
Amgen
AMGN 185.79
AnalogDevices ADI 87.99
Apple
AAPL 155.90
AppliedMaterials AMAT 52.59
ArchCapital ACGL 99.15
Atlassian
TEAM 39.77
Autodesk
ADSK 117.05
ADP
ADP 114.11
BOK Fin
BOKF 90.20
Baidu
BIDU 262.41
BankofOzarks OZRK 47.66
Biogen
BIIB 332.83
BioMarinPharm BMRN 94.33
Bioverativ
BIVV 59.88
BlackBerry
BBRY 11.34
BlueBuffaloPet BUFF 28.31
bluebirdbio BLUE 131.65
BrighthouseFin BHF 60.10
Broadcom
AVGO 245.99
CA
CA
33.64
CBOE Holdings CBOE 108.43
-0.06
0.07
1.04
-1.81
0.27
0.65
0.72
2.70
0.54
-0.11
0.79
-4.51
-4.40
0.19
-3.79
0.25
-0.71
2.43
0.33
0.28
0.06
-0.10
-0.36
0.18
-0.09
0.54
0.85
10.19
0.24
3.82
-0.69
1.02
0.07
-0.79
0.15
-0.02
-0.43
0.07
-0.79
Continued on Page B13
BANKRATE.COM® MMA, Savings and CDs
Average Yields of Major Banks
Type
Tuesday, October 10, 2017
MMA
1-MO
2-MO
3-MO
6-MO
1-YR
2-YR
2.5YR
5YR
0.11
0.21
0.07
0.07
0.07
0.07
0.12
0.14
0.20
0.22
0.35
0.38
0.47
0.51
0.46
0.48
0.93
0.97
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.01
0.01
0.00
0.02
0.01
0.02
0.01
0.01
0.00
0.02
0.01
National average
Savings
Jumbos
Weekly change
Savings
Jumbos
Consumer Savings Rates
Explanation of ratings: Safe Sound SM, (855) 733-0700, evaluates the financial condition of federally insured institutions and assigns a rank of 1,2,3,4 or 5 based on data from the fourth quarter
of 2015 from federal regulators. 5: most desirable performance; NR: institution is too new to rate,
not an indication of financial strength or weakness. Information is believed to be reliable, but not
guaranteed.
High yield savings
Bank/rank
Phone number
Minimum
Yield
(%)
Money market and savings account
$1
1.40
$100
1.35
$0
1.30
VirtualBank /4
$10,000
(877) 998-2265
AloStar Bank of Commerce /4 $1,000
(877) 738-6391
Mount McKinley Bank /4 $5,000
(907) 452-1751
0.15
DollarSavingsDirect /4
(866) 395-8693
CIT Bank /4
(855) 462-2652
Barclays /4
(888) 720-8756
One-month CD
0.10
0.10
Two-month CD
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Bank/rank
Phone number
Minimum
Yield
(%)
Six-month CD
VirtualBank /4
$10,000
(877) 998-2265
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
Pacific National Bank /4
$1,000
(305) 539-7500
1.36
1.35
1.25
One-year CD
CD Bank /4
$10,000
(888) 201-8185
Goldman Sachs Bank USA /5
$500
(855) 730-7283
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
1.65
1.65
1.62
Two-year CD
$10,000
0.15
$1,000
0.05
Three-month CD
-0.32
0.06
0.31
...
-0.32
0.46
0.06
1.18
0.14
0.43
0.29
-0.37
0.23
-0.53
-0.13
-4.81
2.15
-0.03
1.67
0.79
-0.37
-0.69
0.30
-0.33
0.59
0.60
0.35
-0.06
-0.18
0.28
-0.18
0.25
-0.85
1.08
0.26
-0.01
0.10
-1.24
0.02
-0.08
0.44
-0.01
0.36
0.31
-0.01
-0.04
0.55
0.28
0.05
-0.02
0.18
-0.78
-1.42
0.20
-0.22
1.35
...
-0.33
0.33
0.04
-0.03
-0.05
0.82
-3.20
0.32
0.21
-0.49
-0.18
0.38
0.12
-0.93
-0.62
0.25
-0.84
0.07
-0.57
...
0.14
0.40
-0.23
0.84
0.55
0.35
2.41
0.21
0.13
0.11
0.99
0.15
-0.02
-0.26
-1.60
-0.53
0.18
0.28
0.13
0.15
0.46
0.19
0.21
0.77
0.77
-1.25
3.02
0.01
0.97
Net
Sym Close Chg
Stock
EverBank /3
$5,000
(855) 228-6755
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
Luana Savings Bank /4
$1,000
(800) 666-2012
Congressional Bank /4
$25,000
(301) 978-3290
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
VirtualBank /4
$10,000
(877) 998-2265
1.85
1.81
1.81
Five-year CD
1.01
1.00
0.90
Goldman Sachs Bank USA /5
$500
(855) 730-7283
Barclays /4
$0
(888) 720-8756
Synchrony Bank /5
$25,000
(800) 903-8154
2.40
2.35
2.35
High yield jumbos - Minimum is $100,000
Money market and savings account
ableBanking,adivisionofNortheastBank/4
(877) 505-1933
BBVA Compass /3
(800) COMPASS
Discover Bank /5
(877) 505-4051
1.30
1.25
1.05
One-month CD
USAA /5
(800) 583-8295
VirtualBank /4
(877) 998-2265
AloStar Bank of Commerce /4
(877) 738-6391
0.15
0.10
1.35
My e-BAnC by BAC Florida Bank /4
(855) 512-0989
First Internet Bank of Indiana /4
(888) 873-3424
EverBank /3
(855) 228-6755
1.65
1.62
1.62
Two-year CD
0.15
0.05
0.01
Three-month CD
TriState Capital Bank /4
(866) 680-8722
Luana Savings Bank /4
(800) 666-2012
EverBank /3
(855) 228-6755
1.45
1.36
One-year CD
0.22
Two-month CD
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Citizens Trust Bank /4
(404) 659-5959
Six-month CD
TriState Capital Bank /4
(866) 680-8722
VirtualBank /4
(877) 998-2265
First Internet Bank of Indiana /4
(888) 873-3424
Nationwide Bank /4
(855) 255-1176
First Internet Bank of Indiana /4
(888) 873-3424
VirtualBank /4
(877) 998-2265
1.85
1.81
1.81
Five-year CD
1.30
1.05
1.01
Synchrony Bank /5
(800) 903-8154
First Internet Bank of Indiana /4
(888) 873-3424
EverBank /3
(855) 228-6755
2.35
2.30
2.30
Notes: Accounts are federally insured up to $250,000 per person effective Oct. 3, 2008. Yields
are based on method of compounding and rate stated for the lowest required opening deposit to
earn interest. CD figures are for fixed rates only. MMA: Allows six (6) third-party transfers per
month, three (3) of which may be checks. Rates are subject to change.
Source: Bankrate.com, a publication of Bankrate, Inc., North Palm Beach, FL 33408
Internet: www.bankrate.com
THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | B13
MUTUAL FUNDS
ADVERTISEMENT
Data provided by
Top 250 mutual-funds listings for Nasdaq-published share classes with net assets of at least
$500 million each. NAV is net asset value. Percentage performance figures are total returns,
assuming reinvestment of all distributions and after subtracting annual expenses. Figures don’t
reflect sales charges (“loads”) or redemption fees. NET CHG is change in NAV from previous
trading day. YTD%RET is year-to-date return. 3-YR%RET is trailing three-year return
annualized.
e-Ex-distribution. f-Previous day’s quotation. g-Footnotes x and s apply. j-Footnotes e and s
apply. k-Recalculated by Lipper, using updated data. p-Distribution costs apply, 12b-1. rRedemption charge may apply. s-Stock split or dividend. t-Footnotes p and r apply. v-Footnotes
x and e apply. x-Ex-dividend. z-Footnote x, e and s apply. NA-Not available due to incomplete
price, performance or cost data. NE-Not released by Lipper; data under review. NN-Fund not
tracked. NS-Fund didn’t exist at start of period.
Fund
Tuesday, October 10, 2017
Net YTD
Net YTD
NAV Chg % Ret Fund
NAV Chg % Ret Fund
A
American Century Inv
43.74
Ultra
American Funds Cl A
31.35
AmcpA p
41.02
AMutlA p
27.19
BalA p
12.96
BondA p
63.08
CapIBA p
51.73
CapWGrA
56.32
EupacA p
62.49
FdInvA p
50.23
GwthA p
10.49
HI TrA p
40.80
ICAA p
23.41
IncoA p
44.22
N PerA p
46.57
NEcoA p
65.66
NwWrldA
56.13
SmCpA p
13.00
TxExA p
44.98
WshA p
+0.03 25.4
+0.03
+0.15
+0.03
...
+0.27
+0.30
+0.45
+0.12
-0.02
...
+0.11
+0.07
+0.17
+0.18
+0.43
+0.18
...
+0.09
16.8
13.0
11.3
3.3
12.1
19.8
27.5
16.9
19.5
6.6
13.9
10.4
25.2
29.5
27.6
22.1
4.5
14.0
+0.01
+0.01
3.7
4.2
Baird Funds
10.90
11.26
BlackRock Funds A
20.21
GlblAlloc p
BlackRock Funds Inst
22.98
EqtyDivd
20.33
GlblAlloc
7.86
HiYldBd
StratIncOpptyIns 9.98
Bridge Builder Trust
10.20
CoreBond
+0.07 11.2
+0.09 12.0
+0.06 11.4
+0.01 7.5
+0.01 4.2
+0.01
3.7
+0.06
8.1
...
+0.23
+0.20
+0.12
+0.14
+0.18
+0.20
+0.05
+0.05
+0.13
+0.17
+0.08
+0.10
2.2
26.6
29.6
23.3
20.5
25.3
23.6
14.4
12.8
8.5
5.1
5.5
11.9
D
Del Invest Instl
Value
21.02
Dimensional Fds
11.02
5GlbFxdInc
29.91
EmgMktVa
EmMktCorEq 22.18
14.12
IntlCoreEq
19.73
IntlVal
21.43
IntSmCo
23.38
IntSmVa
21.80
US CoreEq1
US CoreEq2 20.75
36.48
US Small
US SmCpVal 39.11
25.12
US TgdVal
38.71
USLgVa
Dodge & Cox
109.21
Balanced
14.04
GblStock
13.82
Income
46.85
Intl Stk
201.91
Stock
DoubleLine Funds
NA
TotRetBdI
NA
TotRetBdN
-0.02 9.1
+0.03 17.9
... 3.9
+0.21 23.0
-0.04 12.7
...
...
NA
NA
E
Edgewood Growth Instituti
EdgewoodGrInst 29.31 +0.02 32.0
F
Federated Instl
StraValDivIS
6.48 +0.05 12.6
Fidelity
500IdxInst
500IdxInstPrem
500IdxPrem
ExtMktIdxPrem r
IntlIdxPrem r
TMktIdxF r
TMktIdxPrem
USBdIdxInstPrem
USBdIdxPrem
89.23
89.23
89.23
62.58
42.89
74.15
74.14
11.62
11.62
Fidelity Advisor I
32.62
NwInsghtI
Fidelity Freedom
16.62
FF2020
14.37
FF2025
17.99
FF2030
Fidelity Invest
24.82
Balanc
85.27
BluCh
123.26
Contra
123.26
ContraK
10.29
CpInc r
41.09
DivIntl
178.22
GroCo
178.17
GrowCoK
7.94
InvGB
11.30
InvGrBd
52.14
LowP r
LowPriStkK r 52.10
103.57
MagIn
105.80
OTC
23.36
Puritn
SrsEmrgMkt 21.13
SrsGroCoRetail 17.50
16.13
SrsIntlGrw
10.80
SrsIntlVal
10.71
TotalBond
Fidelity Selects
234.69
Biotech r
First Eagle Funds
60.02
GlbA
FPA Funds
35.06
FPACres
FrankTemp/Frank Adv
2.37
... 8.1
IncomeAdv
FrankTemp/Franklin A
Schwab Funds
7.43
... 4.6 S&P Sel
CA TF A p
39.83 +0.10
11.96
... 2.8
Fed TF A p
2.39
... 8.0
IncomeA p
59.43 +0.17 13.9 TIAA/CREF Funds
RisDv A p
FrankTemp/Franklin C
19.14 +0.04
EqIdxInst
2.42
... 7.9 IntlEqIdxInst 20.14 +0.15
Income C t
FrankTemp/Temp A
Tweedy Browne Fds
12.18 -0.05 3.6 GblValue
GlBond A p
28.40 +0.09
Growth A p 27.06 +0.14 14.9
FrankTemp/Temp Adv
GlBondAdv p 12.13 -0.05 3.7 VANGUARD ADMIRAL
235.60 +0.55
500Adml
33.84 +0.05
BalAdml
Harbor Funds
11.83 +0.01
CAITAdml
73.62 +0.14 30.0 CapOpAdml r 154.97 +0.68
CapApInst
70.53 +0.32 20.7 EMAdmr
IntlInst r
36.93 +0.28
Harding Loevner
75.79 +0.37
EqIncAdml
NA
... NA ExtndAdml
IntlEq
82.21 +0.16
...
GNMAAdml 10.53
69.23 +0.10
GrwthAdml
Invesco Funds A
HlthCareAdml r 91.01 +0.19
11.29 +0.01 8.1 HYCorAdml r
EqIncA
5.99
...
25.72 +0.03
InfProAd
94.45 +0.95
IntlGrAdml
John Hancock Class 1
...
ITBondAdml 11.44
15.88 +0.05 12.5 ITIGradeAdml 9.82
LSBalncd
...
17.01 +0.06 15.7 LTGradeAdml 10.57 +0.01
LSGwth
John Hancock Instl
MidCpAdml 183.75 +0.34
23.95 +0.08 11.6 MuHYAdml
DispValMCI
11.38
...
JPMorgan Funds
14.20 +0.01
MuIntAdml
39.79 +0.10 9.3 MuLTAdml
MdCpVal L
11.66
...
JPMorgan I Class
10.99
...
MuLtdAdml
11.64 +0.01 3.4 MuShtAdml
CoreBond
15.80
...
JPMorgan R Class
PrmcpAdml r 134.02 +0.53
11.65 +0.01 3.4 REITAdml r 118.70 +0.32
CoreBond
SmCapAdml 68.42 +0.11
...
STBondAdml 10.45
Lazard Instl
...
STIGradeAdml 10.69
19.41 +0.22 22.2 TotBdAdml
EmgMktEq
10.78
...
Loomis Sayles Fds
TotIntBdIdxAdm 21.78 -0.01
14.26 +0.01 7.3 TotIntlAdmIdx r 29.71 +0.23
LSBondI
Lord Abbett A
63.86 +0.14
TotStAdml
... 2.2 TxMIn r
ShtDurIncmA p 4.28
14.05 +0.11
Lord Abbett F
39.46 +0.13
ValAdml
4.28
... 2.5 WdsrllAdml
ShtDurIncm
68.67 +0.26
64.96 +0.14
WellsIAdml
73.19 +0.19
WelltnAdml
WndsrAdml 78.67 +0.25
Metropolitan West
10.68 +0.01 2.8 VANGUARD FDS
TotRetBd
26.11 +0.05
10.67 +0.01 3.0 DivdGro
TotRetBdI
215.74 +0.45
10.04
... 3.0 HlthCare r
TRBdPlan
INSTTRF2020 22.38 +0.05
MFS Funds Class I
40.77 +0.18 13.8 INSTTRF2025 22.63 +0.06
ValueI
INSTTRF2030 22.81 +0.07
MFS Funds Instl
25.33 +0.16 25.0 INSTTRF2035 22.99 +0.08
IntlEq
INSTTRF2040 23.17 +0.09
Mutual Series
32.79 +0.06 9.0 INSTTRF2045 23.30 +0.09
GlbDiscA
38.97 +0.28
33.47 +0.06 9.2 IntlVal
GlbDiscz
19.76 +0.04
LifeCon
32.87 +0.12
LifeGro
26.74 +0.07
LifeMod
Oakmark Funds Invest
26.76 +0.08
33.81 +0.04 11.1 PrmcpCor
EqtyInc r
32.94 +0.12
83.64 +0.02 15.4 SelValu r
Oakmark
27.00 +0.07
STAR
29.03 +0.17 27.9
OakmrkInt
10.69
...
STIGrade
Old Westbury Fds
15.83 +0.03
14.79 +0.07 15.3 TgtRe2015
LrgCpStr
31.40
+0.08
TgtRe2020
Oppenheimer Y
18.39 +0.05
41.96 +0.25 31.2 TgtRe2025
DevMktY
33.21 +0.11
42.93 +0.40 23.8 TgtRe2030
IntGrowY
20.39 +0.07
TgtRe2035
35.10 +0.14
TgtRe2040
22.04 +0.09
TgtRe2045
Parnassus Fds
35.45 +0.14
TgtRe2050
NA
... NA
ParnEqFd
13.52 +0.02
TgtRetInc
PIMCO Fds Instl
NA
... NA TotIntBdIxInv 10.89 -0.01
AllAsset
26.82 +0.06
10.31
... 5.0 WellsI
TotRt
42.38 +0.11
Welltn
PIMCO Funds A
38.69 +0.14
NA
... NA WndsrII
IncomeFd
VANGUARD INDEX FDS
PIMCO Funds D
235.59
+0.55
500
NA
... NA
IncomeFd
202.87 +0.40
ExtndIstPl
PIMCO Funds Instl
55.44 +0.16
NA
... NA SmValAdml
IncomeFd
10.74
...
TotBd2
PIMCO Funds P
17.76 +0.14
NA
... NA TotIntl
IncomeP
63.84 +0.15
TotSt
Price Funds
94.77 +0.06 30.5 VANGUARD INSTL FDS
BlChip
33.85 +0.06
29.58 +0.07 12.9 BalInst
CapApp
34.62 +0.17 11.5 DevMktsIndInst 14.07 +0.11
EqInc
21.99 +0.18
DevMktsInxInst
68.52 +0.16 15.5
EqIndex
82.21 +0.16
68.41 +0.04 28.5 ExtndInst
Growth
69.24 +0.10
74.57 -0.06 26.2 GrwthInst
HelSci
10.48 +0.02
InPrSeIn
38.35 +0.03 31.2
InstlCapG
232.45 +0.55
19.15 +0.13 25.2 InstIdx
IntlStk
232.47 +0.55
15.36 +0.10 19.9 InstPlus
IntlValEq
57.29 +0.14
91.12 +0.10 20.9 InstTStPlus
MCapGro
40.59 +0.07
30.91 +0.06 6.4 MidCpInst
MCapVal
200.19 +0.37
54.69
... 26.3 MidCpIstPl
N Horiz
68.42 +0.11
SmCapInst
9.51 +0.01 3.6
N Inc
...
11.29 +0.08 24.5 STIGradeInst 10.69
OverS SF r
10.78
...
23.08 +0.06 13.1 TotBdInst
R2020
10.74
...
17.79 +0.06 14.8 TotBdInst2
R2025
10.78
...
26.18 +0.08 16.2 TotBdInstPl
R2030
...
19.13 +0.07 17.4 TotIntBdIdxInst 32.69
R2035
27.47 +0.10 18.4 TotIntlInstIdx r 118.81 +0.94
R2040
38.36 +0.18 14.0 TotItlInstPlId r 118.83 +0.94
Value
63.87 +0.14
TotStInst
PRIMECAP Odyssey Fds
39.46 +0.13
35.45 +0.08 23.8 ValueInst
Growth r
Principal Investors
13.87 +0.11 26.1
DivIntlInst
Western Asset
Prudential Cl Z & I
NA
...
14.52 +0.01 5.5 CorePlusBdI
TRBdZ
S
B
AggBdInst
CorBdInst
Net YTD
NAV Chg % Ret
+0.21
+0.21
+0.21
+0.13
+0.26
+0.16
+0.17
...
...
15.7
15.7
15.7
14.0
21.5
15.4
15.4
3.1
3.1
+0.04 22.1
+0.04 12.7
+0.03 13.5
+0.06 15.9
+0.04
+0.19
+0.07
+0.08
...
+0.27
+0.37
+0.38
+0.01
...
+0.09
+0.09
+0.07
+0.34
+0.02
+0.16
+0.05
+0.11
+0.05
+0.01
13.6
29.2
26.0
26.1
10.3
23.4
30.3
30.4
3.6
3.8
13.8
13.9
20.0
32.8
14.4
34.6
31.0
26.0
17.9
3.8
+0.44 34.8
+0.12 10.6
+0.05
8.8
15.7
T
15.4
21.7
13.4
V
H
I
J
L
M
O
P
15.7
10.4
4.7
24.7
26.5
13.1
14.0
2.0
21.9
20.1
7.2
1.9
40.3
3.9
4.1
8.5
13.9
6.5
4.5
5.3
2.7
1.4
23.1
4.3
11.8
1.5
2.2
3.2
1.3
23.0
15.4
22.1
10.9
11.3
7.6
10.6
14.6
13.1
20.0
11.1
12.5
13.8
14.9
16.2
16.7
22.7
8.7
15.0
11.8
20.6
14.5
14.8
2.1
9.1
11.1
12.5
13.7
14.9
16.2
16.7
16.7
6.8
1.2
7.5
10.5
11.2
15.6
14.0
8.0
3.1
22.9
15.3
10.4
22.1
22.1
14.0
21.9
1.9
15.7
15.7
15.4
13.9
13.9
11.8
2.2
3.2
3.2
3.2
1.4
23.0
23.0
15.4
10.9
W
Stock
Stock
Net
Sym Close Chg
CDK Global CDK 64.88
s CDW
CDW 70.30
CH Robinson CHRW 77.09
s CME Group CME 137.23
CSX
CSX 52.39
s CadenceDesign CDNS 41.01
Carlyle
CG
24.00
Celgene
CELG 139.69
Cerner
CERN 71.41
CharterComms CHTR 364.92
s CheckPointSftw CHKP 117.28
ChinaLodging HTHT 130.88
CincinnatiFin CINF 77.12
s Cintas
CTAS 150.24
CiscoSystems CSCO 33.55
CitrixSystems CTXS 81.20
s Cognex
CGNX 117.52
s CognizantTech CTSH 74.00
Coherent
COHR 246.57
Comcast A CMCSA 37.69
CommerceBcshrs CBSH 58.44
CommScope COMM 32.32
s Copart
CPRT 35.56
CoStarGroup CSGP 279.29
Costco
COST 156.87
Ctrip.com
CTRP 54.61
t DISH Network DISH 51.70
DentsplySirona XRAY 57.57
DiamondbackEner FANG 100.76
DiscoveryComm A DISCA 20.53
t DiscoveryComm C DISCK 19.40
DollarTree
DLTR 89.30
E*TRADE
ETFC 43.99
EastWestBancorp EWBC 60.41
s eBay
EBAY 38.84
ElbitSystems ESLT 150.63
ElectronicArts EA 117.82
Equinix
EQIX 451.89
Ericsson
ERIC 5.81
Exelixis
EXEL 25.94
Expedia
EXPE 146.43
ExpeditorsIntl EXPD 59.96
ExpressScripts ESRX 58.18
F5Networks FFIV 116.40
Facebook
FB 171.59
Fastenal
FAST 44.86
FifthThirdBncp FITB 28.42
Fiserv
FISV 127.87
Flex
FLEX 17.16
Fortinet
FTNT 38.45
Gaming&Leisure GLPI 36.83
Garmin
GRMN 54.26
Gentex
GNTX 20.05
GileadSciences GILD 83.04
Goodyear
GT
33.02
Grifols
GRFS 20.99
HD Supply
HDS 35.41
Hasbro
HAS 96.19
HenrySchein HSIC 79.89
Hologic
HOLX 36.86
JBHunt
JBHT 106.17
HuntingtonBcshs HBAN 13.98
s IAC/InterActive IAC 122.47
IdexxLab
IDXX 157.33
IHSMarkit
INFO 44.24
INC Research INCR 54.95
IPG Photonics IPGP 192.86
IRSA Prop
IRCP 58.50
IcahnEnterprises IEP
55.57
Icon
ICLR 114.01
-0.14
0.02
1.64
-0.76
-0.42
...
...
0.42
-0.03
-1.13
1.17
-5.03
0.76
0.64
-0.21
0.58
1.13
0.35
1.11
-0.11
0.46
-0.77
0.17
2.51
2.26
-0.69
0.02
-0.52
0.82
-0.30
-0.39
0.93
-0.44
0.59
-0.15
-0.43
-0.80
0.57
-0.08
0.28
-0.03
-0.03
-1.04
0.10
-0.91
-0.93
0.29
0.36
0.16
-0.32
0.11
0.34
-0.10
1.06
0.30
-0.20
-0.73
-0.43
-0.21
-0.03
0.26
0.13
0.74
-0.96
0.04
-0.90
-1.12
0.04
-0.34
0.33
s
s
s
s
s
s
s
s
s
s
s
Net
Sym Close Chg
Illumina
ILMN 204.15
Incyte
INCY 114.77
Intel
INTC 39.65
InteractiveBrkrs IBKR 47.34
Intuit
INTU 144.18
IntuitiveSurgical ISRG 354.99
IonisPharma IONS 55.84
JD.com
JD
40.17
JackHenry
JKHY 105.32
JazzPharma JAZZ 143.57
JetBlue
JBLU 20.23
KLA Tencor KLAC 104.45
KraftHeinz
KHC 78.14
LKQ
LKQ 36.74
LamResearch LRCX 184.90
LamarAdvertising LAMR 67.96
LibertyBroadbandA LBRDA 95.12
LibertyBroadbandC LBRDK 96.36
LibertyGlobal A LBTYA 31.81
LibertyGlobal C LBTYK 30.66
LibertyLiLAC A LILA 24.26
LibertyLiLAC C LILAK 23.97
LibertyQVC A QVCA 22.25
LibertyVenturesA LVNTA 59.00
LibertyFormOne A FWONA 37.90
LibertyFormOne C FWONK 39.58
LibertyBraves A BATRA 25.37
LibertyBraves C BATRK 25.20
LibertySirius A LSXMA 43.14
LibertySirius C LSXMK 43.00
LincolnElectric LECO 93.84
LogitechIntl LOGI 35.91
LogMeIn
LOGM 117.50
lululemon
LULU 63.31
MarketAxess MKTX 187.65
Marriott
MAR 114.08
MarvellTech MRVL 18.51
MatchGroup MTCH 25.15
MaximIntProducts MXIM 48.98
MelcoResorts MLCO 24.20
MercadoLibre MELI 273.64
MicrochipTech MCHP 91.92
MicronTech MU
41.98
Microsemi
MSCC 52.27
Microsoft
MSFT 76.29
Middleby
MIDD 123.73
Momo
MOMO 32.05
Mondelez
MDLZ 41.45
MonsterBeverage MNST 55.36
Mylan
MYL 38.45
NXP Semi
NXPI 115.00
Nasdaq
NDAQ 74.56
NatlInstruments NATI 44.24
NetApp
NTAP 43.66
Netease
NTES 269.33
Netflix
NFLX 195.08
NewsCorp A NWSA 13.50
NewsCorp B NWS 13.85
Nordson
NDSN 122.29
NorthernTrust NTRS 93.27
NorwegianCruise NCLH 59.16
NVIDIA
NVDA 188.93
OReillyAuto ORLY 209.87
OldDomFreight ODFL 108.37
ON Semi
ON
19.38
OpenText
OTEX 33.45
PTC
PTC 58.98
Paccar
PCAR 73.42
PacWestBancorp PACW 49.23
Paychex
PAYX 63.71
PayPal
PYPL 66.04
0.88
0.78
-0.21
-0.22
0.22
0.38
0.72
1.26
0.01
-1.74
0.74
0.50
0.81
0.11
0.24
0.31
...
0.21
-0.56
-0.63
0.32
0.32
-0.10
-0.05
-0.54
-0.58
-0.09
-0.17
-0.67
-0.58
-0.15
0.24
0.35
1.36
-1.72
1.32
0.06
-0.16
0.17
0.32
3.72
0.43
1.02
-0.11
...
-1.70
0.58
0.64
-0.03
0.20
0.48
0.06
0.53
-0.71
-6.30
-1.79
0.32
0.30
0.22
0.62
0.27
3.54
2.05
-0.43
0.07
0.09
0.40
0.12
0.13
0.06
-0.19
Stock
s
s
s
t
t
s
Net
Sym Close Chg
People'sUtdFin PBCT 18.32 0.17
PilgrimPride PPC 28.90 -0.07
Priceline
PCLN 1916.65 -10.28
Qiagen
QGEN 34.64 -0.40
Qorvo
QRVO 71.84 -0.82
Qualcomm
QCOM 53.87 0.99
RandgoldRscs GOLD 98.68 0.14
RegenPharm REGN 461.13 -8.43
RossStores ROST 64.84 -0.45
RoyalGold
RGLD 88.87 -0.16
Ryanair
RYAAY 106.17 1.56
SBA Comm SBAC 148.42 0.69
SEI Investments SEIC 63.37 0.56
Sina
SINA 111.99 -1.75
SS&C Tech SSNC 40.66 -0.14
SVB Fin
SIVB 188.93 0.93
ScrippsNetworks SNI
85.46 -0.27
Seagate
STX 33.75 -0.10
SeattleGenetics SGEN 57.72 0.15
Shire
SHPG 151.50 1.26
SignatureBank SBNY 127.16 3.14
SiriusXM
SIRI
5.65 -0.07
Skyworks
SWKS 104.35 -0.39
Splunk
SPLK 63.81 -1.72
Starbucks
SBUX 55.42 0.40
SteelDynamics STLD 35.63 0.12
Stericycle
SRCL 70.80 0.53
Symantec
SYMC 31.59 -1.04
Synopsys
SNPS 82.68 -0.03
TD Ameritrade AMTD 47.91 -0.73
TESARO
TSRO 118.22 -0.89
T-MobileUS TMUS 61.23 -0.33
TRowePrice TROW 92.18 0.20
TakeTwoSoftware TTWO 102.67 -1.44
Tesla
TSLA 355.59 12.65
TexasInstruments TXN 92.38 0.80
TractorSupply TSCO 60.30 0.08
Trimble
TRMB 40.59
...
TripAdvisor TRIP 40.99 -1.05
21stCenturyFoxA FOXA 26.77 0.19
21stCenturyFoxB FOX 26.15 0.18
UltaBeauty ULTA 212.69 -4.65
UltimateSoftware ULTI 194.56 0.34
UniversalDisplay OLED 128.45 -1.85
VEON
VEON 3.84 -0.10
VeriSign
VRSN 108.12 -1.65
VeriskAnalytics VRSK 83.74 0.41
VertxPharm VRTX 154.52 -1.03
Viacom A
VIA 33.95
...
Viacom B
VIAB 25.56 0.14
Vodafone
VOD 28.59 0.53
WPP
WPPGY 92.40 0.51
WalgreensBoots WBA 69.85 -1.02
Weibo
WB 99.72 -0.61
WesternDigital WDC 86.01 1.74
WillisTwrsWatson WLTW 155.95 1.27
Workday
WDAY 108.31 -0.38
WynnResorts WYNN 142.54 -0.83
Xilinx
XLNX 72.48 -0.09
Yandex
YNDX 31.71 -0.76
ZebraTech
ZBRA 110.27 0.36
Zillow A
ZG
41.60 -0.35
Zillow C
Z
41.87 -0.26
ZionsBancorp ZION 47.71 0.37
NYSE AMER
CheniereEnergy LNG
CheniereEnerPtrs CQP
CheniereEnHldgs CQH
ImperialOil
IMO
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THEMART
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THE WALL STREET JOURNAL.
B14 | Wednesday, October 11, 2017
COMMODITIES
Futures Contracts
Metal & Petroleum Futures
Dec
Contract
Open
High hi lo
Low
Settle
Chg
Copper-High (CMX)-25,000 lbs.; $ per lb.
Oct
3.0255
3.0520
3.0215
3.0455 0.0285
Dec
3.0285
3.0705
3.0275
3.0605 0.0295
Gold (CMX)-100 troy oz.; $ per troy oz.
1282.60 1293.00
1281.70 1290.60
8.80
Oct
Dec
1286.80 1296.70
1284.60 1293.80
8.80
Feb'18
1290.50 1300.80
1289.80 1298.00
8.90
April
1294.30 1304.80
1294.10 1302.10
9.00
June
1297.40 1307.90
1297.40 1306.00
9.00
Dec
1310.10 1320.70
1310.10 1318.10
9.00
Palladium (NYM) - 50 troy oz.; $ per troy oz.
Dec
929.00
939.50
928.00
933.65
5.65
March'18 926.90 933.25
926.20
928.60
5.60
Platinum (NYM)-50 troy oz.; $ per troy oz.
931.90
932.00
931.90
933.10 18.70
Oct
Jan'18
920.30
937.20
918.70
936.50 18.30
Silver (CMX)-5,000 troy oz.; $ per troy oz.
16.935
17.165
16.925
17.155 0.239
Oct
Dec
16.990
17.280
16.960
17.207 0.236
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl.
49.55
51.06
49.54
50.92
1.34
Nov
Dec
49.87
51.38
49.87
51.23
1.30
Jan'18
50.12
51.59
50.12
51.43
1.25
March
50.45
51.85
50.45
51.68
1.15
June
50.64
51.86
50.64
51.72
1.02
Dec
50.48
51.47
50.39
51.32
0.82
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal.
1.7364
1.7767
1.7339
1.7649 .0297
Nov
Dec
1.7381
1.7750
1.7352
1.7644 .0303
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal.
1.5551
1.5971
1.5545
1.5915 .0321
Nov
Open
interest
1,690
175,494
223
402,022
58,926
11,391
11,005
10,787
29,490
1,404
14
70,053
520
143,522
407,051
390,707
243,184
212,838
194,837
263,375
103,768
90,838
110,560
Dividend Changes
Symbol
Amount
Yld % New/Old Frq
Payable /
Record
Increased
Civista Bancshares
MVC Capital
CIVB
MVC
1.2
5.8
.07 /.06
.15 /.135
Q
Q
Nov01 /Oct17
Oct31 /Oct24
.1188
.1216
.0994
.083
.125
.125
.125
M
M
M
M
M
M
M
Oct31 /Oct20
Oct31 /Oct20
Oct31 /Oct20
Oct31 /Oct19
Nov30 /Nov06
Dec29 /Dec15
Jan31 /Jan12
Funds and investment companies
Clough Glbl Eqty Fd
Clough Global Dividend
Clough Global Opp Fd
Eagle Growth & Incm Opps
KKR Income Opps Fund
KKR Income Opps Fund
KKR Income Opps Fund
GLQ
GLV
GLO
EGIF
KIO
KIO
KIO
10.5
10.3
10.5
5.9
8.3
8.3
8.3
Settle
Chg
Nov
Dec
Jan'18
Feb
March
April
Open
interest
Open
Contract
High hilo
Low
Settle
Open
interest
Chg
Contract
High hilo
Low
Open
1.5463
1.5796
1.5424
1.5753
.0290
97,730
March'18
448.75
453.00
446.75
449.25
.50
80,305
Eurodollar (CME)-$1,000,000; pts of 100%
2.836
3.022
3.137
3.150
3.120
2.908
2.896
3.073
3.192
3.201
3.167
2.937
2.833
3.014
3.135
3.146
3.117
2.905
2.891
3.071
3.189
3.200
3.166
2.936
.058
.053
.049
.048
.044
.025
291,796
167,551
160,660
83,931
141,167
120,431
Dec
March'18
623.00
637.25
627.75
641.00
615.75
629.75
617.50
631.50
–5.75
–5.75
36,283
23,696
Oct
Dec
March'18
Dec
154.000
155.725
154.975
156.975
153.675
155.150
154.075
156.150
.300
.650
8,038
21,244
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
Agriculture Futures
Corn (CBT)-5,000 bu.; cents per bu.
Dec
349.00
351.25
348.25
349.25
March'18 362.00 364.50
361.75
362.75
Oats (CBT)-5,000 bu.; cents per bu.
Dec
248.50
252.50
247.00
249.50
March'18 252.25 252.25
250.00
251.50
Soybeans (CBT)-5,000 bu.; cents per bu.
Nov
966.25
975.75
964.25
966.00
Jan'18
976.75
986.00
974.75
976.25
Soybean Meal (CBT)-100 tons; $ per ton.
Oct
315.10
315.30
312.00
312.50
Dec
315.50
319.50
315.30
316.20
Soybean Oil (CBT)-60,000 lbs.; cents per lb.
Oct
32.88
32.91
32.82
32.86
Dec
33.22
33.25
33.00
33.11
Rough Rice (CBT)-2,000 cwt.; $ per cwt.
Nov
1184.50 1209.00
1181.00 1202.00
Jan'18
1213.50 1235.50
1211.50 1232.00
Wheat (CBT)-5,000 bu.; cents per bu.
Dec
436.75
439.75
434.00
435.25
March'18 457.00 459.25
454.00
455.25
Wheat (KC)-5,000 bu.; cents per bu.
Dec
431.00
435.50
429.00
431.25
Company
Dividend announcements from October 10.
Company
Contract
High hilo
Low
Open
WSJ.com/commodities
Symbol
Legg Mason Gl Infr
Tekla Healthcare Opps Fd
Tekla World Hlthcr Fd
THL Credit Senior Loan Fd
INFR
THQ
THW
TSLF
Amount
Yld % New/Old Frq
2.1
7.2
9.5
6.6
.14917
.1125
.1167
.096
Q
M
M
M
1:5
PBW
–.25 792,226
… 269,697
1.25
–.75
4,523
1,269
–.75 302,004
–1.00 155,840
1.00
654
.70 159,146
–.16
287
–.15 180,947
18.00
19.00
7,497
2,452
–.75 250,702
–.75 94,589
.50 136,260
Payable /
Record
Oct13 /Oct11
Oct31 /Oct19
Oct31 /Oct19
Oct31 /Oct19
/Oct23
Foreign
Seaspan
Seaspan 7.95% Pfd. D
Seaspan 8.2% Pfd. G
Seaspan Pfd. Series E
Seaspan Pfd. Series H
SSW
SSWpD
SSWpG
SSWpE
SSWpH
6.9
8.2
8.4
8.3
8.3
.125
.49688
.5125
.51563
.49219
Q
Q
Q
Q
Q
Cattle-Feeder (CME)-50,000 lbs.; cents per lb.
Oct
Nov
Cattle-Live (CME)-40,000 lbs.; cents per lb.
Oct
Dec
111.750
117.050
114.050
119.100
111.750
117.000
Hogs-Lean (CME)-40,000 lbs.; cents per lb.
Stocks
PowerSh WildrHil Clean
Wheat (MPLS)-5,000 bu.; cents per bu.
Oct30 /Oct20
Oct30 /Oct27
Oct30 /Oct27
Oct30 /Oct27
Oct30 /Oct27
KEY: A: annual; M: monthly; Q: quarterly; r: revised; SA: semiannual;
S2:1: stock split and ratio; SO: spin-off.
Oct
Dec
59.675
61.225
60.400
62.350
59.575
61.225
113.700
118.800
60.175
61.550
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft.
98.6350
98.4800
98.3550
98.0900
98.6375
98.4950
98.3700
98.1200
Open
interest
Settle
Chg
98.6375
98.4850
98.3600
98.1050
.0050
.0050
.0050
.0150
98.6350
98.4800
98.3550
98.0900
166,561
1,871,585
1,348,040
1,638,116
Currency Futures
Japanese Yen (CME)-¥12,500,000; $ per 100¥
2.275 15,306
1.875 150,127
Oct
Dec
.8879
.8903
.8931
.8957
.8866
.8890
.8901
.8926
.0024
1,696
.0024 240,859
Oct
Dec
.7975
.7972
.8010
.8014
.7969
.7968
.7994
.7997
.0024
423
.0024 172,330
Oct
Dec
1.3143
1.3167
1.3227
1.3253
1.3136
1.3158
1.3202
1.3227
.0048
856
.0049 176,398
Dec
March'18
1.0251
1.0337
1.0316
1.0383
1.0248
1.0319
1.0299
1.0369
.0045
.0045
.7765
.7763
.7748
.7758
.7770
.7795
.7794
.7790
.7787
.7780
.7750
.7748
.7744
.7743
.7765
.7782
.7780
.7776
.7775
.7770
Dec
.05292
.05327
.05243
.05263 –.00030 192,934
Oct
Dec
1.1745
1.1783
1.1830
1.1870
1.1744
1.1782
1.1808
1.1848
Canadian Dollar (CME)-CAD 100,000; $ per CAD
1.150 14,807
.600 117,946
British Pound (CME)-£62,500; $ per £
416.30
417.50
406.30
407.30 –6.40
4,355
Nov
Jan'18
403.80
404.20
394.40
395.80 –5.70
1,503
Milk (CME)-200,000 lbs., cents per lb.
16.65
16.70
16.63
16.70
–.04
4,089
Oct
Nov
16.20
16.30
16.17
16.24
–.16
4,483
Cocoa (ICE-US)-10 metric tons; $ per ton.
Dec
2,021
2,062
2,016
2,045
37 116,254
March'18
2,032
2,075
2,031
2,061
38 73,530
Coffee (ICE-US)-37,500 lbs.; cents per lb.
131.00
132.70
130.05
131.00
.05 112,152
Dec
March'18 134.65 136.25
133.75
134.70
.10 51,703
Sugar-World (ICE-US)-112,000 lbs.; cents per lb.
14.05
14.27
13.91
14.17
.17 427,266
March
May
14.14
14.34
14.04
14.24
.13 121,867
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb.
27.00
27.00
27.00
27.00
.01
2,183
March
Cotton (ICE-US)-50,000 lbs.; cents per lb.
69.00
69.88
68.61
68.95
… 127,228
Dec
March'18
68.43
69.23
68.08
68.38
–.04 70,044
Orange Juice (ICE-US)-15,000 lbs.; cents per lb.
157.10
161.65
155.65
161.25
3.75
4,081
Nov
Jan'18
157.85
160.75
156.15
160.55
2.60
3,129
Swiss Franc (CME)-CHF 125,000; $ per CHF
Australian Dollar (CME)-AUD 100,000; $ per AUD
Oct
Nov
Dec
Jan'18
March
Mexican Peso (CME)-MXN 500,000; $ per MXN
Euro (CME)-€125,000; $ per €
48,388
132
.0025
1,021
.0025
613
.0025 141,696
.0025
407
.0025
589
.0054
1,840
.0054 426,436
Index Futures
Mini DJ Industrial Average (CBT)-$5 x index
22707
22729
22799 s
22781 s
22706
22708
22784
22768
2543.30
2553.20 s
2543.00
2548.50
Dec
March'18
S&P 500 Index (CME)-$250 x index
Dec
Interest Rate Futures
Mini S&P 500 (CME)-$50 x index
Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
2543.25 2553.25 s
2542.75 2548.50
Dec
March'18 2543.50 2553.50 s 2543.25 2548.75
Mini S&P Midcap 400 (CME)-$100 x index
1815.40 1824.20 s
1814.80 1818.50
Dec
Mini Nasdaq 100 (CME)-$20 x index
6062.3
6088.5 s
6039.0
6065.3
Dec
March'18 6080.8 6100.3 s
6052.0
6077.5
Mini Russell 2000 (ICE-US)-$100 x index
1507.30 1513.90
1505.00 1509.90
Dec
March'18 1513.70 1514.50
1512.00 1510.10
Mini Russell 1000 (ICE-US)-$100 x index
1414.30 1416.70 s
1410.80 1413.30
Dec
U.S. Dollar Index (ICE-US)-$1,000 x index
93.57
93.57
92.95
93.10
Dec
March'18
93.24
93.24
92.68
92.82
152-070 153-020
151-280 152-160
13.0 747,350
Dec
March'18 150-260 151-270
150-260 151-100
13.0
64
Treasury Notes (CBT)-$100,000; pts 32nds of 100%
125-045 125-140
125-005 125-085
5.5 3,128,443
Dec
March'18 124-270 125-020
124-270 124-300
6.0
3,892
5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
117-112 117-160
117-092 117-130
2.5 2,965,984
Dec
2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
107-247 107-257
107-242 107-252
.7 1,618,623
Dec
30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg.
98.845
98.848
98.845
98.845
… 243,225
Oct
Jan'18
98.645
98.660
98.645
98.650
… 345,732
10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
101.203 101.516
101.109 101.281
.234 29,640
Dec
1 Month Libor (CME)-$3,000,000; pts of 100%
98.5850 98.5850
t 98.5850 98.5825 .0050
1,625
Dec
73 154,602
74
1,382
4.70
50,414
4.75 3,053,792
4.75 24,162
5.30
92,115
.8 279,021
.5
887
2.30
2.30
61,064
76
2.80
299
–.40
–.40
44,542
1,733
Source: SIX Financial Information
Key Interest Rates
Official Court-Approved Notice – Wells Fargo Unauthorized Account Settlement
Did You Have an Unauthorized Wells Fargo
Account Anytime Since May 2002?
You could get a payment from a $142 Million
Wells Fargo Class Action Settlement
Data are annualized on a 360-day basis. Treasury yields are per annum,
on actively traded noninflation and inflation-indexed issues that are
adjusted to constant maturities. Data are from weekly Federal Reserve
release H.15.
Week Ended
Oct 6 Sep 29
52-Week
High
Low
Federal funds (effective)
1.12
1.16
0.35
1.10
1.17
1.22
1.12
1.16
1.20
1.12
1.17
1.22
0.40
0.48
0.54
1.17
1.19
1.23
1.07
1.20
1.25
1.19
1.22
1.26
0.44
0.57
0.66
Discount window primary credit
1.75
The Settlement includes customers who had certain unauthorized Wells
Fargo credit, checking, or savings accounts, or authorized identity theft
protection service, since May 2002.
Go to www.WFSettlement.com to learn more about how you could
be included.
Cash benefits include:
• A payment to compensate you for fees you may have paid in connection
with unauthorized accounts.
• Cash to compensate you for damages caused by harm to your credit.
• Plus, any money remaining in the fund, after paying the benefits above and
all costs and expenses, will be paid out as additional compensation on a
per-account basis.
How It Works
1.75
1.75
1.00
n.a.
n.a.
Conventional mortgages
n.a.
n.a.
Treasury yields at constant
maturities
1.00
1.06
1.21
1.33
1.49
1.63
1.94
2.17
2.34
2.65
1-month
3-month
6-month
1-year
2-year
3-year
5-year
7-year
10-year
20-year
0.97
1.06
1.19
1.31
1.46
1.59
1.89
2.12
2.28
2.59
1.07
1.13
1.21
1.33
1.49
1.64
2.08
2.37
2.55
2.91
0.21
0.32
0.47
0.64
0.82
0.97
1.24
1.53
1.70
2.10
1-month
3-month
6-month
0.98
1.04
1.19
0.95
1.04
1.17
1.05
1.11
1.19
0.21
0.32
0.46
0.21
0.40
0.49
0.78
0.81
0.17
0.38
0.43
0.72
0.76
0.29
0.49
0.63
0.97
0.97
-0.30
-0.13
0.08
0.45
0.50
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1.00
1.09
1.17
1.25
1.33
1.48
1.65
2.00
0.97
1.05
1.12
1.19
1.26
1.38
1.54
1.87
TIPS
5-year
7-year
10-year
20-year
Long-term avg
Interest rate swaps
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1-year
2-year
3-year
4-year
5-year
7-year
10-year
30-year
Corporate bonds, Moody's seasoned
n.a.
n.a.
n.a.
n.a.
Aaa
Baa
n.a.
n.a.
n.a.
n.a.
State and local bonds
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Eurodollars
1 month
3 month
6 month
Notes on data:
Federal-funds rate is an average for the seven days ended Wednesday, weighted according to rates
on broker trades; Commercial paper rates are discounted offer rates interpolated from sales by
discounted averages of dealer bid rates on nationally traded certificates of deposit; Discount window
primary credit rate is charged for discounts made and advances extended under the Federal
Reserve's primary credit discount window program; rate is average for seven days ended Wednesday;
Inflation-indexed long-term TIPS average is indexed and is based on the unweighted average bid
yields for all TIPS with remaining terms to maturity of 10 years or more; Swap rates are International
Swaps and Derivatives Association (ISDA(R)) mid-market par rates for a fixed-rate payer, who in
return receives three-month Libor, and are based on rates collected at 11:00 a.m. ET by Garban
Intercapital PLC; Source is Reuters; Moody's triple-AAA rates are averages of industrial bonds only;
Muni rates are Thursday quotes based on the Bond Buyer Index for general obligation, 20 years to
maturity, mixed quality debt; Mortgage rates are contract rates on commitments for fixed-rate first
mortgages
Sources: Federal Reserve; for additional information on these rate data and their derivation,
please see, www.federalreserve.gov/releases/h15/data.htm
Borrowing Benchmarks | WSJ.com/bonds
Money Rates
October 10, 2017
Key annual interest rates paid to borrow or lend money in U.S. and
international markets. Rates below are a guide to general levels but
don’t always represent actual transactions.
UU UU UU
Inflation
Aug. index
level
Other short-term rates
Chg From (%)
July '17 Aug. '16
U.S. consumer price index
245.519
252.460
All items
Core
Visit www.WFSettlement.com
to fill out the simple claim form
in a few minutes.
52-Week
High
Low
Treasury yields (secondary market)
1.16
Commercial paper
Nonfinancial
1-month
2-month
3-month
Financial
1-month
2-month
3-month
Week Ended
Oct 6 Sep 29
Your claim will be examined.
If eligible, you’ll receive a
check in the mail.
0.30
0.21
1.9
1.7
International rates
Latest
Week
ago
Your Rights, Next Steps, & Important Dates
Policy Rates
You may object or exclude yourself from the Settlement by December 5, 2017.
You must submit a valid claim before February 3, 2018.
0.00
0.50
0.25
1.50
1.11
U.S.
Discount
If you are an eligible Class Member and stay in the Settlement, you will be
eligible for a cash payment and cannot sue Wells Fargo.
Effective rate
High
Low
Bid
Offer
Visit www.WFSettlement.com for more details on the Settlement, to fill out
a claim form, and to review your rights and options. You may hire an attorney
at your own cost to represent you.
www.WFSettlement.com
1-866-431-8549
0.00
0.50
0.25
1.50
0.00
0.50
0.25
1.50
Overnight repurchase
The Court will hold a hearing on January 4, 2018, to determine whether
to approve the Settlement. This hearing date may change, so check
www.WFSettlement.com for updates.
Attorneys representing the Class will request Court approval for attorneys’
fees up to 15% of the Settlement Fund, plus costs.
0.00
0.50
0.25
1.50
1.07
Call money
3.00
1.38
0.15
U.S. government rates
90 days
1.75
1.1700
1.3125
1.0300
1.1600
1.1700
1.75
1.00
1.2000
1.3125
1.1600
1.1700
1.1900
0.3500
0.5625
0.2400
0.3000
0.3200
Treasury bill auction
1.015 0.980 1.300 0.240
1.085 1.050 1.180 0.340
1.220 1.190 1.220 0.470
4 weeks
13 weeks
26 weeks
2.25
n.a.
1.23
1.30
0.62
1.23778 1.23778 1.23889 0.52400
Three month
1.35667 1.34250 1.35667 0.87567
Six month
1.52433 1.51572 1.52489 1.24267
One year
1.80678 1.79872 1.82761 1.55622
Euro Libor
One month
-0.401 -0.405 -0.376 -0.405
Three month
-0.376 -0.378 -0.319 -0.381
Six month
-0.309 -0.308 -0.212 -0.309
One year
-0.222 -0.221 -0.071 -0.223
Euro interbank offered rate (Euribor)
Federal funds
1.1700
1.3125
1.0500
1.1600
1.1700
3.00
One month
One month
1.75
3.00
Libor
4.25 4.25 4.25 3.50
3.20 3.20 3.20 2.70
1.475 1.475 1.475 1.475
Euro zone
Switzerland
Britain
Australia
52-Week
high
low
Commercial paper (AA financial)
52-Week
High
Low
Prime rates
U.S.
Canada
Japan
Week
ago
Latest
-0.371 -0.373 -0.366 -0.375
Three month
-0.329 -0.330 -0.306 -0.332
Six month
-0.274 -0.273 -0.203 -0.275
One year
-0.181 -0.171 -0.066 -0.181
Latest
Value
Traded
52-Week
High
Low
DTCC GCF Repo Index
Treasury
1.114
18.100 1.366 0.244
MBS
1.159
96.400 1.506 0.257
Open Implied
Settle Change Interest Rate
Secondary market
Fannie Mae
DTCC GCF Repo Index Futures
30-year mortgage yields
30 days
3.463 3.452 3.865 2.960
60 days
3.485 3.480 3.899 2.990
Treasury Oct
98.880 unch. 5020 1.120
Treasury Nov
Treasury Dec
98.880 -0.005 5503 1.120
98.730 -0.005 1940 1.270
Notes on data:
U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks,
and is effective June 15, 2017. Other prime rates aren’t directly comparable; lending practices vary
widely by location; Discount rate is effective June 15, 2017. DTCC GCF Repo Index is Depository
Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in
billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET. Futures on the
DTCC GCF Repo Index are traded on NYSE Liffe US.
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information;
General Electric Capital Corp.; Tullett Prebon Information, Ltd.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | B15
MARKETS DIGEST
EQUITIES
Dow Jones Industrial Average
S&P 500 Index
Last Year ago
22830.68 s 69.61, or 0.31%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio 20.91 20.10
P/E estimate *
19.30 17.61
Dividend yield
2.25
2.59
All-time high 22830.68, 10/10/17
Nasdaq Composite Index
Last
2550.64 s 5.91, or 0.23%
High, low, open and close for each
trading day of the past three months.
Year ago
Trailing P/E ratio 24.70 24.59
P/E estimate *
19.27 18.42
Dividend yield
1.96
2.13
All-time high: 2552.07, 10/05/17
Last Year ago
6587.25 s 7.52, or 0.11%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio * 25.98
24.35
P/E estimate *
21.15
19.97
Dividend yield
1.10
1.20
All-time high: 6590.18, 10/06/17
Current divisor 0.14523396877348
Session high
UP
Close
t
DOWN
Session open
65-day moving average
2560
6600
22400
2530
6500
22000
2500
6400
21600
2470
6300
21200
2440
Open
t
Close
22800
65-day moving average
6200
65-day moving average
20800
Session low
6100
2410
Bars measure the point change from session's open
20400
July
Aug.
Sept.
6000
2380
Oct.
July
Aug.
Sept.
July
Oct.
Aug.
Sept.
Oct.
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
Major U.S. Stock-Market Indexes
High
Latest
Close
Low
Net chg
% chg
High
52-Week
Low
% chg
% chg
3-yr. ann.
YTD
Dow Jones
22850.51 22770.99 22830.68
Industrial Average
9920.33
9928.48
63.59
739.49
731.18
739.43
7.64
26522.45 26412.20 26469.36
688.38
684.65
686.23
59.60
1.31
Utility Average
Total Stock Market
Barron's 400
69.61
9988.38
Transportation Avg
Nasdaq Stock Market
Nasdaq Composite
6608.30
Nasdaq 100
6084.14
Standard & Poor's
500 Index
6561.78
6036.72
2555.23
6587.25
6063.52
2544.86
0.31
0.64
1.04
0.23
0.19
7.52
4.99
2550.64
5.91
0.11
0.08
22830.68 17888.28
25.9
15.5
11.3
9973.80
7967.02
22.8
9.8
7.9
754.80
625.44
15.4
12.1
9.6
26496.16 21514.15
687.05
521.59
19.7
26.1
13.7
14.1
10.3
11.8
6590.18
6064.57
0.23
2552.07
0.30
19.6
22.6
9.5
8.9
11.7
14.3
1156.89
22.8
11.1
12.7
12346.60 10289.35
1818.58
912.50
5.41
1.78
0.20
1819.96
918.72
Other Indexes
Russell 2000
1511.33
1503.92
1508.01
4.44
0.30
1512.09
12356.00 12321.61 12346.60
NYSE Arca Biotech
23.56
LendingClub
LC
10,605.7
Ambev ADR
ABEV 10,166.9
12.36
42.00
39.75
SPDR S&P 500
SPY
4,766.4 254.53
-0.09
-0.04 254.63 253.97
Vipshop Holdings ADR VIPS
4,762.8
8.34
0.06
0.72
8.34
8.27
Kinross Gold
4,112.6
4.30 -0.001
-0.03
4.32
4.30
KGC
Percentage gainers…
Castlight Health Cl B
CSLT
6.3
4.60
0.25
5.75
4.60
4.35
Web.com Group
WEB
16.4
26.50
1.20
4.74
26.50
25.23
15.7
17.70
0.79
4.67
17.70
16.91
Altimmune
ALT
6.3
2.59
0.08
3.19
2.65
2.59
Celldex Therapeutics
CLDX
73.0
3.21
0.08
2.56
3.21
3.13
16.6
7.85
-0.75
-8.72
8.90
7.50
506.0
24.00
-1.74
-6.76
26.35
23.70
Halozyme Therapeutics HALO
0.50
0.01
4304.77
2834.14
34.4
38.8
12.3
553.88
463.78
10.2
15.0
2.7
100.76
70.90
39.3
9.8
13.5
VOXX International
VOXX
96.72
73.03
8.2
10.0
3.9
Barracuda Networks
CUDA
117.79
-17.2
-24.5 -16.8
Flexion Therapeutics
FLXN
802.88 48.1
9.19 -34.4
33.2 29.1
-28.2 -22.0
Micron Technology
MU
Tableau Software
DATA
138.74
138.84
-0.13
1194.85
9.94
1207.20
10.08
7.34
-0.25
192.66
-0.10
0.61
-2.42
Philadelphia Stock Exchange
1207.20
22.51
...And losers
149.9
25.57
-1.60
-5.89
27.17
25.25
5,390.1
40.15
-1.83
-4.36
42.00
39.75
22.4
74.01
-2.22
-2.91
76.48
74.01
Sources: SIX Financial Information; WSJ Market Data Group
International Stock Indexes
Region/Country Index
Close
Percentage Gainers...
Net chg
2942.30
381.38
257.47
15.40
1.97
2.07
DJ Americas
615.68
Sao Paulo Bovespa 76897.21
S&P/TSX Comp
15770.36
S&P/BMV IPC
49982.94
Santiago IPSA
4157.96
1.72
1170.40
42.04
–89.00
–6.32
The Global Dow
DJ Global Index
DJ Global ex U.S.
390.16
389.70
4055.24
5363.65
12949.25
1441.19
22335.91
541.14
1134.86
10142.30
586.80
9267.17
7538.27
EMEA
Eurozone
Belgium
France
Germany
Israel
Italy
Netherlands
Russia
Spain
Sweden
Switzerland
U.K.
Stoxx Europe 600
Euro Stoxx
Bel-20
CAC 40
DAX
Tel Aviv
FTSE MIB
AEX
RTS Index
IBEX 35
SX All Share
Swiss Market
FTSE 100
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
S&P/ASX 200
5738.10
Shanghai Composite 3382.99
Hang Seng
28490.83
S&P BSE Sensex
31924.41
Nikkei Stock Avg
20823.51
Straits Times
3288.95
Kospi
2433.81
Weighted
10532.81
Latest
% chg
0.53
0.52
0.81
16.2
17.0
20.3
0.28
1.55
0.27
13.9
27.7
3.2
9.5
29.0
–0.18
–0.15
–0.01
–0.05
–0.22
–0.86
0.84
–0.04
–2.18
–0.21
–27.15
–0.26
–3.70
–140.84 –0.63
–0.01
–0.05
2.41
–93.70 –0.92
–0.21
–1.23
7.83
30.38
–1.20
8.61
164.24
77.52
132.80
–2.61
39.34
…
YTD
% chg
0.02
0.21
0.08
0.40
–0.02
0.26
0.58
0.24
0.64
–0.08
1.64
Closed
8.0
11.3
12.4
10.3
12.8
–2.0
16.1
12.0
–1.5
8.4
9.8
12.7
5.5
1.3
9.0
29.5
19.9
8.9
14.2
20.1
13.8
Company
Symbol
AnaptysBio
KalVista Pharmaceuticals
Helios Matheson Analy
MannKind
Celsion
ANAB
Sorrento Therapeutics
Aradigm
Prima Biomed ADR
Cherokee
Peregrine Pharma
SRNE
PAM Transportation Svcs
Pain Therapeutics
Abeona Therapeutics
Yield10 Bioscience
Citius Pharmaceuticals
PTSI
KALV
HMNY
MNKD
CLSN
High
70.41 35.41 101.17
10.19 2.84 38.64
27.89 6.80 32.24
6.71 1.38 25.89
4.60 0.88 23.66
70.48 15.17
15.80 5.48
28.70 2.20
6.96 0.67
16.66 1.24
...
46.1
281.5
123.8
-71.2
Cleantech Solutions Intl
IZEA
Valeritas Holdings
KBS Fashion Group
Rennova Health
CLNT
Symbol
General Electric
MannKind
Bank of America
iShares MSCI Emg Markets
Chesapeake Energy
GE
Micron Technology
Advanced Micro Devices
SPDR S&P 500
Ambev ADR
Finl Select Sector SPDR
MU
MNKD
BAC
EEM
CHK
AMD
SPY
ABEV
XLF
CBAK
28.06
4.83
19.95
3.56
3.58
3.50
0.60
2.45
0.42
0.42
14.25
14.16
14.00
13.43
13.33
28.63 14.50
9.31 3.10
20.35 4.05
9.30 2.18
14.85 2.55
31.7
-8.9
202.7
...
-65.9
Social Reality Cl A
Black Box
Insys Therapeutics
DLH Holdings
Net Element
SRAX
A consumer rate against its
benchmark over the past year
30-year mortgage, Rate
t
30-year fixed-rate
mortgage
3.00
t
2.00
1.00
0.00
N D J FMAM J J A S O
2016 2017
Pinnacle Mortgage Solutions Inc
3.63%
Henderson, NV
702-966-8216
Rocket Mortgage by Quicken Loans
3.63%
Detriot, MI
888-980-3148
Accelin Loans LLC
Kaneohe, HI
3.75%
206-855-6323
Accelin Loans LLC
Bend, OR
3.75%
541-410-6086
1
3 6
month(s)
One year ago
1 2 3 5 710
years
maturity
Federal-funds rate target
1.00-1.25 1.00-1.25
Prime rate*
4.25
4.25
Libor, 3-month
1.34
1.36
Money market, annual yield
0.31
0.32
Five-year CD, annual yield
1.45
1.46
30-year mortgage, fixed†
3.90
3.93
15-year mortgage, fixed†
3.16
3.21
Jumbo mortgages, $424,100-plus† 4.44
4.40
Five-year adj mortgage (ARM)† 3.54
3.40
New-car loan, 48-month
3.06
3.07
HELOC, $30,000
5.30
5.25
3-yr chg
52-Week Range (%)
Low 0 2 4 6 8 High (pct pts)
0.25 l
l
3.50
0.88 l
0.26 l
1.19 l
l
3.54
l
2.80
l
4.23
l
3.13
l
2.85
l
4.57
1.25
4.25
1.36
0.36
1.47
4.33
3.50
4.88
4.03
3.36
5.30
1.00
1.00
1.13
-0.10
-0.07
-0.13
-0.01
0.18
0.03
-0.16
0.84
KALV
42,367
42,224
38,184
36,007
35,038
44.5
-32.6
-38.7
113.0
-32.5
2.49
1.71
0.26
2.59
0.46
41.98
13.70
254.62
6.74
26.37
23.25
0.67
15.60
33.94
3.55
42.00 16.17
15.65
6.22
255.05 208.38
6.86
4.70
26.46 19.11
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
Yen, euro vs. dollar; dollar vs.
major U.S. trading partners
0
–5
WSJ Dollar index
0.75
–10
0.00
–15
30
Euro
WSJ
.COM
-1.62
-1.17
-0.46
-0.41
-0.35
-24.85
-21.51
-16.61
-14.39
-13.98
10.70
7.85
48.00
18.00
103.50
2.31
1.37
2.28
1.41
2.03
28.9
-25.7
-95.2
-61.3
-96.8
1.80
6.43
2.25
3.45
8.00
-0.25
-0.89
-0.30
-0.42
-0.95
-12.20
-12.16
-11.76
-10.77
-10.61
2.35
10.29
5.51
13.90
12.70
1.20
5.87
1.08
3.45
7.81
-14.3
-35.7
-54.9
-44.3
...
2.94
3.25
7.85
6.00
5.35
-0.34 -10.37
-0.35 -9.72
-0.81 -9.35
-0.61 -9.23
-0.54 -9.17
8.95
17.05
15.06
7.38
15.40
1.11
2.85
7.55
4.10
2.56
-54.1
-75.8
-35.7
24.7
-50.5
Volume % chg from Latest Session
(000) 65-day avg Close % chg
DWLD
33772
4093
3529
3232
2753
FEU
SPDR STOXX Europe 50
ANAB
AnaptysBio
CN
Xtrackers MSCI All China
BIOP
Bioptix
SPDR Bloomberg LT Corp Bd LWC
918
5,770
289
984
955
2346
2311
2101
1885
1814
Country/currency
IDLV
SPHB
US$vs,
YTDchg
Tues
in US$ per US$ (%)
Americas
s Yen
9.8
–2.3
–6.9
–6.0
–1.5
unch
–9.2
–2.6
–0.2
2.3
Asia-Pacific
2016 2017
Yield (%)
Last Week ago
52-Week
High
Low
Total Return (%)
52-wk
3-yr
2.079
2.063
2.237
1.466 –1.583 1.951
2.343
2.994
2.570
5.109
2.850
1.927
2.332
2.983
2.550
5.051
2.800
1.937
2.609
3.390
2.790
6.448
3.120
2.516
1.739
2.648
2.050
4.948
2.170
1.668
1.568
2.514
0.588
7.592
0.447
1.714
803.802
5.438
5.411
6.290
5.279
4.776 5.914
1.821
3.873
2.374
4.590
2.186
2.530
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Australian dollar
.7779 1.2855
China yuan
.1522 6.5715
Hong Kong dollar
.1281 7.8042
India rupee
.01533 65.235
Indonesia rupiah .0000740 13513
Japan yen
.008893 112.45
Kazakhstan tenge .002963 337.51
Macau pataca
.1244 8.0389
Malaysia ringgit
.2370 4.2198
New Zealand dollar
.7069 1.4146
Pakistan rupee
.00951 105.200
Philippines peso
.0194 51.479
Singapore dollar
.7374 1.3562
South Korea won .0008808 1135.31
Sri Lanka rupee
.0065168 153.45
Taiwan dollar
.03294 30.361
52-Week
High
Low
38.64
0.75
0.69
0.19
0.41
15.80
35.17
33.71
40.27
24.79
5.48
28.78
27.95
31.56
20.00
35.79 0.88
70.41 101.17
36.99 0.98
8.75 0.11
42.02 0.10
35.81
70.48
37.05
9.60
42.50
28.11
15.17
25.90
2.14
38.57
10.19
35.14
33.34
40.04
24.77
Track the Markets
Compare the performance of selected global stock
indexes, bond ETFs, currencies and commodities at
WSJ.com/TrackTheMarkets
–7.4
–5.4
0.6
–4.0
–0.1
–3.9
1.1
1.5
–5.9
–2.0
0.8
3.8
–6.3
–6.0
3.4
–6.5
US$vs,
YTDchg
Tues
in US$ per US$ (%)
Country/currency
.03008 33.250 –7.1
.00004399 22730 –0.2
Thailand baht
Vietnam dong
Europe
Czech Rep. koruna
Denmark krone
Euro area euro
Hungary forint
Iceland krona
Norway krone
Poland zloty
Russia ruble
Sweden krona
Switzerland franc
Turkey lira
Ukraine hryvnia
UK pound
.04563 21.914 –14.7
.1587 6.3030 –10.8
1.1808 .8469 –10.9
.003800 263.18 –10.6
.009518 105.06 –7.0
.1258 7.9519 –8.0
.2750 3.6369 –13.1
.01725 57.964 –5.4
.1239 8.0739 –11.3
1.0253 .9753 –4.3
.2694 3.7114 5.3
.0376 26.5750 –1.9
1.3204 .7573 –6.5
Middle East/Africa
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6508 .3772 0.02
.0568 17.6150 –2.9
.2861 3.4951 –9.2
3.3111 .3020 –1.2
2.5974 .3850 0.01
.2682 3.728 2.4
.2667 3.7502 –0.01
.0730 13.7002 0.1
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 86.63 –0.33–0.38 –6.79
Sources: Tullett Prebon, WSJ Market Data Group
Commodities
COMMODITIES
Tuesday
52-Week
Pricing trends on someClose
raw materials,
or commodities
Net chg % Chg
High
Low
DJ Commodity
Get real-time U.S. stock quotes and track most-active
stocks, new highs/lows and mutual funds. Plus,
deeper money-flows data and email delivery of key
stock-market data. Available free at WSJMarkets.com
4.90
4.27
2.31
2.44
2.16
3,508
2,279
2,766
3,790
495
GWX
Argentina peso
.0574 17.4287
Brazil real
.3145 3.1801
Canada dollar
.7989 1.2517
Chile peso
.001589 629.50
Colombia peso
.0003382 2957.04
Ecuador US dollar
1
1
Mexico peso
.0531 18.8297
Peru new sol
.3063 3.265
Uruguay peso
.03415 29.2800
Venezuela b. fuerte .097835 10.2213
10%
1.50
52-Week
Low
% chg
U.S.-dollar foreign-exchange rates in late New York trading
Forex Race
5
High
Currencies
1458.776
EMBI Global, J.P. Morgan
* Primary market NYSE, NYSE American NYSE Arca only.
†(TRIN) A comparison of the number of advancing and declining
issues with the volume of shares rising and falling. An
Arms of less than 1 indicates buying demand; above 1
indicates selling pressure.
* Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least
5,000 shares =Has traded fewer than 65 days
10-yr Treasury, Ryan ALM 1732.455
DJ Corporate
380.066
Aggregate, Barclays Capital 1938.490
High Yield 100, Merrill Lynch 2864.468
Fixed-Rate MBS, Barclays 1985.390
Muni Master, Merrill
521.446
Treasury, Ryan ALM
NYSE Arca
Ranked by change from 65-day average*
KalVista Pharmaceuticals
SPDR S&P Intl Small Cap
PowerShares S&P Intl Dev
PowerSh S&P 500 Hi Beta
Davis Select Worldwide
2.25
Close
NETE
32.38
6.96
26.30
46.08
8.20
Corporate Borrowing Rates and Yields
Bond total return index
DLHC
91.0 23.36 -0.30
859.9 6.71 25.89
-31.1 25.93 0.31
-7.9 46.05 0.99
40.7 3.91 -6.68
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Yield/Rate (%)
Last (l)Week ago
INSY
77,348
47,930
45,436
44,557
42,885
3.75%
Tuesday
BBOX
Symbol
3.00
3.50%
972-387-4600
SECO
Company
notes and bonds
t
10-year Treasury
note yield
TexasLending.com
Dallas, TX
IPDN
52-Week
High
Low
Benchmark
Yields
Treasury
yield
curve
andtoRates
Yield
maturity of current bills,
t
4.00%
CATB
Volume % chg from Latest Session
(000) 65-day avg Close % chg
* Volumes of 100,000 shares or more are rounded to the nearest thousand
3.93%
Bankrate.com avg†:
LINK
Volume Movers
s
Selected rates
RNVA
CBAK Energy Technology
Interlink Electronics
Catabasis Pharmaceuticals
Professional Diversity
Secoo Holding ADR
s
U.S. consumer rates
KBSF
-66.7
-35.0
-12.4
-75.2
42.3
CREDIT MARKETS & CURRENCIES
Consumer Rates and Returns to Investor
VLRX
1.50
0.78
1.40
2.10
1.97
Most Active Stocks
Company
Nasdaq
Total volume*1,769,121,008 189,334,790
Adv. volume*1,015,558,021 139,524,766
Decl. volume* 712,085,768 48,917,538
Issues traded
3,035
1,288
Advances
1,774
998
Declines
1,121
261
Unchanged
140
29
New highs
243
275
New lows
25
24
Closing tick
191
77
Closing Arms†
1.11
1.22
Block trades*
7,269
1,104
Latest Session
Close Net chg % chg
IZEA
7.68
6.87
3.26
11.87
5.78
PPHM
CTXR
Symbol
19.05
18.65
15.28
14.89
14.29
CHKE
YTEN
Company
0.40
0.69
0.34
0.35
0.48
PBMD
ABEO
52-Week
Low
% chg
2.50
4.39
2.57
2.70
3.84
ARDM
PTIE
Total volume* 708,704,073 8,986,634
Adv. volume* 431,628,236 3,949,437
Decl. volume* 256,366,072 4,184,302
Issues traded
3,048
325
Advances
1,893
157
Declines
1,015
151
Unchanged
140
17
New highs
197
4
New lows
15
1
Closing tick
158
14
Closing Arms†
1.20
1.36
Block trades*
6,595
105
Percentage Losers
Latest Session
Close Net chg % chg
Sources: SIX Financial Information; WSJ Market Data Group
Interest rate
6.72
12.39
4268.53
141.90
6.38
6.74
-4.36
4244.29
1210.18
10.66
6.39
-0.15
-0.08
4280.89
-0.92 -1.05
unch.
-0.01
-1.83
6.1
86.74
…
6.73
-0.01
6.3
86.56
6.39
40.15
7.3
88.19
23.56
12.38
11.7
0.61
23.61
5,390.1
14.5
0.39
-0.04
8,679.0
17.1
2.13
Low
-0.01
MU
455.65
0.61
After Hours
% chg
High
F
545.78
553.88
Net chg
Ford Motor
0.43
100.76
NYSE NYSE Amer.
Micron Technology
0.24
549.94
Americas
Brazil
Canada
Mexico
Chile
11,335.5
1.30
100.12
Last
VanEck Vectors Gold Miner GDX
52.65
553.93
World
10.2
Volume
(000)
Symbol
543.32
100.84
PHLX§ Semiconductor
CBOE Volatility
Company
542.02
NYSE Arca Pharma
PHLX§ Oil Service
Volume, Advancers, Decliners
545.01
KBW Bank
PHLX§ Gold/Silver
Trading Diary
Most-active and biggest movers among NYSE, NYSE Arca, NYSE Amer.
and Nasdaq issues from 4 p.m. to 6:30 p.m. ET as reported by electronic
trading services, securities dealers and regional exchanges. Minimum
share price of $2 and minimum after-hours volume of 5,000 shares.
Most-active issues in late trading
15.5
16.1
1476.68
703.64
1815.08
910.70
2085.18
22.4
24.7
13.9
1823.08
915.00
NYSE Composite
25.5
25.7
19.4
MidCap 400
SmallCap 600
Value Line
5046.37
4660.46
Late Trading
TR/CC CRB Index
Crude oil, $ per barrel
Natural gas, $/MMBtu
Gold, $ per troy oz.
589.60
7.00
183.20
50.92
2.891
1290.60
2.24
1.34
0.058
8.80
1.20
591.05
527.06
1.24 195.14
54.45
2.70
3.93
2.05
0.69 1346.00
166.50
42.53
2.56
1127.80
% Chg
8.93
YTD
% chg
3.94
-3.15 -4.84
0.26 -5.21
-10.69 -22.37
3.00 12.23
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B16 | Wednesday, October 11, 2017
THE WALL STREET JOURNAL.
BANKING & FINANCE
Vanguard Adds $300 Billion to Arsenal
Inflow in first nine
months of 2017 nearly
matches the results
for all of last year
BY SARAH KROUSE
Investors plowed nearly
$300 billion into Vanguard
Group funds in the first nine
months of this year, nearly
matching flows into the firm
for all of 2016, in the latest affirmation of the primacy of
low-cost passive investing.
The torrent of investor
money extends a winning
streak for the Malvern, Pa.,
firm, which has emerged as
one of the chief beneficiaries of
Americans’ embrace of index
funds during an eight-year-old
U.S. stock bull market.
Vanguard has been the
fleetest among many firms on
Wall Street in offering consumers cheap, easy ways to
act on a simple idea: Most actively managed mutual funds
trying to pick winning stocks
don’t perform well enough to
justify the fees they charge.
The concept, embraced by
Vanguard founder John C.
Bogle in 1975, has since spread
in varying degrees into a host
of other asset classes, from
bonds to currencies. In some
of these markets, the rise of
passive products has only recently begun.
“It’s a high cost/low cost
debate,” said Vanguard Chief
Executive Officer F. William
McNabb III in an interview
Tuesday. “Last year was one
that I never thought we’d see
again,” in terms of firmwide
flows, he added.
Vanguard’s assets topped
$4 trillion for the first time at
the end of January and have
continued their upward climb
since, now reaching $4.7 trillion. The firm’s rise and the
growth of passive investing
broadly
are
prompting
changes spanning the financial
world, from corporate governance to market structure.
At the same time, many investors fret that the passive
revolution that has fed the
growth of Vanguard and rivals
such as BlackRock Inc. is itself
creating a series of structures
that haven’t been tested and
could be vulnerable to unpredictable behavior in a downturn.
“I don’t think that there’s
much that changes these flows
until we have a negative market,” said Daniel Wiener, edi-
tor of the Independent Adviser
for Vanguard Investors, an independent newsletter that follows Vanguard funds. “I can’t
tell you when that happens,
but when it does there will be
a lot of very surprised investors,” he added.
Mr. McNabb acknowledged
that a sharp downturn would
“certainly” cause investors to
dial back their investments in
the stock market. Such a move
could at least slow down the
surge of money into passive
investments.
He added, today, “you’re
still seeing the highest level of
flows into riskier assets than
at any time in my career.”
Vanguard long set itself
apart as a firm owned by its
fund shareholders that offered
rock-bottom fees and refused
to pay for distribution of its
funds. It started the first index
fund for individual investors
40 years ago.
This year, some $516 billion
has flowed into U.S. mutual
funds and exchange-traded
funds, according to research
firm Morningstar Inc., with
the vast majority of that investor cash flowing into index
funds such as ETFs.
—Rob Copeland
contributed to this article.
Partnerships at
Goldman: Not Just
For Bankers, Traders
CHRISTOPHER POLK/GETTY IMAGES
BY LIZ HOFFMAN
Eminem is featured in publicity for a share offering of a firm that will buy some royalties from his music. He has no part in the IPO.
Startups Use Stars to Promote IPOs
BY CORRIE DRIEBUSCH
AND BEN EISEN
Some startups are trying to
lure investors to a risky new
kind of share offering with an
old tactic: the sheen of celebrity.
These firms are using a process known informally as Regulation A+, which is meant to
help small businesses that are
typically ignored by big investment banks to go public through
a crowdfunding approach.
Since this process is less
regulated than a traditional
initial public offering, it has
enabled small companies to
turn to boldfaced names like
actor Ashton Kutcher or
lesser-known figures like a bit
player in the sitcom “Seinfeld”
to promote their businesses in
ways that regulators would
question or even prohibit for
larger companies.
Reg A+ is still in its infancy
and is off to a slow start. Only
five companies have used it to
list on major U.S. exchanges.
Four of them are trading below
their IPO prices, while the
broader market has been rising.
Whether celebrity endorsements can generate more interest and better results remains to
be seen. But dozens of companies are still trying to list
through this shortcut approach,
and a number are hoping star
affiliations will rub off on them.
Royalty Exchange is the
latest example. The Denver
firm, which runs a music royalty auction website, last
month filed plans to launch an
offshoot that will purchase
some of the sound-recording
royalties generated by rapper
Eminem’s music. In announcing its subsidiary’s plans to go
public, the company repeatedly mentioned Eminem’s
Up and Down
Of the five companies that have used a new type of share offering
under Regulation A+, four are trading below their IPO prices.
Change in share price since IPO*
Adomani
250%
S&P 500
Arcimoto
200
Myomo
150
Chicken Soup
for the Soul
Entertainment
100
ShiftPixy
50
0
–50
June
July
Aug.
name in a press release and
during the CEO’s TV appearances. “The star power helps a
lot,” said Matt Smith, CEO of
Royalty Exchange. He noted
that the popularity of an artist
typically means its royalties
are more valuable.
The company says 7,500
people have signed up to be
notified when the shares are
offered for sale.
Eminem, who has no part in
the IPO, was less enthused. A
spokesman said he “has no
connection to this company”
and “Eminem was not consulted.” The decision was
made by a third party who retains royalties for an early
portion of his catalog, the
spokesman added.
Some financial advisers
worry that celebrity affiliations could distract potential
mom-and-pop investors from
looking closely at the companies they are funding.
New Highs and Lows | WSJ.com/newhighs
52-Wk %
Sym Hi/Lo Chg Stock
52-Wk % Stock
Sym Hi/Lo Chg VangdInfoTech VGT
155.94 0.1
Continued From Page B10
Stock
SPDRMSCIACWIIMI ACIM
SPDRACWILowCarbon LOWC
SPDRMSCICAStrat QCAN
SPDRMSCIEAFEStrat QEFA
SPDRMSCIDEStrat QDEU
SPDRMSCIJapanStrat QJPN
SPDR NYSE Tech XNTK
SPDRMomentumTilt MMTM
SPDR S&P500MidGr MDYG
SPDRS&P500Growth SPYG
SPDR Aero & Dfns XAR
SPDRS&PSft&Svs XSW
SPDRS&PTechHardwr XTH
SPDRGenderDivers SHE
SPDRSSgAGlbAll GAL
SchwabFundIntLrgCo FNDF
SchwabFundIntlSmCo FNDC
SchwabIntEquity SCHF
SchwabIntlSC
SCHC
SchwabUS BrdMkt SCHB
SchwabUS Div SCHD
SchwabUS LC
SCHX
SchwabUS LC Grw SCHG
SchwabUS LC Val SCHV
SchwabUS MC SCHM
SPDR DJIA Tr
DIA
SPDR EurSTOXX FEZ
SPDR MSCI exUS CWI
SPDR S&PMdCpTr MDY
SPDR S&P 500 SPY
SPDR SP China GXC
SPDR SP EmAsPac GMF
SPDR IntlSC
GWX
SPDR S&P exUS GWL
SPDR STOXX Eu50 FEU
TechSelectSector XLK
UBS FIEnhGlbHY FIHD
VanEckSMEChiNxt CNXT
VanEckNDRCMGLg LFEQ
VanEckSemiconduc SMH
VangdMatrls
VAW
Sept.
Oct.
*Chart includes change in S&P 500 since June 9 for comparison
Source: FactSet
THE WALL STREET JOURNAL.
VangdAWxUSSC VSS
76.18 0.1
VangdFTSEDevMk VEA
87.30 0.4
60.26 0.7 VangdFTSE Europe VGK
64.08 1.0 VangdFTSE Pac VPL
63.63 0.6 VangdFTSEAWxUS VEU
VUG
75.44 0.9 VangdGrowth
VYM
80.72 0.1 VangdHiDiv
VangdIndls
VIS
108.81 0.2
VV
150.14 0.2 VangdLC
VangdMegaCap
MGC
125.94 0.1
82.65 -0.1 VangdMegaGrwth MGK
67.84 -0.1 VangdMCGrowth VOT
VOO
79.33 0.7 VangdS&P500
70.48 0.2 VangdS&P500 Grw VOOG
VTI
37.19 0.4 VangdTotalStk
30.04 0.9 VangdTotlWrld VT
WisdTrEurQualDiv
EUDG
35.13 1.0
33.79 0.8 WisdTrEuropeSC DFE
WisdTrIntlHdgQual
IHDG
36.17 0.9
DLS
61.82 0.2 WisdTrIntlSC
WisdTrJpnCapGds
DXJC
47.75 0.6
60.95 0.2 WisdTrJpnHdgQuDiv JHDG
67.08
... WisdTrJapanHdg DXJ
52.61 0.4 WisdTrJapanSC DFJ
50.82 0.1 WisdTrUSDivxFin DTN
228.43 0.3 WisdTrUSHiDiv DHS
41.52 0.9 WisdTrUSLCDivFd DLN
38.32 0.9 WisdTrUSLCValueFd EZY
331.61 0.3 WisdTrUSTotalDivFd DTD
255.05 0.3 WisdTrUSTotalEarn EXT
107.00 1.0 XtrkrsFTSEDevXus DEEF
102.23 0.8 XtrkrsHarvCSI300 ASHR
35.17 0.7 XtrkrsMSCIAllChina CN
30.92 1.0 XtrkrsMSCIAWxUS DBAW
35.81 0.9 XtrkrsMSCIAWxUSHi HDAW
60.34 0.1 XtrkrsMSCIEAFE DBEF
DBEM
165.72 1.6 XtrkrsMSCIEM
35.55 1.5 XtrkrsMSCIEurope DBEU
25.24
... XtrkrsMSCIJapan DBJP
96.47 0.5 XtrkrsMSCISKorea DBKO
131.60
... XtrkrsRussell2000 DESC
116.18
43.81
58.75
69.12
53.36
134.91
82.38
136.32
117.16
87.52
106.37
123.61
234.25
130.81
131.48
71.68
26.76
69.87
31.07
74.61
26.94
27.54
55.34
75.82
85.66
71.01
88.11
77.09
89.00
90.77
28.94
30.11
37.05
27.58
26.47
31.42
23.99
28.70
41.08
30.72
34.08
0.9
0.9
1.1
0.8
0.9
0.1
0.5
0.2
0.2
0.3
0.2
0.1
0.3
0.1
0.2
0.5
1.0
0.9
0.6
0.9
1.4
0.8
0.5
1.2
0.5
0.6
0.4
0.1
0.5
0.1
1.0
1.0
1.0
0.6
0.4
0.6
0.9
0.6
0.6
0.5
0.4
Stock
52-Wk %
Sym Hi/Lo Chg
NYSE Arca lows - 24
iPathS&P500VIXST VXX
CSAxela3xInvBrent DBRT
DBAgricDoubleLgETN DAG
DirexEM Bear3 EDZ
DirexHY Bear2 HYDD
DirexS&P500Br3 SPXS
DirexSemiBear3 SOXS
DirexTechBear3 TECS
ProShShtDow30 DOG
ProShShMSCI EAFE EFZ
ProShShtMSCI EM EUM
ProShShortQQQ PSQ
ProShShrtS&P500 SH
ProShUltVIXST UVXY
ProShUltShtDow30 SDOW
ProShUltProShS&P SPXU
ProShrUSBscMtls SMN
ProShrUltShFTSEEur EPV
ProShrUS MSCI Jpn EWV
ProShrUS MSCI EM EEV
ProShUltShtQQQ QID
ProShUltShtS&P500 SDS
ProShrUSSemi SSG
ProShsVIXSTFut VIXY
36.88
91.26
2.88
10.26
10.08
34.74
19.09
8.40
16.22
26.15
18.68
37.46
31.68
18.19
25.12
13.18
14.48
31.93
30.30
9.09
14.90
45.28
12.09
30.63
-2.3
-4.7
0.3
-2.9
-0.3
-0.7
-1.7
-0.1
-0.3
-1.0
-1.1
-0.1
-0.2
-4.4
-1.0
-0.7
0.2
-1.9
-1.2
-1.9
-0.2
-0.5
-0.7
-2.1
NYSE American highs - 4
AbrdnGlobIncFd
CisionWt
EmersonRadio
LGLRtWi
FCO
CISN.WS
MSN
LGLr
9.33 2.1
3.40
...
1.89 9.2
0.13 24.9
NYSE American lows - 1
Myomo
“Many investors don’t understand these investments,”
said Winnie Sun, a financial
adviser in Irvine, Calif. “With a
celebrity name, I worry you’re
buying for the wrong reasons,
to get in on a cool celebrity
club, rather than the right reasons, or fully understanding
the business.”
The Securities and Exchange Commission has also
scrutinized celebrity involvement and prohibits advisers
from using such endorsements
in advertisements.
Regulators balked when mutual-fund company Franklin
Templeton placed football legend Joe Montana in ads during
the early 1990s. The SEC eventually relented, but only after
Franklin Templeton agreed to
put stricter parameters around
such ads to make sure they
weren’t misleading.
In the 1980s, actor John
Houseman appeared in com-
MYO
4.57 -5.7
Nasdaq highs - 243
AbeonaTherapWt ABEOW
AbeonaTherap
ABEO
15.21 13.7
20.35 14.0
52-Wk %
Sym Hi/Lo Chg Stock
Actua
ACTA
AgiosPharm
AGIO
Altaba
AABA
AmNtlBcsh
AMNB
AnaptysBio
ANAB
AnikaTherap
ANIK
AppFolio
APPF
AppliedMaterials AMAT
ArrowInvDWATact DWAT
AspenGroup
ASPU
Atlassian
TEAM
AudioCodes
AUDC
BGC Partners
BGCP
Baidu
BIDU
Banner
BANR
BeiGene
BGNE
Biogen
BIIB
Bioptix
BIOP
BldrsDev100
ADRD
BldrsEur100
ADRU
CASI Pharm
CASI
C&F Fin
CFFI
CDW
CDW
CME Group
CME
CNB FinPA
CCNE
CSW Industrials CSWI
CadenceDesign CDNS
Calyxt
CLXT
CapitalCityBank CCBG
CarlylePfdA
TCGP
CavcoIndustries CVCO
CenterStateBank CSFL
CenturyBancorpA CNBKA
ChartIndustries GTLS
CheckPointSftw CHKP
Cintas
CTAS
CodorusValleyBncp CVLY
Cognex
CGNX
CognizantTech
CTSH
CommunityBkrs ESXB
ComtechTel
CMTL
Copart
CPRT
Crocs
CROX
CyclacelPharmPfd CYCCP
CymaBayTherap CBAY
15.75 1.0
71.95 -0.1
69.51 0.3
42.80 0.7
70.48 101.2
60.15 -0.7
52.25 -0.4
53.07 -0.2
11.52
...
8.92 4.8
40.43 0.5
7.37 0.6
16.44 3.0
262.69 4.0
62.24 0.8
118.95 1.3
332.87 1.2
9.60 0.1
23.06 1.1
22.51 0.3
2.35 15.0
58.35 2.2
71.53
...
138.49 -0.6
28.48 1.9
48.85 -0.6
41.14
...
29.50 12.0
24.96 1.6
25.81
...
154.50 -0.4
27.35 1.7
86.85 3.1
43.06 0.8
117.45 1.0
150.43 0.4
32.55 1.6
117.52 1.0
74.10 0.5
9.30
...
22.71 5.2
35.66 0.5
9.99 1.6
8.75 -7.4
9.00 5.3
mercials for Smith Barney in
which he extolled: “They make
money the old fashioned way.
They earn it.” There were
fewer restrictions since the
ads didn’t promote specific
products.
With Reg A+ companies, the
SEC has offered much greater
latitude for marketing their offerings, and it doesn’t restrict
who can appear in the ads.
In one case, YayYo, a company that billed itself as a ridehailing aggregation app, used
late-night TV commercials for
its Reg A+ offering that featured John O’Hurley, the actor
who played fashion-catalog mogul J. Peterman on “Seinfeld.”
YayYo says it paid Mr. O’Hurley
for his endorsement but declined to say how much. The
company has since changed
course, and Ramy El-Batrawi,
YayYo’s founder, said the firm
is now focusing on buying cars
and renting them to drivers. He
has stopped running the J.
Peterman ads on TV.
Executives at Chicken Soup
for the Soul Entertainment,
known for the book series of
the same name, went on the
road to pitch the IPO of its entertainment arm. They talked
often about Mr. Kutcher, who
is an executive producer and
shareholder.
Even though Mr. Kutcher
never made an appearance,
William Rouhana, CEO of the
entertainment unit, said, potential investors told him the
actor’s involvement “resonated.” The offering in August
raised $30 million.
The stock’s performance,
however, has been less pretty.
On its first day of trading,
shares tumbled 14% from its
$12 IPO price. It closed Tuesday at $7.78.
52-Wk %
Sym Hi/Lo Chg Stock
CypressSemi
CY
Daseke
DSKE
DavisWorldwide DWLD
DigitalTurbine
APPS
Diodes
DIOD
EagleBancorp
EGBN
eBay
EBAY
Ebix
EBIX
EntegraFin
ENFC
ePlus
PLUS
EsperionTherap ESPR
EuronetWorldwide EEFT
FNBBancorp
FNBG
FirstFoundation FFWM
FirstMidILBcsh FMBH
FirstLongIsland FLIC
1stSource
SRCE
FT CanadaAlpha FCAN
FT DevMkts
FDT
FT DevMktsXUS FDTS
FT DorseyFoc5 FV
FT NasdTechDiv TDIV
FT EuropeAlpha FEP
FTEurozoneAlpha FEUZ
FT HK AlphaDEX FHK
FT JapanAlpha FJP
FT LC GrwthAlpha FTC
FT MC CoreAlpha FNX
FT MC GrwthAlpha FNY
FT MCGrAlpDX FAD
FT NasdClEdSmGr GRID
FT NasdGlblAuto CARZ
FT Nasd100Tech QTEC
FT NasdSmartphone FONE
FT NasdSemicon FTXL
FT NasdaqTrans FTXR
FT RBAQualIncm QINC
FT RiverFrDynAP RFAP
FT RiverFrDynEur RFEU
FT SC CoreAlpha FYX
FT SC GrwthAlpha FYC
FT SwitzAlpha FSZ
FlexSTOXXGlbESGImp ESGG
FlirSystems
FLIR
FosterLB
FSTR
Goldman Sachs Group Inc.
is hiring two technologists at
the elite rank of partner, as
Wall Street’s computer nerds
continue to expand their
power base.
Jeff Wecker will join as
Goldman’s chief data officer,
with a goal of helping the firm
sort through, and in some
cases begin to sell, the reams
of data it collects every day,
the bank said. He comes from
Bridgewater Associates, the
world’s biggest hedge fund.
Mr. Wecker spent a decade
trading derivatives for Goldman in New York and Tokyo
before leaving in 1994. He later
launched an early electronictrading platform at Lehman
Brothers.
Goldman is hiring Michael
Blum, a veteran of high-frequency trading firms KCG
Holdings and Getco, to oversee
technology in its electronictrading group.
Goldman has been revamping its trading systems to
court so-called quantitative
hedge funds that crave speed.
It has been upgrading outdated technology, where executives acknowledge Goldman
had lost ground to rivals.
Both men’s positions are
new ones for Goldman, created
under Elisha Wiesel, who was
promoted this year to oversee
the firm’s technology and engi-
5.80
104.06
102.00
43.94
21.39
22.21
32.23
26.37
25.90
57.30
24.40
32.20
37.10
28.75
28.70
22.21
31.06
21.55
44.60
123.68
27.54
24.45
30.34
2.72
12.03
39.95
5.59
63.32
61.79
51.33
94.71
34.88
68.80
69.69
48.95
74.49
66.01
66.81
62.39
71.29
71.83
56.53
58.50
163.90
37.75
2.0
1.4
1.0
1.8
0.4
0.5
-0.6
0.5
1.8
1.5
2.7
3.9
0.5
-0.2
32.2
-2.5
0.3
1.7
2.6
0.6
0.3
1.2
11.7
11.6
-0.1
-0.5
3.2
0.9
1.0
0.1
0.6
0.5
1.2
0.6
0.9
1.0
1.0
0.8
1.1
1.0
0.8
0.9
0.3
0.6
1.1
Goldman has been
revamping its trading
systems to court
certain hedge funds.
torically preferred to build its
own software from scratch, is
increasingly turning to opensource solutions that have
worked elsewhere, and hiring
outsiders fluent in them.
“There was a long period of
time, at Goldman and elsewhere, where being insular was
the thing to do,” Mr. Wiesel
said. “But all this amazing new
technology is being developed
outside, and there’s value to being able to use that and hiring
people who are familiar with it.
The mix of ‘build’ versus ‘buy’
versus ‘download’ is shifting.”
Indonesia Scrutinizes
U.K. Bank’s Clients
BY MARGOT PATRICK
Indonesia is investigating
whether dozens of citizens with
trust accounts at Standard
Chartered PLC owe tax after
transferring $1.4 billion from
Guernsey to Singapore in 2015.
The transfers, made just before an automatic tax information-sharing program took effect in Guernsey, involved 81
Indonesians, Indonesia’s top
tax official said. He said no
names from the military, police
or other law enforcement were
on the client list, contradicting
earlier reports that Indonesian
military officials were among
the account holders.
The client transfers and subsequent probes by regulators in
Guernsey and Singapore were
reported by Bloomberg News
last week.
52-Wk %
Sym Hi/Lo Chg Stock
16.00 2.6 GSV Capital
GSVC
14.27 -0.2 Galapagos
GLPG
24.79 0.4 GeneralFin9%PfdC GFNCP
1.62 1.3 GlobalIndemnity GBLI
31.95 2.5 GlbXFinTech
FINX
68.85 0.9 GlbX Robotics&AI BOTZ
39.28 -0.4 GlbXSocialMedia SOCL
67.20 1.9 GovtPropNts2046 GOVNI
26.50 0.8 GreatElmNts22 GECCL
96.65 1.3 GreatSouthernBncp GSBC
57.40 -1.1 GreenBancorp
GNBC
99.93 0.2 GreeneCnty
GCBC
34.83 0.9 GriffinIndlRealty GRIF
18.50 1.9 GuarantyBncp
GBNK
40.24 2.5 Helios&Matheson HMNY
31.80 2.1 HeritageCrystal HCCI
52.09 1.9 HorizDAXGermany DAX
25.80 1.0 HowardBancorp HBMD
60.02 1.1 Hurco
HURC
41.90 1.4 IAC/InterActive IAC
26.65 0.2 IQ Chaikin US SC CSML
33.00 0.2 IXYS
IXYS
38.01 1.0 Ichor
ICHR
43.08 1.1 IderaPharm
IDRA
43.95 0.9 InnerWorkings
INWK
55.89 1.1 Intel
INTC
58.71
... InterNAP
INAP
62.80 0.3 iShAsia50ETF
AIA
37.28 0.1 iShCoreMSCITotInt IXUS
62.84 0.2 iShCoreS&PUSGrowth IUSG
50.35 0.7 iShSelectDividend DVY
41.78 0.6 iShExponentialTech XT
69.75 0.3 iShGlbTimber
WOOD
51.58 1.2 iShMSCIACWIETF ACWI
29.29 0.6 iShMSCIACWIexUSETF ACWX
24.80 0.8 iShMSCIACxJpn AAXJ
24.72 0.2 iShMSCIChinaETF MCHI
59.49 0.7 iShMSCIEAFEESGOpt ESGD
65.10 1.2 iShMSCIEAFESC SCZ
60.02 0.9 iShMSCIEMESGOpt ESGE
42.00 1.2 iShMSCIEmMkAsia EEMA
51.80 1.3 iShMSCIEuropeSmCp IEUS
91.00 0.5 iShMSCIGlbImpact MPCT
41.55 1.0 iShPHLXSemicond SOXX
25.25 2.0 IturanLocation
ITRN
neering division.
Goldman has doubled its lateral hiring this year, President
Harvey Schwartz said at an investor presentation last month,
and has been dangling partnerships for prized recruits. Opening up its most elite ranks to
outsiders is an acknowledgment
that, to grow, the firm must look
beyond its homegrown talent.
That is especially true in
technology, where Goldman
fights for talent with Silicon
Valley. The firm, which has his-
52-Wk %
Sym Hi/Lo Chg Stock
JanusSCGrwAlpha JSML
KalVistaPharm KALV
KewauneeSci
KEQU
LakelandFin
LKFN
LendingTree
TREE
LigandPharm
LGND
LivaNova
LIVN
LivePerson
LPSN
MAM Software MAMS
MillAcqn Un
MIIIU
MackinacFin
MFNC
MagicSoftware MGIC
MannKind
MNKD
ManTechIntl
MANT
Marriott
MAR
McGrathRentCorp MGRC
MicrochipTech
MCHP
MicronTech
MU
Microsoft
MSFT
ModusLink
MLNK
MonolithicPower MPWR
MotifBioWt
MTFBW
MutualFirstFin MFSF
NXP Semi
NXPI
NatlEnerSvs
NESR
NatlInstruments NATI
NortheastBancorp NBN
NorthrimBanCorp NRIM
NuvNasd100Dyn QQQX
NVIDIA
NVDA
OhioValleyBanc OVBC
ON Semi
ON
180DegreeCap
TURN
OtterTail
OTTR
Overstock
OSTK
PAM Transport PTSI
PRA HealthSci PRAH
ParagonCommercial PBNC
Paychex
PAYX
PayPal
PYPL
pdvWireless
PDVW
PeapackGladFinl PGC
PlumasBancorp PLBC
PwrShDWAMom DWLV
PwrShDWA Mom PDP
36.00
15.80
31.20
49.48
262.25
143.26
75.42
15.10
7.89
10.38
16.80
9.25
6.96
46.56
114.11
46.00
92.33
42.00
76.63
2.24
111.55
9.94
40.15
115.17
9.72
44.25
29.95
35.90
22.79
192.95
38.45
19.82
1.87
45.20
33.30
28.63
82.00
59.60
64.08
66.67
33.75
34.80
22.37
30.38
49.76
-0.2
38.6
-0.2
1.6
1.9
0.6
1.2
3.1
-0.1
0.2
4.7
2.2
25.9
1.8
1.2
1.2
0.5
2.5
...
0.9
2.7
-15.4
1.1
0.4
...
1.2
1.7
1.7
0.3
1.9
2.7
0.4
2.4
1.8
-8.3
14.3
-0.3
1.8
0.1
-0.3
2.0
0.7
3.3
0.3
0.2
On Monday, Singapore’s
Monetary Authority confirmed
it is conducting an investigation and will take “firm action”
against any financial institution or individual found breaking its anti-money-laundering
or counterterrorist financing
rules.
Ken Dwidjugiasteadi, director general of tax at Indonesia’s finance ministry, said 62
of the 81 people had participated in a recent tax-amnesty
program in Indonesia.
Standard Chartered self-reported the transfers after
questions were raised internally over their timing and on
due diligence conducted on the
clients, a person familiar with
the matter said.
—I Made Sentana
and P.R. Venkat
contributed to this article.
52-Wk %
Sym Hi/Lo Chg Stock
PwrShDWANasdMom DWAQ
PwrShDWATactical DWTR
PwrShDivAch
PFM
PwrShDynFinl
PFI
PwrShDynIndls PRN
PwrShDynTech PTF
PwrShGlbWater PIO
PwrShQQQ 1
QQQ
PwrShS&P SC Fin PSCF
PwrShS&P InfTech PSCT
PrincplMillennials GENY
ProgressSoftware PRGS
ProShUltPrQQQ TQQQ
QAD B
QADB
RCI Hospitality RICK
RF Industries
RFIL
ROBOGlblRobotics ROBO
RepublicBcpKYA RBCAA
RigelPharm
RIGL
RiverviewBncp RVSB
S&T Bancorp
STBA
SEI Investments SEIC
SMART Global SGH
SPPlus
SP
SafetyInsurance SAFT
SiliconLab
SLAB
SpartanMotors SPAR
SprottFocus
FUND
SunHydraulics
SNHY
SunshineBancorp SBCP
TRowePrice
TROW
TetraTech
TTEK
TexasInstruments TXN
TimberlandBncp TSBK
TowneBank
TOWN
TriCoBancshares TCBK
US Lime&Min
USLM
uniQure
QURE
UtdCmtyFnl
UCFC
UnivLogistics
ULH
UTStarcom
UTSI
VangdRuss1000Grw VONG
VangdRuss3000 VTHR
VangdTotIntlStk VXUS
100.52
27.75
24.95
33.83
59.54
51.98
25.10
148.14
54.53
81.16
32.11
40.87
120.57
29.35
27.17
2.65
39.33
41.30
4.07
8.92
41.38
63.37
33.62
41.20
81.45
84.95
12.40
7.84
57.73
24.05
92.58
48.55
92.41
32.10
34.88
41.80
91.43
11.06
9.99
22.44
2.91
130.40
117.40
55.48
...
0.5
0.6
0.4
-0.3
0.1
0.4
0.1
0.8
0.2
0.4
0.6
0.2
0.2
8.4
1.2
0.5
1.8
-1.0
0.7
1.7
0.9
0.3
0.6
1.0
0.6
2.5
-0.6
-1.5
1.9
0.2
0.4
0.9
5.0
1.5
1.2
3.1
3.7
1.7
-0.5
2.1
0.1
0.2
0.9
52-Wk %
Sym Hi/Lo Chg
44.25 -0.7
VaronisSystems VRNS
103.46 2.2
VSInverseVIXSTerm XIV
34.38 0.9
VicShDevEnhVol CIZ
39.64 0.6
VicShIntlVolWtd CIL
27.59 1.2
VidentIntlEquityFd VIDI
19.63 0.6
ViperEnergyPtrs VNOM
VirtusInvtPfdD VRTSP 108.50 0.3
39.07 -0.3
Virtusa
VRTU
2.66 24.1
WPCS Intl
WPCS
WashTrBcp
59.10 3.7
WASH
4.09 -0.3
WestportFuelSys WPRT
Winmark
WINA 139.05 0.3
82.60 1.0
WisdTrChinaxSOE CXSE
43.01 1.1
WisdTrJapanHdgSC DXJS
23.58 1.5
XOMA
XOMA
72.85 -0.1
Xilinx
XLNX
32.85 6.0
ZaiLab
ZLAB
Nasdaq lows - 25
ANGI Homesvcs ANGI
AchieveLifeSci
ACHV
BlackRidgeAcqn BRACU
DISH Network
DISH
DepoMed
DEPO
DiscoveryComm C DISCK
GlbPartnerAcqn GPAC
GreatElmCap
GECC
HalladorEnergy HNRG
InsysTherap
INSY
LexiconPharm
LXRX
NovelionTherap NVLN
OrganovoHoldings ONVO
ParkerVision
PRKR
ProfDiversity
IPDN
ProShUltraProShQQQ SQQQ
RennovaHealth RNVA
Rentech
RTK
US Gold
USAU
Valeritas
VLRX
VS2xVIXShortTerm TVIX
VSVIXShortTerm VIIX
Viacom B
VIAB
VistaGenTherap VTGN
WalgreensBoots WBA
11.43
1.97
10.08
51.47
5.48
19.10
9.35
10.10
5.15
7.55
11.39
6.41
1.69
1.43
3.45
25.37
2.03
0.22
1.68
2.28
9.98
15.60
25.34
1.29
69.28
...
0.9
-0.1
...
-3.1
-2.0
-6.8
-0.2
-0.8
-9.4
-2.6
-0.3
-12.8
2.8
-10.8
-0.2
-14.0
-37.0
-2.8
-16.6
-4.2
-2.1
0.6
-10.5
-1.4
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Wednesday, October 11, 2017 | B17
* * * *
MARKETS
U.S. government bonds
strengthened, showing some
signs of resilience following
recent declines.
The yield on the 10-year
Treasury note
CREDIT
settled
at
MARKETS 2.343%
on
Tuesday, down
from
2.370%
Friday. The U.S. bond market
was closed Monday for Columbus Day.
Yields, which fall when
bond prices rise, edged
lower as investors continued
to weigh geopolitical risks
against a variety of factors
that have pushed yields
higher in recent weeks.
Along with tensions between the U.S. and North
Korea, Spain’s political crisis
has been a source of concern
that is keeping a check on
Treasury yields, according to
analysts. Catalonia’s separatist
leader
Tuesday
stopped short of a declaration of independence that
would take immediate effect
but reasserted the region’s
right to become a separate
state following an Oct. 1 referendum, which Spain’s government has declared illegal.
2.343%
Yield at which 10-year Treasury
note settled Tuesday
Despite the worries, the
10-year yield has logged four
consecutive weeks of increases, bringing it back to
levels seen before a summer
bond rally pulled it down to
nearly 2%.
Signs that the Federal Reserve will raise interest
rates in December have been
one factor behind the recent
selling. Speculation that Fed
Chairwoman Janet Yellen
could be replaced next year
with
someone
favoring
tighter monetary policy and
progress in Washington toward passing tax cuts that
could boost inflation and expand the budget deficit have
also pressured bonds.
In the near term, “we still
have the risk of slightly
higher yields just based on
central bank expectations,”
said John Canavan, market
analyst at Stone & McCarthy
Research Associates.
At the same time, he said,
“the geopolitical situation
remains in flux, particularly
in regard to North Korea.”
This week could be an
eventful one in the bond
market. Auctions of threeyear and 10-year Treasury
notes are both scheduled for
Wednesday, while a sale of
30-year Treasury bonds is
slated for Thursday.
The Fed will release minutes from its September
meeting on Wednesday afternoon, while new data on
retail sales and the consumer-price index will be released Friday, potentially offering fresh insight into the
state of the economy and
the outlook for monetary
policy.
AUCTION RESULTS
Here are the results of Tuesday's Treasury auctions.
All bids are awarded at a single price at the marketclearing yield. Rates are determined by the difference
between that price and the face value.
13-WEEK AND 26-WEEK BILLS
13-Week
26-Week
$121,892,716,100 $108,535,080,000
$42,000,316,100 $36,000,360,000
$586,859,100 $458,080,000
$200,000,000 $600,000,000
99.725736
99.383222
(1.085%)
(1.220%)
1.103%
1.245%
Coupon equivalent
31.32%
84.28%
Bids at clearing yield accepted
912796ML0
912796PA1
Cusip number
Applications
Accepted bids
" noncomp
" foreign noncomp
Auction price (rate)
Both issues are dated Oct. 12, 2017. The 13-week bills
mature on Jan. 11, 2018; the 26-week bills mature on
April 12, 2018.
52-WEEK BILLS
Applications
Accepted bids
" noncompetitively
" foreign noncompetitively
Auction price (rate)
Coupon equivalent
Bids at clearing yield accepted
Cusip number
$65,425,759,100
$20,000,056,100
$229,301,100
$0
98.619833
(1.365%)
1.398%
72.47%
912796NZ8
The bills, dated Oct. 12, 2017, mature on Oct. 11, 2018.
FOUR-WEEK BILLS
$101,452,986,900
Applications
$35,000,026,900
Accepted bids
$552,598,900
" noncompetitively
$0
" foreign noncompetitively
99.921056
Auction price (rate)
(1.015%)
1.030%
Coupon equivalent
33.68%
Bids at clearing yield accepted
912796KX6
Cusip number
The bills, dated Oct. 12, 2017, mature on Nov. 9, 2017.
BY MICHAEL WURSTHORN
AND RIVA GOLD
Gains in Wal-Mart Stores
and shares of other consumerstaples companies pushed major U.S. stock indexes higher.
The advances helped shares
recover from
TUESDAY’S its
modest
MARKETS
losses on Monday, when U.S.
stock-trading
volume declined to its lowest
level of the year for a full day
of trading.
The Dow Jones Industrial
Average gained 69.61 points,
or 0.3%, to 22830.68—a record. The S&P 500 rose 5.91
points, or 0.2%, to 2550.64,
while the Nasdaq Composite
added 7.52 points, or 0.1%, to
6587.25.
Wal-Mart
contributed
roughly 25 points to the Dow
industrials’ daily gain after
company executives said the
retailer would keep U.S. store
openings to a minimum, while
focusing more on e-commerce
and launching locations overseas to increase sales.
Wal-Mart jumped $3.60, or
4.5%, to $84.13, to notch its
highest close since February
2015.
The company led gains in
the S&P 500’s consumer-staples sector, which rose 1%.
Costco Wholesale rose 2.26,
or 1.5%, to 156.87, while
Hormel Foods gained 50
cents, or 1.6%, to 31.75.
“Consumer staples is a sector that has been completely
left behind for the year, particularly last quarter,” said
Don Townswick, director of
equity strategy at Conning,
adding that he expects the
group to post gains in the
fourth quarter.
The sector shed about 2% in
the three months ended in
September.
Shares of airliners broadly
rose after American Airlines
Group raised its revenue guidance for the third quarter and
United Continental Holdings
said a measure of airline traffic would fall, but less than it
had expected in its early September guidance.
American rose 2.43, or
4.8%, to 53.03, while United
gained 3.02, or 4.7%, to 67.72.
With earnings season getting under way, investors expect that U.S. firms will continue to deliver solid results.
Improving profit and revenue
at American companies has
helped support stocks over the
past year.
At the end of September,
analysts polled by FactSet expected companies in the S&P
500 to post earnings growth
of 4.2% in the third quarter, a
slightly slower rate than previous quarters, in part because of the recent hurricanes.
Companies with a higher
share of global revenue are
forecast to particularly benefit
from a strengthening world
economy and weaker dollar,
according to FactSet.
“The profit picture has
been solid, but I would keep
an eye on the dollar because if
it starts to strengthen again,
that would throw a little more
caution to my outlook for equities,” said Mark Heppenstall,
JOSHUA ROBERTS/REUTERS
BY SAM GOLDFARB
Stock Indexes Resume Their Climb
American Airlines shares surged 4.8% after the carrier raised its view on third-quarter revenue.
chief investment officer at
Penn Mutual Asset Management.
The WSJ Dollar Index,
which tracks the dollar against
a basket of 16 currencies,
dropped 0.4% Tuesday but has
risen for five of the past six
weeks.
Elsewhere, the Stoxx Europe 600 slipped less than
0.1% as declines in shares of
Spanish and Italian companies
offset a modest advance in
U.K. stocks.
Early Wednesday, South Korea’s Kospi was up 0.6% after
advancing 1.6% to its highest
close since July on Tuesday.
Also early Wednesday, Japan’s
Nikkei was up 0.2% and Hong
Kong’s Hang Seng Index was
up 0.3%.
Soaring
Shares of airlines were among the biggest gainers in the S&P 500
on Tuesday.
8%
American Airlines Group
United Continental Holdings
6
4
2
S&P 500
0
9:30 10
11
noon
1
2
3
4
THE WALL STREET JOURNAL.
Source: WSJ Market Data Group
Amazon’s Private-Label Brands Set to Deliver Huge Profits
Oil Rises
As Saudi
Plan Lifts
Spirits
BY SARAH MCFARLANE
AND STEPHANIE YANG
DOUG STRICKLAND/CHATTANOOGA TIMES FREE PRESS/ASSOCIATED PRESS
Treasurys
Rebound;
New Note
Sales Loom
Amazon.com’s business
selling phone chargers, batteries
and diaper wipes under its own
brand names could become a $1
billion boon to its bottom line by
2019, according to a Morgan
Stanley equity analyst.
Amazon is increasingly
focusing on expanding its
private-label business, Brian
Nowak wrote in a research note
Tuesday. The retailer has been
selling its own brands for years,
debuting the AmazonBasics
private-label line back in 2009 to
sell mostly electronics.
Today, Amazon has 34
different private-label brands,
Morgan Stanley estimates,
selling everything from sheets to
luggage. Amazon’s recent
purchase of Whole Foods added
the grocery chain’s 365 brand to
its lineup.
“But it’s still early,” writes Mr.
Nowak. Morgan Stanley
estimates other big retailers
receive about 18% of their
revenue from private-label
brands, while Amazon gets only
about 0.15% of its global sales
from its own labels.
Alongside businesses such as
advertising and subscriptions,
Morgan Stanley believes the
private-label business will turn
into a crucial source of profits
for Amazon as the company
ramps up spending. In the
second quarter, Amazon’s profit
fell 77% despite higher sales as
the company poured more
money into new warehouses
and data centers.
The bank estimates privatelabel brands will add $1 billion to
Amazon’s gross profit by 2019 if
the business grows into 5% of
its sales.
“We’re always listening to
customers, learning and
innovating on their behalf and
bringing them products we think
they will love,” an Amazon
spokeswoman said. Shown
above is an Amazon fulfillment
center in Chattanooga, Tenn.
Private-label businesses also
tend to be more profitable,
Morgan Stanley says, on
average having profit margins
that are 6 percentage points
above those of branded lines.
Amazon doesn’t break out
results for its private-label
business.
“A deepening gross profit
pool gives Amazon more dollars
to invest and (eventually) allow
to flow down the [profit and
loss] for shareholders, Mr.
Nowak wrote. “Private label is
likely to be the next driver.”
Amazon shares have surged
32% so far this year.
—Chelsey Dulaney
Symantec’s Shares Are Coming Undone
BY CHRIS DIETERICH
The hack at Equifax Inc.
last month gave shares of security-software maker Symantec Corp. a bump. This
week, Wall Street cooled on
the stock.
EQUITIES
The
shares
have fallen 6.9%
over the past
two days, making the firm the
worst-performing technology
stock in the S&P 500 this
week. The culprit was a pair of
research reports by analysts
who said the price moved too
far, too fast. On Tuesday, the
stock fell 3.2%, to $31.59.
Symantec jumped roughly
10% in the days after credit-reporting company Equifax said
hackers gained access to the
personal information of potentially 145.5 million Americans.
Headlines about the breach
led to a surge in consumer demand for identify-theft protection service LifeLock, which
Symantec acquired last year
for $2.3 billion.
Symantec, one of the earliest players in providing antivirus software for personal com-
puters, has been acquisitive to
boost growth as digital security is becoming a top concern
in corporate boardrooms.
Analysts this week said that
the stock’s move fully valued a
spurt of new business at LifeLock. Keith Weiss at Morgan
Stanley said that any improvement in LifeLock is “still
too small to move the needle”
and materially translate into
Symantec’s bottom line over
the next year. Mr. Weiss cut
his rating on the stock Tuesday to “equalweight” from
“overweight.”
Cowen & Co. analyst Gregg
Moskowitz on Monday cut his
view on Symantec to “underperform,” the equivalent of
sell, saying the “spike in the
shares since last month’s disclosure of the Equifax breach
is overdone.” And more to the
point, he warned that new
business at LifeLock could
prove transitory. “Recent history has shown that consumers’ sense of urgency with respect to security purchases is
typically short-lived.”
Symantec didn’t return a
request for comment.
Oil prices rose, after Saudi
Arabia’s plans to cut monthly
exports in November renewed
faith in the major oil producer’s efforts to drain global
stocks.
Light,
COMMODITIES sweet crude
for November delivery
advanced $1.34, or 2.7%, to
$50.92 a barrel on the New
York Mercantile Exchange on
Tuesday. Brent, the global
benchmark, rose 82 cents, or
1.5%, to $56.61 a barrel.
Saudi Arabia’s oil ministry
said Monday that the kingdom
will export 7% less crude by
sea in November, compared
with the same period last
year. The move is part of efforts by the Organization of
the Petroleum Exporting
Countries and other producers, including Russia, to stabilize prices by curbing output
in a deal that expires in March
2018.
Last week, Saudi King Salman and Russian President
Vladimir Putin met in Moscow, where discussions included extending the cuts, but
no new agreement was struck.
“The Saudis still continue
to signal their intention,” said
Gene McGillian, research manager at Tradition Energy.
“This is a sign that they’re serious about trying to rebalance the market.”
Weekly U.S. oil inventory
data, due Wednesday, is expected to show a continued
draw in crude stocks. Analysts
surveyed by S&P Global Platts
expect oil supplies to have
fallen by 400,000 barrels in
the week ended Oct. 6.
The damage done by Hurricane Nate this weekend fell
short of more severe storms
this season such as Harvey
and Irma. However, its path
through the Gulf of Mexico
disrupted oil production as
platforms and rigs were evacuated and some operations
were halted.
Analysts and traders expect
data from the U.S. Energy Information
Administration
Thursday to show a decline in
crude stockpiles for the week
ended Oct. 6.
Investors are also awaiting
OPEC’s monthly report due
Wednesday, followed by the
International Energy Agency’s
monthly report Thursday, for
updated supply and demand
forecasts.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B18 | Wednesday, October 11, 2017
THE WALL STREET JOURNAL.
MARKETS
Traditional Retailers Face Holiday Chill
Some large companies’
stocks are likely to end Shift in Shopping
year lower because of A group of S&P 500 retailers has been under pressure this year as consumers continue to switch to online
move to e-commerce purchases. Holiday sales are projected to rise, but with much of the growth coming from e-commerce.
Share-price performance
BY MICHAEL WURSTHORN
Brick-and-mortar retailers
shouldn’t expect much relief
from their brutal year during
the holiday season, many investors and analysts say.
Consumers’ shift to buying
clothes, electronics and other
goods online at the click of a
button has helped put shares
of several traditional retailers
on course for declines in 2017.
Some analysts and investors
say consumers’ preference for
e-commerce is likely to keep
pressure on the stocks during
the most important sales season of the year.
A group of six retailers in
the S&P 500 that includes
Macy’s Inc., Target Corp.,
Kohl’s Corp. and Nordstrom
Inc. has fallen 9.5% in 2017.
The group would be down
even more if it weren’t for
Dollar General Corp., up 9.3%,
and Dollar Tree Inc., up 16%,
as shares of discount retailers
have proved more resilient to
the slump in traditional retail.
Investors are stepping up
bets against the group and its
peers. Short interest in shares
of department stores has risen
nearly 17% this year to $4.5
billion, while that of generalmerchandise stores such as
Target jumped 30% to roughly
$6.9 billion, according to financial-analytics firm S3 Partners. Investors also have been
making bearish bets against ecommerce giant Amazon.com
Inc., which have mostly lost
money, and the companies expected to be affected by its expansion plans, the data firm
added. Investors and analysts
watch short interest to gauge
sentiment and to look for
signs of potential swings in
heavily shorted stocks.
“The Amazon threat isn’t
Email: heard@wsj.com
20%
Dollar Tree
S&P 500
Dollar General
10
0
–10
Nordstrom
Kohl's
–20
Target
–30
–40
Macy's
–50
January
February
March
April
May
June
Sales, change from previous quarter
July
August
September
October
Total U.S. holiday sales
6%
$800 billion
All retail
E-commerce
4
600
2
400
0
200
0
–2
2010 ’11
’12
’13
’14
’15
’16
’17
2002 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17*
*Projection Note: Retail stocks make up the S&P 500's multiline retail group.
Sources: FactSet (shares); U.S. Census Bureau (sales growth); National Retail Federation, Census Bureau (holiday sales)
going away,” said Thomas Digenan, head of U.S. Intrinsic
Value Equities at UBS Asset
Management. “There will be
survivors, but no one knows
how it’s going to play out.”
Mr. Digenan said he is bearish on department-store stocks
going into the end of the year,
but expects same-store sales
declines to be less severe than
previous quarters because of
higher consumer spending.
September retail-sales figures due later this week should
give investors a glimpse into
how stores fared after major
summer storms, while holiday
sales and quarterly earnings
reports are projected to show
a continued divide between
traditional and online stores.
U.S. holiday sales, which run
from November through December, are expected to increase between 3.6% and 4%,
up from $655.8 billion last year,
according to estimates from the
National Retail Federation last
week, with nonstore sales, including those made online, rising 11% to 15% to around $140
billion. Last year, overall holiday spending among consumers rose, driven by e-commerce,
while sales within department
stores, general merchandisers
and other retailers declined, according to the NRF.
“There are definitely gains
to be made among these retailers,” said GlobalData Retail analyst Neil Saunders of the holiday shopping season. “But it’s
not really robust enough to give
them a big boost in growth.”
Earnings for a group of internet retailers in the S&P
THE WALL STREET JOURNAL.
500, which includes Amazon
and Netflix Inc., are projected
to grow 0.3% in the third quarter and 17.5% in the final quarter of the year, compared with
their respective year-earlier
periods, according to FactSet
estimates as of Monday. Meanwhile, earnings at department
stores in the S&P 500, such as
Macy’s and Kohl’s, are expected to contract 16.1% in the
third quarter and post growth
of 7.2% in the fourth quarter,
according to FactSet.
As department-store chains
HEARD ON THE STREET
FINANCIAL ANALYSIS & COMMENTARY
What Could Dash Hopes of Bank Investors
The third quarter was
pretty dull for American
banks, which is not so bad
considering what was
happening a decade ago.
Maybe investors like boring,
because they gave bank
shares a nice boost at the
end of the quarter.
The rally won’t last long if
banks don’t show good
numbers on loan growth and
consumer credit when they
report earnings starting on
Thursday.
J.P. Morgan Chase and
Citigroup lead off the
parade, and analysts have
penciled in earnings-pershare increases of 5.1% and
5.6% from a year earlier for
the two banks, respectively,
according to FactSet.
Banks enjoyed the benefit
of a June rate increase by
the Federal Reserve during
the quarter. But total loans
and leases extended by U.S.
commercial banks were up
just 3.3% at the end of
September from a year
earlier, compared with 6.2%
growth at the end of last
year, according to Fed data.
And yet the KBW Nasdaq
Bank Index has risen 11%
over the past month on
optimism about the global
economy and rising
expectations of a Fed rate
increase. Markets are now
pricing in a nearly 90%
probability that the Fed will
raise rates again in
December, according to CME
Group.
Bankers may talk about
global growth and rate
increases on their earnings
calls, but it is doubtful
they’ll have any great
insights. What the bankers
do know is where two key
indicators are heading: loan
growth and credit quality.
Nvidia Keeps Driving to a Higher Level
More so than most chip
companies, Nvidia is
benefiting from being in the
right places at the right
time. The law of scarcity
also helps.
Take the automotive
business. While there is no
shortage of chip companies
driving hard for the
opportunity, Nvidia has
garnered a pole position in
the race to build self-driving
cars thanks to its advances
in artificial intelligence. That
position seemed to get
stronger Tuesday after the
company announced a
powerful new system called
Pegasus, based on its Drive
PX platform, that is designed
to handle fully automated
vehicles. The company also
announced a deal with
Deutsche Post DHL to
deploy a test fleet of
autonomous delivery trucks
next year.
The news gave Nvidia’s
already highflying stock
another lift. Nvidia is now up
75% since the start of the
year and commands one of
the richest multiples in the
chip sector at nearly 52
times forward earnings.
That would seem to make
Nvidia a dicey prospect for
investors, especially because
cars are a relatively small
part of its business.
Automotive sales accounted
for just 6% of Nvidia’s
revenue for the trailing 12month period ended July 30,
and Wall Street expects that
to increase to only 7% for
the next fiscal year. But cars
are just one of the
company’s fast-expanding
segments; Nvidia’s larger
data center business is also
expected to double in size
this year.
It also helps that the
playing field has narrowed
considerably. Stifel Nicolaus
analyst Kevin Cassidy noted
Tuesday that the field of
publicly traded
semiconductor companies
has fallen from 118 in 2007
to 55 today, thanks mostly to
industry consolidation. But
chip companies now have
more growth opportunities
beyond just smartphones
and PCs. Investors looking
for exposure to that growth
simply have fewer places to
park.
—Dan Gallagher
One bright spot in the
lending data is that
commercial and industrial
loans, which had been
almost totally dormant, have
picked up slightly. On a
sequential basis, they rose
1.4% from the previous
quarter, up from 0.8%
growth in the second
quarter. Bank executives can
help investors get a read on
whether corporate
borrowers are getting
comfortable again despite
political uncertainty, perhaps
encouraged by solid
economic trends.
They can also shed light
on the financial health of
American consumers, who
lately have been falling a bit
behind on their credit-card
and auto loans. This is less
of a risk for the top banks
than for smaller, consumerfocused lenders like Capital
One Financial and
Synchrony Financial. But
the huge credit-card
portfolios of banks like
Citigroup bear watching.
This may have been a
forgettable quarter for
banks, but it is important for
the industry’s future.
Lending growth will have to
rebound, and consumer
credit losses stabilize, for
the recent bank rally to have
staying power. If not, the
fourth quarter will really be
one to forget.
—Aaron Back
OVERHEARD
Former Federal Reserve
Chairman Alan Greenspan
stayed true to his libertarian
intellectual roots on Tuesday,
arguing that government
spending is at the root of what
ails the U.S. economy.
Speaking at a conference
held by Grant’s Interest Rate
Observer, Mr. Greenspan said
entitlement spending in particular is largely responsible for
the stagnation of productivity
growth in the U.S. since 2009
because it crowds out private
savings and investment. U.S.
markets may be entering a period of “euphoria” in the near
term, but it will be a “false
dawn” followed by stagflation
“unless we can slow down or
actually reverse entitlements.”
He added what could be read
as criticism of postcrisis global
monetary policy.
He sounded a lot like one
James Grant, the editor of
Grant’s Interest Rate Observer
and a prominent critic of lowrate policies under recent Fed
governors and Mr. Greenspan
himself. Before an audience of
famous short sellers and
hedge-fund managers, Mr.
Grant asked Mr. Greenspan
how he would invest given this
gloomy scenario. Mr. Greenspan began explaining that he
believes it is best to constantly
invest in stock index funds before he was gently interrupted
by his host.
“This isn’t the crowd for
that,” said Mr. Grant.
such as Macy’s and Kohl’s
cope with several quarters of
declining same-store sales and
store closings, executives at
those companies say they are
investing to improve their instore experiences as well as
their online operations to grab
consumers’ holiday spending.
Kohl’s said over the summer
that it was focused on attracting customers from retailers
that were shutting down
stores. Macy’s, meanwhile,
said it was retaining about 12%
of sales from closed stores at
other locations, a higher percentage than previous closings.
“You take that into the
fourth quarter with you,”
Macy’s Chief Executive Jeffrey
Gennette said.
Shares of both companies
are down by double-digit percentages this year.
“Retail has gotten really
punished, and the majority of it
is justified,” said Trip Miller,
managing partner at money
manager Gullane Capital Partners, which owns shares of Amazon as well as Dollar General.
Investors looking for an upside to this year’s holiday
spending spree should look to
stocks with greater e-commerce
exposure, as well as traditional
retailers that are further along
in growing online sales and attracting customers back to
their stores, analysts said.
Wal-Mart
Stores
Inc.
jumped 4.5% Tuesday after the
company announced efforts to
free up funds for new e-commerce and store improvements.
Wal-Mart said it would deepen
cost-cutting and keep U.S.
store openings to a minimum.
Shares of Best Buy Co. are
up 34% in 2017 after it struggled with falling sales and
dwindling profits years earlier.
The company has been closing
stores, investing in its e-commerce operations and has
brought prices in line with online rivals. In its most recent
quarter, same-store sales grew
5.4%, with much of that coming
from a jump in online sales.
WSJ.com/Heard
Peltz or Not,
P&G Shares
Look Pricey
Procter & Gamble is the
world’s biggest marketing
company, so investors
shouldn’t be too surprised if
it managed to shout down
Nelson Peltz’s efforts to win
a board seat. The real problem is that, despite its
growth problems, P&G’s
shares look expensive.
P&G says its shareholders
voted against Mr. Peltz, who
wanted a board seat on behalf of his activist firm,
Trian Fund Management.
Mr. Peltz hasn’t conceded
defeat yet.
It would be better if Mr.
Peltz won his proxy fight.
Having an investor monitoring the company’s turnaround would be helpful.
But in reality the result
won’t change much. Mr.
Peltz’s plan for the company
isn’t substantially different
from management’s; it
mainly involved pushing
harder on doors management had already opened.
P&G Chief Executive David
Taylor will be under pressure to show results.
An interesting precedent
may be Mr. Peltz’s failure to
win a seat on the board of
DuPont in 2015. The chemical company’s management
rebuffed the activist’s calls
for a breakup, only to propose a far more complex
split following a merger with
rival Dow Chemical. Mr.
Peltz lost the proxy battle
but in a sense won the war.
Whether the efforts of either Mr. Taylor or Mr. Peltz
succeed in boosting the
share price is another matter. P&G’s stock has lagged
behind peers, but still trades
at 21 times forward earnings,
close to a 10-year high. Even
if management revives the
company’s growth, the rewards for shareholders may
not follow.
—Stephen Wilmot
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