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The Wall Street Journal - 24 October 2017

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TUESDAY, OCTOBER 24, 2017 ~ VOL. CCLXX NO. 97
* * * * *
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10-YR. TREAS. À 2/32 , yield 2.375%
WSJ.com
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Tillerson Travels to Iraq, Afghanistan to Shore Up Ties
What’s
News
mazon said 238 cities
and regions had bid to be
the site of the company’s second headquarters, a project
expected to be worth $5 billion over nearly 20 years. A1
A
Sears will stop selling
Whirlpool appliances, following a pricing dispute.
Separately, Whirlpool issued
a profit warning. B1, B3
Hartford agreed to acquire Aetna’s group life
and disability-insurance
unit for $1.45 billion. B11
ON THE ROAD: Secretary of State Rex Tillerson Monday made unannounced visits to Afghanistan and Iraq, where U.S. troops and local
forces are trying to stop militant groups. He met with Afghan President Ashraf Ghani, top, and Iraqi Prime Minister Haider al-Abadi. A7
The Treasury criticized a
CFPB rule that makes it easier to bring class-action suits
against financial firms. B11
Russia’s Kaspersky Lab
pledged to turn over the
source code for its antivirus software for review. B4
Cisco said it would pay
$1.73 billion for BroadSoft, a
maker of cloud-based communications software. B4
Potlatch intends to
combine with Deltic Timber in an all-stock deal. B3
T-Mobile said it added
817,000 postpaid customers. B3
World-Wide
Green Berets fought Islamic State militants in Niger
for two hours before air support arrived, much longer
than the Pentagon previously
reported about the deadly
Oct. 4 ambush, the Joint
Chiefs chairman said. A1
Trump pledged to protect 401(k) plans, shooting
down a proposal to cap
contributions to the retirement-savings program. A4
Tillerson met with the
leaders of Iraq and Afghanistan on his first trip
as secretary of state to
those two countries. A7
U.S. Revises Niger Timeline
Ambushed Army
Green Berets unit took
hour to call for help, top
military official says
Pentagon officials.
The Special Forces unit
didn’t call for help for an hour
after shooting started, and
French Mirage jets didn’t arrive
for another hour after that, said
Gen. Joe Dunford, chairman of
the military’s Joint Chiefs of
Staff. By that time, the Army
would determine later, four U.S.
soldiers had been killed and
two others wounded.
Gen. Dunford, speaking at a
hastily convened Pentagon
news conference, provided the
most detailed public accounting to date of what happened
in the Oct. 4 ambush of 12 U.S.
BY BEN KESLING
WASHINGTON—A U.S. Army
Green Berets patrol, outnumbered by suspected Islamic
State militants, fought for two
hours in Niger before air support provided by French military jets arrived, a top U.S. official said Monday, much longer
than previously reported by
Japan Stocks Stage a Record Run
Japanese investors celebrated the election victory of Prime
Minister Shinzo Abe, driving the country’s benchmark stock index
to its 15th straight gain on Monday, a record streak. A6, B12
Japan's Nikkei Stock Average, year-to-date performance
Investors grow nervous
over rising tensions
between the U.S. and
North Korea
Japan's economy
marks its longest
quarterly expansion
streak in 11 years
Prime Minister
Shinzo Abe scores
a clear victory in
general election
Antiregime activists
posted photos of two malnourished children who
died in a besieged suburb
of Syria’s capital. A7
Abe said he would tackle
the Japanese economy’s
structural problems following his election victory. A6
Japan’s defense minister
said the threat from North
Korea has reached a “critical
and imminent level.” A6
Iowa is withdrawing its
application to alter the
health-care law after federal
officials laid out tough conditions for its approval. A5
Journal Report
A spotlight on media and
technology. WSJ D.Live
R1-14
Markets............. B12-13
Opinion.............. A15-17
Sports....................... A14
Technology............... B4
U.S. News............. A2-5
Weather................... A13
World News....... A6-9
>
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
19000
Nikkei posts gains for 15
consecutive trading sessions
18000
Jan.
Feb.
March April May
June
July
Source: FactSet
Aug.
and 30 Nigerien troops, which
marked the single deadliest
American toll resulting from
military combat so far during
the Trump administration.
But his description also reflected the depth of the mystery
still surrounding the incident in
remote West Africa, where the
U.S. has a force of about 800
troops and relies on Nigerien
forces, French deployments and
contract support to function.
For instance, officials want
to determine why it took the
U.S. force an hour to call for
air support, Gen. Dunford said.
“My judgment would be
Sept. Oct.
THE WALL STREET JOURNAL.
i
Bergdahl lawyers fault
president for remarks........... A3
Gerald F. Seib: Where
unpredictability could hurt... A4
Amazon.com Inc.’s open
competition for its second
headquarters triggered an extraordinary response, with the
tech giant saying 238 cities
and regions had bid for the
project it expects to cost $5
billion over nearly 20 years.
The proposals, from 54
states, provinces, districts and
territories, were announced on
Monday. Only seven U.S. states
don’t have a location participating in the beauty contest,
according to a map published
by the company. Amazon,
based in Seattle, didn’t name
any of the bidders or say when
it would come up with a short
list of finalists.
Cities including New York,
Boston, Atlanta, Nashville,
Tenn., and Austin, Texas, have
said they applied for the new
corporate site. The more unexpected
bidders
included
Puerto Rico, which was devastated by a hurricane last
month, and several locations
in Mexico and Canada.
The proposals were due last
week, and Amazon has said it
would make a decision on the
new location next year.
Amazon has said it would
consider factors such as the
availability of software developers and other tech talent,
good transportation options,
cultural fit—recreational opportunities are a metric—and
the ability to move into a
phase-one site as early as
2019. Other items on its wish
list: a metro area of more than
one million people and tax incentives such as breaks, abatePlease see AMAZON page A4
Supersized Family Farms
Transform U.S. Agriculture
Big growers, with scale and clout, squeeze struggling smaller outfits
COLBY, Kan.—Lon Frahm may represent
the future of farming. Inside a two-story office building overshadowed by 80-foot steel
grain bins, he points to a map showing the
patchwork of square and circular fields that
make up his operation. It covers nearly 10% of
the county’s cropland, and when he climbs
into his Cessna Skylane to check crops from
the air, he can fly 30 miles before reaching
the end of his land. At 30,600 acres, his farm
is among the country’s vastest, and it yields
enough corn and wheat each year to fill 4,500
semitrailer trucks.
Big operations like Mr. Frahm’s, which he
has spent decades building, are prospering
despite the deepest farm slump since the
1980s. Years of low prices for corn, wheat and
other commodities brought on by a glut of
grain world-wide are driving smaller American farmers out of business.
Farms with $1 million or more in annual
sales—only 4% of the total—now produce
two-thirds of the country’s agricultural output, the largest portion since the U.S. Agriculture Department’s census began tracking the
statistic in the ’80s.
The shift means food production is being
increasingly handled by larger farms, which
can be more financially secure. It also fuels a
cycle in which size begets size, further transforming the rural economy. Smaller-scale
farmers struggle to expand their operations
to become profitable. Work becomes more
scarce. Farm-supply retailers and grain companies are pressured, since larger farms use
their size to wrangle better deals.
Owners say the big operations—which are
Please see FARM page A10
INSIDE
Give the English 1.6 Kilometers
And They’ll Take a Mile
i
that the unit thought they
could handle the situation
without additional support,”
Gen. Dunford said.
“I have been in these situations myself where you’re confronted with enemy contact,
your initial assessment is you
can deal with that contact with
the resources that you have,
and at some point in the fire
fight, they concluded they then
Please see NIGER page A7
BY JACOB BUNGE
20000
Bergdahl’s lawyers said
Trump’s comments on his
case make it impossible for
the former Taliban captive
to receive a fair sentence. A3
CONTENTS
Business News.. B3,6
Capital Journal...... A4
Crossword.............. A13
Heard on Street.. B13
Journal Report R1-14
Life & Arts....... A11-13
22000
21000
Catalan separatists called
for civil disobedience amid
the prospect of Madrid’s
temporary takeover of the
regional police force. A8
YEN 113.43
BY LAURA STEVENS
ALEX BRANDON/AGENCE FRANCE-PRESSE/GETTY IMAGES (2)
Arconic named a former
GE executive as CEO, as the
aerospace parts firm missed
earnings expectations. B1
EURO $1.1751
Amazon
Lures 238
Bids for
Its Second
Home
Business & Finance
GE shares took another
pounding, reflecting fears
that the firm may be forced
to cut dividends. B1, B6, B11
U.S. stocks fell. The Dow
shed 54.67 points to finish
at 23273.96, with GE its
worst performer. B12
HHHH $4.00
i
Brexit-inspired vigilantes use ladders,
sticky letters to eradicate metric system
BY JENNY GROSS
“We have our own very excellent system of weights and
BURNLEY, England—Tony measures,” said Mr. Bennett, 70
Bennett took Brexit prepara- years old and not the American
tions into his own hands at crooner. “We don’t need big indusk one Friday this month, de- stitutions in Europe telling us
fying authority to reinstate a what to do.”
venerable element of British
Mr. Bennett is a member of
culture.
Active Resistance
All it took was
to Metrication, a
glue and stick-on
tiny group that has
numerals.
for years been
The
retired
pushing England to
lawyer
crept
go back to its old
Converted sign
through a park, he
weights and measaid, and up to a footpath sign. sures. Britain’s planned exit
It read “1.5km.”
from the European Union has
Unacceptable!
breathed new hope into his
He took a numeral and campaign.
pasted it on to make the sign
By the end of the night’s
read, simply, “1.” That’s one “raid,” as Mr. Bennett called it,
mile, one glorious British impe- he had plastered miles over kirial mile, rounding up a bit. No lometers—a mile is 1.6 kilomeneed to add an “m,” Mr. Ben- ters—on three signs in the
nett said, because Britons park. He said he fixed 10 more
Please see METRIC page A10
would know what it meant.
DIVIDEND FEARS
TAKE TOLL
ON GE
ET TU,
STEVE
BANNON?
HALLOWEEN
DECOR GOES
OUT ON A LIMB
BUSINESS & FINANCE, B1
OPINION, A15
LIFE & ARTS, A11
Uber Investment Jolts Saudi Fund
BY JUSTIN SCHECK
AND MAUREEN FARRELL
RIYADH—Saudi
Arabia’s
state-owned Public Investment
Fund is poised to become one
of the world’s biggest investors. But the fund is troubled
by disappointing investments,
including in Uber Technologies
Inc., and has struggled to calculate its own value.
This week, investing luminaries including chief executives of BlackRock Inc. and
Blackstone Group LP and leaders from Goldman Sachs Group
Inc. and J.P. Morgan Chase &
Co. are descending on a Riyadh
palace for a conference where
the fund is expected to discuss
its strategy, among other topics. Attendees are calling it
“Davos in the desert.”
The fund plans to detail its
central role in efforts to break
Saudi oil dependence. The
fund, which already is making
large investments, has allocated about $50 billion to tech
alone. It is now preparing to
make new investments that
could grow much larger after a
cash infusion from a planned
offering of stock in the statePlease see FUND page A2
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
A2 | Tuesday, October 24, 2017
* ***
THE WALL STREET JOURNAL.
U.S. NEWS
After Harvey, a Rush to the Courthouse
Water released from Addicks Reservoir flowed into Houston neighborhoods on Aug. 29 in the aftermath of Hurricane Harvey. The release has sparked suits by residents.
Lawyers Vie to Lead
Dam-Release Cases
The flooding litigation has
attracted the attention of plaintiffs’ lawyers from across Texas
and other states, including
those who typically specialize in
personal-injury and privacy
cases, as well as other unrelated specialties.
People at the introductory
hearing in Houston estimate at
least 100 attorneys filled the
room. Now, many of them are
forming coalitions and vying for
a leadership position in the
cases, which would position
them to help steer the direction
and potentially be in line for extra compensation.
Houston attorney Derek
Potts said he has hosted in his
office two meetings of lawyers
from between 40 and 50 area
firms to try to create a cohesive plan for the litigation. “This
is a very high-profile case that
strikes close to home for all of
us,” he said.
Judge Susan Braden with
the U.S. Court of Federal
Claims, a specialized court used
for claims against the federal
government, set an Oct. 20
deadline for applications for
lead counsel.
The judge has also asked
for input on the best way to
consolidate the more than 50
cases that have been filed so
far, some as proposed class actions and others on behalf of
individuals or groups.
Lawyers involved say it
looks like the court wants to
avoid a repeat of the prolonged
litigation against the federal
government that followed Hurricane Katrina in 2005. Some of
those cases are still on appeal.
The Justice Department,
meanwhile, has proposed a
timeline that wouldn’t determine if the case is a class action until 2018, with discovery
starting after that.
—Sara Randazzo
the government’s position as
the “one flood free” rule.
“I figured, they know what
they’re doing, and are releasing water only when it won’t
cause harm to everybody else,”
said Jennifer Arriaga, 44 years
old, whose home in Houston’s
Memorial Bend neighborhood
largely survived the storm be-
fore being flooded with 18
inches of water from the Addicks dam release. Her family
faces an estimated $220,000 in
damage in the house they built
a year ago, and is pursuing litigation.
Val Aldred, 65, a retiree
who is a plaintiff in the litigation, said he was shocked to
see water inching closer to his
Memorial
Bend
home
that Tuesday after the storm
when the rain had already
stopped. “They didn’t even
give me notice,” he said. “If
they said look, we’re going to
release the water, and you’ve
got…even three hours to get
out, I would have at least ap-
preciated that. That angers me
like you can’t believe.”
In 2012, the U.S. Supreme
Court ruled that temporary
flooding could qualify as a taking eligible for compensation,
in a case brought by the Arkansas Game and Fish Commission against the U.S. government over the flooding of a
U.S. WATCH
JUSTICE DEPARTMENT
CALIFORNIA
U.S. Will Now Target
MS-13 Street Gang
State Senate Orders
Harassment Probe
Attorney General Jeff Sessions on Monday designated
MS-13, the violent gang, a target
for a Justice Department task
force that has traditionally attacked drug kingpins and cartels.
The designation will allow the
Justice Department to more aggressively go after the gang for
violating racketeering, gun and
tax laws, Mr. Sessions said in a
speech in Philadelphia.
MS-13, short for Mara Salvatrucha, is comprised mostly of
immigrants from El Salvador and
their offspring. Mr. Sessions’
move has designated it a priority
for the Justice Department’s Organized Crime Drug Enforcement
Task Forces.
Justice Department officials
said the designation would allow
a variety of law-enforcement
agencies to better coordinate
and target the gang.
MS-13 has focused most of
its energy on such activities as
human trafficking, prostitution
and extortion, rather than drug
dealing.
But Mr. Sessions said he believed the gang’s willingness to
engage in extreme acts of violence and retaliation justified
designating it a priority for the
drug-enforcement task forces.
—Del Quentin Wilber
California’s Senate is taking
steps to address reports of a
culture of sexual harassment
within the Sacramento capital
community, a move that highlights the ripple effects of the
sexual-harassment allegations
that have engulfed Hollywood.
The Senate has hired Law Offices of Amy Oppenheimer,
which specializes in workplace
investigations, to probe allegations of sexual harassment and
assault, Senate President Kevin
de León said Monday.
The Senate also hired a workplace-consulting firm, CPS HR
Consulting, to review Senate policies and practices against “harassment, discrimination and retaliation,” it said.
More than 140 women in
Sacramento’s political community
last week signed a letter, first
published in the Los Angeles
Times, outlining what they called
a pervasive culture of sexual harassment and intimidation in California’s state capital.
The letter came amid the fallout from sexual-harassment and
assault allegations against film
mogul Harvey Weinstein, who
was fired earlier this month from
the company he co-founded after
the allegations became public.
—Nour Malas
THE WALL STREET JOURNAL
(USPS 664-880) (Eastern Edition ISSN 0099-9660)
(Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241)
FUND
Continued from Page One
owned Saudi oil company.
Behind the scenes, however,
it faces turmoil.
After the Saudi fund invested $3.5 billion in Uber last
year, the car-hailing company’s
fortunes dimmed when its chief
resigned under misconduct allegations. At the same time, the
investment gave Uber help in
trying to undercut a local company that was a successful investment for the fund.
More recently, the fund’s
chairman has been pushing
back against parts of a deal
with the biggest PIF partner,
SoftBank Group Corp., that
could cut Uber’s value, which
would force the Saudi fund to
take a loss.
A spokesman for the fund
didn’t respond to specific questions about its investments.
The move into startups is a
shift for a fund that spent four
decades backing only domestic
interests including banks and a
money-losing fish farm.
That changed in 2015, after
Saudi King Salman charged his
then-30-year-old son, Prince
Mohammed bin Salman, with
weaning the country off oil.
The prince led a strategy that
would sell stock in the Saudi
state oil company to fund investments in nonoil sectors.
Saudi Arabia’s broader shift
from petrostate to a high-tech
Saudi Prince Mohammed bin Salman led a strategy in which
sales of stock in the state oil company fund nonoil investments.
Saudi Arabia’s shift
from petrostate to a
high-tech economy is
untested.
economy is also untested,
amounting to a bet that Saudi
money managers can get better
returns than the world’s most
productive oil fields.
Prince Mohammed began
making investments soon after
unveiling his 2015 plan—before
hiring experienced international investors, and before the
fund determined its holdings’
value. Poor accounting made it
difficult for Saudi officials and
foreign consultants to calculate
CORRECTIONS AMPLIFICATIONS
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the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of the Americas, New York, N.Y. 10036. The Journal
reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall constitute final acceptance
of the advertiser’s order.
A photo of Merck KGaA
headquarters incorrectly accompanied a Business & Finance article Monday about
Merck & Co. layoffs.
Letters to the Editor: Fax: 212-416-2891; email: wsj.ltrs@wsj.com
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The U.S. dollar conversion
for €60 billion was $70.9 billion, using data from late New
York trading on Friday, Oct. 13.
A Page One article on Monday,
Oct. 16 about central bankers’
wildlife management area that
destroyed timber.
Ilya Somin, a law professor
at George Mason University,
said the plaintiffs’ claims seem
plausible, but that the “doctrine in this area is very
vague,” and that courts sometimes have a tendency to rule
in favor of the government.
The Arkansas case laid out
guidelines for when a deliberate flooding by the government can count as a taking, he
said, but didn’t specify how
long the flooding must take
place, what degree of intent is
required, and other key factors, leaving the issue somewhat open to interpretation.
Separate Hurricane Harveyrelated litigation is being pursued against local entities that
released water from Lake Conroe, and lawyers say litigation
is also likely against insurance
companies as residents start to
file claims.
BANDAR AL-JALOUD/AGENCE FRANCE-PRESSE/GETTY IMAGES
The plaintiffs’ lawyers lined
up shoulder to shoulder on a
recent Friday in a Houston
courtroom, filling every available bench, jury box and table.
All had come to hear how they
could get a piece of sprawling
litigation emerging from the
devastation wrought by Hurricane Harvey.
“I’ve never seen so many
suits in the same room, unless
it was in church,” said Chris
Johns, a Texas lawyer in attendance at the Oct. 6 hearing.
The lawyers have coalesced
around a corner of eminentdomain law they hope will lead
to big payouts from the federal
government. Dozens of lawsuits filed so far seek compensation for the damage homeowners say was caused when
the U.S. Army Corps of Engineers released water from two
area reservoirs in the days after a Category 4 hurricane and
historic rainfall flooded Houston in late August.
With an estimated 10,000
homes or more affected by the
reservoirs, the litigation has
the potential to reach into the
billions of dollars. But convincing a judge the controlled release counts as an improper
“taking” of private property
under eminent-domain law
could face challenges in court,
and a payout isn’t a sure thing.
The Addicks and Barker
dams were built in the 1940s
to reduce the risk of flooding
in Houston. By ordering the
controlled release, the Army
Corps alleviated water levels
that could have poured over or
around the two earthen dams,
potentially rupturing them and
causing significant damage.
The government said in a
court filing that the flooding
was a 1,000-year event, and
that the release of water to relieve the Addicks and Barker
dams doesn’t qualify as a taking under the Constitution’s
Fifth Amendment. A “single
flood—as opposed to an inevitably
recurring
flooding
caused by the Government—is
not a taking as a matter of
law,” the filing said.
The Justice Department
didn’t respond to a request for
comment.
Affected homeowners and
their lawyers are referring to
DAVID J. PHILLIP/ASSOCIATED PRESS
BY SARA RANDAZZO
concerns about inflation incorrectly stated the conversion as
$79.7 billion.
Archer Daniels Midland
Co. is 115 years old. A Journal
Report article on Oct. 16 about
the global food sector misquoted the company’s CEO,
Juan R. Luciano, as saying the
company had been around for
150 years.
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 fund’s value, according to a
fund official and a person
briefed on the effort to audit it.
“More than $200 billion and
less than $300 billion,” said
one senior official at the fund
earlier this year.
“One-hundred-eighty
to
$200 billion,” estimated a government minister involved in
the fund’s oversight.
A person briefed by the
fund said it recently determined a “fairly definitive”
value, but declined to detail it.
Some holdings lacked Western governance standards, said
a person briefed on an audit of
the fund by Ernst & Young. “Although they do have audited financial statements, they’re not
necessarily the right figures,”
this person said.
The accounting challenge
stems from rapid growth in the
fund, said officials with the
fund. But others trace it to the
central decision-making role of
Prince Mohammed, rather than
professional investors. A
spokesman for the Saudi royal
court didn’t respond to questions about the fund and the
prince’s role in it.
The fund committed $500
million last year to Dubai-based
e-commerce startup Noon.com,
which promised to offer 20
million products by last January.
By May, when Noon still
hadn’t launched, it fired most
staff including its CEO, said
people familiar with the com-
pany. It recently started shipping, but the delay allowed
Amazon.com Inc. to beat it into
the Gulf market. Representatives for Noon didn’t respond
to requests for comment.
Prince Mohammed last year
also met with Uber’s then CEO
Travis Kalanick—whom he subsequently called “a friend”—
and this led to another big deal
for the fund.
Talks originally involved the
fund investing $1.5 billion in
Uber, said people familiar with
the matter. But Prince Mohammed wanted control and information, so demanded a board
seat. In exchange for a $3.5 billion investment, Uber agreed to
put the fund’s chief, Yasir al
Rumayyan, on its board, according to the people.
Mr. Kalanick later came under fire for Uber’s flouting of
local regulations and for employees’ claims he fostered a
culture that allowed men to harass women. Mr. al Rumayyan
pushed to keep the CEO, said
people familiar with the matter,
but investors forced him to resign. At the time of his resignation, Mr. Kalanick said he accepted the investors’ request to
step aside so Uber could “go
back to building.”
The Uber deal also worked
against the kingdom’s most
successful homegrown tech
firm, which the fund backed
before Prince Mohammed’s
Uber splurge. Taxi-app maker
Careem, started in Saudi Arabia
in 2013, was on its way to generating paper returns in excess
of 50 times the initial investment for the venture capital
arm of Saudi Telecom, which is
majority owned by the fund.
Careem had little competition until 2014, when Uber
launched in Riyadh. Uber, willing to lose money to take market share, undercut Careem on
price, according to people familiar with the situation. Uber
also announced that it hired a
Saudi princess as an adviser,
then received the $3.5 billion
Saudi investment. Careem officials remain disappointed—and
“baffled,” one executive said—
that the fund would tilt the
scales in favor of its rival.
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.
Hackers Target Schools
© Verdura. All rights reserved.
U.S. NEWS
Tuesday, October 24, 2017 | A3
Some districts bet it is
cheaper to surrender
and pay up, going
against FBI advice
Hackers looking to exploit
sensitive information for profit
are increasingly targeting the
nation’s schools, where they are
finding a relatively weak system
to protect a valuable asset: student data.
Cyberthieves have struck
more than three dozen school
systems from Georgia to California so far this year, stealing
paychecks and data or taking
over networks to extort money.
The thefts have prompted
many school officials to hire
cybersecurity consultants to
fight back against a trend that
experts say is growing fast.
The attackers have gained
access to servers containing
student names, addresses, Social Security numbers, birth
dates, academic performance,
phone numbers and medical
and discipline records—in some
cases releasing data in an escalating series of demands and
actions. A few districts, betting
that surrender would be
cheaper and easier than defeating a hack, have gone against
Federal Bureau of Investigation
advice and paid off the hackers.
“They know that cyber craziness is not our game, and they
are winning,” said Laura
Sprague, a spokeswoman in the
Johnston Community School
District in Iowa, where hackers
this month publicly released
student information. “These
groups are targeting some of
the most vulnerable people in
the nation—kids.”
Cyber experts say as schools
rush to ramp up the use of
technology in the classroom,
they haven’t done enough to
protect an easily monetized
trove of data on students.
“Bad guys can use that information to create fake identities
and things like that, and that
information can be sold on the
black market for a lot of
money,” said Zuly Gonzalez, a
former cybersecurity expert
with the National Security
Agency and chief executive officer of Light Point Security in
Maryland.
In 2016, the FBI’s Internet
Crime Complaint Center received 2,673 complaints from
various entities including
schools for ransomware, which
locks up networks, with victim
LOS ANGELES VALLEY COLLEGE
BY TAWNELL D. HOBBS
Los Angeles Valley College in California paid $28,000 in ransom to hackers in January.
118k
8 k gol
g o l d , $ 99,50
,50 0
Districts Bolster
Their Defenses
School districts are responding to the increase in hacks by
bringing in security experts, investing in cyber insurance and
getting employees trained in
computer security.
Dorchester School District
Two in South Carolina beefed up
schools’ security after being
hacked. The district paid a
$5,000 deductible in an insurance claim, which covered the
$2,900 ransom and just over
$150,000 for legal fees, consulting costs and personnel costs to
rebuild some databases destroyed in the hack.
Some school districts have
spent thousands to reimburse
employees whose direct deposits
were rerouted by hackers, including Atlanta Public Schools where
27 employees had a combined
$56,000 stolen in such a scheme
last month.
At Fulton County Schools in
Georgia in August, thieves tricked
46 employees into providing login
credentials via phony emails and
then used that information to reroute direct deposits onto reloadable money cards. About
$75,000 was lost, with the district recouping about $3,400 by
reversing some transactions. The
district reimbursed its employees.
Cyber experts say schools
need to be proactive in the rush
to go digital, such as having antivirus software up-to-date, backup
files, and providing computer security training.
“We’re rushing to connect everything while we know that
even for the most sophisticated
technology companies in the
world that they’re vulnerable, and
schools don’t have a chance in
that context,” said Douglas A.
Levin, president of EdTech Strategies LLC, a Virginia-based research and consulting company
focused on education and technology. “It’s really a nightmare.”
—Tawnell D. Hobbs
losses of $2.43 million—up
from $1.62 million in 2015. For
extortion cases, where thieves
target sensitive information for
payment, losses increased by
7% to $15.8 million last year.
Hackers gain access in various ways, including from users
opening infected emails, links
or programs. Affected schools
have lost tens of thousands of
dollars either by fighting back
against attacks, reimbursing
stolen paychecks, providing
credit-monitoring services for
victims, or paying the hackers.
Los Angeles Valley College in
California paid $28,000 in ransom to hackers in January.
Dorchester School District Two
in South Carolina paid $2,900
in July. In 2016, Horry County
Schools in South Carolina paid
nearly $10,000.
School districts in Atlanta,
Boston and Georgia’s Fulton
County each had payroll
checks stolen this year after
hackers rerouted employee direct-deposits into unauthorized accounts.
The FBI warns against paying ransom, saying it is a risky
strategy that could encourage
future attacks.
“We don’t condone the payment of ransom. However, we
understand that certain business decisions have to be
made,” said Lauren Hagee, a
spokeswoman with the FBI’s
Dallas division.
School officials who paid up
say they had little choice.
“If we decided not to pay, it
would virtually guarantee our
data would be lost,” said Los
Angeles Valley College spokes-
woman Jennifer Fong Borucki.
After paying, “we’re back up
and running,” she said.
Charles
Hucks,
Horry
County’s executive director of
technology, said its nearly
$10,000 payment to hackers
pales in comparison to each day
it didn’t have access to files and
content created by 43,000 students and 4,000-plus faculty
and staff.
In the Splendora Independent School District in Texas,
where hackers are threatening
to release student information, physical security has
been beefed up but parents
are on edge.
“My kid has to go there,”
said parent Tiffany Autrey. “I’m
just trying not to think about it
too much. If I do, I’ll just start
to worry.”
Trump’s Remarks Forestall
Fair Hearing, Lawyers Argue
BY NANCY A. YOUSSEF
Wisconsin
Eyes Halting
M.B.A.
Program
BY KELSEY GEE
JONATHAN DRAKE/REUTERS
FORT BRAGG, N.C.—Defense
lawyers for Army Sgt. Bowe
Bergdahl argued Monday that
he shouldn’t be sent to prison
because President Donald
Trump’s latest comments on
the case make it impossible
for the former Taliban captive
to receive a fair sentence.
Army Col. Jeffrey Nance, the
military judge handling Sgt.
Bergdahl’s court-martial and
now sentencing phase, said he
would rule on whether the
president’s latest statements
about the case could be seen as
“undue command influence.”
Military law defines undue
influence as occurring when a
commander exerts influence
over the action of a court in
reaching the findings or the
sentence in any case. That
definition encompasses the
U.S. president, who is commander-in-chief of the U.S.
armed forces.
Col. Nance previously has
ruled that Mr. Trump’s comments during the presidential
campaign—when he called Sgt.
Bergdahl a traitor—didn’t constitute undue command influence. On Monday, he noted that
Mr. Trump’s statements during
an Oct. 16 news conference
were made while president, not
as a candidate. Because of
that, the public could conclude
that Sgt. Bergdahl can’t get a
fair sentence, Col. Nance said.
During the Oct. 16 Rose
Garden news conference with
Senate Majority Leader Mitch
McConnell (R., Ky.), Mr. Trump
was asked whether he believed
his past comments affected
Sgt. Bergdahl’s ability to receive a fair trial.
Mr. Trump, a Republican,
said he couldn’t comment on
FEAT H ER CU FF EA RCLI PS
U.S. Army Sergeant Bowe Bergdahl, right, arrived at the
courthouse at Fort Bragg, N.C., on Monday.
the case, then added: “But I
think people have heard my
comments in the past.”
Sgt. Bergdahl, 31 years old,
had pleaded guilty that day to
misbehavior before the enemy
and desertion when he walked
away from his post in Afghanistan on June 30, 2009. The
misbehavior charge carries a
‘It’s not as simple as,
“Can we figure out
what Donald Trump
thinks?”’
maximum life sentence; desertion brings a maximum fiveyear sentence.
During Monday’s session,
the defense played a video clip
of Mr. Trump’s news conference, followed by a second clip
of Mr. Trump, when he was a
candidate, calling Sgt. Bergdahl a traitor and vowing: “If I
get in, I will review his case.”
Sgt. Bergdahl has said he
left his post in 2009 to go to
another outpost, where he
wanted to raise concerns
about his chain of command.
He was captured by militants
and held more than five years,
suffering repeated torture.
Col. Nance spent most of
an hour-long hearing Monday
questioning the prosecution
about whether Mr. Trump’s
assertion that the public
knew his position on the case
would affect views of Sgt.
Bergdahl’s ability to receive a
fair sentence.
The prosecutor, led by Army
Maj. Justin Oshana, argued
that Mr. Trump’s latest comments on the case shouldn’t
lead the judge to reconsider
his previous rulings and that
there was no way to draw a
definitive conclusion from Mr.
Trump’s latest comments.
“It’s not as simple as, ‘Can
we figure out what Donald
Trump thinks?’ ” Maj. Oshana
said.
Officials at the Wisconsin
School of Business have proposed suspending admissions
to its full-time master’s in
business administration program for a year.
At a time when students
want shorter, more targeted
degrees, the school at the University of Wisconsin-Madison
may become the latest to discontinue its flagship M.B.A.
program. The University of
Iowa’s Tippie College of Business and Wake Forest University’s business school have
also ended their full-time
M.B.A. programs recently, citing flagging student demand.
The proposal has touched a
nerve with students and
alumni, who say a vote to halt
M.B.A. admissions at Wisconsin, one of country’s oldest
business schools, could effectively end the program.
Hundreds of the business
school’s students and staff assembled Monday for a townhall meeting with Dean Anne
Massey, attendees said. Originally scheduled for 45 minutes, the meeting stretched to
nearly two hours as students
questioned the dean about
potentially cutting the program.
Faculty are scheduled to
vote on whether to halt M.B.A.
admissions in early November
as part of a wider review of
the school’s programs.
In a posting on its website
Monday, the school said its
portfolio review was prompted
by competing demands for resources and “a changing market for graduate business education.”
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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A4 | Tuesday, October 24, 2017
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THE WALL STREET JOURNAL.
U.S. NEWS
Where Unpredictability Could Hurt Trump
At home, it’s harder for his
opponents to work around
him if they aren’t sure exactly where he will plant his
flag, and less likely they’ll
try to bulldoze over him if
they think there’s a chance
he’ll shift to their side.
Because Mr. Trump has no
fixed ideology, he sees no
need to defend a position
simply on philosophical
grounds. Instead, he maintains maximum flexibility to
close a deal in the end.
“He has a lot of flexibility
in his own mind,” says John
Feehery, who served as a top
aide to former House
Speaker Dennis Hastert.
“There’s a lot of ideological
flexibility there. But the
American people have a lot
of ideological flexibility too.”
CAPITAL JOURNAL
By Gerald F. Seib
EVAN VUCCI/ASSOCIATED PRESS
Donald Trump warned us.
During the 2016 presidential campaign, then-candidate Trump advertised that
he would be unpredictable,
and, in fact, saw unpredictability as a strategic asset. In
his campaign-season book
“Crippled America,” he
wrote: “I don’t want people
to know exactly what I’m
doing—or
thinking. I like
being unpredictable. It
keeps them
off balance.” He said a business associate described unpredictability as “one of my
better qualities.”
Later, in a television interview, he went further. He
was asked whether voters
had a right to know whether
he would go so far as to
bomb Iran’s nuclear facilities. “No, they don’t,” Mr.
Trump replied. “The voters
want unpredictability.”
Now the more pertinent
question is this: When does
unpredictability serve a president, leaving him flexibility
while keeping his opponents
off guard, and when does it
turn into a liability, leaving
friends convinced they can’t
count on him and enemies
potentially miscalculating his
true intentions?
“Unpredictability can be
occasionally helpful,” says
Kenneth Duberstein, who
President Donald Trump waves after signing an executive order on health care in the White House’s Roosevelt Room this month.
served as Ronald Reagan’s
White House chief of staff.
“But it can’t be an operating
management style.”
T
he question arises
most immediately because of Mr. Trump’s
U-turns in the past two
weeks on health care, which
has left fellow Republicans
baffled about his bottom
line. Two weeks ago, he
ended subsidies the federal
government had been paying
to insurers to help them absorb the cost of policies for
low-income Americans.
Then, last Tuesday, he appeared to support a biparti-
san deal being worked out by
Republican Sen. Lamar Alexander and Democratic Sen.
Patty Murray that would
continue those subsidies. Mr.
Trump said the White House
was involved in the negotiations, and he seemed to bless
the compromise, saying
“they’re coming fairly close
to a short-term solution.”
Finally, 24 hours later, Mr.
Trump pulled the plug on his
backing of the deal, saying in
a tweet: “I can never support
bailing out” insurance companies that have “made a
fortune” under Obamacare.
Lawmakers in both parties
are perplexed. Could the
WASHINGTON WIRE
Senate Bill Would
Assist Puerto Rico
RON SACHS/CNP/ZUMA PRESS
BY RICHARD RUBIN
DECORATED: Retired U.S. Army Capt. Gary M. Rose, a Special
Forces combat medic during the Vietnam War, received the Medal
of Honor from President Trump at the White House on Monday.
HOMELAND SECURITY
Republicans and Democrats
demanded answers from the
U.S. government after BritishAmerican financier William
Browder, who lobbied heavily for
a law targeting Russian officials
over human rights, said his visa
was revoked.
Mr. Browder pushed for the
2012 law named after his former employee, Russian whistleblower Sergei Magnitsky, that
AMAZON
Continued from Page One
ments, credits and rebates.
“Few companies have the
swagger, the wherewithal to
do a high profile site selection
like this,” said John Boyd,
principal and site-selection expert at The Boyd Co. Inc.
“Clearly, this is a very special,
special case.”
The last time site selection
has seen something remotely
comparable to this process
was in the late 1980s, when
General Motors Co. had governors going on TV to market
their states for a car-manufacturing plant, Mr. Boyd added.
Massachusetts released a
proposal last week separate
from Boston’s, touting the
state’s higher education network—125 colleges and universities—and Amazon’s existing
operations there, which include warehouses and an office focusing on robotics.
New York City said that it
imposed travel bans on, and
froze assets of, dozens of Russian officials. Mr. Magnitsky died
in jail after accusing Russian officials of stealing government
money in a tax-fraud scheme.
Mr. Browder said on Monday
he was checking in for flight to
the U.S. on Sunday when he discovered his visa had been revoked. He said it was denied because Russian President Vladimir
Putin had issued “an abusive Interpol arrest warrant for me.”
Mr. Browder said he believed
his visa was revoked by “an auwas proposing four different
locations: Midtown West, Long
Island City, the Brooklyn Tech
Triangle and lower Manhattan,
all of which meet Amazon’s
prerequisites.
“We see this as a competition for 50,000 new job openings—jobs we want New Yorkers to land,” Mayor Bill de
Blasio said in a statement last
week.
Washington, D.C., in comments released last week, proposed four sites, touting last
year’s No. 1 restaurant-city
ranking in Bon Appétit, as well
as its 2014 “Coolest City” title
from Forbes. Amazon founder
and Chief Executive Jeff Bezos,
who also owns the Washington
Post, bought a home there last
year for $23 million
In recent weeks, would-be
competitors have tried to grab
Amazon’s attention with
stunts including New York
lighting up its iconic buildings
in the company’s signature orange and southern Arizona attempting to send Mr. Bezos a
21-foot cactus. (Amazon ar-
tomatic process” in the U.S., and
he didn’t think this was an active attempt by President Donald Trump’s administration to
bar him from entering the U.S.
Senate Armed Services Committee Chairman John McCain
(R., Ariz.) and Maryland Sen.
Ben Cardin, the top Democrat on
the Foreign Relations Committee, said Mr. Browder was a
“strong advocate for anticorruption efforts” and Homeland Security should immediately review
the decision.
—Associated Press
contributions at as little as
$2,400 a year and push additional savings into so-called
Roth-style accounts where
posttax dollars go in and
money comes out tax-free in
retirement was a combination
of both. Much of the revenue
it generated would have come
from accelerating tax collections from the future into the
near term.
WASHINGTON—President
Donald Trump pledged Monday to protect a popular retirement-savings
program,
promising to leave it untouched in the forthcoming
GOP plan to overhaul taxes.
Mr. Trump, in a tweet, shot
down an idea that had been
circulating in Washington policy circles and worrying the
retirement-savings industry:
limiting pretax contributions
to retirement accounts.
“There will be NO change to
your 401(k),” the president
wrote on Twitter. “This has always been a great and popular
middle class tax break that
works, and it stays!”
Mr. Trump’s comments point
to a challenge he and fellow
Republicans face as they race
to write and pass a tax plan:
They have ambitious targets
for rate cuts and a self-imposed
$1.5 trillion limit on the size of
the tax cut over the decade.
Those guidelines have propelled them to look for large
tax breaks they can limit or
repeal and to seek budgetary
maneuvers that shift the timing of tax revenue into the period measured by congressional scorekeepers.
The proposal to cap 401(k)
Cities including New York, Boston, Atlanta, Nashville, Tenn., and
Austin, Texas, have applied for the new corporate site for Amazon.
ranged for it to be donated.)
Some cities and states are
proposing big incentives. Newark, N.J., last week said it
would offer a potential package of $7 billion over a decade.
Still, it is unclear where
Amazon might land. “I don’t
think any one market fits everything. It’s going to be a balancing act of the various attributes,” said Dave Bragg, a
managing director at Green
Street Advisors, a Newport
Beach, Calif., firm that conducts real-estate research.
Amazon has increased its
workforce from a few thousand
to more than 40,000 over the
past decade. And it is still
planning to add 2 million
square feet and 6,000 people in
Seattle in the next 12 months.
While Amazon continues to
grow in Seattle, experts say it
would be difficult for the company to essentially double its
footprint there. In addition,
But even a few days of
chatter showed the concept’s
unpopularity, especially at the
$2,400 level. By foreclosing
changes to 401(k) plans, Mr.
Trump again positioned himself in favor of a broadly enjoyed tax break.
Mr. Trump’s decision to
weigh in on a still-forming
proposal showed how he can
alter the legislative process,
but it is Congress, not the
president, that is putting the
details together.
“Presidents have a right to
make determinations and we
ought to pay attention to it,
but there are some things he
shouldn’t be shooting down,”
said Senate Finance Chairman
Orrin Hatch (R., Utah), who
said he didn’t like the potential 401(k) limits. “He can
make his moves, but we’re going to do things up here that
might be a little bit different
and that might be one where
we have to say we disagree.”
Other parts of the tax plan
that the president and congressional Republicans support would deliver significant
benefits to households at the
top of the income scale.
“I plan to hold President
Trump to his word that he and
congressional Republicans will
not put forward any plan that
taxes the retirement savings
of American families,” Rep.
Richard Neal of Massachusetts, the top Democrat on the
House Ways and Means Committee, said.
Lobbyists and others in the
retirement and financial-services industries who had spoken to congressional staff said
last week that lawmakers are
looking at proposals that
would allow 401(k) participants to contribute significantly less before taxes than
what is currently allowed.
hiring thousands more software developers will almost
certainly be cheaper and easier in a different city, they say.
Amazon has said that it will
give its team leaders the
choice of staying in Seattle,
relocating or being based out
of both locations.
The weeks leading up to the
deadline included some applications from potentially unlikely candidates. Puerto Rico
bid even as much of the island
remains without electricity
following Hurricane Maria.
Some Native American reservations also applied.
Nearly a dozen Canadian
cities have submitted bids, including a joint effort from Toronto and Waterloo as well as
bids from Hamilton, Vancouver and Ottawa.
While the Toronto-led bid
didn’t include any tax incentives, it appears to be Canada’s best bet in landing the
tech giant’s second headquarters, highlighting the region’s
access to local talent, a strong
immigration policy and how
the country’s health-care system could save Amazon another $600 million a year.
According to Amazon’s map,
bids came from three Mexican
states: Chihuahua, which borders Texas and New Mexico,
Hidalgo and Querétaro.
Four of the U.S. states that
didn’t bid—North and South
Dakota, Wyoming and Vermont—don’t have one million
people. Two more that didn’t
bid, Montana and Hawaii,
aren’t far above that mark.
Arkansas, home to Amazon’s biggest competitor, WalMart Stores Inc., was also absent from bidding. Little Rock
last week launched a new, economic-development campaign
with an ad and a banner over
Seattle that said, “Hey Amazon, it’s us, not you.”
“We decided that we would
break up with them before
they broke up with us,” Little
Rock Mayor Mark Stodola said
in an interview last week.
—David George-Cosh
and Robbie Whelan
contributed to this article.
‘This has always
been a great and
popular middle class
tax break that works.’
ELAINE THOMPSON/ASSOCIATED PRESS
Rights Activist Says
U.S. Visa Revoked
price of jeopardizing his
cherished tax overhaul.
It was left for White
House budget director Mick
Mulvaney to say over the
weekend that the AlexanderMurray effort doesn’t go “far
enough yet” in making other
changes Republicans
want. One Republican veteran described the back-andforth as an example of “unplanned unpredictability.”
It’s clear that Mr. Trump
thinks that, in most cases,
being unpredictable is better
than being transparent, especially when trying to keep
enemies abroad guessing
about American intentions.
Trump Promises ‘No Change’
To 401(k) in Big Tax Overhaul
DISASTER RELIEF
The Senate pressed ahead on
a $36.5 billion hurricane-relief
package that would give Puerto
Rico a much-needed infusion of
cash.
The measure also would replenish dwindling emergency disaster accounts and provide $16
billion to permit the financially
troubled federal flood-insurance
program to pay an influx of Hurricane Harvey-related claims.
The bill rejects requests from
the Texas and Florida congressional delegations for additional
money to rebuild after hurricanes Harvey and Irma. After a
procedural vote Monday a final
vote on the bill is expected no
later than Tuesday.
—Associated Press
president accept a plan that
continues the insurance subsidies or not? Is it worthwhile for Sens. Alexander
and Murray to continue their
efforts, or would the president try to block Republican
backing and ultimately veto a
deal?
One guess among Republicans is that Mr. Trump simply misread the situation and
didn’t realize Alexander-Murray was hitting a lot of resistance from conservatives,
whose support is going to be
crucial for getting a tax-cut
plan across the finish line.
Mr. Trump badly wants a
health deal but not at the
D
omestically, the danger is that lawmakers
start to simply ignore
what Mr. Trump says because they don’t think they
can count on it. Internationally, the danger is that opponents miscalculate because
they don’t know where bluster ends and bottom-line reality begins. That seems a
real danger right now in the
tensions with North Korea.
President Barack Obama
learned the price of unpredictability in foreign policy
in at least one important
case. He warned publicly that
Syria’s use of chemical weapons in its civil war would
cross a red line for him,
prompting retaliation. When
that red line was crossed,
Mr. Obama failed to act, creating doubts about American
reliability that lingered
through his presidency.
As that suggests, in national security, steady-asshe-goes may be preferable
to you-never-can-be-sure.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | A5
* * * * *
U.S. NEWS
Pence Vets
Warsh as
Potential
Fed Chief
BY ANNA WILDE MATHEWS
BY PETER NICHOLAS
AND KATE DAVIDSON
Iowa is withdrawing its application for an ambitious program to reshape the Affordable
Care Act after federal officials
laid out tough conditions for
its approval, a decision that
signals limits to states’ efforts
to alter parts of the health law.
Iowa had applied for federal
permission to move forward
under a provision of the ACA
that allows states to waive certain parts of the law. Though
the Trump administration initially signaled it welcomed
such initiatives, states have recently gotten mixed results for
their applications. The foundering of Iowa’s much-watched
effort will likely be seen as another caution flag as other
states consider their own future proposals.
Separately, federal officials
said a Massachusetts waiver
application was incomplete
and couldn’t be approved fast
enough.
Iowa officials had said they
wanted to repair an ACA exchange that is down to just
one insurer next year, Medica.
The company is increasing average premiums by around
57%, due partly to the Trump
administration’s cutoff of federal cost-sharing payments to
insurers.
Iowa’s governor, Republican
Kim Reynolds, faulted the 2010
health law for Iowa’s individual insurance market problems
and the failure of the waiver
application, and she called the
ACA “unworkable.”
Around 72,000 Iowans currently buy individual plans, either through the exchange or
outside it. The state’s waiver
application suggested that as
many as 22,000 might drop
out of the market if the status
quo continued. However, patient groups said the Iowa program, if implemented, could
hurt lower-income ACA enrollees.
The Centers for Medicare
and Medicaid Services, a federal agency, in a letter on
Thursday to Iowa officials detailed limits on the federal
funding that could be available
to support the state’s program,
based on the ACA’s rules. Iowa
would have to “ensure sufficient funds, on an annual or
other appropriate basis,” according to the letter.
The response came days before enrollment for 2018 plans
is set to start, on Nov 1. Iowa
Insurance Commissioner Doug
Ommen,
a
Republican,
said Monday that the Treasury
Department
signaled
it
couldn’t give the state a final
projection on the money available for several more weeks.
A spokesman for the Department of Health and Human
Services responded to a request for comment by referring to a joint statement criticizing the ACA that was
attributed to both Gov. Reynolds and CMS Administrator
Seema Verma.
A bipartisan bill that has
been introduced in the Senate
would somewhat bolster the
flexibility of the waiver review
process, but the fate of that
bill is uncertain amid mixed
signals from the Trump administration.
The Iowa setup would have
offered just one type of insurance plan in the individual
market and reshaped the subsidies that help people buy
coverage, among other big alterations to the infrastructure
of the ACA. Iowa’s largest insurer, Wellmark Blue Cross
and Blue Shield, had said it
would reverse its plans to exit
from the state’s individual
market and would instead sell
plans in every county next
year if the state won approval
for its proposal.
MARK WILSON/GETTY IMAGES
Iowa Won’t Redo
Health Law After
Federal Demands
Sens. Patty Murray, left, and Lamar Alexander, architects of the bill, on Capitol Hill last week.
GOP Faces Decision on Backing
Bipartisan Senate Health Deal
BY STEPHANIE ARMOUR
Republicans returning to
Washington will decide in
coming days whether to embrace or set aside a bipartisan
health bill that has gained
traction in Congress, a decision potentially made harder
by President Donald Trump’s
statements praising the effort
but opposing the bill itself.
Senate Minority Leader
Chuck Schumer (D., N.Y.) said
on Sunday the bipartisan bill’s
support includes all 48 Senate
Democrats as well as the 12
publicly committed Republicans, enough to overcome any
filibuster. Senate Majority
Leader Mitch McConnell (R.,
Ky.) said he would bring the
bill to a vote if it is clear Mr.
Trump will sign it.
But that remains far from
certain, given Mr. Trump’s recent comments on the plan
from Sens. Lamar Alexander
(R., Tenn.) and Patty Murray
(D., Wash.). The proposal
would bolster the Affordable
Care Act by providing payments to insurers to help off-
set the costs of providing subsidies to some low-income
consumers, while giving states
more flexibility in implementing the 2010 health law.
Some GOP lawmakers have
been talking with Mr. Trump
in hopes he will decide to support the proposal, likely in exchange for some tweaks. On
Tuesday, Mr. Trump is sched-
Bill has the support
to pass, but Trump’s
opposition could
prevent a floor vote.
uled to appear at Senate Republicans’ weekly luncheon.
Mr. Trump sounded supportive of the deal initially but
later signaled opposition. A
White House spokesman has
since said the president could
only support a bipartisan
agreement if it includes a series of conservative provisions.
A new one-page paper from
the White House, circulating
on Capitol Hill on Monday,
outlined administration demands such as ending, this
year, the requirement that
most people have health insurance or pay a penalty, as well
as halting penalties on larger
employers who don’t provide
health coverage.
The administration is also
demanding that Americans
have more access to shortterm insurance plans that offer
fewer benefits, as well as socalled association health plans
that can be exempt from some
ACA requirements.
It is unlikely Democrats
would support significant
changes that further roll back
the ACA. Democrats have said
such actions would erode the
main goal of the ACA of expanding insurance coverage.
Ending the requirement people
have insurance would likely
raise premiums for older and
sicker consumers, they say.
Many Democrats are pressing Mr. McConnell to bring the
bill to the floor quickly in its
current form.
Kevin Warsh, a candidate
for the Federal Reserve chairmanship, met with Vice President Mike Pence last week to
talk about the central-bank
job, according to a White
House aide.
Mr. Warsh visited Thursday—the same day Fed Chairwoman Janet Yellen was in the
Oval Office interviewing for
the same job with the president. Ms. Yellen’s term as Fed
chairwoman expires in early
February.
Mr. Pence has been part of
a small group of senior White
House officials who have been
vetting candidates for the
world’s most powerful centralbanking job.
The president has narrowed
his search to five candidates,
telling reporters Monday he is
“very, very close” to a decision. In an interview with Fox
News on Friday, he named Ms.
Yellen, Fed governor Jerome
Powell and John Taylor, a
Stanford University economics
professor, as favorites.
Mr. Trump has talked to all
five about the job, interviewing Mr. Warsh last month. Mr.
Pence also has interviewed
Messrs. Taylor and Powell, a
White House official said. Mr.
Trump’s top economic adviser,
Gary Cohn, is also a candidate.
Mr. Warsh is a former Morgan Stanley executive who
served on the Fed board from
2006 to 2011.
Advocates say Mr. Warsh
would tolerate the faster economic growth Mr. Trump has
promised to achieve through
tax cuts and looser regulation
without raising rates too
quickly, though as a Fed governor after the financial crisis
he argued against easy-money
policies that were meant to
support growth.
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THE WALL STREET JOURNAL.
A6 | Tuesday, October 24, 2017
WORLD NEWS
From
After Win, Abe Turns to Economy Risk
Pyongyang
Victory at polls puts
Japanese leader in
position to tackle
long-term challenges
Is Called
‘Critical’
TOKYO—Prime
Minister
Shinzo Abe said he would
tackle some of the Japanese
economy’s deeper structural
problems after his coalition
scored a convincing victory in
parliamentary elections.
A relatively strong economy
and higher stock prices helped
Mr. Abe’s ruling coalition win
more than two-thirds of Parliament’s lower house in Sunday’s voting. Investors cheered
the result by driving Tokyo’s
benchmark stock average on
Monday to a record 15th
straight day of gains.
But Mr. Abe faces longerterm challenges for Japan’s
economy, including an aging
society and productivity that
trails other leading nations.
Mr. Abe said on Monday
that he would push to make
preschool education free for
all families and higher education free for all who need it,
lifting a page from the policies
pushed by his left-leaning opponents in a bid to encourage
larger families. “The key to
sustainable growth in our
country is our response to aging and the low birthrate,” he
said. “It is the biggest challenge for Abenomics.”
Mr. Abe is also likely to
move ahead with labor legislation that was delayed by the
election. The package of bills
aims to reduce excess overtime
and encourage equal pay for
temporary workers who often
receive less than full-time counterparts for doing similar work.
One of the proposed
changes would eliminate mandatory overtime pay for certain professional workers. Officials
in
Mr.
Abe’s
government say it would make
it easier for people like con-
BY GORDON LUBOLD
RODRIGO REYES MARIN/AFLO/ZUMA PRESS
BY PETER LANDERS
AND STEVEN RUSSOLILLO
Prime Minister Shinzo Abe, above in Tokyo on Saturday, said Monday that the biggest challenge to Abenomics is Japan’s aging.
sultants and financiers to be
paid as they are in the U.S.
Opponents, including labor
unions, say it could pave the
way for long work hours without compensation, running
counter to the aims of Mr.
Abe’s overhaul.
The election also pointed to
one of the areas where Mr.
Abe has fallen short on an oftstated promise of Abenomics.
He has said he wants women
to occupy 30% of positions of
responsibility in Japanese organizations, but only 47
women were elected to the
465-seat lower house, with a
handful of seats left to be determined, according to public
broadcaster NHK.
Mr. Abe said he would go
ahead with an increase in the
national sales tax to 10% from
8% planned for October 2019.
While that is likely to reassure
fiscal hawks, the additional
spending on education left
some concern, said Morgan
Stanley MUFG Securities economist Robert Feldman.
Mr. Abe’s election stance
“represented a modest shift
toward larger government,
with no clarification of how
fiscal reform would be
achieved,” said Mr. Feldman in
a note to clients. “Investors
will be left confused on the direction of economic policy until the new government clarifies its stance.”
Another concern hanging
over the market is tension
with North Korea, which has
fired two missiles over Japanese territory in recent
months. Mr. Abe on Monday
spoke by phone with President
Donald Trump, who is visiting
Japan as the first stop on his
Asian tour next month.
The two leaders plan to
play golf with Japanese professional Hideki Maruyama before turning to intensive talks
on North Korea, officials in
Tokyo said.
Mr. Abe will soon have to
decide whether to reappoint
Bank of Japan Gov. Haruhiko
Kuroda or name a successor
when Mr. Kuroda’s term expires in April. Either way,
markets expect the major portions of the central bank’s ul-
tra-easy monetary policy, including its annual ¥6 trillion
($53 billion) of purchases in
exchange-traded stock funds,
to continue.
Takahiro Sekido, Japan
strategist with Bank of TokyoMitsubishi UFJ, said he believed the BOJ would continue
its stock-fund purchases,
“which will be a big supporting factor.”
Recent moves suggest the
BOJ has begun to taper its
purchases of Japanese government bonds, and Mr. Kuroda
or his successor will have to
determine how far to lag the
Federal Reserve in tightening
policy.
—Suryatapa Bhattacharya
contributed to this article.
CLARK FREEPORT, Philippines—Japan’s defense minister said the threat posed by
North Korea has grown to an
“unprecedented, critical and
imminent level,” reflecting a
rising sense of urgency over
Pyongyang’s nuclear weapons
program.
Japanese Defense Minister
Itsunori Onodera told counterparts from South Korea and
the U.S. at a gathering of defense ministers of the Association of Southeast Asian Nations here that Japan supports
the American position that “all
options are on the table”—referring to a possible military
response—while also favoring
efforts at peace.
He said the danger from
North Korea’s development of
nuclear weapons and ballistic
missiles meant the allies had
to carefully calibrate their response.
Mr. Onodera met with Defense Secretary Jim Mattis
and South Korean Minister of
National Defense Song Youngmoo, for a rare trilateral meeting on security issues.
The Japanese defense minister’s pronouncements on
North Korea came within a
day of an election victory by
Prime Minister Shinzo Abe,
who has pushed to change
Japan’s posture as a pacifist
nation and play a larger international role, taking part in
peacekeeping missions and
other operations.
South Korea, considered the
most vulnerable to a missile
attack from the North, has
struggled to refine its message
since a new, more liberal administration was installed earlier this year. Mr. Song said
Monday that military options
must be weighed carefully.
FINTECH
GREG BAKER/AGENCE FRANCE-PRESSE/GETTY IMAGES
ESG
BL ACK SWANS
BLOCKCHAIN
Chen Min’er, center, is expected soon to be named to the Communist Party’s 25-member Politburo.
Protégé of President Xi Rises
To Political Heights in China
BY EVA DOU
AND CHUN HAN WONG
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BEIJING—The best career
move by rising political star
Chen Min’er may well have
been his efforts 15 years ago
to promote another phenom—
Xi Jinping.
With Mr. Xi now starting a
second five-year term as
China’s top leader—and with
the question looming of
whether he will step down in
2022—Mr. Chen is poised to
enter the upper ranks as a potential handpicked successor
to his mentor.
“Chen Min’er has enjoyed a
helicopter ride to the top,”
said Willy Lam, a professor at
the Chinese University of
Hong Kong. “It’s a signal that
he’s certainly one of the favorites of Xi Jinping.”
No Chinese leader since
Deng Xiaoping in the 1980s
has picked his own successor.
But Mr. Xi has shown impatience with such conventions.
In his first five years he
commandeered decision-making, and the Communist Party
Congress now under way is expected to grant him more authority for his next five.
After that, Mr. Xi faces retirement conventions intended
Stepping Stones
On Way to the Top
u 1960 Born in Shaoxing,
Zhejiang province
u 1987 Propaganda director,
Shaoxing
u 2001 Propaganda director,
Zhejiang province
u 2013 Governor, Guizhou
province
u July 2017 Party secretary,
Chongqing municipality megacity
to avoid the infighting and
bloodshed that tore at the
party during the later years of
Mao Zedong—who ruled until
he died—and after his passing.
Mr. Xi, 64 years old, is
keeping his options open, said
Steve Tsang, director of the
School of Oriental and African
Studies China Institute at the
University of London. “I think
it depends in five years’ time
how powerful he has become,”
said Mr. Tsang. “He may continue to rule. But if he thinks
there is a need to formally
stand down, he could hand
over the presidency to one of
his trusted younger colleagues.”
The most likely candidate,
Mr. Tsang said, appears to be
Mr. Chen.
When Mr. Xi governed the
wealthy coastal province of
Zhejiang in the 2000s, Mr.
Chen, as propaganda director,
was there to burnish his image.
After Mr. Xi became Communist Party general secretary
five years ago, Mr. Chen’s career took off. He was appointed governor of impoverished Guizhou and then, in
July, to head the megacity of
Chongqing.
When the Party Congress
ends this week, Mr. Chen, 57
years old, is expected to be
named to the 25-member Politburo because of his role as
party secretary of Chongqing.
He could also vault directly
into the leadership’s inner
sanctum—the Politburo Standing Committee—which could
place him in pole position to
succeed Mr. Xi, especially if
other members of the new
standing committee are too
old to be considered leadersin-waiting under the party’s
recent retirement norms.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | A7
* *
WORLD NEWS
Rex Tillerson made his first
trip as secretary of state to
Iraq and Afghanistan, secretly
jetting in and out of countries
where U.S. troops and local
forces are trying to stop Sunni
Muslim militant groups threatening beleaguered governments allied with Washington.
By Paul Sonne in Doha,
Qatar, and Craig
Nelson in Kabul
Mr. Tillerson met the leaders
of both nations, including Iraqi
Prime Minister Haider al-Abadi
and Afghan President Ashraf
Ghani, on Monday during a
broader tour through the Middle East and South Asia, which
has included stops in Saudi Arabia and Qatar and will take him
to Pakistan and India this week.
Mr. Abadi’s government in
Iraq and Mr. Ghani’s in Afghanistan are relying on U.S.
troops and aid to help them
reassert control amid militant
threats. In recent years, attacks by Islamic State in Iraq
and the Taliban and Islamic
State in Afghanistan have
weakened governmental authority, leaving swaths of territory in the two countries
outside government control.
At the same time, both coun-
tries are suffering from severe
political divisions. An independence bid by the Kurds in Iraq
has sparked tensions with Baghdad, while political discord in
Afghanistan has undermined the
effectiveness of Kabul’s government amid heightened violence.
In Baghdad, Mr. Tillerson
said the U.S. is “concerned and
a bit saddened by the recent
differences that have emerged
between the Kurdistan Regional Government and the
Iraqi government.”
During his meeting with Mr.
Tillerson in Baghdad, Mr.
Abadi vowed to complete the
liberation of Iraq from Islamic
State and secure the country’s
borders, the Iraqi prime minister’s office said.
Mr. Abadi also addressed his
government’s dispute with the
Kurds, describing his recent decision to reassert control over
disputed areas of the Kirkuk
province by force as a necessary reimposition of state authority. He said Baghdad didn’t
want to go to battle with any
component of the country
“since all of them are our sons.”
Mr. Tillerson’s trip has focused heavily on marshaling
support from others in the region to help stabilize Iraq and
Afghanistan. Western officials
ALEX BRANDON/ASSOCIATED PRESS
Tillerson Visits
Afghans, Iraqis
To Bolster Ties
Secretary of State Rex Tillerson, center, on Monday stepped off a plane in Baghdad, where he met with Iraqi Premier Haider al-Abadi.
see improving ties between
Iraq and Gulf Arab neighbors
as a way to hedge against Iranian influence in the region.
The secretary of state met
on Sunday in Riyadh with Saudi
Arabia’s King Salman and Iraq’s
Mr. Abadi, encouraging Saudi
Arabia to play a bigger role in
Iraq to counter Iran’s growing
influence there. On Tuesday, he
is going to Pakistan and India,
where he will outline ways they
can play a more constructive
role in Afghanistan.
Mr. Tillerson, speaking from
Bagram Air Field north of Kabul on Monday, where he
touched down for meetings
with top U.S. and Afghan officials for just under three hours,
called Pakistan’s cooperation in
the fight against the Taliban
critical to achieving stability in
neighboring Afghanistan.
The U.S. has made “some
very specific requests of Pakistan” to erode the Taliban’s
support, Mr. Tillerson said. He
said the future of the U.S.’s relationship with Pakistan would
be based on whether Islam-
abad takes the steps Washington has requested.
“In our conversations with
Pakistani leadership, we are as
concerned about the future
stability of Pakistan as we are
in many respects here in Afghanistan,” he said. “Pakistan
needs to I think take a cleareyed view of the situation that
they are confronted with in
terms of the number of terrorist organizations that find safe
haven inside of Pakistan.”
Islamabad insists there are
no remaining havens for Tali-
ban and other militants on its
territory, and it calls for action
against terrorists based in Afghanistan that attack Pakistan.
Mr. Tillerson said the U.S.
would stay in Afghanistan until securing reconciliation and
peace in the country, but he
cautioned the Trump administration’s approach didn’t
amount to an unlimited commitment.
—Isabel Coles in Baghdad
and Felicia Schwartz
in Washington
contributed to this article.
Infant Deaths Signal Worsening Aid Crisis in Syria
Two malnourished children
died over the weekend in a
suburb of Syria’s capital under
government siege, and antigovernment activists circulated photos showing their
emaciated bodies near death,
underlining the toll of the
yearslong conflict.
One-month-old Obeida died
of malnutrition on Saturday in
the Damascus suburb of Eastern Ghouta, according to activists and a humanitarian group.
Photos before his death
showed his skin wrinkled
around emaciated legs.
The next day, 1-month-old
Sahar died from an infection
and malnutrition, said Mohamad Katoub, advocacy manager with the humanitarian
group, the Syrian American
Medical Society.
Photos showed her with
sunken eyes and visible ribs.
The last photo posted was of
her tiny grave.
The organization, founded
by Syrian-Americans, supports
hospitals and clinics in opposition-held parts of Syria, including Eastern Ghouta, as
well as neighboring countries
with large refugee populations.
Residents of the suburb
say stockpiles of food and
medicine have begun to run
out as regime forces have
tightened the siege in recent
months and commercial shipments and aid convoys have
become rare.
Residents said they fear the
situation will worsen as government forces making steady
gains against Islamic State
elsewhere in Syria turn attention back to conquering the
few areas still under opposition control.
“In another month or two
we will see even more of an
impact,” said Nizar Madani, a
surgeon in Eastern Ghouta.
Since 2016, antigovernment
rebels have been forced to
surrender many areas they
once
controlled—often
through sieges and bombardments like the ones Eastern
Ghouta is under.
In many places, such as the
eastern half of the city of
Aleppo, the areas were retaken by regime forces, and
rebel fighters and tens of
thousands of civilians were
sent to northwest Idlib province, one of the last opposition
strongholds in Syria.
Though a recent cease-fire
Damascus Suburb
Has Been Under
Siege Since 2013
AMER ALMOHIBANY/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY RAJA ABDULRAHIM
One-month old Sahar died on Sunday of malnutrition in a Damascus suburb, an aid group said.
deal was reached between rebels in Eastern Ghouta and the
Syrian regime of President
Bashar al-Assad, government
forces continue to launch airstrikes on the suburb, local activist Anas Dauod said.
There are 68 other cases of
severe malnutrition in the
suburb, all in children under 5
years of age, said Mr. Katoub.
In a report released last
month, the medical group said
there are at least 243 critical
medical cases in need of evacuation from the suburb.
In addition to the two latest
deaths, three other children
have died while awaiting evacuations and a 9-year-old girl
died while negotiations were
under way, according to the
report.
“Medicine has begun to run
out,” said Dr. Madani, who
added that with the coming
Continued from Page One
needed support.”
He said a continuing military investigation would try to
ascertain what happened, and
added “we shouldn’t conclude
anything” about why it took
them an hour to call for air
support. “This is a very complex situation that they found
themselves in. A pretty tough
firefight,” Gen. Dunford said.
U.S. officials earlier had
said French planes were overhead within 30 minutes after
first contact. Gen. Dunford
said that estimate was based
on incomplete information.
Questions surrounding the
ambush have taken on a sharp
note of contention because of
acrimony over condolence calls
by President Donald Trump, especially involving a call to the
widow of Sgt. La David Johnson, who was killed in the ambush but whose body wasn’t
found for nearly two days.
Instead of an intimate exchange between a president and
a grieving widow, the calls have
turned into a public spat pitting
the president and his chief of
staff, John Kelly, against Sgt.
Johnson’s widow, mother and
Rep. Frederica Wilson (D., Fla.),
a friend of the family.
The discord continued on
Monday, with Myeshia Johnson,
the soldier’s widow, saying in an
ABC interview that the call from
Mr. Trump was hurtful because
of the way he spoke to her and
because of what she described
as the president’s difficulty re-
JOE SKIPPER/REUTERS
NIGER
Myeshia Johnson, the widow of Army Sgt. La David Johnson, at
a graveside service on Saturday in Hollywood, Fla.
calling her late husband’s name.
Rep. Wilson has backed Ms.
Johnson’s statement.
Mr. Trump posted a Twitter
message afterward, saying: “I
had a very respectful conversation with the widow of Sgt.
La David Johnson, and spoke
his name from beginning,
without hesitation!”
Gen. Dunford’s meeting with
reporters Monday also came
against the backdrop of repeated complaints by lawmakers that the Trump administration hadn’t been forthcoming
about the incident. Sen. John
McCain (R., Ariz.), chairman of
the Senate Armed Services
Committee, last week threatened to subpoena information,
prompting Defense Secretary
Jim Mattis to travel to the Capitol to brief Mr. McCain and
Sen. Lindsey Graham (R., S.C.).
Lawmakers as well complained they didn’t know about
the 800 U.S. troops in Niger, although American forces have
been there for many years, and
more steadily since a flare-up of
extremist violence in neighboring Mali and Algeria in 2013.
Gen. Dunford disclosed Monday that an estimated 6,000
troops are engaged in missions
in 53 African countries.
The 12-member patrol made
up primarily of Army Special
Forces, or Green Berets, accompanied 30 Nigerien troops
on what Gen. Dunford said was
a “simple reconnaissance mission” from the country’s capital of Niamey to a village
about 50 miles north. Two of
the Americans killed were not
Green Berets, but were attached to the unit.
The troops began their mission on Oct. 3, spent the night
in the village, and were on
their way back to their base
the next day when the firefight
began in the middle of the
morning, Gen. Dunford said.
The troops came under fire
from a variety of weapons including small arms and rocketpropelled grenades, he said.
It took an hour for the Americans to first request air support,
according to initial investigations, Gen. Dunford said. Within
minutes of that call, an American drone arrived on scene. The
drone didn’t fire at the militants,
and Gen. Dunford declined to
comment on whether the drone
was armed or if it simply didn’t
fire and just provided intelligence and surveillance.
French pilots took 30 minutes
to begin to respond to the emergency call and were on the scene
another 30 minutes after that,
he said. That put French jet
fighters overhead some two
hours after the first shots were
fired, according to Gen. Dunford.
The Pentagon previously said air
support arrived in half an hour.
Once in the area, the French
jets apparently didn’t launch airstrikes against the dozens of
suspected Islamic State fighters,
although Gen. Dunford said
there were no known limitations
against action by the planes.
“I don’t know why the Mirages didn’t drop bombs during
those initial passes,” he said. “I
don’t know if the unit on the
ground asked them to do that.
Those are things we’ll find out
in the investigation.”
French officials weren't immediately available for comment. The French pilots may
not have felt they had adequate communication with
ground forces in a chaotic setting, officials have said.
winter the situation could become even more dire. “We are
entering a very, very dangerous phase with regards to the
hunger and siege.”
The yearslong siege coupled
with continuing clashes and
airstrikes carried out by regime and Russian warplanes
have crippled the economy of
the farming suburb, once
known as the capital’s food
basket.
Eastern Ghouta, home to
nearly 400,000 people, has
been under siege by Syrian
regime forces since 2013.
Aid deliveries or medical
evacuations to the area must
be approved by the regime.
The United Nations has previously said requests for access
to certain besieged areas
have been denied or blocked.
The last convoy to reach
Eastern Ghouta, in September, included food and nutritional packets for 25,000
people for one month, said
Ingy Sedky, a spokeswoman
for the International Committee of the Red Cross.
Before that was another
limited aid convoy in August.
Each month, ICRC requests
access to the suburb, but it
isn’t always granted. Both
sides—the rebels and the regime—must agree to allow
access and the safe passage
of the aid convoy, she said.
—Raja Abdulrahim
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A8 | Tuesday, October 24, 2017
* *
THE WALL STREET JOURNAL.
WORLD NEWS
WORLD WATCH
Catalonia Tensions Ensnare Police
BARCELONA—Catalan separatists on Monday called for
massive civil disobedience
amid the prospect of Madrid’s
temporary takeover of a police
force and other institutions
that are potent symbols of the
region’s autonomy.
Prime Minister Mariano Rajoy is set to deploy never-used
constitutional powers in a bid to
halt Catalonia’s drive for independence. The prospect of unauthorized, prolonged protests in
the region could provide an
early test of whether Catalonia’s
police force, the Mossos D’Esquadra, would obey Madrid’s orders after many of its officers
resisted an order from a Spanish
court to stop voters from participating in an independence referendum on Oct. 1.
“There is lot of respect for
[the Mossos] in Catalonia,”
said Siân Edwards, a professor
at Cardiff University in Wales.
Control from Madrid “will be
seen as an attack on Catalan
institutions.”
Lawmakers in Catalonia’s
regional parliament, where
separatists hold a majority of
seats, are set to meet on
Thursday and some are calling
for officials to unilaterally declare independence.
This Friday, Spain’s Senate
Economic Overhaul
Double-digit inflation has been
the norm in Argentina for years.
Consumer prices
Change from previous year
50%
June 2017
22.9%
40
30
20
10
0
2007
’10
Source: PriceStats
’15
THE WALL STREET JOURNAL.
’17
LLUIS GENE/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY JEANNETTE NEUMANN
AND GIOVANNI LEGORANO
Catalan President Carles Puigdemont, center, and police chief Josep Lluís Trapero review Mossos forces.
will vote on Mr. Rajoy’s request to remove Carles Puigdemont, the president of Catalonia
and leader of the separatist
movement, and his 13 cabinet
members, including the Mossos
leadership. Mr. Rajoy’s centerright Popular Party has a majority in the upper house, so approval is widely expected.
Madrid would start to administer Catalonia’s institutions as
soon as Monday, although it remains unclear how such a transition would occur. The premier
will seek to convene regional
elections within six months and
hand back control to a new Catalan leadership.
Such a move would be a
blow to a region that enjoys
significant power over its own
institutions, controlling its education and health systems, as
well as the Mossos.
The 17,000-strong Mossos
force has risen in the estimation
of some Catalans after the Barcelona terrorist attacks in August, when locals cheered its
work in tracking down several
terrorists.
Pro-independence Catalans
also cheered the Mossos over
how they handled the referendum. Officials said the force
would have caused more harm if
it tried to use force to prohibit
hundreds of thousands of Catalans from entering polling stations, pointing out that Mossos
officers did seize ballot boxes
and closed some voting places.
Indeed, Spanish national police
clashed with voters, injuring
hundreds, regional officials said.
The contrasting views came
into sharp focus Saturday, when
protesters in Barcelona demonstrating in support of Catalan
independence booed and made
obscene gestures at a national
police helicopter, then greeted
officers from the region’s local
police with applause, friendly
banter and requests for selfies.
Last week, a Spanish judge
seized the passport of Mossos
Chief Josep Lluís Trapero as
the courts investigate him and
another Mossos official on allegations of sedition during a
pro-independence rally in September. Mossos spokesmen say
the allegations Mr. Trapero
tried to hinder an investigation
by national police are false.
Catalonia’s foreign-affairs
chief on Monday said he expected officials in the region
to disobey Madrid. “I have no
doubt that all civil servants in
Catalonia will keep following
the instructions provided by
the elected and legitimate institutions that we have right
now in place” in Catalonia,
Raul Romeva told BBC radio.
Mr. Rajoy demurred on Saturday when asked how the
government would respond if
Catalan civil servants ignored
orders. A Mossos spokesman
said the force is awaiting details on the powers Madrid will
assume.
Argentine Leader Pushes Deficit Cuts
BY TAOS TURNER
BUENOS AIRES—President
Mauricio Macri, buoyed by a
sweeping nationwide victory in
midterm congressional elections on Sunday, vowed to push
ahead with tax cuts and austerity measures aimed at overhauling Argentina’s economy.
Mr. Macri, speaking at a
news conference, defended a
decision to lift gasoline prices
about 10% on Monday, just
hours after the election, saying
it was necessary to reduce a
bloated fiscal deficit and curb
double-digit inflation.
Mr. Macri said that his top
priority is to reduce a 28.6%
poverty rate, and that this requires lowering inflation and
cutting costly government subsidies for some public services.
The president plans to submit bills to Congress soon to
overhaul the tax code, cut the
deficit and make it less expensive to hire and employ workers, officials say.
Mr. Macri was elated by the
election results. His ruling
Let’s Change coalition won
more than 40% of the vote na-
FloorLiner™
tionwide, almost unprecedented for a new political
movement in a country long
dominated by Peronism, an
ideologically diverse platform
loyal to big labor unions. His
coalition picked up 21 seats in
the Lower House of Congress
and nine in the Senate, winning elections in Argentina’s
five most populated districts.
“Macri’s electoral sweep in
the regions solidify his ability
to drive through further economic reforms in the next two
years and enhance his chances
in the 2019 presidential elec-
tions,” Exotix Capital said in a
report on Monday.
Mr. Macri’s top Senate candidate in Buenos Aires province, Esteban Bullrich, outpolled former President Cristina
Kirchner by about 41% to 37%,
potentially weakening her
hopes of regaining control
over the Peronist movement.
Although she won one of three
seats at stake in the province,
her failure to beat Mr. Bullrich
could embolden her Peronist
rivals, many of whom support
Mr. Macri and don’t want her
in the presidency again.
PHILIPPINES
Marawi Is Declared
Clear of Militants
The Philippine government
said it had broken the final
stand of Islamic State-linked militants in the southern city of
Marawi, killing all remaining
combatants exactly five months
after the bloody battle began.
“We have successfully concluded what has been, so far,
the most serious threat of violent extremism and radicalism in
the Philippines and in Southeast
Asia,” presidential spokesman
Ernesto Abella said.
Mr. Abella said the government would shift its focus “to
the enormous and challenging
task of rebuilding, reconstruction and rehabilitation of the Islamic City.”
Separately, at a meeting of
defense ministers from Southeast Asia in the northern city of
Clark, Defense Secretary Delfin
Lorenzana said there were no
more militants in Marawi and
that combat was over, local media reported.
The battle for Marawi, once a
relatively prosperous Muslim
trading town of 200,000, has
stoked concern about the spread
of Islamic State-inspired violence
into other parts of the world, including Southeast Asia, as the
terror group loses its traditional
strongholds in the Middle East.
—Jake Maxwell Watts
EUROZONE
Consumers Express
Greater Confidence
Eurozone consumers continued to gain confidence in October.
The European Commission
said Monday its monthly measure of sentiment rose to minus
1.0 from minus 1.2 in September,
its highest level since April 2001.
The steady rise in confidence
over the past 12 months has
been driven by greater optimism
about the outlook for the eurozone economy, which has experienced a tumultuous decade as
the global financial crisis and the
currency area’s debt troubles
caused two periods of contraction.
The economy has been growing
since mid-2013 and the pace of its
recovery has picked up in 2017.
—Paul Hannon
MARCELO SAYÃO/EPA/SHUTTERSTOCK
Cargo Liner
Police at the entry of the Miguel Couto Hospital, where the 67-year-old victim was taken.
TechLiner®
CargoTech®
Officers Shoot Tourist Dead
In Rio Amid Rising Violence
BY PAUL KIERNAN
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RIO DE JANEIRO—Police
shot and killed a foreign tourist
visiting a slum here on Monday, underscoring a sharp rise
in police violence that is on
pace to claim more than 1,000
lives this year in Rio state.
Police said officers opened
fire on a vehicle in Rocinha,
one of the city’s largest socalled favelas, or slums, hitting a passenger in the neck.
The victim, whom police identified as 67-year-old María Esperanza Jiménez Ruiz of
Spain, was taken to a nearby
hospital but couldn’t be revived. After the shooting, police determined that the vehicle was providing an organized
tour of the community.
Rio’s state government said
it “laments the death…and is
following the investigation” by
police. Local media reported
the officer who did the shooting was detained. He couldn’t
immediately be reached for
comment.
The incident is likely to
deepen public concern over
the tactics of Rio’s police
force, regarded by humanrights organizations as one of
world’s most violent. In the
first eight months of 2017, Rio
state police killed 712 people,
30% more than a year earlier
and the most since 2009, according to official statistics.
Rio’s overall homicide rate
also rose 8%.
A police official said Ms. Jiménez was in the back seat of
a sport-utility vehicle with
tinted windows of the sort often used by drug dealers. Police alleged that the driver,
whose identity they didn’t re-
The surge in police
violence comes amid
severe budget
problems in Rio.
lease, disobeyed an order to
stop at a checkpoint that authorities had set up following
a shootout with suspects about
an hour earlier that left two
officers wounded. The driver,
who was identified in local media reports, couldn’t immediately be reached for comment.
Brazil’s Globo News reported
that the driver and at least one
other passenger denied the police’s account that they ordered
the vehicle to stop.
The surge in police violence
has come amid severe budget
problems in Rio following the
Olympics last year. Police officers, like other civil servants,
aren’t receiving their salaries
on time, let alone sufficient
funding for equipment ranging
from office supplies to patrol
cars. A touted initiative to introduce community policing to
troubled neighborhoods like
Rocinha has fallen into disarray.
Some experts blame leadership for the crisis, saying the
state government’s head of
public security since last October, a former SWAT commando
named Roberto Sá, has been
lenient toward violent officers.
“The criminals are armed,
bellicose and aggressive, and
the police are out of control,”
said Silvia Ramos, head of the
Center for Security and Citizenship Studies at Rio’s Candido Mendes University.
Mr. Sá didn’t immediately
respond to a request for comment.
Ms. Jiménez is at least the
fourth foreign tourist killed in
Rio since December, though
she is the first to die at the
hands of authorities. A Spanish diplomat said she was with
her brother and his wife at the
time of the shooting.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | A9
NY
WORLD NEWS
Indonesia Pilgrimage Scam Turns Political
Islamist opposition to President Joko Widodo embraces cause of thousands who paid for trips they didn’t receive
BY ANITA RACHMAN
Travel Boom
Indonesia has seen a surge of
Muslims making the umrah
pilgrimage to Mecca.
AMR NABIL/ASSOCIATED PRESS; MUHAMMAD FADLI FOR THE WALL STREET JOURNAL (BELOW)
JAKARTA, Indonesia—An
alleged travel scam that police describe as one of the
biggest frauds in Indonesia’s
history has put new scrutiny
on the country’s billion-dollar pilgrimage industry and
forced the government to rethink how it regulates trips
to Islam’s holiest site.
More than one million Indonesians traveled to Mecca
in the last Islamic year, a
significant increase as conservative Islam gains ground
in the population and politics of the largest Muslimmajority nation.
President Joko Widodo’s
hard-line Islamist opponents
have seized on the rising
number of allegations of
fraud by companies that organize trips to Mecca on the
umrah, which is known as
the minor pilgrimage in comparison with the hajj.
The Islamic Defenders
Front, an influential hardline pressure group, is offering free legal help to pilgrims and said it would
press lawmakers and the
Ministry of Religious Affairs,
which regulates and oversees
pilgrimages, to make sure
swindlers are prosecuted.
“The ministry functions as
checks and balances here.
We demand their responsibility,” said Aziz Yanuar, a
lawyer for the group, which
is also known as the FPI.
The FPI brought hundreds
of thousands of protesters to
the streets over the past year
in a successful campaign to
defeat a re-election bid by
the governor of Jakarta, an
ally of Mr. Widodo, and have
him jailed for blasphemy.
Any further gains by the
FPI would represent a growing challenge for Mr. Widodo
in the run-up to the 2019
presidential election.
Iskan Qolba Lubis, an Islamist opposition lawmaker
who isn’t affiliated with the
900 thousand
800
700
October 2016June 2017
876,246
600
500
400
300
200
100
0
1434
1436
Islamic lunar calendar
Pilgrims in Mecca in June. Below, Asmana, who sells soup by the street, said she is still determined to make the umrah journey.
FPI, said the Ministry of Religious Affairs should compensate victims.
The ministry is supporting
investigations and prosecutions, but won’t pay compensation for fraud victims, said
Mastuki, a ministry spokesman who goes by one name.
Umrah trips attracted more
than 876,000 Indonesians in
the season of around nine
months that ended in June,
an increase of around 60%
from four years ago. Pilgrims
must wait up to 30 years for
one of Indonesia’s 211,000 annual places in the hajj.
Until recently, the Religious Affairs Ministry had
only eight employees to
monitor umrah trips, and it
wasn’t prepared to handle
the surge, Mr. Mastuki said.
The ministry has now doubled that number, he said.
The ministry and other
agencies said they would
form a regulator to check the
flow of funds to and from all
umrah travel companies. The
ministry is also looking at
reviewing some permits.
In the case that drew national attention to alleged
umrah fraud, police accuse
Anniesa Hasibuan, a designer of Muslim fashion,
and her husband, Andika
Surachman, of taking
around $63 million from
nearly 60,000 people who
booked trips with their Ja-
karta-based company, First
Travel, and failing to provide services.
The couple have been
named as suspects pending
the conclusion of police investigations, at which time
prosecutors will decide
whether to press formal
charges. Police allege the
couple used client payments
to finance the purchase of a
palatial home, fund a fashion
business and put on shows
at New York Fashion Week.
The couple’s lawyer, Deski
Kuddeh, said that his clients
deny any wrongdoing and
don’t know what happened
to the money. “Ms. Anniesa’s
volunteer did the corruption,” he said, without explaining further.
“It was a time bomb,” Sularsi, coordinator for complaints and legal issues of
the nonprofit Indonesian
Consumers Foundation,
said of First Travel. “We’ve
received many reports from
pilgrims who registered with
various agents before this
case exploded, but no real
actions were taken by the
government.”
The foundation said it had
received more than 22,000
complaints from pilgrims
this year through July, of
whom 17,000 were registered
with First Travel.
Mr. Mastuki said the ministry had monitored the busi-
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1438
Note: Data from the nine-month umrah
season in the Islamic lunar calendar.
1434=November 2012-August 2013
Source: Ministry of Religious Affairs
THE WALL STREET JOURNAL.
ness well, and that many
complaints reported to the
foundation were about trips
managed by unregulated companies outside of the ministry’s ability to take action.
Asmana, a 63-year-old
grandmother who sells noodles by the roadside on the
outskirts of Jakarta, said she
picked First Travel’s umrah
package because it was
cheaper than others.
She paid $1,000 in February 2016 to make the umrah
in February this year. After
the company delayed the
trip, she paid another $184
to book a June departure,
only to be delayed again.
When news of the First
Travel arrests broke in August, she learned that she
had been defrauded. She said
she is still determined to
make the trip.
“I am embarrassed,” she
said. “I told my neighbors
and even my loyal diners.
People say, ‘it’s great, a noodle seller can go to Mecca.’ ”
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Tuesday, October 24, 2017
THE WALL STREET JOURNAL.
* *
Continued from Page One
still almost entirely run by
private farmers and not companies—use machinery and
technology more efficiently,
get better prices on bulk supplies and manage to keep
more of the profits by cutting
out middlemen.
Mr. Frahm, 59 years old,
said decisions on his farm are
driven by the constant analysis
of efficiency and scale—cents
per pound or units per acre.
“I’m always interested in, how
big is too big, how far can this
thing go?” he said, clad in bluejeans and a Pioneer seeds ball
cap. In more than three decades of running his farm,
through droughts and commodity-market swings, he said
he had only one losing year.
Three decades
Mr. Frahm estimated that
farms of his size can produce
$10 million to $15 million
worth of grain in a good year.
With that amount of production, well-managed farms can
reap $1 million to $3 million in
profit, even in times of low
crop prices, he said.
A typical smaller farm selling just $500,000 worth of
grain annually has over the
past three years generated a
5% profit margin, or about
$25,000, said Mark Wood, a
Colby-based agricultural economist for the Kansas Farm
Management Association.
Mr. Frahm said his farm
provides steady, well-paying
jobs and helps fund Colby’s
hospital and community college. But he has stepped in at
the last moment to place the
winning bid at land auctions,
and he knows that rankles
other farmers. Some landowners see him as more of a corporate manager than a grower
and have avoided renting their
fields to him, looking instead
for smaller farmers, he said. “I
run into that resentment—‘haven’t you got enough by
now?’ ” he said.
Mr. Frahm’s family settled
and began farming near Colby,
which now has a population of
5,419, in the 1880s. In 1986, after a heart attack killed his father, Mr. Frahm took over the
family’s 5,600 acres. The farm
was large but not unheard-of in
Kansas at that time.
He said he looked for opportunities to expand, persuading
relatives to lease him fields
and plowing profits from good
years into buying land. In 2013
he negotiated his biggest-ever
expansion, adding 7,000 acres
when an uncle retired, boosting
his total land by nearly one-
Green Acres
More U.S. farms are becoming
giant operations. Number of
farms, by agricultural sales:
$100,000 to $499,999
$500,000 or more
300 thousand
250
200
150
100
50
0
1982 ’87 ’92 ’97 2002 ’07 ’12
Source: U.S. Department of Agriculture
THE WALL STREET JOURNAL.
METRIC
Continued from Page One
the next day.
The English from at least
medieval times have hewed to
their own measurements—cubits, stones, miles, acres—some
of which are still used in America. Since 1965, the British government has been pushing its
people toward the metric system, used most everywhere
else but the U.S., Liberia and
Myanmar.
While metric measurements
frequently appear in parks, on
packaging, in cookbooks and at
markets, Britons still weigh
themselves in stone, drink pints
and drive under miles-per-hour
speed limits.
The EU requires members to
use the metric system alone, although the U.K. negotiated exemptions, such as road-traffic
signs and to label produce in
metric and imperial. Beer, cider
and a few other items can be
sold in imperial units.
For many Britons, the Brexit
vote, driven by the perception
Brussels had too much influ-
ence on the isles, raises questions about what kind of country Britain should be. One with
strong or weak ties to Europe?
Interventionist or isolationist?
Dark-red passports, as elsewhere in Europe, or traditional
navy-blue?
Metric or imperial?
In a YouGov PLC poll after
the Brexit vote, 45% preferred
produce sold in pounds and
ounces while 39% wanted it in
kilos. Most over 50 wanted imperial measurements; those between 18 and 24 preferred metric.
A move back to exclusively
imperial measurements isn’t on
the table, said Liam Fox, Britain’s trade secretary, this
month.
That hasn’t stopped the Active Resistance—it counts three
full members who amend signs
and dozens of supporters
around England—from pressing
the point. Mr. Bennett and another member, retired engineer
Derek Norman, 83, said they
planned the most recent raid
over tea and white-bread sandwiches at Mr. Norman’s house.
At meetings, they typically
talk about expenses and discuss
Jacob Rickli heads back to work after a dinner break during the corn harvest on one of Lon Frahm’s fields in Colby, Kan., this month.
Shift to Greater Size
The largest U.S. farms are growing in number and size, and commanding more of the country's food production, while smaller farms shrink.
Number of farms,
by size of farm
500 to 999 acres
Percentage of acres harvested,
by size of farm
1,000 to 1,999 acres
250 thousand
50%
200
40
150
30
100
20
50
10
0
1982 ’87 ’92 ’97 ’02 ’07 ’12
Midpoint farm size*
Percentage of market of
agricultural products sold
by farms with revenue of
$1 million or more
1,200 acres
80%
2,000 acres or more
900
60
600
40
300
20
0
0
0
1974 ’78 ’82 ’87 ’92 ’97 ’02 ’07 ’12
1982 ’87 ’92 ’97 ’02 ’07 ’12
1987
*Harvested cropland
Source: U.S. Department of Agriculture
have family in it, you’re probably not going to get into it, because of the expense” of acquiring land, he said.
The local school district has
lost more than one-fourth of
its students over the past 20
years, he said. “The young
people are moving away, because the farmers need less
help,” Mr. Miller said. The big
machinery and technology
used on large farms—such as
remote sensors for irrigation
systems—mean fewer workers
are needed.
At Colby’s Farm Credit of
Western Kansas, chief credit
officer Mark Winger said the
bank over the past decade has
reduced the number of loan officers that deal with farmers.
As large farms absorb smaller
ones, he said, that leaves fewer
farmers to finance, and more
concentration of risk.
Supplier pressure
Some area farm-supply retailers, which sell seed and
chemicals, have trimmed head
count. Local grain companies,
such as Winona Feed and Grain
and Rexford Grain, which buy
grain from farmers and sell it
on to exporters, livestock operations and ethanol plants, have
been absorbed by larger regional players, including Frontier Ag Inc. Large farmers often
seek to buy chemicals and materials from suppliers with direct links to manufacturers,
and increasingly handle grain
storage and sales themselves.
Farmer-owned cooperatives,
which handle grain and suptips about metric signs around
England deserving of conversion. Sometimes, they pack into
a car and head out together on
raids.
On a raid several years ago
in Chelmsford, northeast of
London, Mr. Norman said he
and Mr. Bennett had to dash
through hedges in the dark after a park ranger threatened to
call police, who sometimes
tried to thwart such raids.
The group said it has
changed about 3,000 signs
since it formed in 2001—most
still in place, it said—and
writes to local officials where
signs are metric. Members use
imperial-inspired code names
including “Yardstick” and “Wun
Tun.”
They sometimes distribute
leaflets at markets reminding
traders they can label produce
in imperial units alongside
metric and have written clothing companies urging them to
use imperial units only in catalogs.
Movement toward metrication threatens to erode British
culture, said Stephen Dixon, 56,
a supporter of the Active Resistance to Metrication and a
’92
’97
’02
’07
’12
THE WALL STREET JOURNAL.
plies and share profits among
member-owners, are working
to adjust.
Jeff Kahle, who grew up
near Colby and now manages
eight regional facilities under
farm cooperative company CHS
Inc., has watched area farms
consolidate.
Two decades ago, around
the time Mr. Kahle started
working at the co-op, it wasn’t
uncommon for 120 farmers to
turn up at a planting seminar
hosted by Kansas State researchers. These days, he figures 20 farmers might show
up, even though they still represent the same number of
acres. As a result, he said his
operation has shed about onefifth of its staff over the past
10 years.
“The larger [the big farms]
get, the more difficult they are
to do business with on a retail
level,” Mr. Kahle said. Over
time he said he aims to provide
more advisory and technology
services to farmers.
Mr. Frahm said he largely
stopped dealing with local coops around 15 years ago, when
he started finding better prices
by scouring the internet for
deals on seed and chemicals.
Now he orders seed and pesticides by the truckload.
When selling crops, he prefers dealing with brokers that
match up his crops with area
feedlots and ethanol plants,
which can fetch him higher
prices. He stores nearly all his
grain in his own bins and runs
his own loading station, saving
on transport costs and giving
him more flexibility on when to
sell based on grain prices.
Cooperatives are becoming
“just a place to drink coffee,”
Mr. Frahm said. “They can’t
change quickly enough to keep
up with competition that can
turn on a dime.”
Mr. Frahm, who holds three
degrees in business and agricultural economics, said his operation thrives by pushing efficiency at every turn.
His nine-person team totes
tablet computers that control
sprinkler systems miles away,
switching them off when sensors report adequate moisture.
When his tractors are rolling,
automated systems monitor
the number and type of seeds
being sown in each row, to
maximize planting on fertile
ground.
Tony Bennett with signs he
freed from the metric system
member of a sister group, the
British Weights and Measures
Association, which opposes
compulsory metric-system use.
He realized things had gone
too far, he said, when paging
through a Bible and seeing
Noah’s Ark described in meters,
not cubits. “Now of course,
we’re supposedly coming out of
the European Union,” said Mr.
Dixon, a retired archivist.
The equipment beams the
data to remote servers, where
Mr. Frahm and his team analyze it to determine how machinery can be run more efficiently, or where they can
spray fewer chemicals. This
year Mr. Frahm has been testing automated insect traps that
deliver updates on the number
and type of bugs killed to help
time pesticide spraying.
Mr. Frahm acknowledges big
farms have brought changes to
the community. But he sees his
operation as an economic engine for Colby. His employees
hold year-round, salaried positions with health care and four
weeks of vacation. His longesttenured employee started
working for Mr. Frahm’s father
on the farm 43 years ago.
He brings them on cruises
as bonuses and outfits them
with matching white Ford pickups for work. He said he gives
each one $1,000 each year to
donate to charity. “These jobs
offer a higher quality of life
than if you were out trying to
[farm] on your own,” he said.
The farmer’s Colby office is
outfitted with flat-screen TVs
and a grand piano where he
sometimes plinks out jazz standards. Before Mr. Frahm
bought the building, it housed
the bank that lent him money.
He owns a sprawling house on
the town’s edge, and vacation
houses in Denver and Arizona
and a cabin on a nearby lake.
Wheeling his own white
Ford truck around Colby, where
rows of corn march up to the
edge of the town’s main thoroughfare, Mr. Frahm notes the
farm’s sponsorship of the annual county fair, and support
for the historical society and
public radio station.
Mr. Frahm said he has no
heirs, and after he dies he
plans to have a foundation own
his property, with the goal of
maintaining jobs and funding
his community charities.
“There’s a reason behind
continuing to accumulate,” Mr.
Frahm said. “My main concern
is that everything carries on.”
“Surely, logically, we de-metricate.”
Melding systems as the U.K.
does can cause confusion. Zena
Martin, a 53-year-old from
Connecticut, has lived in London for nearly two decades and
still relies on conversion websites when baking from U.K.
cookbooks. Her cookies kept
coming out flat, she said, until
she realized she was converting
grams of butter incorrectly.
In Burnley, Bernadette
Blackburn, a 59-year-old administrator, said the U.K. has
been too slow to align with the
world “because you get the old
stick in the mud that doesn’t
want change.”
The metrification-resistance
group argues the law is on its
side, as U.K. road signs must be
in imperial units only, except
for those showing height and
width restrictions, which must
be in both systems—all allowed
under EU exemptions.
Burnley’s offense: The town
council this year erected kilometer signs along footpaths. In
an email demanding their removal, Mr. Bennett, using the
name “Polly Peck,” said town
residents voted overwhelm-
ingly for Brexit and “clearly indicated that they would prefer
to have signs in miles and
yards.”
The council replied saying it
would look into the matter. It
geared the signs toward walkers and runners who may be
training for 5K or 10K races,
said Jeremy Richards, a council
spokesman.
Mr. Bennett—he also goes by
“Hundredweight,”
or
112
pounds—said he couldn’t wait
for Burnley to ponder its signs
and drove 3½ hours to the
town for his raid.
Passerby Alan Wall, 69, approved. “Seeing as we’re coming out of the EU,” he said,
“what’s the point of using metric?”
Mr. Bennett eventually won
the Burnley battle. The council
spokesman Mr. Richards, acknowledging the kilometer
signs are noncompliant, said
the town will put up imperial
numbers.
Mr. Bennett said he has been
arrested several times on
charges of criminal damage but
considers it his duty to act.
“We want to keep what’s best
about Britain.”
‘I’m always
interested in, how big
is too big, how far
can this thing go?’
JENNY GROSS/THE WALL STREET JOURNAL
FARM
third. This spring, Mr. Frahm
rented another 480 acres, and
he said he is negotiating this
fall to buy more.
Rural demographics are
moving in Mr. Frahm’s favor.
The average age of a U.S.
farmer is 58. Younger people
are moving away, and over
time more fields wind up
owned by heirs in towns or cities hundreds of miles away.
In Kansas’ Thomas County,
where agricultural economists
estimate that more than half
the land is absentee-owned,
Mr. Frahm can make an attractive tenant. Some landlords
have approached him to rent
their fields, knowing he has a
good reputation for making
payments and maintaining
land.
That makes it tough for
farmers like Michael Juenemann. He grew up on a family
farm near Colby, but his parents’ 160 acres don’t produce
enough crops to support the
two of them, let alone Mr.
Juenemann and his own family.
For the past five years Mr.
Juenemann, 29, has been renting small parcels of land to
farm himself, borrowing machinery and rolling out of bed
to bale his own hay in the dark.
To make ends meet he
works for other farmers, and
said the hours mean he missed
much of his son’s first years.
Still, he said, “for as long as I
can remember, it’s been what I
wanted to do.”
Mr. Juenemann needs more
land if he is to farm full time
for himself. But buying enough
acres requires a down payment
he can’t afford. This spring, a
few fields became available for
rent just up the road from his
in-laws’ farm—but Mr. Juenemann only found out after Mr.
Frahm began farming them.
“That’s aggravating—opportunities like that where I could
get some more land, but [landowners] will go directly to the
big guys,” said Mr. Juenemann, adding he doesn’t
blame Mr. Frahm.
Many large farmers pay cash
on leases, versus the crop-sharing deals that smaller farmers
have often used and which add
risk for the landowner. Some
large farmers provide more
data on how the property is
cared for. Mr. Frahm offers a
mobile app that shows his
landowners how much moisture their fields are getting.
Three-quarters of America’s
farmed cropland is controlled
by 12% of farms, USDA data
show. The number of milliondollar-plus revenue farms more
than doubled between 1992
and 2015, while the ranks of
smaller farms, with revenue
between
$350,000
and
$999,999, fell by 5%, as farmers
get older and have a hard time
making profits. USDA researchers, in a December report, said
consolidation is likely to continue.
An average farm household
in the Colby area needs income
of at least $50,000 annually to
get by, said Mr. Wood, the agricultural economist, which has
become harder to generate
from a smaller farm. “The big
guys can cover their costs and
have money left over to grow,”
Mr. Wood said. Smaller farms,
he said, “are going to struggle.”
Bill Miller, 65, who farms
about 10,000 acres around
Colby, has absorbed other
farms from neighbors who retired or moved on. He said the
younger generation will have a
hard time growing big enough
to compete with large, entrenched farms. “If you don’t
NICK COTE FOR THE WALL STREET JOURNAL
IN DEPTH
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | A10A
NY
* *
GREATER NEW YORK
A New Way to Pay the Fare
DAVID KLEPPER/ASSOCIATED PRESS
MTA panel OK’s plan
to have subway, bus
riders use bank cards,
phones to ‘tap and go’
High-Tax States
Balk at Republican
Deduction Plan
BY MIKE VILENSKY
Lawmakers from New York
and other high-tax states are
resisting efforts to roll back a
policy that helps residents
save on their federal taxes.
Republicans have proposed
eliminating or limiting the deductibility of state and local
taxes as part of new tax legislation. New York Gov. Andrew
Cuomo, a Democrat, has seized
on the issue, touring the state
and joining with local and federal lawmakers who want to
preserve the lucrative tax break.
The deduction allows individuals to subtract their homestate levies from their federal
taxable income. In high-tax
states such as New York, that
can allow taxpayers to save big.
“This is probably one of the
most destructive policies to the
state of New York I’ve heard proposed in 30 years,” Mr. Cuomo
said Monday at a news conference with Sen. Chuck Schumer, a
fellow New York Democrat.
The status of White House
and congressional efforts to
eliminate the deduction for
some or all taxpayers isn’t clear.
A tax policy the White House
outlined earlier this year proposed repealing the deduction.
House Republicans from New
York, New Jersey and other
high-tax states have been resisting GOP leaders’ proposals
to repeal the deduction and use
the money to lower tax rates.
House leaders need at least
some of those members’ votes
to get the bill through and
they have been negotiating
with New York and New Jersey
lawmakers. So far, they haven’t
announced a deal, though they
have been considering proposals to allow property tax deductions or to set an income
limit for the tax break.
On Monday, a White House
spokeswoman said: “The President has made it clear that
his two non-negotiables are a
middle-class tax cut and getting the corporate rate down
to 20% or lower.”
The spokeswoman also said
that only about 30% of U.S.
taxpayers claim itemized deductions, and pointed to a report from the Congressional
Budget Office that said the
state and local tax deduction
“provides a much larger benefit relative to income for
higher-income households than
for lower-income households.”
The issue has put some
New York Republicans in a difficult position, torn between a
policy their party generally
supports and concerns about
how it could affect them in
their districts.
Rep. Peter King, a Republican representing Long Island,
has been at the fore for pushing back on the policy within
his party. In an interview, Mr.
King described a recent meeting of House Republicans
where he and other high-tax
state representatives expressed concerns about repealing the deduction.
“Politically and economically, it would be devastating,”
Mr. King said, describing his
suburban district as a swing
region where voters backed
Mr. Trump last year after previously voting for President
Barack Obama, a Democrat.
“The deduction is essential for
these people to get by.”
For Mr. Cuomo, the issue is
familiar. In the 1980s, Republican President Ronald Reagan
sought to eliminate the deduction, and New York Gov. Mario
Cuomo, Mr. Cuomo’s late father, led a successful effort
against the repeal.
—Richard Rubin
contributed to this article.
The MTA is looking to phase out the MetroCard system, which is more than two decades old.
and labor to take care of everything from fixing MetroCard
machines to handling cash.
Each MetroCard transaction
costs the agency about 15 cents,
according to MTA Chairman Joseph Lhota. Transaction costs
would drop under the new system, partly because the new
readers won’t break down as
often because they have fewer
moving parts, said Mr. Lhota.
John Raskin, executive director of the Riders Alliance,
an advocacy group, said the
new system would open up the
possibility of faster boarding
Man With a Mission
on buses and new fare options
that “make transit more efficient and fair” for low-income
New Yorkers.
The new payment system
will be rolled out in 2019, part
of a first phase which includes
development of the back-end
system, a website and the installation of the readers at
500 turnstiles and in 600
buses. The system will work
on subways, buses and the
Long Island Rail Road and
Metro-North. MetroCards will
be totally phased out in 2023.
The MTA expects the ma-
jority of riders will use an established digital-wallet program, like Apple Pay, or a style
of debit card issued from a
personal bank for “tap-and-go”
payment, commonly referred
to as contactless payment.
The MTA will also roll out
its own contactless card,
aimed at the roughly 10% of
riders who don’t have a cellphone or use a bank account.
The plan is to phase in the
agency’s own contactless cards
late in the process to force riders to use their phones or their
own bank-issued debit cards.
Mayor Puts the Brakes
On Prospect Park Cars
BY MARA GAY
BRENDAN MCDERMID/REUTERS
Gov. Andrew Cuomo, right, and Sen. Chuck Schumer on Monday
So long, swipe.
A committee of the Metropolitan Transportation Authority on Monday approved a
contract for the creation of a
new payment system that will
allow riders to “tap” or wave a
cellphone, a bank debit card or
an MTA-issued card with a
special chip at a subway turnstile or upon boarding a bus.
Such systems are used in
other major cities, including
London and Chicago.
The committee voted to
award the $573 million contract for the development and
rollout of the new payment
system to Cubic Corp., the
company that created the current MetroCard system. The
total cost to convert the payment system is expected to be
around $1 billion.
A final vote on the new system is scheduled for Wednesday’s full MTA board meeting.
Phasing out the MetroCard
has long been on the agenda
for the MTA. The current system, now more than two decades old, requires constant
upkeep—like
maintaining
swipe readers at turnstiles—
CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL
BY MELANIE GRAYCE WEST
CRUSHING BLOW: Ashrita Furman, who is the holder of the
most Guinness World Record titles, tried Monday in Queens to
break the record for the most pumpkins smashed in one minute.
New York City Mayor Bill
de Blasio is banning cars from
Brooklyn’s Prospect Park, a
move he says will make one of
the city’s flagship parks safer
and more tranquil.
“People are working really
hard, long hours, a lot of
stress,” he said at an event on
Monday. “There gotta be some
places that are stress free.”
Cars will be permanently
banned from the park starting
Jan. 2. They had been temporarily prohibited this summer
in what Mr. de Blasio, a Democrat, had said was linked to his
“Vision Zero” initiative to reduce pedestrian fatalities in the
city.
Prospect Park has been the
scene of deadly crashes involving cars and pedestrians or cyclists.
About 1,000 people walk,
jog, or bike through the park
weekday mornings, and about
300 vehicles use it during the
same period, according to the
city’s Transportation Department.
De Blasio administration officials said they received petition this summer supporting a
permanent ban.
The mayor said he and others had worked to prohibit
cars in Prospect Park since his
days as a New York City councilman, representing the Park
Slope neighborhood adjacent
to the park.
He noted that he and his
wife, Chirlane McCray, were
married in the park and their
two children played there.
“I can’t possibly describe to
you how much Prospect Park
has meant to our family,” Mr.
de Blasio said.
Mitchell Moss, director of
the Rudin Center for Transportation Policy and Management
at New York University said the
ban was “long overdue.”
He added: “It makes sense
for safety and because there’s
overwhelming sentiment in the
communities around the park
that this is the right thing.”
Moore Show Falls Short at Box Office
Film director Michael Moore
may have arrived on Broadway
with the self-professed goal of
taking down a sitting president.
But in the end, his politically
liberal-minded show, “The
Terms of My Surrender,” which
closed this past weekend, failed
to wow at the box office.
In its 13-week run, including
a preview period, the show had
ticket sales of $4.2 million, according
to
BroadwayWorld.com, a theater website
that tracks grosses. That figure
represents only about 49% of
the show’s potential gross.
Mr. Moore’s largely oneman production started on a
strong note, taking in
$456,000 in its first full week.
But it quickly fell well under
that mark, with ticket sales
dipping below $300,000 in
some subsequent weeks.
By contrast, Bruce Springsteen’s show, simply titled
“Springsteen on Broadway,”
already has grossed a total of
$6.6 million, far eclipsing Mr.
Moore’s show.
True to the billing, Mr.
Moore’s production skewered
Republican President Donald
Trump. It also focused on Mr.
Moore’s life and history of political activism.
In an email, Mr. Moore said
the show was “the most artisti-
MICHAEL NOBLE JR./ASSOCIATED PRESS
BY CHARLES PASSY
Michael Moore’s Broadway show ended a 13-week run last weekend.
cally gratifying experience of
my life.” He said there are
“talks happening about taking
this show on the road.”
A spokesman for the show
didn’t comment on the budget
of the production or if it made
a profit or loss.
Theater-industry observers
say reviews of the show, which
mostly were negative, affected
the box office.
Moreover, observers noted
that Mr. Moore wasn’t helped
by the fact that many comedians already are offering that
Trump-skewering
perspective—without charging their
audiences the price of a Broadway ticket.
“If you want to see something anti-Trump, you can just
watch any of the late-night
shows” on television, said
Christopher McKittrick, an editor with Daily Actor, a website
that covers theater.
GREATER NEW YORK WATCH
SEXUAL HARASSMENT
State Opens Probe
Into Weinstein Co.
New York Attorney General
Eric Schneiderman has opened
an investigation into the Weinstein Co. to determine whether
its handling of allegations of
sexual misconduct against company co-founder Harvey Weinstein violated state or city laws.
The civil rights bureau of the
attorney general’s office issued a
subpoena to the company Monday, a person familiar with the
investigation said.
Representatives for the
Weinstein Co. and Mr. Weinstein
didn’t respond to requests for
comment. Mr. Weinstein, who
was fired from the company
earlier this month, has denied allegations of nonconsensual sex.
—Rebecca Davis O’Brien
ENVIRONMENT
City Could See Dire
Floods, Study Warns
Within the next three decades, floods that used to strike
the New York City area only
once every 500 years could occur every five years, according to
a new scientific study released
just days before the fifth anniversary of superstorm Sandy.
The study, performed by researchers at several universities
and published Monday in the Proceedings of the National Academy of Sciences, primarily blames
the predicted change on sea-level
rise caused by global warming.
The researchers based their
analysis on multiple models that
factored in predictions for sealevel rise and possible changes
in the path of future hurricanes.
—Associated Press
ROBERTO COIN BOUTIQUE
Westfield World Trade Center
Oculus | Main Level C2
New York, NY | 212.287.1299
BLACK JADE COLLECTION | robertocoin.com
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A REAL ALTERNATIVE*
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THE WALL STREET JOURNAL.
LIFE&ARTS
Tuesday, October 24, 2017 | A11
HALLOWEEN
What Would
Santa Say?
BY ANNE MARIE CHAKER
A 6-foot fake
willow tree with
orange lights from
Target, left, and a
Treetopia tree
bedecked with
skeletons, giant
spiders and
ghoulish ornaments.
evenly,” says Ms. Book. She aims to have the
tree completed by the second weekend in
September so the family has six weeks to enjoy it. After Halloween, it is replaced by autumnal décor like gourds and pumpkins for
Thanksgiving. Then, her 7-foot Christmas tree
goes up, trimmed with home-sewn burlap garland, strings of popcorn and cranberries and
an “Our New Home” ornament from 2006.
“It’s more sentimental,” she says. “The
Halloween tree is funny and silly.”
While some people may shudder at the
ITS UGLY AND SPOOKY, and that’s the
point.
The Halloween tree is a fake orange
Christmas tree, and retailers hope we’ll buy
it, and then also candy corn lights, black
and orange ornaments, oversize spiders and
miniature pumpkins. Candy makers like the
idea because we’ll need garlands of skull
chocolates and gummies, too.
Target Corp. for the first time
is selling 6- to 9-foot trees for
Halloween, including a $968 orange Christmas tree and has new
in-store “Hyde and Eek Boutiques” featuring holiday merchandise like lace copper pumpkins or $20 plastic spooky-piano
figurines.
Spending on Halloween decorations, candy and costumes is expected to reach $9.1 billion this
year, up 8% from last year’s projection, according to the National
Retail Federation. At online
home-décor retailer Wayfair, sales
of Halloween-themed trim, such
as a $20 string of candy corn
lights, have increased by 73%
since last year. Bronner’s Christmas Wonderland, a year-round
holiday decorations store in Frankenmuth, Mich., says it increases
its Halloween inventory each
year, including window and tree
ornaments as well as a Halloween
village.
“Anything Halloween I can
find goes on the tree,” says Drew
Holmes, a 31-year-old pharmacist
in Morgantown, W.Va., who has
two trees, including a bright orange fake fir purchased last
month from Treetopia and decorated with black Christmas balls.
That is in addition to his black
Christmas tree trimmed with
$300 worth of orange and purple
lights, garlands and ornaments,
including clip-on feathery blackSpending expected on Halloween
birds.
decorations, candy and costumes
“A Christmas tree is a blank
canvas that you can change the
look of,” says Carrie Chen, brand
manager for Treetopia. “It can beA Christmas tree is
come spooky.” The online Christmore sentimental
mas tree retailer has sold 40%
more orange trees this fall combut the Halloween
pared with last year and carries
tree is silly, says
an assortment of other brightlycolored trees including hot pink
Christina Book,
Increase in
and “sassy sapphire.”
number of
who
starts
For some households, Halloworange trees sold
een kicks off a three-month pedecorating her
by Treetopia
riod of home decorating. Christhis year
home
in
September.
tina Book, a 35-year-old stay-athome mother of three in
Bakersville, Calif., creates a Halspookification of the Christmas symbol,
loween witch-stuck-in-a-tree in her home’s
she says, “I see it as a way to fill with
entryway by positioning a plastic witch and
things that add to the atmosphere of the
a pointy hat in a pre-lit artificial black fir.
home.” When friends and neighbors see it,
“Whenever people come in, it’s ‘oh my gosh
she says, “they definitely giggle and think
you have a Halloween tree,’” she says. Her
it’s awesome.”
tree comes out from a backyard storage
Since September, sales of fake trees at Balshed in early September, and she and her
sam Hill, a Redwood City, Calif., maker of arthree children trim it with orange ribbon,
tificial Christmas trees sold online, are up
store-bought ornaments and homemade
more than 10% due in part to the Halloween
Popsicle-stick crafts, children’s phototree phenomenon, says Thomas Harman, Balgraphs and glittery classroom projects.
sam Hill chief executive. “People don’t only
“I always take a few steps back as I’m gowant to decorate with spiders and witches,”
ing, to make sure things are distributed
F. MARTIN RAMIN/THE WALL STREET JOURNAL (TREES); ISTOCK (4)
$9.1 billion
40%
he says. “They’re pulling forward their Christmas decorations and decorating with trees
and garlands.” It also sells a Halloween tree.
“Halloween tree” this year is one of the
most-searched product queries for Halloween, along with inflatables, wreaths and pillows on Wayfair. The site began selling Halloween décor four years ago. This year, sales
of Halloween trees—including a $385, 7-foot
tree that shakes—are up 20%.
Nestlé SA, maker of Butterfinger, Nerds
and SweeTarts, says it has been pleased
with its candies’ role in the Halloween tree
phenomenon. “All of our products can be
used to make Halloween crafts, including
being strung or hung,” says spokeswoman
Tricia Bowles.
“I’ve seen SweeTarts Skulls & Bones
glued to yarn to create a strung look that
was then wrapped around a Halloween
tree,” says Ms. Bowles. “So creative!”
One caveat for Halloween tree decorators:
They are tempting to household cats. Ms.
Book’s cat, Milo, finds the fabric bats hard
to resist: “I have to hang them high in the
tree or else he’ll have them in his mouth.”
YOUR HEALTH | By Sumathi Reddy
ALAN WITSCHONKE
FOR WOMEN, FIBROID HELP WITHOUT SURGERY
THE FIRST ORAL TREATMENT for
women with the common condition of
uterine fibroids could be available as
soon as summer 2018, with two other
medications in the pipeline.
The drugs, experts say, would provide a new treatment option for a condition most commonly treated with a
hysterectomy, or removal of the uterus.
“For the longest time we have not
really had good options from an oral
medication standpoint to treat fibroids,”
says Arnold Advincula, vice chairman of
women’s health and chief of gynecology at
Sloane Hospital for Women at NewYorkPresbysterian/Columbia University Medical Center. “It’s nice to have some additional tools in the toolbox.”
Earlier in October the U.S. Food and
Drug Administration accepted Allergan’s
new drug application for ulipristal acetate
(UA) to treat abnormal uterine bleeding
caused by uterine fibroids. The company
expects a decision by May.
The drug has been available in Europe
and Canada for several years.
Two other oral medications indicated to
treat uterine fibroids are also in development. Bayer launched a phase 3 clinical
trial—usually the final trial
used by regulators to decide
whether to approve a drug—
for a similar drug, vilaprisan,
in the summer. And AbbeVie is
in the midst of phase 3 trials
for elagolix to treat uterine fibroids and endometriosis, a
disorder in which the tissue
that lines the inside of the
uterus grows outside of it,
causing pelvic pain. The company hopes to have a product
available by 2020.
Uterine fibroids are benign tumors that grow in and around the
uterus. It’s estimated that as many
as 26 million women in the
U.S. have one or more such
tumors, though less than half
experience symptoms. The most
common symptom is long and
excessive bleeding during menstrual periods, which can lead
to anemia and the need for
blood transfusions. Other
symptoms can include pelvic
pain or pressure, a swollen abdomen and frequent urination.
Fibroids can also cause fertility
and pregnancy problems, de-
pending on their size and location.
The cause of fibroids remains unknown.
African-American women have a higher
rate of uterine fibroids. If a woman
has no symptoms, treatment of fibroids isn’t necessary, experts say.
While a hysterectomy is the most
common way to treat fibroid tumors,
women who still want to have children
can have a myomectomy. That surgery
removes fibroids while keeping the
uterus intact. But fibroids can grow back
after the procedure. A number of other
minimally invasive procedures are less
commonly used and usually not recommended for women who want to have children. There’s some chance of recurrence
with most of them.
UA belongs to a group of drugs called
selective progesterone receptor modulators (SPRM). They block the progesterone
from feeding the fibroids, which causes
them to shrink.
“This particular drug also works directly on the lining of the uterus—the enPlease see HEALTH page A13
The location of fibroids in and around the uterus helps determine whether a woman is
symptomatic, and how severe symptoms are.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
A12 | Tuesday, October 24, 2017
LIFE & ARTS
WINE. CHOCOLATE. Bingewatching “The Crown.”
How are your coping
strategies working for you
these days?
Therapists have, for
months, been reporting a
significant increase in clients who are stressed and
saddened by current
events—hurricanes, fires,
the threat of nuclear war.
In some cases, they say,
these large-scale worries
are undermining people’s
ability to cope with their
own private stressors.
In addition to talk therapy, many therapists teach
their clients new tactics
for dealing with anxiety
and stress when it arises.
Psychologists use the
term “emotion regulation”
to describe how we change
our emotions. Most often
(but not always) people
want to change, or “down
regulate,” a negative emotion. We can effectively reduce anxiety or worry in
one of two fundamental
ways, says Maurice
Schweitzer, a professor at
the Wharton School at the
University of Pennsylvania,
who studies the regulation
of emotions. You can
switch your attention to something else, such as when you are
on an unpleasant flight and you
watch a movie. Or you can change
the way you conceptualize the situation: A co-worker snaps at you,
yet you try not to take it personally because you realize he is under a lot of stress. “This gives us
agency,” Dr. Schweitzer says. “We
can choose what to focus on and
decide how we want to react.”
Many people rely on exercise,
yoga and meditation, and favorite
music, all proven to reduce stress
and calm our nervous system. Peter
Wagner, 60, an investment manager
in New York, has created a “calmdown” playlist of songs, which includes Dusty Springfield’s “Son of a
Preacher Man” and Randy New-
BONDS: ON RELATIONSHIPS | By Elizabeth Bernstein
Calm Your Mind
In Anxious Times
man’s “Sail Away.” Barry McCarthy,
74, a psychology professor in Washington, D.C., curbs his late-night
worrying by reminding himself that
problems seem unsolvable between
midnight and 5 a.m. and switching
to thoughts of past or future vaca-
tions. And when Mary Westheimer,
62, a business manager from Phoenix, is anxious, she pictures a water
faucet, turns the tap on in her mind
and lets all the water run out.
Shannon McCormick, 42, a public
relations manager from Columbus,
Ohio, limits her worrying to one
room in the house, a stress-management strategy that a nun taught her
in high school. (She uses the bathroom.) Liz Singer, 61, a psychotherapist in New York, puts both hands
on her chest and envisions her body
progressively relaxing, from
the soles of her feet on up.
Then she focuses in her
mind on a place she loves in
upstate New York. Brooke
Devine, 39, a school psychologist in Louisville, Ky.,
practices deep breathing by
imagining her breath coming in her body, filling her
lungs and abdomen, and
then releasing out. And Ellen Jovin, 51, a communication skills consultant from
New York, has recently
started listening to audiobooks about ancient history
or science. “How much can
you really worry about an
unpleasant task hanging
over your head when you
are learning about delightful ancient sea creatures?”
she says.
I put on upbeat music,
and try to distract myself
with a funny show, movie
or novel. (Carl Hiaasen has
never let me down.) I have
sticky notes above my
desk, on my nightstand
and on the front of each
journal I use that say
“Don’t speculate!” They are
constant reminders that it
is impossible to know the
outcome of an event or
what another person is
thinking or will do. So it’s better
to focus on my own actions, which
are the only thing I can control.
And when I’m really stressed I
picture my friend, James, who
taught me to scuba dive, giving me
an OK sign. It’s a signal often used
in diving, and the first time James
flashed me an OK sign, 40 feet
down in the Atlantic, and I replied
with my own, was a transformative
experience for me. Now, imagining
someone I trust asking me if I’m
OK, and responding in my head
“yes” immediately calms me down.
Write to Elizabeth Bernstein at
elizabeth.bernstein@wsj.com or
follow her on Facebook, Instagram
and Twitter at EBernsteinWSJ
Seven Tips From the Experts to Cut Out Stress
IDENTIFY THE CAUSE. A study by researchers
at Yale University and the University of Toronto,
published in 2013 in the journal “Psychological
Science,” showed that people often misattribute
the source of their anxiety. They think it is one
thing when it really is another. As a result, they
make bad decisions. An example: You almost
get into a car accident on your way home from
work, which leaves you sweaty and tense. Then
when you get home you need to make an investment decision and are more conservative
than you would normally be.
Some questions to ask yourself:
What is the source of your feelings?
Do they stem from something you are
dealing with in the moment or a different issue? “Focus only on what is before you,” says
Jeremy Yip, the lead researcher on the study,
who is now an assistant professor at Georgetown University’s McDonough School of Business.
DON’T RUMINATE. As soon as you notice yourself doing it, decide to take action. Brad Stulberg,
a mental-skills coach for executives and entrepreneurs in Oakland, Calif., and author of “Peak Performance,” tells clients that the question “what
if?” is a clue they’re ruminating, as is feeling their
mind is racing for 10 minutes.
Pause and ask yourself what step you can
take. Are you worried about your child? Plan
some quality time with her. Upset
about a natural disaster or political issue? Make a donation. You’ll feel
better because you’ve taken control
of your thoughts and done something, however small, to make the
situation
better.
PUT DOWN YOUR PHONE. Social media
can produce the same gawker effect as
a car accident on the highway, Mr.
Stulberg says. We can’t tear our eyes
away from the carnage on Twitter or
Facebook. This is a pathway to rumination, so set a time limit for social
media.
Texas. Speaking it out loud
helps you realize how you speak
to yourself and identify thoughts
that may sound ridiculous when
verbalized.
VISUALIZE YOUR ANXIETY.
Focus intently for a moment on
your worry and give it a rating on a
one-to-10 scale. Picture where the fear is
in your body—chest, throat, abdomen? Then
imagine your fear as an object, such as a fiery,
red ball.
Now, imagine the color of the ball changing.
Make it pink or pale yellow. Put stripes or polka
dots on it. Visualize it changing size. Then lift it
up over your head in your mind and imagine the
breeze carrying it away. “This allows you to
shape your emotions in a positive way,” says
Candida Abrahamson, a life coach in Skokie, Ill.
SAY IT OUT LOUD. “When our voice is trapped
in our mind we start to believe it is true,” says
Vasavi Kumar, a licensed social worker in Austin,
TAP. The “emotional freedom technique,” or “tapping,” helps calm
anxiety by focusing on our energy and where it may be
blocked, says Julie Barthels, a
licensed clinical social worker in
Rockford, Ill. You start by labeling your
emotion as specifically as you can—“I am worried my partner is irritated with me”—and rating
it on a one-10 scale. Then, take two fingers and
tap gently on the top of your head while saying
your worry slowly out loud several times.
Repeat this by tapping in the following spots
down the same side of your body: the inside of
your eyebrow, outside of your eyebrow, under
your eye, your chin, your collarbone, and the side
of your torso.
After you finish, take a deep breath and rate
the strength of your feeling. Repeat as needed
until you get to one. “It sounds hokey, but it
works,” Ms. Barthels says.
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don’t have to try to breathe deeply or slow
down your breath. Just focus on the sensation.
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.
Tuesday, October 24, 2017 | A13
LIFE & ARTS
FROM TOP: GETTY IMAGES; PARAS GRIFFIN/WIREIMAGE
ART REVIEW
Conversing via Canvas
BY KAREN WILKIN
Washington
I’VE REMEMBERED, for more than
two decades, debates I overheard at
the National Gallery of Art’s great Johannes Vermeer retrospective about
what had provoked the pictures. Was
the robust girl pouring milk from a
jug a servant in the artist’s household? Was the woman with the balance his wife? Probably because the
space of these domestic interiors was
so logical and the floods of light illuminating them so convincing, visitors
seemed to believe that Vermeer had
scrupulously reproduced real events,
translating glimpses of actuality into
mesmerizing images. It was like listening to the criticisms leveled at
Caravaggio by his enemies during his
lifetime—all he did, they claimed, was
copy nature.
But art, although it is about many
things, is almost always about other
art— even that of Vermeer and his
contemporaries during the Golden
Age of Dutch painting—an observation confirmed by the spectacular, enlightening exhibition “Vermeer and
the Masters of Genre Painting: Inspiration and Rivalry,” at the National
Gallery. Jointly organized by the curator of the landmark Vermeer show,
the museum’s Arthur K. Wheelock Jr.,
with Adriaan Waiboer of the National
Gallery of Ireland, Dublin, and Blaise
Ducos of the Louvre Museum, Paris,
the show and its excellent catalog examine, for the first time, the complex
relationships and cross-fertilization
manifest in the work of the leading
genre painters of 17th-century Holland. We learn that while Vermeer
and such colleagues as Gerard ter
Borch, Gerrit Dou, Pieter de Hooch,
Gabriel Metsu, Frans van Mieris and
Jan Steen, to name only a few, may
have all painted themes rooted in the
life of their times, how they presented
them owed as much to shared aesthetic ideals and inventions as it did
to a desire for fidelity to appearances.
The exhibition concentrates on
what it calls “high life” genre
scenes—images not of rowdy smokers
in taverns, but of well-dressed people
in well-appointed domestic interiors.
Witness Vermeer’s women in their ermine-trimmed jackets and fashionable
hairstyles, apparently captured unawares at intimate moments: writing
and receiving letters, putting on a
necklace, playing a virginal, making
lace. We associate these motifs with
the Delft master, but we discover that
Vermeer was following the lead of Ter
Borch, an accomplished painter 15
years his senior who was the first to
explore images of women in unguarded, private moments.
“Vermeer and the Masters of Genre
Painting” underscores such connections by presenting us with groups of
works by different artists on similar
subjects—with similar compositions
and, often, similar combinations of
hues and protagonists in similar costumes. One gathering encourages
comparison of scenes of men entering
Uterine fibroids are often treated with a hysterectomy. Tanika
Gray Valbrun, below, advocates for awareness of the condition.
HEALTH
NATIONAL GALLERY OF IRELAND, DUBLIN
Johannes Vermeer’s ‘Woman Writing a Letter, With Her Maid’ (c. 1670-71).
emphasizing his particular strengths;
sometimes it seems there was competition to see who could paint the most
dazzling cascades of silk.
Moving through the show, we notice
more and more repetitions and variations throughout the exhibited paintings, enlarging our understanding of
how Dutch Golden Age artists worked.
But the show can be enjoyed simply for
its superb works, some, normally in diverse collections, reunited, such as Vermeer’s pendants “The Geographer”
(1669) and “The Astronomer” (1668)
with their sturdy male figures surrounded by the accouterments of scientific investigation, in washes of warm
light, or Ter Borch’s pair of letter-writing correspondents and their companions, linked by near-mirror-image
rooms and a play of reds and blues. Everything, including the paintings by less
familiar artists, richly rewards study.
But, as always, Vermeer’s glowing images of insignificant moments endlessly
prolonged demand our attention, despite the excellence and close thematic
relationships of the works beside them.
No one else constructed compositions
with such Apollonian authority.
the domain of women, some as welcome suitors and guests, other as intruders, albeit blocked by laughing
maidservants. The paintings are by
Metsu and Ter Borch, the compositions and concepts subtly varied, yet
each includes an elegant young
woman in a shimmering white silk
skirt and a cochineal-red bodice.
Other groups reveal the prevalence of
compositions anchored by a standing
woman seen from the back or by
women playing musical instruments,
often gazing at the viewer, as if inviting him to join them.
Each work is freshly conceived, yet
the relationships are palpable. It’s not,
however, a question of younger artists
following the example of teachers or
mentors. It’s a cross-generational call
and response across the Netherlands.
It’s clear that even the most innovative artists of the day were alert to
what their fellows of all ages were doing, even those working in different
places. Then, as now, travel to and
from the main centers of (notably
small) Holland was quick and relatively simple, so it was easy for artists
to see each other’s work in studios
and collections. (The time required for
regularly scheduled horse-drawn canal
barges to reach The Hague from Amsterdam compares favorably with
modern transportation.) Nor, despite
the similar motifs, were artists imitating each other. Rather, each interpreted his chosen themes individually,
Ms. Wilkin is an independent curator
and critic.
The WSJ Daily Crossword | Edited by Mike Shenk
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ENJOY! | By Melina Merchant
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Solve this puzzle online and discuss it at WSJ.com/Puzzles.
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ication makes it grow thicker.
Dr. Al-Hendy says the
changes to the endometrium
don’t raise the risk of endometrial cancer, which some
have raised as a concern.
Patients with the condition say it’s time for better
treatments. Tanika Gray Valbrun, a 39-year-old network
news producer in Atlanta,
says she welcomes less invasive treatments that don’t
affect fertility. She started
the White Dress Project, a
nonprofit patient advocacy
group for women with uterine fibroids, in 2014.
She was diagnosed with
fibroids at 19. She has suffered from pelvic pain, abdominal bloating that has resulted in people mistakenly
Vermeer and the Masters of Genre
Painting: Inspiration and Rivalry
The National Gallery of Art,
through Jan. 21, 2018
Weather
V
ancouver
Vancouver
Continued from page A11
dometrium—so it also quite
fast and dramatically decreases and stops the vaginal
bleeding,” says Ayman AlHendy, director of interdisciplinary translational research at Augusta
University in Georgia and a
member of Allergan’s advisory board. Bleeding is reduced within five to six days,
he says. Headaches and hot
flashes were the most common side effects in the trials
with UA, affecting less than
10% of women.
Patients take the once-aday pill for three months and
then stop for one menstrual
cycle to allow the endometrium to shed, since the med-
thinking she’s pregnant and
extremely heavy bleeding
that has left her anemic.
“I’ve had five blood transfusions because of the amount
of blood I’ve lost,” she says.
She has tried different
types of birth control, but
none helped with her symptoms. In 2013 she had a myomectomy and doctors removed 27 fibroids, keeping
her out of work for nine
weeks. Four years later, the
fibroids are back.
Vanessa Jacoby, an associate professor in the department of obstetrics, gynecology and reproductive
sciences at University of
California, San Francisco,
conducts research in new fibroid treatments.
She says UA appears to
have fewer side effects than
Lupron, the only medication,
an injectable, available
in the U.S. that shrinks
fibroids. Lupron effectively puts women into
early menopause,
which can result in hot
flashes and bone loss.
Women often must take
it with hormone replacement therapy. It is
usually used in preparation for surgery to
shrink fibroids and
maintain blood reserves.
While the company
has done studies of
women taking the drug
up to a year, some experts believe the longterm health profile of a
drug needs to be evaluated up to seven years.
Shao-Lee Lin, vice president of therapeutic areas
and international development at AbbVie, says the
company is testing a twice
daily dosing of elagolix. It is
also studying including lowdose hormone therapy
within elagolix to help maintain bone health.
Like Lupron, elagolix decreases sex hormones that
cause fibroids to grow.
What makes it different is
it’s fast-acting and easier to
reverse the effects if you
stop taking it.
Studies have found it significantly reduces heavy menstrual bleeding and decreases
the thickness of the endometrium by six months. It also
decreases the size of fibroids.
52 Musical Diamond
53 Home run pace
54 James in the
Blues Hall of
Fame
56 1967 World
Series MVP
Gibson
Previous Puzzle’s Solution
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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.
A14 | Tuesday, October 24, 2017
SPORTS
MLB
The Rise of Baseball’s Superteams
A World Series matchup between the Dodgers and Astros highlights the huge gap between baseball’s top and bottom teams
Devotees of baseball’s data revolution describe the playoffs as a
crapshoot, an unpredictable tournament where chaos reigns and the
most deserving participant rarely
emerges victorious.
But this year’s World Series between the Los Angeles Dodgers and
Houston Astros introduces a new
paradigm sweeping the sport. Instead of the vast parity that defined the last decade, there exists a
Grand Canyon-sized gap between
the top and bottom of the standings. A few teams accumulated so
much talent that they simply overpowered the field, which is weakened by a phenomenon in which
many executives view mediocrity
as the ultimate failure—and are
willing to suffer ineptitude for a
while to achieve greatness.
It resulted in a regular season in
which three teams—the Dodgers,
Astros and Cleveland Indians—finished with more than 100 wins for
the fourth time in major-league
history. Starting Tuesday night at
Dodger Stadium, two such clubs
will square off with a championship at stake for the first time
since 1970.
Welcome to the Age of the Superteam.
“You have front offices thinking
more strategically about, ‘Which
side of the spectrum are we on?’”
Dodgers general manager Farhan
Zaidi said. “Because I’m actively
trying to avoid getting stuck in the
middle.”
This push to the extremes originated in basketball and football,
before seeping into baseball more
recently. On paper, it makes sense:
Good teams vie for titles and reap
the benefits of qualifying for the
postseason. Bad ones earn coveted
top draft picks, the easiest way to
add a direction-altering player
without giving anything up in return—a must for smaller franchises
that lack vast financial resources.
Teams in the middle often stay in
neutral, spinning their wheels
without going anywhere.
To escape that fate, teams developed a strategy known, somewhat controversially, as “tanking”—a rebuilding technique that
involves enduring a stretch of futility in order to acquire the pieces
necessary to climb back to prominence.
With commitment and patience,
the approach undoubtedly can
work. Theo Epstein employed it
with the Chicago Cubs, the reigning champs. Under Jeff Luhnow,
Houston’s ultra-statistically minded
GM, the Astros embarked on an
unprecedented teardown, averaging 103 losses in his first three
years at the helm. This season,
they went 101-61, brimming with
young stars like Carlos Correa,
George Springer and Alex Bregman.
Luhnow faced plenty of skepticism for using such an unorthodox
method. Now, with copycats
JIM YOUNG/REUTERS, ELSA/GETTY IMAGES
BY JARED DIAMOND
AND BRIAN COSTA
Above, the Dodgers celebrate during Game 5 of the National League
Championship Series. Left, Carlos Correa and Jose Altuve of the Astros.
sprouting up, nobody questions the
Astros anymore.
“We were just bluntly honest
with people,” Astros president Reid
Ryan said.
Those in the industry attribute
the popularity of Houston’s model
to changes to the MLB draft that
coincided with Luhnow’s hiring for
the 2012 season. Before that point,
teams could sign draftees for as
much money as they wanted,
which in some cases disincentivized high picks. Cash-strapped
teams would sometimes refrain
from selecting the best available
player out of fear that his contract
demands would strain their economic limits.
To combat that problem, the
league implemented limits on how
much teams could spend in draft
bonuses, with teams holding more
desirable picks receiving a larger
pool. Suddenly, putting up the
worst record in the majors came
with an even better prize, and
smart teams took advantage.
As time passes, the tactic seems
less crazy, which was not the case
a decade ago. Former Baltimore
Orioles executive Jim Duquette recalled that in 2007, saddled with a
hopeless team, he wanted to trade
shortstop Miguel Tejada. The Los
Angeles Angels offered Ervin Santana and Erick Aybar, a package
Duquette thought would help the
Orioles in the future. He says his
boss, Peter Angelos, quickly rejected the idea.
“My owner wasn’t willing to
take that beating and be really
bad,” said Duquette, now an analyst for SNY. “He wanted to stay
somewhat competitive.”
More owners appear willing to
go that route now. For the first
time since 1997, only five American
League teams finished with a win-
ning record, the five that made the
playoffs. Four teams finished with
at least 95 losses—the same number as 2015 and 2016 combined.
With a growing number of
teams choosing to struggle, it creates an opportunity for win-now
teams to load up in ways never before possible. It sparked an arms
race among a few teams to suck up
as many assets as they possibly
could, not only to improve their
few weak spots, but to bolster areas of strength.
Consider the Dodgers, who at
104-58 compiled the best record in
the major leagues since 2004. They
mixed baseball’s largest payroll
with smart leadership to construct
a squad with a stunning amount of
depth, replete with quality backups
at every position, at least some of
whom would start elsewhere.
When they lost All-Star shortstop
Corey Seager to a back injury for
the National League Championship
Series, they replaced him with
Charlie Culberson, who went 5for-11 at the plate.
Though the Dodgers already
boasted MLB’s best rotation heading into the end of July, they still
targeted arguably the best starting
pitcher on the market, trading for
right-hander Yu Darvish. After the
Dodgers clinched their first pennant since 1988 last week, closer
Kenley Jansen praised Zaidi and
president of baseball operations
Andrew Friedman, saying they “put
a ridiculous team together.”
Darvish turned a great team into
an even greater one. The Astros responded. A month after the
Darvish deal, Houston dealt for ace
right-hander Justin Verlander, who
has gone 4-0 with a 1.46 ERA in
the playoffs. He cemented the Astros’ status as a Superteam.
“When we came into spring
training, we thought we had a
great team, but at the All-Star
break, some teams started loading
up. The Dodgers were one of those
teams,” Astros pitcher Lance
McCullers Jr. said. “We were really
excited to get [Verlander], because
we felt like that was our moment
to get loaded up.”
The stratification is producing a
strange new reality—the duty to
lose. Vince Gennaro, the associate
dean at NYU’s Tisch Institute for
Sports Management, Media, and
Business, said that in this environment, middling teams with trade
chips “have an obligation to their
fans to deal those players for prospects to make their team less competitive in the near future so they
can return to contention.”
Others question how long it will
remain effective. If too many teams
try to tank at once, not all of them
can lose enough to get the draft
spot they seek. This season, for instance, the San Diego Padres
looked like textbook tankers, and
they didn’t even finish in last place
in their division. Zaidi pointed out
that “there are equilibrium effects
to a bunch of people changing
their strategy.”
The Dodgers and Astros, meanwhile, will exit their showdown
with a mission to outsmart their
opponents again when the time
comes to retool.
“How do you stay at the top
once you’re successful?” Luhnow
said. “That’s the Holy Grail we’re
trying to figure out.”
THE COUNT
On Saturday, Michigan will host
Rutgers and, in all likelihood, mercilessly pulverize a weaker team. To
put it another way, it won’t be too
different from what Penn State did
to the Wolverines this past weekend.
Two and a half years into Jim
Harbaugh’s tenure, this is the state
of Michigan football: The Wolverines
are decent. And that’s better than
worse-than-decent, but it isn’t exactly a compliment, either, for one of
the game’s pre-eminent powerhouses.
For the third straight season,
Michigan is out of the national title
conversation. Any faint hopes the
team still clung to were summarily
extinguished during Saturday’s 42-13
loss to the Nittany Lions.
Still, the Wolverines are 5-2 and
for maybe any other coach at most
any other school, these early returns
might be considered incredible. But
Harbaugh isn’t just any coach. He’s
the one so celebrated that he turned
the world’s blandest article of clothing—the khaki—into a fashion statement. His return to Ann Arbor to
coach at his alma mater was met
with unbridled jubilation, along with
one of the fattest checks in the entire sport.
The problem is this: Through Har-
baugh’s first 33 games, Michigan is
25-8. Which is the exact same record
his predecessor, Brady Hoke, had during his first two and a half years on
the job.
During that third season, Hoke
limped to a 7-6 finish. The team
went 5-7 the next year, and Hoke
was canned.
Nobody is expecting for Michigan
to miss out on a bowl game and hit
that type of low, but Harbaugh is going through a rough patch of his
own: Dating back to last year, the
Wolverines are 6-5 in their last 11
games.
That includes a 1-3 record against
ranked opponents, with the lone win
coming against a Florida team that’s
now 3-3. With a 2-2 conference record this year, the Wolverines are
tied for fourth place in the Big Ten
East division (with Rutgers) and
have games against two top-10
teams, Wisconsin and Ohio State,
still to come.
(Here it deserves mentioning
that, unlike Harbaugh, Hoke actually
beat Ohio State in his first year. Harbaugh, thus far, is 0-2 against the
school’s dreaded rival after last year’s
double-overtime thriller.)
“A team that goes through this
understands that it can have a great
First 33 Games
How some notable coaches performed through their first 33
games at their current schools:
COACH/SCHOOL
RECORD
Urban Meyer Ohio State
30-3 (.909)
Jim Harbaugh Michigan 25-8 (.758)
Nick Saban Alabama
25-8 (.758)
Jimbo Fisher Florida State
24-9 (.727)
Brian Kelly Notre Dame
23-10 (.697)
Chris Petersen Washington 21-12 (.636)
James Franklin Penn State
19-14 (.576)
Dabo Swinney Clemson*
19-14 (.576)
3RD SEASON
14-1 (Won national
championship)
5-2 (t-4th, Big Ten East)
14-0 (Won national
championship)
12-2 (Won the Orange
Bowl)
12-1 (Lost national
championship)
12-2 (Lost CFP
semifinals)
11-3 (Lost the Rose
Bowl)
6-7 (Lost Meineke Car
Care Bowl )
JUSTIN K. ALLER/GETTY IMAGES
MAYBE JIM HARBAUGH
ISN’T INFALLIBLE
Source: Stats LLC; WSJ *Includes interim season in 2008
opportunity,” Harbaugh said at his
news conference Monday. “When the
going gets tough, the tough get going. It’s a cliche, many call it a cliche,
but cliches are usually cliches because they’re true.”
In fairness: College-football turnarounds can be notoriously slow because of the time it takes to get top
recruits and then actually develop
them. And Michigan has one of the
youngest teams in the country.
Still, preaching patience to college
football fans is like serving steak and
whole milk to a vegan. So what’s
stranger than the time it has taken
Harbaugh to turn Michigan into a
College Football Playoff team is the
reason why: Harbaugh, the former
quarterback and offensive mastermind who produced Andrew Luck at
Stanford, hasn’t found a reliable signal caller yet for the Wolverines.
Wilton Speight struggled at the
position to start the year, and then
he got hurt. His replacement, John
O’Korn, has thrown four interceptions
and just one touchdown. Harbaugh
has brought in two highly regarded
recruits, but they’re young and have
combined for one career pass.
Despite these bumps in the road,
Harbaugh’s record so far at Michigan
is still better than many other big-
name coaches—such as Clemson’s
Dabo Swinney, Penn State’s James
Franklin and Notre Dame’s Brian
Kelly—through as many games at
their current stops.
In fact, Harbaugh’s mark is exactly the same as the best coach in
the entire sport in his first 33 games
at his school. At Alabama, Nick Saban started out 25-8 as well, which
included a 7-6 record in that first
season—and some of those wins
were later vacated. But there’s a big
difference, too: Saban’s third year
wrapped up undefeated and with a
national championship.
—Andrew Beaton
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.
Tuesday, October 24, 2017 | A15
OPINION
Et Tu, Steve Bannon?
Is Steve Bannon working
for
my
agenda—or
his?
That’s the
question DonMAIN
ald
Trump
STREET
might
ask
By William
himself now
McGurn
that Mr. Bannon has declared a “season of war”
against establishment Republicans on the president’s behalf. Mr. Bannon’s top target?
Senate Majority Leader Mitch
McConnell.
During an appearance at
the Value Voters Summit two
weekends ago, Mr. Bannon invoked Plutarch and Shakespeare to declare that we are
reliving the “Ides of March.”
The only question on Capitol
Hill, he warned Mr. McConnell, is “who’s going to be
Brutus to your Julius Caesar.”
But whereas Caesar was
done in by Roman senators
wielding knives, Mr. Bannon
proposes a bloodless assassination. He wants to make Mr.
McConnell’s continued leadership a litmus test for every
Republican Senate candidate
next year. That means backing
primary challengers who
pledge not to support Mr.
McConnell as leader. Unfortunately for Mr. Trump, given
what the past few weeks have
revealed about the GOP’s political shortcomings, it’s difficult to see how Mr. Bannon’s
new initiative will end up providing the president what he
needs most today: more Republican senators.
The
Bannon-McConnell
clash grows out of an age-old
political argument. McConnell
advanced his side of this argument in the Rose Garden of
the White House last week
alongside President Trump:
“Our operating approach will
be to support our incumbents
and, in open seats, to seek to
help nominate people who can
actually win in November.
That’s my approach and that’s
the way you keep a governing
majority.”
To which Mr. Bannon responds: What good is having a
majority if it does’t deliver?
Here Exhibit A is the sevenyear Republican promise to
repeal ObamaCare, which met
its death in Mr. McConnell’s
Republican Senate.
Certainly Mr. McConnell’s
leadership has taken a hit
from the failures to get an
ObamaCare repeal through.
But slim majorities always
disproportionately empower
dissenters and outliers, regardless of who the majority
leader might be. So long as
GOP bills can be defeated by
the defection of three Republicans, the Trump agenda will
be held hostage to those on
the margins, whether it’s John
McCain or Lisa Murkowski.
This is where Mr. Bannon’s
war could end up doing the
Trump agenda harm. In 2018,
Democratic senators are up
for re-election in 10 states Mr.
Trump carried last November.
In any normal year, Republicans would concentrate on increasing their Senate numbers
by squeezing these Democratic incumbents on issues
where they are vulnerable.
Take Claire McCaskill. She’s
running for re-election in Missouri, which Mr. Trump carried by almost 19 points. The
last time she ran, her GOP opponent, Todd Akin, basically
took himself out of the race
with a boneheaded comment
that a women wouldn’t get
pregnant from “legitimate
rape.” This time Mr. Trump is
telling Missourians that if Ms.
McCaskill doesn’t vote to
lower taxes, “you have to vote
her out of office.”
Taking out McConnell
will not give Trump
what he needs: more
Republican senators.
Ditto for Indiana Sen. Joe
Donnelly, a Democratic incumbent in another state Mr.
Trump carried by 19 points.
So long as the focus is on Mr.
McConnell and Republican-onRepublican warfare, it largely
lets incumbents like Sens. McCaskill and Donnelly off the
hook.
Some people think this
doesn’t matter to Mr. Bannon,
because his real objective is
less in moving the Trump
agenda forward than in making himself relevant again.
Josh Holmes, a former chief of
staff to Sen. McConnell, puts
it this way: “The best path to
the front page of any newspaper is an attack on a Republican from within the tent. [Mr.
Bannon] knows that.”
In the short term, the future of the Bannon-McConnell
feud will likely be determined
by another Senate vote key to
the Trump agenda: tax reform.
In sharp contrast to the way
the president outsourced the
ObamaCare repeal to Congress, he and his team are
now publicly making the case
for tax reform. If Mr. McConnell gets a bill through the
Senate, the victory will recast
the debate, and it will be more
difficult to make his Senate
leadership a compelling primary issue.
If a tax-reform bill dies under Mr. McConnell, it would
be a second big strike against
his leadership. But even here,
it’s not clear Mr. Bannon’s war
is the solution. It is one thing
to take a candidate you oppose out; it is quite another to
get one you support in. Or, as
Mr. McConnell tartly put it,
Mr. Bannon is a “specialist at
nominating people who lose.”
In other words, Mr. Bannon
may succeed in rallying unhappy Republican voters to
oust Republican incumbents
deemed insufficiently proTrump. He may even succeed
in ousting Mr. McConnell from
the Senate leadership.
But killing off establishment Republicans does nothing to get Mr. Trump’s judicial
picks through, his federal
nominees confirmed, or his
legislation passed. Surely the
president must appreciate
that unless this “war” results
in more Republican senators,
Mr. Bannon will have undermined the Trump agenda.
Write to mcgurn@wsj.com.
What Brings Trump and Macron Together
By John Vinocur
W
Paris
hat Europe lacks most
today, French President Emmanuel Macron believes, is a common
strategic culture. In his view,
that means one that is interventionist, has a single doctrine for taking action, and has
a joint budget for producing
its own military hardware.
“Our inability to work together
convincingly undermines our
credibility,” Mr. Macron asserted in a speech at the Sorbonne last month.
Correct. And, although he
won’t say it, this reality savages the idea that the European Union, in an undertaking
called Defence Europe, could
emerge as a military player of
sufficient substance and boldness to inhibit Russia in Eastern Europe or stare down a
threat in the Middle East.
Two Fridays ago, Mr. Macron publicly received the 2017
Strategic Review, a 100-page
doctrinal summary drawn up
by a panel of experts proud of
France’s “strategic singularity”—its nuclear strike forces,
its capacity to intervene rapidly around the globe, and its
permanent membership in the
U.N. Security Council. In an uncertain time, the review essentially repeated, as expected,
what Mr. Macron has said
must be Europe’s goal for
2020: “autonomous European
operating capabilities in complement to NATO.”
Yet the document, in its
published version, skipped
naming the central element
smothering a common European strategic culture: Germany and its passivity. Although this reality discomforts
Mr. Macron’s sought-after
closeness with Chancellor Angela Merkel, members of the
French defense community attacked Germany’s soft strategic stance at a closed seminar
last month.
Washington and Paris
have a problem in
common: Germany’s
passive attitude.
Alain Barluet of Le Figaro, a
participant, reported that
French officers and experts
were concerned about a “Germanization of the Defence Europe project. That means making concessions to norms and
a culture recalcitrant to join
tough operations.” He called
the difference in concepts “a
chasm.”
Meantime, Jean-Dominique
Merchet of L’Opinion wrote
that “French military men, industrialists and defense experts regard Germany more
readily as a counter-model or a
threat than an indispensable
partner.” At the general staff
level, he went on, the U.S. and
Britain, sharing what was described as France’s we-actually-fight strategic culture,
were called “our two closest
allies.”
The French and Germans
may sign joint communiqués
disapproving of Mr. Trump’s
position on the Paris climate
accord or the Iran nuclear
deal, but there are real differences behind them. Earlier this
month Mr. Macron told Der
Spiegel that he has an “extremely cordial relationship”
with Mr. Trump, while Germany’s Foreign Minister Sigmar Gabriel, an eager friend of
Russia, routinely portrays
America as a warmonger forcing Europe to align itself with
Russia and China on Iran and
North Korea.
These days, Mrs. Merkel
hardly puts any energy into
comprehending an American
president whose popularity
rating in her country runs at
about 5%.
Yet at the U.N. last month,
discussing the adequacy of the
Iran nuclear pact, Mr. Macron
asked rhetorically, “Is this accord enough?” and answered,
“No. It is not.” he said: “Let’s
be honest, the tensions are on
the rise. Look at activities of
Hezbollah and Iran’s pressure
on Syria.” He spoke of the need
“to reassure regional countries
and the United States.”
And on North Korea the
same
dissuasion-conscious
tone comes out of Paris.
Pyongyang is the creator of a
“strategic rupture,” French
Foreign Minister Jean-Yves Le
Drian recently said in a television appearance. “It’s hard to
see how the Americans could
accept the risk of a ballistic
missile pointed towards Alaska
or a part of the United States.”
No major German political fig-
ure brushes close to using that
vocabulary.
Where the French and Germans seem to have more strategic commonality is in wanting to start production of
military equipment for sale to
their neighbors. It’s at the
disregard of the North Stream
2 natural gas pipeline problem, where they both are participants, and Russia as producer has the strategic goal of
dominating European energy
supply.
At the same time, France is
trying to sell fighter-bombers
to Belgium against NATO’s recommendation that it purchase
Lockheed-Martin F-35s with
dual conventional and nuclear
bomb-carrying capabilities
that the French Rafales can’t
accommodate. Norway, the
Netherlands and Denmark already bought the F-25s.
In response, Florence Parly,
the French armed forces minister, has said the Rafales’ purchase “would contribute to the
reinforcing of the Defence Europe project and to its strategic autonomy.”
That’s a reckless statement.
It would threaten the European Union defense effort
among many of its members,
ridicule Mr. Macron’s contention that the undertaking is “in
complement to NATO,” amuse
Russia, and end the French
president’s hopes that Mr.
Trump comes to see him as
America’s go-to guy in Europe.
Mr. Vinocur was executive
editor and vice president of the
International Herald Tribune.
Family Businesses Deserve a Tax Break
By Brian Reardon
T
he U.S. is unique in its
prevalence of small and
family-owned businesses.
S corporations and other passthroughs employ the majority
of workers and are the foundation of thousands of local economies, ensuring that the benefits of economic growth aren’t
concentrated in a few financial
centers.
The tax-reform debate has
largely ignored this reality. Instead, it has been mired in
claims that family businesses
do not pay enough taxes. In reality, the combination of higher
marginal rates, the individual
alternative minimum tax, and
the inability to shift income to
lower-taxed countries results
in S corporations, not C corporations, paying the highest effective tax rate. There is good
reason to support cutting rates
for C corporations, but there is
an even better argument to apply those rate cuts to passthrough businesses.
What about the tax on dividends and capital gains—the
so-called corporate double
tax? Only a small percentage of
C corporations today pay any
dividends, and most of that
money goes to shareholders
with limited or no tax liability,
‘S corporations’ are
major job creators
but get a bum rap.
such as pensions, mutual
funds, nonprofits and foreign
investors. The Congressional
Budget Office estimates that
shareholder taxes add just 2
percentage points to the corporate effective tax rate.
Pass-through businesses are
more than law firms and
hedge funds, too. There are 4.3
million active S corporations,
and they are in every industry
and every corner of the country. S corporations easily outnumber C corporations in
manufacturing, construction,
wholesale trade, agriculture,
mining, transportation and
food services.
Large pass-through businesses are a major source of
employment. A 2011 Ernst &
Young report estimates that
pass-through businesses with
at least 100 workers account
for nearly 1 in 6 private-sector
jobs. The income from these
businesses, even when reinvested in the company, helps
to push their owners into the
top tax brackets.
Cutting the C corporation
rate while leaving passthrough rates high would put
these employers in a no-win
situation: They could remain
as they are and pay higher
taxes. Or they could convert to
C corporation status and pay
higher taxes. Unlike most C
corporations, these businesses
would be subject to the entire
double tax.
Either option is unsustainable. A business that operates
with effective tax rates in the
mid-30s cannot long survive
competing against companies
paying effective rates in the
low 20s or high teens.
The third alternative would
be to sell the family business.
That might be good for private-equity investors eager to
snap them up, but it would be
bad for local communities. The
choice whether to keep production domestic or move it
offshore is more meaningful
when the person making the
decision lives in the same community as the workers whose
jobs are at stake.
The good news for these
communities is that the tax reform framework targets family
businesses for lower rates similar to the rate cuts for C corporations. For tax reform to
help all employers, these lower
rates need to stay in the plan.
Mr. Reardon is president of
the S Corporation Association
and a former White House official at the National Economic
Council.
BOOKSHELF | By Peter Stothard
That’s How
You Got Caesar
The Storm Before the Storm
By Mike Duncan
(PublicAffairs, 327 pages, $27)
D
onald Trump has been good for the study of Ancient
Rome. Those who see the president as a monster have
eagerly likened him to the “bad emperors” (almost any
one will do), deploying parallels to Caligula, Nero and Commodus to highlight sins of self-glorification, nepotism, the
free use of the lie and playing fast-and-loose with political
norms. At the same time, the president’s sympathizers have
responded with parallels of their own. Victor Davis Hanson
has noted how the “careful and shrewd” elderly emperor
Claudius, ruling between the reigns of Caligula and Nero, was
hated by the intellectuals of his time, deemed as “sometimes
hasty and inconsiderate, occasionally silly and like a crazy
man.” “Sound familiar?” asks Mr. Hanson, reminding Mr.
Trump’s critics that a president whom they think of as bad
may not only be good, but an alternative (or precursor) to
someone worse.
Comparing individuals
is little more than a game.
But it is a simplification of
a very old American game.
To the Founding Fathers,
any Roman emperor, “good”
or “bad,” was a warning. A
better Republican constitution had existed before them
in Rome, and even the best
of autocrats was a subversion
of it. Benjamin Franklin’s minatory message to his fellow
Americans that the constitution’s framers had given them
a Republic, if they could keep
it, is cited on the opening page of Mike
Duncan’s “The Storm Before the Storm: The Beginning of
the End of the Roman Republic.” The author is described as
“one of the foremost history podcasters in the world” and
his book is a retelling for present times of Rome’s history
from 146 to 78 B.C., when the seeds of constitutional subversion were sown.
What parallels does Mr. Duncan see to our current age?
Noting that the American republic has not collapsed and been
taken over by a dictator (“that hasn’t happened yet,” he
writes), the author suggests that “if the United States is anywhere on the Roman timeline, it must be somewhere between
the great wars of conquest and the rise of the Caesars.”
(Carthage and Corinth were destroyed in 146 B.C.; Julius
Caesar’s rise began in around 60 B.C.) “If” and “somewhere”
are the key vagaries in Mr. Duncan’s assertion, but he cites
“rising economic inequality, dislocation of traditional ways of
life, increasing political polarization, the breakdown of
unspoken rules of political conduct” as well as “a set of elites
so obsessed with their own privileges that they refused to
reform the system in time to save it.”
Tiberius Gracchus was born into a wealthy elite
but cemented a bond with the poor plebes who
distrusted domination by elites. Sound familiar?
The Roman generals who triumphed in 146 B.C. ended the
independence of the Republic’s two greatest rivals in north
Africa and Greece. At Carthage the glory went to the old
aristocrat and aesthete, Scipio Aemilianus; at Corinth it went
to a “new man” (the first senator from his family), Lucius
Mummius, an upstart with a cheerful contempt for foreign
art. Also at Carthage was Tiberius Gracchus, a young
aristocrat who would become a popular radical, demanding a
fairer distribution of the spoils of empire and driving what
Mr. Duncan sees as the dominant plot line of the period. The
reforms he and his brother Gaius attempted to force into
effect helped pave the way for the civil wars that make up
most of the narrative of “The Storm Before the Storm.”
The book’s final year, 78 B.C., is the date of the death of
the dictator Sulla, the most successful leader of the old
guard. The most prominent character is Gaius Marius, dominant among the “new men.” In Republican Rome there were
no political parties of the modern kind, but the successor to
Sulla’s senatorial support was Pompey the Great, while the
heir to Marius’s was Julius Caesar. The radical martyrs won
some of their aims before everyone fell under the one-man
rule of Caesar’s adopted son, the first emperor, Augustus.
When Mr. Duncan’s tale begins, Rome had what nostalgics
would come to see as a constitution of checks and balances:
executive consuls served for only one year at a time; a senate
of land-owning elders served for life; popular assemblies
passed laws and elected peoples’ tribunes. After the death of
Sulla, Rome was well on the way to a checked-and-balanced
constitution only in name.
How did this happen? Was it inevitable? Was the constitution
ever really balanced in the first place, given how easily it gave
way? How, in the future, might a country produce a constitution
strong enough to withstand the bad rulers who, under any system, must appear from time to time? To most Romans, “democracy” simply meant mob rule, and this was the aim of almost no
one except as a means to an end. Liberty, however, was a clarion
call always worth answering. How was liberty to be preserved
when the virtuous who believed in it were not in control?
Mr. Duncan does not answer such questions. He is a story–
teller, and a story alone never can give an answer. His style is
more folksy than forensic. “Fate intervened to alter the
course of Roman history,” he declares when describing the
windfall legacy that King Attalus of Pergamum left to the
Republic, and which Tiberius Gracchus hoped would pay for
his redistribution of land. “History has a sense of humor,” he
adds, which is humorous if not helpful. The author does
disentangle well some complex events others neglect: Marius
made his name through some massive victories against what
the Romans saw as marauding northern tribes, but how the
Teutones and the Cimbri saw their own ambitions is wholly
unknown. Mr. Duncan gives them due place in his story.
Yet for a professional of the spoken word, he is curiously
silent on what is perhaps the greatest parallel between his
subjects and President Trump: the use of rhetorical devices
to identify the wealthy speaker with the poor, the man born
to an elite with those who distrust domination by elites, the
educated anti-intellectual with those not much educated at
all. It is possible to argue that President Trump brilliantly
used the playbook of Marius and Caesar—and that his opponents last year and this have sounded more like the aristocratic old guard. More on language and less on war would
have better advanced Mr. Duncan’s argument.
Mr. Stothard is the author of “The Senecans: Four Men and
Margaret Thatcher.”
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THE WALL STREET JOURNAL.
A16 | Tuesday, October 24, 2017
OPINION
W
REVIEW & OUTLOOK
LETTERS TO THE EDITOR
The Wages of Corporate Taxes
Death Taxes and the Capital-Gains Step-Up
hat do left-of-center economists back to the U.S. for new investment. Much of
have against a tax cut that would that investment will go to increase worker proraise wages for American workers? ductivity, which would boost wages.
They’re always telling us that
What really angers the libAmerica needs a raise, and Kevin Hassett earns the erals is that, in a paper rethat labor isn’t capturing
leased this month by the
wrath of the left by
enough of corporate profits,
White House, Mr. Hassett colyet along come Republicans
lected years of economic evishowing how tax rate
promising to raise wages by
to make the case that
cuts will help workers. dence
encouraging more investment
cutting the U.S. rate to 20%
in the U.S., and they react with
would raise average wages by
shock and smears.
$4,000 to perhaps more than
That’s the only way to describe the remark- $9,000. Outrageous, says Mr. Summers.
able attack on economist Kevin Hassett for
But Mr. Hassett isn’t alone. Economist Laumarshaling the considerable economic evi- rence Kotlikoff wrote on these pages last week
dence that cutting the corporate tax rate to that the GOP framework would “raise real
20% from 35% will benefit workers. Mr. Hassett wages by 4% to 7%, which translates into
is an expert in this field, having done his own roughly $3,500 a year for the average working
research over the years, and now he is chair- household.” Other economists have found the
man of the White House Council of Economic increase closer to $1,000. Still others say it’s
Advisers.
higher, but the debate is over the magnitude of
Mr. Hassett didn’t start this fight. But he felt the raise, not the fact that American workers
obliged to respond to the recent political as- will benefit if the U.S. cost of capital falls.
sault on tax reform by the Tax Policy Center.
In their blogs, economists Casey Mulligan of
The TPC, which fancies itself nonpartisan but the University of Chicago and Greg Mankiw of
has a record of opposing every Republican tax Harvard dissect Mr. Summers’ academic argureform, assailed the Trump-Congress tax policy ments in rigorous detail, and Mr. Mulligan does
framework by inventing details that don’t exist. him the service of citing some of his earlier
So on Oct. 5 Mr. Hassett responded in a speech work. In a 1981 paper Mr. Summers referred to
at the TPC.
“the increase in gross wages which results from
It was “scientifically indefensible,” Mr. Has- the increased capital intensity arising from
sett said, for the TPC to assert that there would eliminating capital taxation.”
be little growth from the proposed reform. The
In his response, Mr. Summers has grabbed
static analysis, Mr. Hassett added, was “based for the lifeline that a small economy like Ireon many fictions.” And by promoting its attack land has no relevance to America and that
before the final details were known, the TPC Britain saw no increase in wages after it cut
had behaved “irresponsibly” and undermined the corporate tax rate. But the corporate tax
hopes for “bipartisan cooperation.”
rate isn’t the only factor in the cost of capital,
In speaking so forthrightly, Mr. Hassett un- and the U.K. partially offset the benefit of the
leashed the furies. Not only was he wrong, rate cut with other tax changes. And until
thundered former Treasury Secretary Larry Brexit, the U.K. economy was still one of the
Summers, the plan he defended is “an atrocity,” strongest in Europe.
a combination of “ignorant, disingenuous and
Other large economies are also cutting their
dishonest.” The Summers-ettes in the economic corporate rates, and Emmanuel Macron wants
press corps all kicked in unison, and Sen. Chuck to cut the French rate to 25% from 33%. In his
Schumer called it “fake math.”
paper Mr. Hassett points out that wage growth
i
i
i
has been far greater since 2013 in the 10 develThere is a long and legitimate debate about oped countries with the lowest statutory tax
who pays corporate taxes. Corporations essen- rate compared with those with the highest.
i
i
i
tially collect taxes that are ultimately paid by
Which brings us back to why Mr. Summers
someone else: a combination of workers in
lower wages, customers in higher prices, or and his followers are so upset now. Our guess
is that it has something to do with the disasshareholders in lower after-tax returns.
For many years the dominant belief was that trous record of their own policies in lifting
shareholders bore the biggest burden, but this wages. Mr. Hassett had the audacity to point
has changed in recent decades with new research out that real corporate profits rose 11% a year
on the impact of capital mobility in a global under President Obama, but “the pass-through
economy. While labor is relatively immobile, es- to workers” was only 0.3%.
The Summers crowd that preaches about the
pecially across national borders, capital can go
dangers of inequality presided over an economy
whereever it wants with relative ease.
U.S. companies have taken advantage of this that increased it. Obamanomics was great for
reality by investing more abroad in lower-tax Wall Street, not for the American middle class.
countries. The benefits accrue to Irish or Singa- How dare conservatives try to do better—and
porean workers whose jobs are created by that with policies that look to increase supply-side
capital investment. In his speech at the TPC, Mr. incentives rather than by redistributing inHassett noted that in 1989 the average statutory come, fixing prices and regulating business to
corporate tax rate in the OECD was 43%—com- the point that capital investment has been hispared with 39% for the U.S. Today the average torically weak.
If we presided over that liberal record, we’d
corporate tax rate for the Organization of Economic Cooperation and Development—a proxy be sore, too. But if they look in the mirror with
some honesty, they might understand that the
for the industrialized world—is 24%.
Yet the combined average U.S. federal and failure of their policies in lifting wages is one
state rate is still 39%. By making the U.S. rate reason Donald Trump is President. Meanwhile,
competitive in a global market, capital will flow why begrudge Americans a raise?
A
Argentina Votes for Change
rgentina may finally be turning away
from the populist class-warfare politics
of former president Cristina Kirchner.
President Mauricio Macri’s Let’s Change coalition
clobbered its opponents in Sunday’s midterm
elections, taking the five-most populated districts
in the country and 40% of the national vote.
Argentines put Mr. Macri at the helm two
years ago, and on Sunday confirmed their fatigue with kirchnerismo. Mrs. Kirchner’s Citi-
I
zen’s Unity movement won in only three of 23
provinces. In her own bid for a senate seat, she
lost to Let’s Change candidate Esteban Bullrich.
On Monday Mr. Macri pledged to cut taxes, curb
inflation and reduce poverty.
Standing next to Buenos Aires Province Governor María Eugenia Vidal on Sunday, Mr. Bullrich captured the nation’s hopes when he said,
“We are the generation that came to change the
province forever.” Sunday was a good start.
Rule and Law in Catalonia
t’s a topsy-turvy world when an elected and Madrid, but he won’t say what he wants to
leader enforcing a democratic constitu- negotiate. He has refused even to say whether
tion gets accused of staging a coup, but he is declaring independence.
then that’s Catalonia this
Mr. Rajoy owes it to loyal
Rajoy tries to stave off Catalans to call time on this
month. Separatists are furious that Spanish Prime Minisfarce. Though he may need to
mob rule until voters
ter Rajoy might suspend audeploy a heavy police prestake responsibility.
tonomous government and
ence to quell violent protests,
force a new election to rethe focus should be on keeping
solve a separatist crisis in the
streets safe, schools open and
northeastern region.
other public services functioning while preparSeparatists, led by regional President Carles ing quickly for regional elections. The courts
Puigdemont, claim Catalonia voted for indepen- will weigh sedition prosecutions against indidence from Spain in a referendum this month. vidual Catalan officials in some cases. Two local
No such thing happened. A majority of the mi- police officials are under investigation for their
nority of Catalans who participated in a public- failures to stop the illegal vote, charges they
ity stunt dressed up as an election said they deny. Madrid should be judicious but not shy
want to secede. A constitutional court had ruled about enforcing the laws.
the exercise illegal before it happened. It was
There is nothing undemocratic about this. A
an attempt at mob rule.
duly elected national leader is trying to afford
Now Mr. Rajoy wants to protect the rights all citizens the protection of the national conof the non-secessionist majority. The national stitution against a minority of rabble-rousers.
Senate will vote Friday on Mr. Rajoy’s plan to The biggest threat to Spain—and to Europe—
invoke a constitutional clause suspending au- would be to set a precedent for allowing fake
tonomous local government until new elections votes to tear real countries apart.
for a regional parliament can be held, perhaps
The virtue of Mr. Rajoy’s approach is that it
in six months. In the interim, Madrid would take would put Catalan voters firmly back in control,
over responsibility for policing, taxation and through a legal election. Those voters say they
most public administration.
want to remain within Spain but they keep
It’s a draconian step, but Mr. Rajoy has little electing separatist local officials, presumably
choice. The regional government abandoned its as a protest and on the assumption Madrid
obligation to uphold Spain’s constitution when would hold the country together anyway. A new
it authorized the phony vote. Mr. Puigdemont ballot offers Catalans a path out of this crisis
claims to want negotiations between Barcelona by taking political responsibility for the union.
Regarding Phil Gramm’s “The
GOP’s ‘Tax the Rich’ Temptation”
(op-ed, Oct. 9): The estate tax (or
death tax) only applies to 0.02% of
Americans. The $5.49 million exemption reaches only the super rich.
The remaining 99.98% of estates in
America reap great economic benefits from the estate tax through a
mechanism called “step-up basis.”
Because every estate is subject to
estate tax (though almost none pay
it), all assets are revalued at death
at their current value rather than at
their original cost. Say farmer A
paid $200 an acre for farmland
many years ago, which gets revalued
to $12,000 at his death. The heirs
can then sell it immediately without
paying the costly capital-gains tax.
But if the estate tax ends there
would be no reason for a step-up.
Ending the estate tax would be a
pure gift to the richest 0.02% and
put a new burden on 99.98% of families, as well as a drag on GDP.
MIKE CARROLL
Tuscola, Ill.
The repeal of the estate tax and
the asset step-up basis provisions
embedded with it will ensure that
assets passed to the next generation
will eventually be taxed if there is
no estate tax. Reports indicate that
there are currently $3 trillion of unrealized gains held by U.S. taxpayers. Much of this escapes taxation
because the step-up basis provisions
of the estate tax system are effective on death even if no estate tax
is paid.
Minor law changes to the capitalgains tax provisions so that assets
held at death are taxed as if they
had been sold at capital-gains tax
rates could generate far more for
the Treasury than the current estate
tax. This approach would also flat-
ten the tax system so that it reaches
a much wider population, but at
much lower rates of taxation: 15%
for long-term capital gains contrasted with the federal 40% estate
tax on all assets held at death above
the threshold exemption at current
rates.
Canada and many other countries
have declined to enact estate taxes
but rely on capital-gains taxation as
outlined above.
R .D. MCCREERY
Cleveland
Mr. Gramm compares the percentage of income taxes paid by the
top 10% U.S. earners to France and
Sweden, concluding that the top
10% U.S. earners pay a greater percentage of taxes than in the other
countries. While this may be true
on the surface, it’s a fallacious comparison because Mr. Gramm conveniently fails to mention that the
percentage of total income earned
by the top 10% of U.S. earners is
much higher than the top 10% in
France or semi-socialist Sweden due
to the U.S.’s far more skewed income distribution.
STAN KUICK
Richland, Wash.
Mr. Gramm doesn’t mention the
best argument for repealing the estate tax: the waste of brainpower.
Brilliant accountants and attorneys
are working to prevent their clients’
estates from being taxed, opposed
by equally brilliant people in the
IRS.
We have a bunch of geniuses
spending their professional lives
canceling each other out fighting
over a trivial sum, less than 1% of
federal tax revenue.
KEITH SMITH
Silver Spring, Md.
Difficult to Hold Rogue Prosecutors to Account
In your editorial “Prosecutorial
Impunity” (Sept. 18), you state: “The
only real check on prosecutorial
abuse are judges willing to enforce
standards of honesty.” You are sadly
mistaken. Judges cannot enforce
standards, they can only enforce
laws. Sen. Ted Stevens’s conviction
was overturned because the prosecution didn’t abide by the rulings of
the U.S. Supreme Court pertaining to
the sharing of exculpatory evidence
with the defense. This didn’t save
his political career, which was destroyed by the initial conviction.
When the trial judge in the case
tried to obtain some punitive action
against the offending prosecutors,
he could not, because the rulings of
ObamaCare’s Generational
Disparate Impact Eased
Regarding your editorial “The
ObamaCare ‘Sabotage’ Meme” (Oct.
14): Thanks to President Trump you
healthy under-35-year-olds may soon
be free from the intrusive, socialist
strictures of ObamaCare. Since you
have little or no need for health insurance, the government has no right
to make you pay for it in order for
you to have access to medical services and drugs you don’t need or
want, or otherwise pay a penalty. You
will no longer be subsidizing those
elderly who do need such coverage.
After all, this is fairness, this is democracy.
I trust you will remember this
when later in life you need essential,
continuing treatment for diabetes, arthritis, congestive heart failure or dementia.
TOM MOULSON
Corona del Mar, Calif.
Desire to Preserve National
Culture Isn’t Undemocratic
William A. Galston doesn’t seem to
understand the current concern
among nations faced with a surge in
immigration (“Is Populism a Threat
to Democracy?,” Politics & Ideas, Oct.
18). Their populist concern isn’t opposition to democracy. Their opposition is to changes in their freedoms
that could be imposed by the culture
and beliefs of a new, nonnative ruling
majority.
The standards for individual rights
and freedoms vary among peoples
from different cultural backgrounds.
Even though the newcomers from
other political or religious backgrounds are a minority, they can have
a disruptive influence, especially if
they resist social integration and tolerance for the beliefs of their host
nation.
HOLLISTER SYKES
Cranford, N.J.
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to wsj.ltrs@wsj.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
the Supreme Court do not have the
force of law. Therefore the powerabusing prosecutors didn’t break the
law. The only remedy against prosecutors disobeying Supreme Court
rulings is the overturn of the conviction on appeal. The same thing will
be true of any “standards of honesty.”
I would respectfully suggest that
you change your recommendation as
follows: “The only real check on
prosecutorial abuse are laws that
consider the willful use of false information in any prosecution to be a
crime of malfeasance in office and
will be punished as such.”
May I recommend an additional
consideration: Any willful disregard
of U.S. Supreme Court rulings pertaining to the criminal justice system will also be considered malfeasance in office and will be punished
as such.
SAMUEL COLMAN
Boca Raton, Fla.
Why Should the Kurds or
Anyone Else Trust the U.S.?
You say abandoning the Kurds
would damage America’s credibility
(“Assault on the Kurds,” Review &
Outlook, Oct. 17). But we’ve often
abandoned people we once supported. Just ask the Cuban exiles,
the South Vietnamese, the Afghans
who defeated the Soviet Union (see
“Charlie Wilson’s War”), the Iraqis
who worked with us in fighting Saddam Hussein and now the Kurds,
whom we should fully support. It
has been demonstrated over and
over again that our word means
very little.
Also why would anyone want to
negotiate and strike a deal with the
U.S. if we sign agreements and then
abandon them shortly thereafter
(see Paris Accords, Iran deal)?
The fact is American credibility is
already damaged and is getting to
the point of no repair under the
shortsighted leadership of President
Trump.
STEVEN MORRIS
Mount Pleasant, S.C.
Pepper ...
And Salt
THE WALL STREET JOURNAL
“This year I’m planting only invasive
species so they can kill each other.”
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | A17
OPINION
By Peter Berkowitz
N
ews broke last week about
possible Russian wrongdoing in the U.S., and it
didn’t involve the Trump
campaign. The Hill reported that in 2009 the FBI “gathered
substantial evidence that Russian nuclear industry officials were engaged
in bribery, kickbacks, extortion and
money laundering designed to grow
Vladimir Putin’s atomic energy business inside the United States.”
The former FBI directors
tend to investigate
Republicans far more
zealously than Democrats.
The FBI kept that information from
Congress and the public, the Hill reported, even as Hillary Clinton’s State
Department in 2010 approved a deal
that transferred control of more than
20% of America’s uranium supply to a
Russian company. The Hill also reported the FBI had documents showing that during this period Russia engineered the transmission of millions
of dollars to the Clinton Foundation.
The FBI director at the time: Robert
Mueller, now special counsel in charge
of investigating “Russian interference
with the 2016 presidential election
and related matters.” The revelations
can only heighten anxieties about Mr.
Mueller, the FBI and the rule of law.
The special counsel’s open-ended
mandate covers not only “any links
and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump” but also “any
matters that arose or may arise directly from the investigation.”
Because Mr. Mueller has interpreted his mandate expansively, his effort may become the most politically
disruptive federal investigation of our
young century—more than the FBI’s
investigation of Mrs. Clinton’s private
email server and mishandling of classified information, more than Special
Counsel Patrick Fitzgerald’s investigation into the 2003 disclosure of CIA
employee Valerie Plame’s identity.
All three investigations have one
important characteristic in common:
James Comey, Mr. Mueller’s successor as FBI director, played a dubious
role in each.
In December 2003, after Attorney
General John Ashcroft recused himself from the Plame matter, then-Deputy Attorney General Comey named
Mr. Fitzgerald—a close friend who
was godfather to one of Mr. Comey’s
children—as special counsel to head
the Justice Department’s “investigation into the alleged unauthorized disclosure” of Ms. Plame’s employment.
Unknown to the public then, and
still not widely known, that potential
crime had already been solved. By
early fall 2003, the CIA had determined that revealing Ms. Plame’s
identity caused no injury to national
WIN MCNAMEE/GETTY IMAGES
Comey and Mueller Imperil the Rule of Law
James Comey and Robert Mueller at the White House, June 21, 2013.
security, while the FBI knew it was not
a White House official—as many Democrats and liberal pundits ardently believed—but rather Deputy Secretary
of State Richard Armitage who was
columnist Robert Novak’s source for
the original Plame story.
Mr. Fitzgerald declined to prosecute Mr. Armitage, but he played
hardball with the Bush White House.
Over several years, Mr. Fitzgerald inflicted severe damage by feeding the
false accusation that the president
had lied the nation into the Iraq war.
The only criminal charges he prosecuted were generated by his investigation. He won a 2007 conviction of I.
Lewis “Scooter” Libby, former chief of
staff to Vice President Dick Cheney,
for obstruction of justice, false statements and perjury. The conviction
When Ballpark Fan Favorites Strike Out
By Bob Greene
‘V
ery disappointing,” said
Larry White, the tone of his
voice matching the words.
“Ninety percent of the appeal was in
the anticipation. What am I going to
get? What’s going to be in my hand
when I reach in there?”
Mr. White, of Rowley, Mass., is one
of the nation’s leading authorities on
Cracker Jack—specifically, the toys
and doodads that for more than a
century were included in Cracker
Jack boxes. At one time he owned in
excess of 120,000 Cracker Jack
prizes, and is the author of a guide to
their resale value.
Cracker Jack prizes
aren’t what they used
to be, but there is still
hope for the World Series.
I sought out Mr. White after my
inspired plan for attending the World
Series had gone sour and I had ordered a 24-pack of Cracker Jack to
munch on while I watched on television. No foodstuff has ever been
more associated with baseball.
When the Cracker Jack arrived, I
was mildly disheartened that the 24
packages were not the traditional
boxes, but little bags. Still, there was
Sailor Jack on the front with his dog,
Bingo. And there, in capital letters,
was the eternal promise: NEW PRIZE
INSIDE!
I ripped open the top pack. There
were the caramel-coated popcorn
pieces and a few peanuts. I searched
for the prize. There have been so
many delightful (although understandably inexpensive-to-produce)
ones down through Cracker Jack history, such as metal locomotives,
wooden wedding rings, miniature
park benches, tiny joke books, colorful whistles, scaled-down trumpets.
What I found was a small square
of paper with a scannable image on
it. I was instructed to download a
cutely named app, aim my phone at
the image, and then “experience” a
videogame of some sort on my
screen.
I started to tear open the other
bags. Same thing: Download, aim, experience.
Which is why I called Mr. White.
He informed me that the big change
came last year, when Cracker Jack—
owned by Frito-Lay since 1997—decided it would be a good idea to get
rid of the traditional prizes, and to
go all-digital. “This is not progress,”
Mr. White said.
Frito-Lay’s official position, as explained in a news release, is that “for
nearly 125 years, the Cracker Jack
brand has been a part of memorable
family moments,” and the new
“baseball-inspired mobile digital experiences” are consistent with a
product that “authentically reminds
people of simpler times [and] childhood memories.”
Because there’s nothing like going
to a beautiful ballpark with your
mom and dad, buying some Cracker
Jack, and then spending the rest of
the afternoon gazing at the Cracker
Jack app on the screen of your
phone.
I was not going to allow this to
dissuade me; I had another plan to
get in the World Series mood. For
the first time in decades, I bought
some packs of Topps baseball cards:
the 2017 edition.
As a boy, I knew that if you didn’t
live in a big-league city, you could do
one of two things: Mail a stamped,
self-addressed postcard to a favorite
star in care of the ballpark where he
played (Stan Musial at old Busch Stadium, Duke Snider at Ebbets Field)
and hope against hope that, sitting
around the clubhouse before a game,
he might take the time to scrawl his
autograph and have the clubhouse
man drop the postcard in a mailbox.
Sometimes this actually worked.
Or you could buy some baseball
cards, stare at the heroic photographic images on the front, and
spend many happy minutes studying
the statistics printed on the back:
number of hits, home runs, walks,
stolen bases. This was real baseball—
the nuts and bolts of it.
I opened my set of Topps 2017
cards and noticed something right
away. Printed prominently on the
back of each card, above the players’ bios and statistics and in larger
typeface, were their social media
accounts. A tacit invitation to toss
the cards to the floor, dispense with
the dull statistics, grab a smartphone or go to a keyboard, and
punch in the players’ Twitter and
Instagram handles.
Which, inevitably, I did. I can’t tell
you much about Baltimore Orioles infielder Ryan Flaherty’s prospects for
next season, but I can vouch for the
cup of clam chowder he photographed during dinner one night.
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New York Yankees hurler Sonny
Gray’s curveball may or may not be
at peak efficiency; I was fixated on
the dozens of jars of pickles he photographed while grocery shopping.
I would comment further, but I
have to go to the mailbox and see if
Willie Mays has sent me his autograph. Yes, it was 1957 when I mailed
the letter to him at the Polo Grounds,
but sometimes items can get delayed
at the post office, and what is a
World Series about if not the excited
conviction that anything can happen?
Mr. Greene is completing a new
novel, “Yesterday Came Suddenly,”
about an America with no internet.
was based on small inconsistencies
Mr. Fitzgerald discovered in (or created from) more than 20 hours of Mr.
Libby’s FBI interrogation and grandjury testimony. Star prosecution witness Judith Miller wrote in her 2015
memoir that Mr. Fitzgerald had withheld crucial information and manipulated her memory, inducing her to
testify falsely against Mr. Libby.
In contrast, then-FBI Director
Comey played softball with the
2015-16 Hillary Clinton investigation.
Despite the gravity of the matter—
military service members can be
court-martialed and discharged for
sending classified information on nonsecure systems—Mr. Comey mostly
avoided issuing subpoenas and cooperated with the Obama Justice Department in obscuring the investigation’s criminal character. He permitted
Mrs. Clinton and her team to destroy
evidence and granted generous immunity deals to her advisers. He drafted
a statement exonerating Mrs. Clinton
months before the FBI interviewed
her. And his FBI neither recorded the
interview nor compelled her to answer questions under oath.
In addition, in a July 2016 press
conference, Mr. Comey usurped the
authority of Justice Department prosecutors by publicly exonerating Mrs.
Clinton. In the process, he confused
the pertinent legal issue by asserting
she did not intend to violate the law.
But intent wasn’t a necessary condition for a crime. Federal law criminalizes “gross negligence” in mishandling classified information. By Mr.
Comey’s own account, Mrs. Clinton
had been “extremely careless.”
With Mr. Trump, by contrast, Mr.
60 YEARS OF ADVENTURE
AND DISCOVERY
Comey is playing hardball even after
leaving government. In May, shortly
after President Trump fired him, Mr.
Comey—possibly in conflict with FBI
policy—leaked notes of an Oval Office
meeting with the president. His purpose, Mr. Comey publicly acknowledged, was to “prompt the appointment of a special counsel.”
Mr. Mueller is playing hardball
too. Unlike the Clinton investigation
into narrowly defined allegations, his
mandate authorizes pursuit of unspecified crimes. That invites casting
a wide net, which Mr. Mueller has
done, exploring conduct that long
predated the 2016 presidential campaign. He has assembled a huge team
that includes, in addition to FBI
agents, 16 seasoned prosecutors, at
least seven of whom have contributed money to Democratic candidates. He might have extended his investigation to Mr. Trump’s business
interests. And he is working with
agents from the Internal Revenue
Service’s criminal investigation unit,
raising the possibility that he has obtained Mr. Trump’s tax returns.
Mr. Mueller has adopted scorchedearth tactics in pursuit of Paul
Manafort, who ran Trump’s presidential campaign from June to August
2016. The special counsel’s team has
reached back more than a decade into
Mr. Manafort’s financial affairs and
conducted a predawn, guns-drawn
raid on his home on a day he was
scheduled to testify before Congress
as a cooperating witness.
One crucial difference distinguishes the probe of Mrs. Clinton
from the two Comey-instigated special-counsel investigations of Republican administrations. Mr. Fitzgerald’s
multiyear investigation of the Bush
administration and Mr. Mueller’s
ever-widening scrutiny of the Trump
campaign exhibit a tenacious and
nearly unconstrained search for persons and crimes to prosecute. In contrast, Mr. Comey’s investigation of
Mrs. Clinton reflects a determination
not to prosecute systematic and obvious unlawful conduct.
Both excesses threaten the rule of
law—but the dogged search for persons and crimes to prosecute poses
the graver threat to constitutional
government.
Mr. Berkowitz is a senior fellow
at the Hoover Institution, Stanford
University.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A18 | Tuesday, October 24, 2017
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
TECHNOLOGY: CISCO FORTIFIES ITS SHIFT AWAY FROM HARDWARE B4
BUSINESS & FINANCE
© 2017 Dow Jones & Company. All Rights Reserved.
S&P 2564.98 g 0.40%
S&P FIN g 0.14%
* * * * **
S&P IT g 0.40%
Tuesday, October 24, 2017 | B1
THE WALL STREET JOURNAL.
DJ TRANS g 0.33%
WSJ $ IDX À 0.11%
LIBOR 3M 1.367
NIKKEI (Midday) 21733.10 À 0.17%
Dividend Fears Take Toll on GE
Conglomerate’s shares
swoon amid worries
slow growth will force
management’s hand
BY BEN EISEN
Shares of General Electric
Co. took another pounding on
Monday, reflecting investors’
fears that a conglomerate that
was once the bluest of blue
chips faces challenges daunting
enough to force a dividend cut.
At least six analysts have either downgraded the stock or
cut their year-ahead price tar-
gets since Friday, when the Boston-based conglomerate missed
analysts’ earnings expectations
and slashed its forecasts. GE’s
new chief executive, John Flannery, called the quarterly performance “unacceptable” and
said he would review the company’s 24-cent quarterly dividend.
Mr. Flannery’s remarks
forced many investors and analysts to reassess their estimates
of the company’s earnings
power, sales growth and capacity to return cash to shareholders in the form of dividends and
share buybacks.
On Monday, GE fell $1.51, or
6.3%, to $22.32, making it the
worst performer in the Dow
Jones Industrial Average on a
day when the index declined by
0.2% to 23273.96. The stock is
down 29% so far this year,
while the S&P 500 is up 15%.
The rout is the latest sign
that GE, once the most-valuable
company in America, is facing
existential challenges revolving
around its size, business mix
and cost structure.
Many analysts and investors
said they believe Mr. Flannery
is well equipped to handle the
task, but few think the company
is on the verge of turning
around a run of bad news that
has shredded $86 billion in
market value this year.
GE shareholders range from
mom-and-pop investors to
America’s biggest institutions
and money managers, such as
BlackRock Inc., Capital Group
and Fidelity Investments.
Many said they are continuing
to hold on to GE shares, reasoning that the firm’s broad array
of business lines and its reputation for cultivating top managers will make the investment a
winner in the long term.
“We’re holding our nose,”
said Mike Bailey, director of research at $1 billion wealth manager FBB Capital Partners,
which is retaining its shares of
GE for the moment. “It’s obviously been tough for a lot of
folks. The pain for the moment
is the dividend fear.”
A dividend cut would reduce
income for holders of the company’s 8.66 billion shares outstanding, and would send a
downbeat signal at a time when
investors have been loading up
on stocks for their income potential, sending the Dow indusPlease see GE page B2
Executive pay at the company
comes up for review.............. B6
GE isn’t alone in woes over
long-term-care insurance... B11
See more at WSJMarkets.com
Arconic
Picks GE
Veteran
As Chief
BY BOB TITA
Aerospace-parts specialist
Arconic Inc. named General
Electric Co. veteran Chip Blankenship as its chief executive,
looking to end a year of management turmoil marked by a
bitter fight with an activist investor and the sudden resignation of its former chief.
Mr.
Blankenship,
who
headed GE’s appliance business
until recently, will become Arconic’s CEO on Jan. 15., the
company said Monday. Interim
CEO David Hess, who has run
the company since April, will
stay as a director.
The appointment came as
Arconic missed quarterly earnings expectations because of
rising aluminum prices and
costs for supplying parts for
new jet engines built by GE and
United Technologies Corp. Arconic shares fell more than 10%
to $24.35.
KELLY LAUB
At GE, Chip
Blankenship
worked in its
jet-engine unit
and led its
appliance
business.
Florida’s insurance market is being upended by assignment of benefit contracts. A fire at Kelly Laub's home drew multiple contractors trying to get her to sign one.
Contractors Vie for Home-Insurance Claims
Average annual premiums
for Florida homeowners*
$1,500
1,000
500
0
2017 ’18 ’19 ’20 ’21 ’22
*For new house costing $150,000;
2018-2022 projected
Source: Florida Office of Insurance Regulation
THE WALL STREET JOURNAL.
BY NICOLE FRIEDMAN
AND LESLIE SCISM
Within hours of a fire at
Kelly Laub’s four-bedroom
house in New Smyrna Beach,
Fla., in June, four contracting
companies showed up to offer
rebuilding services.
Each vendor wanted Ms.
Laub to sign a document giving
the contractor the rights to her
homeowners insurance benefits, she said. In exchange, they
offered to repair her home and
negotiate with her insurance
company on her behalf.
These assignment of benefit, or AOB, contracts are upending the insurance market in
one of the largest U.S. states.
Insurers and regulators said
the pacts are responsible for
Sears and Whirlpool
Split Over Price Fight
BY SUZANNE KAPNER
AND ANDREW TANGEL
Sears Holdings Corp. will
no longer sell Whirlpool Corp.
appliances after a pricing dispute and changing market dynamics fractured a partnership
that stretched back more than
a century.
The struggling department
store chain has stopped carrying products made by the biggest U.S. appliance manufacturer,
including
Maytag,
KitchenAid and Jenn-Air appliances, according to an internal
Sears memo. Sears will deplete
Whirlpool inventory currently
in its stores, the memo said,
but hundreds of items have
disappeared from the websites
of Sears and Kmart, which is
also owned by Sears Holdings.
Sears has been a top seller
of refrigerators, washing machines, dryers and other appliances for decades, but its grip
on the market has weakened
in recent years.
The retailer has closed
hundreds of stores across
the country, and home-improvement chains like Home
Depot Inc. have stolen market share.
As recently as 2002, Sears
sold four of every 10 major appliances in the U.S., far outpacing its rivals. But its share
of the market fell to 22% in
the 12 months ended March,
according to TraQline, a market-research firm.
Sears has scrambled to
keep suppliers from abandoning the retailer as its financial
position has deteriorated. In
June, Chief Executive Edward
Lampert took the unusual step
of suing two makers of Craftsman tools to ensure they continue to supply the chain. Both
lawsuits were resolved and the
manufacturers are continuing
to ship to Sears.
The disagreement with
Whirlpool was unrelated to
Sears’s credit issues and instead had to do with pricing,
Please see SEARS page B6
Whirlpool issues a warning
on its earnings.......................... B3
driving up insurance rates for
some Florida homeowners and
spurring a boom in contractor
lawsuits against insurers.
Based on current AOB
trends, the average statewide
annual homeowners insurance
premium for a $150,000 new
home is projected to rise from
$1,232.08 in 2017 to $1,595.07
in 2022, a 29% increase, according to the Florida Office of
Insurance Regulation. These
increases are higher than nationwide projections from the
Insurance Information Institute, a trade group.
Rate
increases
could
steepen, executives said, if
damage from Hurricane Irma
last month causes major losses
for the state’s insurers or an
increase in AOB-related law-
INSIDE
TESLA TO FACE
CRUCIAL TEST
IN CHINA
AUTOS, B3
ECONOMY
WITHSTANDS
HURRICANES
FINANCE, B12
suits. Many Irma-related insurance claims are still being processed, so it is too soon to see
much litigation related to the
storm.
Catastrophe-modeling firms
expect the insured losses to
reach the tens of billions.
“The concern is that when
you have a large event such as
Irma, that when you add AOB
on top of it, it’s just going to
magnify the impact of the
storm,” said Don Matz, president of Tower Hill Insurance in
Gainesville, Fla. Tower Hill has
raised rates for homeowners in
some Southeast Florida counties
by up to 15% in the past year
partly due to AOB costs, he said.
AOBs allow repair companies to report a homeowner’s
claim to an insurer and be paid
directly, without the money
going first to the consumer.
Contractors can sue the insurer if there is a disagreement about the cost of the
claim. They also can go after
homeowners to make up for
shortfalls if the insurer doesn’t
pay the full amount requested,
according to regulators.
Other states allow AOB
agreements, but they have had
a larger impact in Florida because of a state law that requires the insurer to pay attorneys’ fees if more money is
awarded after a lawsuit than
was initially offered. Insurers
say the use of AOB agreements
in Florida encourages contractors to overcharge insurers for
repair work and perform more
Please see ASSIGN page B2
Russia Capitalizes on YouTube
QILAI SHEN/BLOOMBERG NEWS
Price Push
“Arconic needs improvement in performance across
the board,” Mr. Hess told analysts Monday.
Analysts said Monday’s selloff reflects investors’ anxiety
about whether a new CEO will
be able to deliver on the ambitious profit targets established
by his predecessor, Klaus Kleinfeld, who stepped down in
April under pressure from activist investor Elliott Management Corp.
Arconic, which separated
from aluminum producer Alcoa
a year ago, has been beset by
operating problems that have
forestalled the high profit margins envisioned in the breakup.
Mr. Blankenship, 51 years
old, will be expected to tighten
cost controls and address persistent efficiency and technical
problems weighing on production, particularly in businesses
acquired in recent years to expand Arconic’s presence in
high-value forgings and metals
besides aluminum.
Mr. Blankenship, whose
training is in metallurgy and
material-science engineering,
joined GE in 1992, and cycled
through several jobs with GE’s
aircraft-engine business.
Mr. Blankenship is “an excellent selection” for CEO, said
David Miller, Elliott’s senior
portfolio manager, in a statement issued Monday.
BY JACK NICAS
Google, Facebook Inc. and
Twitter Inc. have spent months
trying to ferret out covert Russian influence on their sites.
Meanwhile, RT, the Russian
state news organization that
federal intelligence officials
call “the Kremlin’s principal international propaganda outlet,”
uses Google’s YouTube, Facebook and Twitter as the main
distributors of its content.
RT’s main English-language
YouTube channel has amassed
2.1 billion views and 2.2 million
subscribers, roughly the same
figures as CNN’s primary YouTube channel. Fox News’s main
channel has 600 million views.
RT has drawn an additional 3.3
billion views across roughly 20
other channels, making it
among YouTube’s most-watched
news networks. YouTube, by
running ads before RT’s videos,
also gives the Russian-government outlet ad revenue.
Twitter named RT in a report last month on alleged
Russian interference in the
U.S. election, and the company
noted that RT spent $274,100
Long Reach
Russian state news outlet RT is among the most watched news
networks on YouTube, helping it spread its content to anyone with
an internet connection.
YouTube
views
in billions
YouTube
subscribers
in millions
RT
2.1
CNN
2.2
Fox News
0.6
Followers
in millions
2.2
4.5 Facebook
2.6 Twitter
28.7
2.4
0.7
38.1
15.5
16.2
Note: Figures are for networks' primary YouTube channels and social-media accounts.
Sources: YouTube; Facebook; Twitter
THE WALL STREET JOURNAL.
to promote tweets to U.S. users. The Twitter dossier, submitted to a congressional committee investigation into
Russian influence in the election, cited a federal intelligence report released earlier
this year that claimed RT was
a primary tool in Russia’s alleged efforts to swing the U.S.
election toward President
Donald Trump—a charge RT
has denied. Yet RT maintains a
thriving presence on Twitter
with 10 million followers.
RT’s popularity on YouTube, Facebook and Twitter
shows how the open approach
of social-media companies can
empower unreliable news
sources—from governmentbacked propaganda outlets to
conspiracy theorists to extremist groups. While the
companies ban harassment,
Please see RUSSIA page B4
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 | Tuesday, October 24, 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.
B
Baidu ........................... R4
Bain Capital ................ B4
Bank of America.........B3
BlackRock....................B1
Bounce Imaging..........R8
BroadSoft....................B4
BuzzFeed.....................R9
C
Capital Group..............B1
Cisco Systems.....B4,R13
CrowdStrike ................ R4
D
Davis Polk & Wardwell
.....................................B3
Dell Technologies........B4
Deltic Timber..............B3
E
Elliott Management ... B1
Equilar.........................B6
Etsy ........................... B11
Eviation.......................R8
F
Facebook
......B1,R1,R5,R9,R13,R14
Fidelity Investments..B1
Fonterra Co-Operative
Group.......................B11
Ford Motor..................R7
Frontier ..................... A10
G
General Electric
.................B1,B6,B11,B12
General Motors ..... R6,R7
GGV Capital...............R11
Goldman Sachs Group B3
Google
.. B1,R1,R2,R4,R5,R9,R13
Google Ventures.......R11
H
Hartford Financial
Services Group ....... B11
Hasbro.........................B3
HCI Group....................B2
Heritage Insurance.....B2
Hikma Pharmaceuticals
.....................................B2
Hurdl............................R8
I-J
IAC/InterActiveCorp...R5
Intel.............................R9
International Business
Machines...................B4
J.P. Morgan Chase......R7
K-L
Kaspersky Lab.............B4
KinTrans ...................... R8
Laughly........................R8
Levi Strauss..............R12
M
Mattel..................B3,B12
Merck .......................... A2
Microsoft.....................R7
My Jomo ..................... R8
N-O
Netflix.........................R5
New York Times....R1,R2
Novartis.......................B2
NXP Semiconductors
...................................R12
P-Q
A
Hurd, Mark..................R6
James, Sha'Ron..........B2
Johnson, Peggy...........R7
B
Bar-Yohay, Omer ........ R8
Bergh, Chip ............... R12
Bitzer, Marc ................ B3
Blankenship, Chip.......B1
Bragg, Dave ................ A4
Bryan, Jeremy...........B12
Bryson, William........B13
D-E
DeBlander, David........B2
Diller, Barry.................R5
Emerson, Joelle..........R5
F
Flannery, John..B1,B2,B6
G
Gonzalez, Zuly............A3
Grooten, Martijn.........B4
J
K
Kaspersky, Eugene ..... B4
Katzenberg, Jeffrey
............................... R1,R2
Khosrowshahi, Dara ... R1
Kleinfeld, Klaus .......... B1
Kosheleva, Natalia......B2
Krzanich, Brian ........... R9
Kurtz, George..............R4
L
Lal, Unmesh................B2
Lampert, Edward........B1
Ledgett, Rick...............B4
Lee, Jenny.................R11
Levchin, Max...............R2
Levin, Douglas A........A3
Li, Robin......................R4
Lore, Marc...................R2
T
Tesla............................B3
Teva Pharmaceutical B13
T-Mobile US................B3
Toshiba........................B4
Tower Hill Insurance .. B1
Toys “R” Us ................ B3
Twitter...................B1,R1
U-V
Uber Technologies.A1,R1
United Technologies...B1
Valeant Pharma..........B2
Vanguard Group..........B2
Volkswagen...............B13
W-Y
Wal-Mart Stores.B13,R2
Whirlpool...............B1,B3
Whole Foods...............R2
WikiLeaks....................B4
Workday......................R8
Y Combinator............R11
YouTube............B1,R1,R2
Matthews, Jessica O.
...................................R10
Matz, Don..............B1,B2
McFaul, Michael..........B4
Meir,, Edward............B13
Mollenkopf, Steven .. R12
Mosley, Dave .............. B4
N-P
Nason, Jennifer .......... R7
Noreika, Keith...........B11
Peretti, Jonah.............R9
R
Robbins, Chuck....B4,R13
S
Sandberg, Sheryl........R1
Saunders, Brent........B13
Schneier, Bruce...........B4
Simons, Thomas.......B12
T-W
Tsai, Joseph................R4
Weinstein, Harvey R1,R2
Y-Z
Yamada, Shusuke ..... B12
Zhang, Yale.................B3
Drugmakers Aim
Branded Generics
At Foreign Markets
Estimated global market size
Branded generic
Unbranded generic
2013
2016
2018*
$99 billion
69
155
80
191
92
*Projected
Source: Sun Pharmaceutical
THE WALL STREET JOURNAL.
15,000
Samsung Electronics R13
Seagate Technology....B4
Sears Holdings............B1
Section 32.................R11
SoftBank Group...A2,R11
Sprint .......................... B3
State Street..............B12
Sun Pharmaceutical
Industries..................B2
M
Branded generics are growing
more quickly than their
better-known cousin, the
plain-package generic.
20,000
S
Marcus, David...........R14
Maris, Bill ................. R11
Brand Aid
25,000
Reckitt Benckiser Group
...................................B11
H
One of Abbott’s latest drug
launches is a fruit-flavored
gummy bear containing a laxative for children.
But the bears won’t be appearing in any U.S. pharmacies: They were developed exclusively for the emerging
markets, rolling out in Russia,
Eastern Europe, the Middle
East and Africa.
The product, known as
Duphabears, is part of Abbott’s
big shift three years ago toward
“branded generics,” essentially
off-patent medicine launched
with the sort of brand name
and marketing more typical of a
patented drug. In many cases,
the drugs are aimed squarely at
fast-growing markets like Eastern Europe, the Mideast and
Latin America.
The sector isn’t one of the
pharmaceutical
industry’s
highest-profile
businesses,
though most generic drug giants make branded generics in
one form or fashion. The category has long been caught
somewhere in between the industry’s two bigger core businesses: patented medicines,
which drug firms spend heavily both developing and then
marketing; and generics,
where they do little of either.
Still, branded generics have
given Abbott and a handful of
other players a relatively cheap
fount of growth—allowing them
30,000
R
Hess, David.................B1
Huffington, Arianna...R1
BY DENISE ROLAND
Assignment of benefit lawsuits
Pershing Square Capital
Management.............R8
Pfizer.........................B13
Potlatch.......................B3
Pro Clean Restoration &
Cleaning....................B2
Qualcomm.................R12
INDEX TO PEOPLE
Ackman, William........R8
Altman, Sam.............R11
Ammann, Dan.............R6
Heavy Caseload
Oracle..........................R6
TANNEN MAURY/EPA/SHUTTERSTOCK
A
Abbott Laboratories...B2
Aetna.........................B11
Affirm..........................R2
Alcoa............................B1
Alibaba Group Holding
............................... R4,R9
Allergan.....................B13
Alphabet.........B4,R4,R12
Amazon.com
......A1,B11,B13,R2,R6,R7
Apple .............. B4,R7,R12
Archer Daniels Midland
.....................................A2
Arconic ........................ B1
AT&T..........................R11
Automatic Data
Processing.................R8
to repackage off-patent drugs and
extend their commercial lifespan.
Novartis AG’s generic drug
arm Sandoz, Valeant Pharmaceuticals Inc. and India’s Sun
Pharmaceutical Industries
Ltd. are among the big drugmakers that also sell them.
They require much less of
the expensive research and development that goes into prescription drugs. Abbott and
others can tweak things like
how the medicine is delivered—for instance, in liquid
form or in gel caps—for relatively little.
Branded generics, while
much cheaper than patented
medicines, can command
higher prices than their unbranded counterparts in the
developing world. In richer
countries, pharmacists, insurers and health-plan administrators tend to guide patients
toward cheaper generics, regardless of the brand’s supplier or manufacturer. But in
poorer countries—where government budgets are strained
and health-care infrastructure
spotty—spending for medicine
tends to come mostly out of a
patient’s pocket. That gives
them discretion to shell out on
brands they trust.
Sales are “very much driven
by promotion,” said Susan
Ringdal, head of corporate
strategy at U.K.-based Hikma
Pharmaceuticals PLC, which
sells branded generics in the
Middle East and North Africa.
All that can translate into
fatter margins. The Hikma division, which sells mostly
branded generics, boasts margins of around 18.4%, versus
6.9% for its unbranded oral generics business. Abbott made an
operating margin of 18.7% on its
branded generics business last
year, according to Wall Street
Journal calculations.
In India, branded generics
accounted for about 63% of all
drug sales by value in 2015, according to Unmesh Lal, a
health-care specialist at consultancy Frost & Sullivan. In
China, that figure stands at
55%. In the U.S., they comprise
around 11%.
—Olga Padorina
contributed to this article.
A Texas home after Hurricane Harvey. AOB pacts have had a larger impact in Florida than other states.
ASSIGN
Continued from the prior page
work than is needed.
Heritage Insurance in
Clearwater, Fla., will pay out
about $50 million more than it
otherwise would have this year
due to AOB claims, said Chief
Executive Bruce Lucas.
Some lawyers, consumer advocates and contractors say
AOB agreements can help
homeowners who are unfamiliar with the claims process and
don’t know how to navigate the
system. Many homeowners are
frustrated when some insurers
can take days or even weeks to
send adjusters to inspect damage, said Sha’Ron James, Florida’s insurance consumer advo-
GE
Continued from the prior page
trials and other indexes to records.
With the 10-year Treasury
note yielding less than 2.4%,
GE’s 4.3% dividend yield—the
firm’s stated annual dividendpayout rate divided by its current share price—has been particularly attractive. The S&P
500’s dividend yield is just under 2%.
Index funds operated by
Vanguard Group are among
the biggest GE owners. The
Falling Flat
Analysts’ price targets for
General Electric have been
tracking the stock price lower.
$34 a share
32
Monday
Analyst
target
$25.56
30
28
26
24
Stock price
$22.32
22
2016 ’17
Source: FactSet
THE WALL STREET JOURNAL.
10,000
5,000
0
2006
’09
’12
’15 ’17*
*Through July 31
Source: Florida Department
of Financial Services
THE WALL STREET JOURNAL.
cate. “The lawyers have found
an opening,” Ms. James said.
“They realized there are a lot
of unhappy consumers.”
Some contractors say the
agreements also ensure builders are paid fairly for their
work. “Unless I have an assignment of benefit, I may not get
paid, or I won’t get paid the
right amount,” said David DeBlander, president of Pro
Clean Restoration & Cleaning
in Pensacola, Fla.
More than 28,000 AOB lawsuits were filed in Florida in
2016, up from 405 in 2006, according to the state’s Department of Financial Services.
Through July of this year,
more than 20,000 were filed.
Insurers and regulators warn
that AOB costs could accelerate
rate increases in the state.
When HCI Group Inc.’s Homeowners Choice unit requested a
3.3% rate increase from Florida
this year, regulators told the
company the increase wasn’t
sufficient to cover its rising
AOB costs. An actuarial analysis
indicated a jump of 19% was
justified. The insurer ended up
increasing its rates by 8%.
Earlier this year, state insurance regulators unsuccessfully sought legislation to
curb AOB lawsuits by limiting
the instances in which insurers
are required to pay attorneys’
fees. Lawmakers are taking up
the issue again.
Brooke Fehr, a magazine editor in Sanford, Fla., tried to
get repair estimates from
about five roofing companies
after Irma. All but one
wouldn’t look at her roof un-
less she signed an AOB contract, she said. After seeing
warnings from state regulators
and her insurance company,
she decided not to sign.
“It’s really tough to be put
into this position,” Ms. Fehr
said. “You’re basically told nobody will do business with you
if you don’t [assign benefits],
but the state is saying absolutely don’t do business this
way.”
Ms. Laub, the homeowner in
New Smyrna Beach, refused to
sign any AOB contracts after
her house fire. She had signed
one earlier for roof damage
and regretted it, because the
roofing company turned out to
be unreliable. “Once they have
that assignment of benefits,
the policyholder is kind of out
of the loop,” she said.
Vanguard Total Stock Market
Index Fund, which had $621 billion in assets as of the end of
September, by itself owns
roughly 205 million shares, or
2.4% of GE’s shares outstanding,
according to Morningstar.
Mr. Flannery, who had previously committed to maintaining
GE’s dividend, said Friday that
his views are “continuing to
evolve.”
GE last cut its dividend in
mid-2009 just as the financial
crisis was ending. Its stock fell
56% in 2008 and rose 6.6% in
2009, far undershooting the
major stock indexes. Recently,
the company has become
known for its dividend growth,
increasing its payout by nearly
9% annually between 2012 and
2016, according to FactSet.
Dividends, and the pace at
which they are increased and
cut, have long operated as a key
barometer of corporate health.
Academic research has shown
that investors tend to bid up
shares of companies that initiate payouts and sell those that
cut them.
“It’s a like a window into the
health of the business,” said
Eric Ervin, co-founder of Reality
Shares, which manages $97 million in its exchange-traded
funds. “If they have to cut the
dividend, what does that say
about the company and management team running the business?”
Reality Shares buys stocks
based on their potential for dividend growth. Its funds have
stayed away from GE because of
weak earnings growth and free
cash flow, among other factors,
Mr. Ervin said—adding, however, that a cut to GE’s dividend
could be a big part of reviving
the company. “Sometimes a
business falls on hard times and
they have to cut the dividend
and it’s the right thing to do,”
Mr. Ervin said.
Some say that with new
management taking over, the
decline in GE’s stock price is a
good chance for investors to
jump in.
“It’s in the new guy’s inter-
est to clear the deck and start
fresh,” said Jack Ablin, chief
investment officer at BMO
Wealth Management, which
holds only a small amount of
GE shares.
Others believe the firm has
no choice but reduce payouts.
“We now don’t see how” GE
can maintain its current rate,
said C. Stephen Tusa, an equity
research analyst at J.P. Morgan
Chase & Co. He said the company would struggle to keep the
dividend intact without taking
on even more debt.
—Chris Dieterich
and Tom Destefano
contributed to this article.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | B3
* *
BUSINESS NEWS
T-Mobile
Puts Off
Sprint
‘Rumors’
Signal Strength
T-Mobile's net postpaid
subscriber additions
1.4 million
3Q 2017
+817,000
1.2
1.0
0.8
0.6
0.4
0.2
0.0
2015
’16
Source: the company
THE WALL STREET JOURNAL.
’17
A Deltic processing plant in Arkansas in 2015. Based on Friday’s closing stock prices, the agreement would provide a roughly 7% premium for Deltic shareholders.
Lumber Companies Cut a Deal
Potlatch and Deltic
plan to combine in
all-stock transaction;
tax benefits of REIT
BY DANA MATTIOLI
Lumber company Potlatch
Corp. intends to combine with
Deltic Timber Corp. in an allstock deal, the companies said
Monday.
Deltic shareholders are to
receive 1.8 common shares of
Potlatch for each share of
Deltic that they own.
Based on Friday’s closing
prices, that would amount to a
roughly 7% premium for Deltic
shareholders.
The Wall Street Journal
first reported the companies
were nearing a deal Sunday.
On Friday, Potlatch shares
closed at $53, giving the company a market value of $2.2
billion. Deltic closed at $89.12,
putting its value at $1.1 billion.
Potlatch shareholders are
set to own about 65% of the
combined company, to be
named PotlatchDeltic. It would
trade under Potlatch’s existing
ticker symbol, PCH.
Shares in Deltic rose 4.1%
to close at $92.77 on Monday,
while Potlatch shares fell less
than 1% to $52.50.
Potlatch and Deltic are big
timberland owners and lumber
manufacturers. Together, they
own nearly 2 million acres,
with 1.1 million in the U.S.
South, 600,000 in Idaho and
150,000 in Minnesota.
Potlatch, of Spokane, Wash.,
got its start in 1903. The company is structured as a realestate investment trust, or
REIT, an entity that passes its
profit to shareholders. As a result of the deal, Deltic will attain REIT status, giving the
new company a more-favorable tax structure.
Under the REIT conversion,
Deltic’s accumulated earnings,
estimated at $250 million,
would be distributed to the
combined company’s shareholders through a dividend,
80% in stock and the rest in
cash, by the end of next year.
The companies expect
about $50 million in synergies
from the deal.
Deltic, based in El Dorado,
Ark., was founded in 1907 and
became part of Murphy Oil in
the 1950s. In 1996, Murphy Oil
spun off the company. In addition to timber, it also has a
real-estate arm.
Mike Covey, chairman and
chief executive of Potlatch,
would serve in those roles at
the combined company. Deltic
CEO John Enlow would run
the integration and serve as
vice chairman, the people said.
Potlatch and Deltic compete
with timber giants such as
Weyerhaeuser Co., which last
year bought competitor Plum
Creek Timber Co. for more
than $11 billion.
Deltic has been under pressure to consider a deal by
Southeastern Asset Management Inc., a big holder of its
shares.
The companies expect the
deal to close in the first half of
next year. Potlatch has agreed
to a $66 million termination
fee if the deal falls through
under certain circumstances,
and Deltic has agreed to a $33
million fee.
Bank of America and Perkins Coie LLP advised Potlatch
on the deal. Goldman Sachs
and Davis Polk & Wardwell
LLP advised Deltic on the deal.
Potlatch on Monday narrowly missed earnings estimates for its third quarter,
posting adjusted earnings per
share of 89 cents on income of
$36.7 million, less than the 90
cents on $36.9 million analysts
expected. But the company
said it plans to raise its annual
dividend to $1.60 from $1.50 a
share beginning in the fourth
quarter.
—Cara Lombardo
contributed to this article.
Whirlpool
Warning
Puts Stock
In a Spin
Hasbro Warns About Sales Impact of Toys ‘R’ Us Bankruptcy
BY ANDREW TANGEL
CHARLES SYKES/INVISION FOR HASBRO/ASSOCIATED PRESS
T-Mobile US Inc. on Monday
said it added 817,000 postpaid
customers in the third quarter
but hardly commented on its
merger discussions with rival
Sprint Corp., keeping investors
on hold about the company’s
future.
T-Mobile ended the period
with about 37 million postpaid
subscribers—its most valuable—with its customer total
reaching 70.7 million.
Shares in the carrier rose
1.7% to $61.47 on Monday. The
stock is up 32% over the past 12
months.
In an unusual move, the
company’s quarterly results
were accompanied by a video
of Chief Executive John Legere
discussing the numbers, rather
than the freewheeling conferences its top executives typically host on the web each
quarter.
Mr. Legere avoided mentioning merger discussions
with Sprint, the No. 4 U.S. carrier by subscribers behind No.
3 T-Mobile.
“With all the rumors and
speculation out there, we decided that we wanted to make
sure you all saw and focused on
our Q3 results and not just on
the rumors and speculation
that seem to fill the news every
day,” he said in the video.
The question of whether the
U.S. wireless industry is due for
another round of consolidation
has vexed investors for months.
Discussions between Sprint and
T-Mobile have gone the furthest but remain short of an
agreement, according to people
close to the matter.
Sprint, which has scheduled
its earnings release for
Wednesday, also plans to forgo
a conference call and instead
share a recorded message.
Overall, T-Mobile posted a
$537 million quarterly profit,
or 63 cents a share, up from
$353 million, or 42 cents a
share, in last year’s third period. Revenue rose 8% to $10
billion.
It has been a relatively quiet
season in the wireless industry,
with most customers choosing
to hold on to their old handsets
instead of upgrading to a new
device. Analysts expect choppier results after Apple Inc.
starts selling its high-end
iPhone X next month.
T-Mobile said it expects to
see most of the impact from
the new iPhones in the fourth
quarter and potentially in the
first quarter of next year, “depending on inventory.”
“T-Mobile typically does
well when there is a jump ball
or an event that pushes customers to act such as the
launch of a new iconic phone or
aggressive promotional activity,” said Colby Synesael, an analyst at investment bank Cowen
Co. With a lack of such catalysts, plus a destructive hurricane season, the company’s results were slightly below Wall
Street’s expectations, he said.
Monthly churn, a measure
of customers dropping service,
rose slightly for T-Mobile in
the third quarter from the second. The uptick was especially
pronounced in T-Mobile’s
MetroPCS brand, with churn in
prepaid plans rising to 4.3%
from 3.9% in the second quarter. T-Mobile contended with
low prices in the prepaid market from Sprint’s Boost Mobile
brand, while its main brand
competed against heavily promoted unlimited plans from
Verizon.
—Cara Lombardo
contributed to this article.
MOMENT EDITORIAL/GETTY IMAGES
BY DREW FITZGERALD
Hasbro Inc. warned that the
Toys “R” Us Inc. bankruptcy will
soften sales during the key holiday period, with the maker of
Nerf guns and Disney Princess
dolls unsure how frequently it
will ship items to the retailer.
Hasbro’s shares fell 8.6%, after the Pawtucket, R.I., company
on Monday forecast fourth-quarter sales growth of between 4%
and 7%, below expectations for
growth of around 11%.
Shares of Mattel Inc. also
dropped, finishing the day down
3.2%. The toy maker is set to report its third-quarter results on
Thursday.
Hasbro Chief Executive Brian
Goldner tried to reassure investors that the impact of the Toys
“R” Us bankruptcy could be softened by the fact that the industry’s fortunes aren’t tied to one
retailer and that toys are
broadly available.
In addition to growth in toy
sales at drugstores and dollar
stores, Mr. Goldner said sales
are growing much more rapidly
online than in stores.
Still, the Toys “R” Us bankruptcy filing—which occurred in
September after some suppliers
scaled back shipments—does inject considerable uncertainty
during a period when around
50% of toy sales are made.
Toys “R” Us has secured $3.1
billion in bankruptcy financing
and plans to continue operating
most of its 1,600 stores through
the holidays.
Mattel and Hasbro were
among the toy retailer’s biggest
unsecured creditors, with Mattel
owed more than $135 million
and Hasbro $59 million when
Toys “R” Us filed for protection,
according to court papers.
For the third quarter, Hasbro
said its earnings rose 3% to
$265.6 million, or $2.09 a share.
Sales gained 7% to nearly $1.8
billion.
—Paul Ziobro
Tesla Likely to Face Price Test in China
BY TREFOR MOSS
SHANGHAI—The Tesla Inc.
brand is becoming popular in
China. But the electric-car
maker’s plan to establish a
factory here raises the question: Is it popular enough?
Tesla has carved out a lucrative niche among wealthy
buyers seeking brand cachet,
but to reach the huge mainstream market it “will need to
lower its costs as soon as possible,” said Yale Zhang, managing director of Automotive
Foresight, a Shanghai-based
consultancy.
Emboldened by strong sales
of imported high-end cars and
by an anticipated boom in
electric vehicles in China,
Tesla has struck a deal to
build its first overseas plant in
the Shanghai free-trade zone,
The Wall Street Journal reported on Sunday.
Tesla didn’t comment beyond referring to a June statement in which it said it was in
talks with Shanghai authorities about a factory.
Chief Executive Elon Musk
is praised in the Chinese media as a tech visionary. That
has helped the upstart become
the only foreign maker to
make significant inroads into
China’s electric-vehicle market—despite being the only
one without a local base.
Tesla sold roughly 12,000
imported cars in the first nine
months of 2017, up from an estimated 11,000 in 2016 and
good for 4% of China’s plug-in
market, according to EV Sales,
a website tracking the sector.
Tesla hasn’t disclosed unit
sales figures, but says China
accounted for $1.1 billion of its
$7 billion revenue last year,
second only to the U.S.
A 25% tariff on imported
cars means Tesla’s Chinese
customers pay far more than
their American counterparts:
The Model S starts at
$106,000 on Chinese auto
website Yiche.com, compared
Channeling China
China is Tesla's second-biggest
market, after the U.S.
China
$1.1B
U.S.
$4.2B
2016
revenue
$7.0B
Rest of World
$1.7B
Source: the company
THE WALL STREET JOURNAL.
with the recommended U.S. retail price of $74,500.
Zhou Lixun said she bought
a $166,000 Model X for her
business partner, who owns an
auto-parts company in Beijing,
earlier this year. “There are
other EV brands, but nothing
else at the top end,” said Ms.
Zhou. “We think Tesla is hightech, and it makes us feel
young and fashionable.”
Now Tesla is seeking to appeal to a much broader customer base. Its China strategy
is to become the first foreign
auto maker to build a wholly
owned plant, according to
people familiar with the company’s plans. Not having to
form a joint venture with a local company will allow it to
safeguard its technology and
retain 100% of profits.
The drawback is that cars
built in a free-trade zone will
almost certainly be subject to
the 25% tariff, auto analysts
say. The Shanghai government
didn’t respond to a request for
comment. That could be a deal
breaker for potential buyers of
the mass-market Model 3,
which starts at $35,000 in the
U.S. “The people who would
buy that car care about their
money,” Mr. Zhang said.
—Kersten Zhang in Beijing
contributed to this article.
Whirlpool Corp. shares fell
sharply in after-hours trading
Monday after the appliance
maker issued a profit warning,
blaming rising costs.
Chief
Executive
Marc
Bitzer cited rising raw-material costs and slow progress
on its European integration as
hurting the company’s profit
margins.
Whirlpool said Monday it
expected to earn $11.10 to
$11.40 a share for 2017, down
from an earlier estimate for
full-year earnings of $12.40 to
$12.90 a share.
The Michigan-based manufacturer said its outlook includes up to $175 million in
costs related to restructuring,
up from a second-quarter estimate of $165 million.
$175M
Outlook for restructuring costs,
up from a $165 million estimate
Whirlpool shares fell almost
10% at one point after hours
but later were off 6.6% at
$170.50, after closing at
$182.50 in 4 p.m. New York
Stock Exchange composite
trading.
Overall for the third quarter, Whirlpool reported profit
of $276 million, or $3.72 a
share, up from $238 million,
or $3.10 a share, in the same
period a year ago. Net revenue
rose 3% to $5.4 billion.
“We are pleased with our
revenue growth and free cash
flow improvement but are not
satisfied with our operating
margins,” Mr. Bitzer said in a
statement.
Mr. Bitzer added that the
company would continue with
its recently announced price
increases on home appliances
and a plan to reduce fixed
costs.
Whirlpool’s latest quarterly
results come as the company
is engaged in a trade battle
over imported washing machines with two South Korean
rivals.
The company is asking U.S.
trade regulators to recommend tariffs and quotas to
combat what it has said is a
flood of imports that hurt the
domestic industry.
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B4 | Tuesday, October 24, 2017
* ****
THE WALL STREET JOURNAL.
TECHNOLOGY
WSJ.com/Tech
BY IMANI MOISE
Seagate Technology PLC
reported higher-than-expected
earnings in its latest quarter
as executives touted benefits
of a prospective technologysupply deal with Toshiba
Corp.’s memory-chip business
and outlined plans for additional cost cuts.
Shares of Seagate rose 13%
to $39.35 Monday as the datastorage provider also guided
revenue and earnings ahead of
estimates in the current quarter.
Late last month, Seagate,
13%
Seagate stock rose by this much
in Monday’s trading.
along with a number of other
companies led by Bain Capital
LLC, signed a deal with the
embattled Japanese industrial
conglomerate for its booming
memory-chip business in a
deal valued at $18 billion.
Seagate is expected to provide $1.25 billion in financing
to support the acquisition,
which Toshiba has said it
wants to close by March 31.
The company said the
Toshiba agreement would solidify its so-called NAND flashmemory business and deepen
its portfolio.
Analysts from RBC Capital
Markets said in a research
note the company’s diverse
product offering helps it
weather the volatility of the
disk-drive industry.
“This agreement has the opportunity to increase the potential for meaningful future
revenue growth from Seagate’s
NAND storage portfolio while
providing significant value for
our storage customers,” Chief
Executive Dave Mosley said on
a call with analysts.
Companies involved in the
deal for Toshiba’s memorychip business, including Apple
Inc. and Dell Technologies
Inc., stand to gain easier access to supply in a competitive
market. Surging demand for
memory chips has led to
shortages and higher prices of
these components.
Seagate, one of the biggest
makers of disk drives, has resorted to job and cost cuts in
recent years to cope with
weakening demand for personal computers that use its
storage product.
Sales continued to fall during the first quarter, dropping
5.9%, but the company said demand for its storage products
is beginning to turn around,
fueled by an increasing appetite for data.
In its current quarter, Seagate said it expects revenue to
rise between 3% and 5% from
the first quarter and to lift
margins by cutting operating
costs between 2% and 3%.
RBC Capital Markets said
the company’s guidance implies earnings of $1.08 a share
on $2.74 billion in revenue at
the midpoint, ahead of estimates of $1.03 a share on
$2.63 billion.
In all for the quarter ended
Sept. 29, the California-based
company reported a profit of
$181 million, or 62 cents a
share, up from $167 million, or
55 cents a share, a year earlier.
On an adjusted per-share
basis, earnings fell to 96 cents
from 99 cents. Revenue fell
5.9% to $2.63 billion.
Analysts polled by Thomson
Reuters had forecast earnings
of 86 cents a share on $2.54
billion in revenue.
SAVOSTYANOV SERGEI/TASS/ZUMA PRESS
Seagate Exceeds
Expectations,
Touts Toshiba Deal
The headquarters of Moscow-based Kaspersky Lab, whose antivirus software has come under suspicion among U.S. officials.
Countermove in Code War
Russia’s Kaspersky
vows transparency
after U.S. complaints
of cyberespionage
BY DAVID GAUTHIER-VILLARS
AND DAN STRUMPF
Kaspersky Lab ZAO, the
Moscow-based cybersecurity
company, pledged to turn over
the source code for its antivirus software for independent
review—a bid to protect its
reputation after U.S. officials
said Russian operatives have
used the popular program to
spy on Americans.
The company said Monday
the review is part of a “transparency initiative” it hopes
will improve the trustworthiness of its products. It said it
would hand over the source
code for its software in next
year’s first quarter but didn’t
specify who would undertake
the review or how widely the
code would be disseminated.
Cybersecurity experts wel-
comed the announcement—a
rare, albeit not unprecedented,
move—but said it could have
limited impact. Martijn Grooten, editor of the Virus Bulletin, a U.K.-based information
portal on information security,
said he hoped the move would
help “take away some of the
distrust between Kaspersky
and Western governments, as
I don’t think there’s a good
reason for this distrust.” But
the move could be viewed as
insufficient because the company could issue, or be forced
to issue, “a rogue update at
any moment,” he added.
Kaspersky has been caught
in a public-relations crisis
amid reports that the company’s flagship software, designed to protect computers
against malware, was used by
the Russian government as an
espionage tool. The Wall
Street Journal reported earlier
this month that Kaspersky’s
antivirus software was used
by Russian operatives to help
them secretly scan computers
around the world for U.S. gov-
ernment documents and topsecret information.
Kaspersky has denied any
complicity with Russian officials—or any government—in
efforts to spy on other countries. The company’s chief executive, Eugene Kaspersky, has
said his firm is being made a
pawn in a wider geopolitical
war of words between the
West and Moscow.
Amid the backlash over the
U.S.
allegations
against
Kaspersky, a number of clients
have said they would stop using the company’s products.
That includes the U.S. Department of Homeland Security.
Others, though, have said
they weren’t shaken by the accusations. In Germany, one of
Kaspersky’s largest markets,
the BSI, a federal cyber
agency, said it had found no
reason to warn against the use
of the company’s products.
“Because of what it does,
an antivirus program needs to
have very intimate access to
your computer,” said Bruce
Schneier, chief technology of-
ficer of International Business Machines Corp.’s cybersecurity unit IBM Resilient.
“So subverting an antivirus
program is a very effective
way to attack someone.”
Rick Ledgett, deputy director of the National Security
Agency when some of the alleged data theft occurred, said
Kaspersky’s proposal doesn’t
address the problem. The
problem isn’t “the code itself,
it’s the use of the code,” he
said in a blog post Monday.
“The experts will find that the
code does exactly what it’s
supposed to do, and [Mr.
Kaspersky] knows that.”
Jeanne Shaheen (D., N.H.), a
member of the Senate Foreign
Relations and Armed Services
committees, said Kaspersky’s
proposed independent review
failed to address concerns
with the company’s products—
“most significantly, that Russian law enables the Kremlin
to monitor data transmissions,
including Kaspersky’s.”
—Shane Harris
contributed to this article.
Cisco Systems Inc. said
Monday it will pay $1.73 billion
to acquire BroadSoft Inc., a
maker of cloud-based communications software, as the networking giant steers further
away from its legacy hardware
and into sales of software and
services.
The deal would help Cisco
increase its recurring revenue
from subscription-based services, which Chief Executive
Chuck Robbins has said is core
to its growth strategy.
Increasingly, software and
services are driving value in
providing corporate technology, while hardware, such as
Cisco’s routers and switches,
face pricing pressures due to
commoditization.
“BroadSoft has been a visionary in the idea that all collaboration technologies are going to move to the cloud,” said
Rowan Trollope, senior vice
president of Cisco’s Applications Business Group.
On Monday, BroadSoft
climbed 1.7% to $54.80.
Cisco is paying $55 in cash
for each of BroadSoft’s shares,
which as of Friday’s close had
gained 31% on the year. The
deal, which had been rumored
since late August, is expected
to close early next year.
BroadSoft, based in Gaithersburg, Md., makes a software
product that combines video,
voice, messaging, screen sharing, file sharing and conferencing in an application accessed
online. It also makes communications software for call centers and team collaboration
that workers can access online.
BroadSoft has been growing
at about 20% annually over the
past few years, but its subscription business has been
growing at about twice that
rate, BroadSoft CEO Michael
Tessler said in an interview. Al-
RUSSIA
Continued from page B1
hate speech, the promotion of
violence and other unsavory
posts, they tend to allow unreliable, misleading and highly
partisan content, as well as
other content that falls in a
gray area, in an effort to avoid
accusations of censorship and
to protect users’ free speech.
One former YouTube employee said YouTube managers
are struggling with the site’s
role in spreading RT’s content.
“There is definitely a lot of
hand-wringing, but there’s
also a lot of, ‘We have to protect this speech,’ ” the employee said.
YouTube’s policy chief, Juniper Downs, said at a conference this month that restricting content on YouTube has
costs, including the infringement of free speech and the
exchange of ideas.
“I don’t think we should
tweak the way the entire system works in order to solve a
very specific problem without
thinking through the collateral
damage,” she said.
YouTube, part of Alphabet
Inc., said, “We have a wide variety of news channels available
on YouTube that represent an
array of viewpoints from across
the political spectrum.” The
company added that it removes
videos that violate its policies.
Facebook and Twitter declined to comment.
RT, which called the intelligence report “a complete fail,”
said in an email: “RT’s goal is,
most half of BroadSoft’s revenue comes from recurring software and subscriptions.
Although Cisco’s revenue
declined 4% in the most recent
quarter compared with a year
earlier, revenue related to recurring software and subscriptions rose by half, good for 31%
of the company’s total take.
Cisco also is creating cloudbased subscription services to
help customers manage its own
networking hardware. “Our objective is to continue moving to
cloud-managed solutions across
our entire enterprise networking portfolio,” Mr. Robbins told
securities analysts in June.
and has always been, to inform.
The hysteria surrounding such
mundane activities as RT’s social-media advertising of its
content—something done by
practically all news organizations—speaks to the establishment’s fear of losing the monopoly on information, and
betrays a concerted effort to
push RT out of the US market.”
Michael McFaul, a former
U.S. ambassador to Russia who
is now a political-science professor at Stanford University,
said RT is “an instrument of
Kremlin foreign policy and
should be thought of that way.”
SHARIFULIN VALERY/TASS/ZUMA PRESS
BY RACHAEL KING
Vladimir Putin
said if the U.S.
acts against
Russian media,
a response will
follow against
U.S. outlets.
When Mr. McFaul toured
RT’s Moscow newsroom as
ambassador a few years ago,
RT officials’ “proudest moment was where they are with
YouTube,” he said.
Until a few weeks ago, YouTube included RT in its package of premium channels for
advertisers, charging brands
extra to advertise before RT
videos. The company said its
algorithm recently removed
RT from the program, but it
declined to say why.
YouTube says such premium channels are among the
top 5% of its most popular
content. RT said in an email
that the move was politically
ROSLAN RAHMAN/AFP/GETTY IMAGES
Cisco Fortifies Shift From Hardware
Cisco has agreed to buy software firm BroadSoft for $1.73 billion.
motivated and called suggestions its viewership is declining “patently absurd.” YouTube still runs ads before
some RT videos, with YouTube
and RT sharing the ad revenue.
Researchers say sites like
YouTube and Facebook have
boosted RT by helping old clips
live on and recommending RT
videos to viewers who have
shown interest in news sources
outside the mainstream.
As a result, YouTube, Facebook and Twitter are now the
battlegrounds for RT’s fight
against Western influence. RT
joined YouTube in March 2007
and uploads roughly 13 videos a
day alone to its main Englishlanguage channel, according to
Tubular Labs, which tracks YouTube data. Google News also includes RT stories, helping legitimize the site with readers.
The Russian government
funds RT, which broadcasts in
six languages, to spread its
perspective to audiences outside Russia. In 2009, it
changed its name from Russia
Today and began boosting its
presence in the U.S. with a
Washington newsroom and cable and satellite carriage deals.
Unlike other governmentfunded news outlets, such as the
U.K.’s BBC or the U.S.’s Radio
Free Europe, researchers say RT
is more overtly political, with a
goal of undermining Western
institutions and democracies.
In recent months, RT has
faced more scrutiny in the U.S.
In September, RT said the Justice Department asked a company affiliated with RT to register as a foreign agent. A
bipartisan bill in Congress
would broaden the foreignagent-registration law to include RT. RT said the legislation is part of an attempt to
eventually ban it from the U.S.
Russian President Vladimir
Putin said last week that if the
U.S. takes any steps to restrict
Russian media, “a mirrored response will immediately follow” against U.S. news outlets
in Russia.
The vast majority of RT’s
YouTube videos are political,
though some of its most popular are of natural disasters. Researchers and former RT employees say the outlet
highlights conflict in the West,
questions prevailing narratives
in Western media and promotes conspiracy theories.
On Nov. 4, four days before
the election, RT posted videos
on YouTube of an interview
with WikiLeaks founder Julian
Assange. Two of the videos—
titled in part “ ‘Trump would
not be permitted to win’ - Assange” and “ ‘Clinton & ISIS
funded by the same money’ Assange”—together have more
than 3.4 million views.
Several times after the U.S.
alleged the Russian-backed Syrian government used chemical
weapons in the country’s civil
war, RT ran segments questioning whether the regime was behind the attacks—or whether
they even happened. RT says
on its website, “We are set to
show you how any story can be
another story altogether.”
Google and Facebook have
included some disclaimers
around debunked stories but
they haven’t labeled posts
from state media.
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.
Tuesday, October 24, 2017 | B5
B6 | Tuesday, October 24, 2017
THE WALL STREET JOURNAL.
* ****
BUSINESS NEWS
BY EZEQUIEL MINAYA
that makes that decision in
the end,” said Dan Marcec, director of content for research
firm Equilar Inc.
Ultimately, however, “Flannery is going to make some
changes to company strategy
and as a result it wouldn’t be
surprising to see performance
measures change to align with
that strategy,” he added.
Companies have increasingly tied performance-based
pay to long-term goals. Mr.
Flannery could try to modify
the metrics used to determine
compensation to achieve a
more immediate impact, said
Steven Hall Sr., founding partner and managing director of
compensation consultancy Steven Hall & Partners.
The conglomerate already
modified its bonus program
for top executives in March to
tie pay more closely to specific
performance goals, including
the level of cost reductions
over the next year. GE at the
time said the changes came
out of discussions with activist investor Trian Fund Management, which had called for
more stringent targets.
The company also cut pay
for Mr. Flannery’s predecessor,
Executive compensation is
one of the many things John
Flannery plans to shake up as
he tightens the belt at General
Electric Co. But his options
may be limited.
The new chief executive
said Friday he was working
with the board
CFO
“on comprehenJOURNAL sive changes” to
the company’s
compensation
plans to “better align the team
with investors.”
The company declined to
elaborate on those plans. Executive compensation at GE—
like many other large public
companies—generally comprises salary, cash bonus and
long-term
performance
awards, such as options and
restricted stock. Pension benefits and other perks, such as
life insurance and aircraft use,
also are included.
Setting compensation policy is the responsibility of independent board members.
But Mr. Flannery, who is also
board chairman, will have a
strong hand.
“It’s absolutely the board
CHRISTOPHER GOODNEY/BLOOMBERG NEWS
GE Executive Pay up for Review SEARS
New Highs and Lows | WSJ.com/newhighs
Monday, October 23, 2017
Stock
52-Wk %
Sym Hi/Lo Chg Stock
214.72
284574
189.72
60.12
15.95
9.25
26.06
265.98
29.93
10.66
29.06
84.59
40.11
17.10
39.20
35.99
43.39
132.34
194.29
43.26
25.49
79.22
16.19
178.81
91.72
37.50
BectonDickinson BDX
A
NYSE highs - 203 BerkHathwy
BerkHathwy B
AbbottLabs
ABT
Accenture
ACN
AdamsDivEquityFd ADX
AffiliatedMgrs
AMG
Albemarle
ALB
AllianzGIEqtyConv NIE
AllyFinancial
ALLY
Ameren
AEE
Ameriprise
AMP
Ametek
AME
Aon
AON
ArcelorMittal
MT
ArcosDorados
ARCO
ArtisanPtrsAsset APAM
BBVABancoFr
BFR
BWX Tech
BWXT
Ball
BLL
BancoMacro
BMA
BankofAmWtA BAC.WS.A
BankofAmerica BAC
Bard CR
BCR
BeazerHomes
BZH
BectonDickinsonPfA BDXA
56.69
140.17
15.56
198.40
141.40
21.03
24.94
61.76
154.75
68.84
152.47
30.32
10.80
36.15
22.73
60.12
43.12
136.10
15.34
27.43
330.31
19.98
57.79
-0.4
-0.1
-0.2
-0.9
-1.6
-0.4
-1.1
0.3
...
-0.1
0.3
0.8
1.0
-0.3
4.0
0.4
1.4
8.4
0.3
...
-0.6
0.2
-0.7
BerryGlobal
BlkRkCapEnIncoFd
BlckRkEnDivTr
BlkRkSci&Tech
Boeing
BostonScientific
BoulderGrowth
BoydGaming
BroadridgeFinl
CAI Intl
CBIZ
CalAtlantic
Canon
Catalent
Caterpillar
Cigna
Colfax
ColonyNorthPfdJ
Comerica
CreditSuisse
Cummins
Danaher
DaqoNewEnergy
BRK.A
BRK.B
BERY
CII
BDJ
BST
BA
BSX
BIF
BYD
BR
CAI
CBZ
CAA
CAJ
CTLT
CAT
CI
CFX
CLNSpJ
CMA
CS
CMI
DHR
DQ
-0.4
0.3
0.2
-0.6
-0.6
1.1
-0.5
-0.9
-0.3
0.2
-0.8
...
4.0
0.9
0.4
0.3
-0.5
0.2
1.0
-0.1
0.2
-0.7
-0.4
0.1
-0.4
-2.4
Jeffrey Immelt, by 35% to
$21.3 million in 2016. Compensation for exiting finance chief
Jeffrey Bornstein fell 25% to
$9.9 million. The conglomerate’s compensation plan for
executives paid out only 80%
of its target amounts.
Stock
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.
% CHG-Daily percentage change from the previous trading session.
52-Wk %
Sym Hi/Lo Chg Stock
John Flannery, General Electric’s new chief executive, is working
with the board on ‘comprehensive changes’ to compensation plans.
52-Wk %
Sym Hi/Lo Chg
83.17 0.6
DellTechnologies DVMT
96.65 4.1
DelticTimber
DEL
13.22 0.1
Dividend&IncomeFd DNI
84.86 0.4
DollarGeneral
DG
95.99 0.6
Dover
DOV
72.18 0.5
DowDuPont
DWDP
52.13 -1.2
EatonVance
EV
66.44 0.5
EmersonElectric EMR
85.99 -0.5
Entergy
ETR
186.98 0.3
FactSet
FDS
96.00 0.5
FidelityNtlInfo
FIS
19.23 -0.9
FirstData
FDC
15.44 -0.2
FT EnhEquity
FFA
68.11 0.8
FortBrandsHome FBHS
22.86 -0.6
GabelliDividend GDV
36.56 -0.7
GenAmInv
GAM
32.15 -0.7
Gildan
GIL
...
GlMedREIT PfdA GMREpA 25.24
27.76
...
GoldmanSachsPfN GSpN
128.30 -0.6
Graco
GGG
14.39 -0.1
GraphicPkg
GPK
52.05 0.9
Greenbrier
GBX
27.21 5.5
GpoSupervielle SUPV
22.31 0.5
HP
HPQ
25.28 -2.0
HannonArmstrong HASI
137.64 0.1
Harris
HRS
ADVERTISEMENT
The Mart
To advertise: 800-366-3975 or WSJ.com/classifieds
AUCTION
52-Wk %
Sym Hi/Lo Chg Stock
HawaiianElec
HE
Heico A
HEI.A
Hexcel
HXL
HoeghLNG PfdA HMLPpA
Honeywell
HON
DR Horton
DHI
Invesco
IVZ
IRSA
IRS
ITT
ITT
IDEX
IEX
IllinoisToolWks ITW
Ingersoll-Rand
IR
Insperity
NSP
IntlFlavors
IFF
iStarPfdD
STARpD
iStarPfdI
STARpI
JPMorganWt
JPM.WS
JPMorganChase JPM
JohnBeanTech
JBT
J&J
JNJ
JupaiHoldings
JP
KKRIncomeOppsRt KIOrw
Kadant
KAI
KoninklijkePhil
PHG
KornFerry
KFY
Kraton
KRA
KronosWorldwide KRO
Kyocera
KYO
LCI Inds
LCII
LambWeston
LW
LennoxIntl
LII
LibertyAllStar
USA
LincolnNational LNC
MVC Capital
MVC
MagnaIntl
MGA
Manpower
MAN
MarriottVacations VAC
Masco
MAS
MaxarTech
MAXR
Maximus
MMS
MeritageHomes MTH
MetLife
MET
MettlerToledo
MTD
MicroFocus
MFGP
ModineMfg
MOD
MohawkIndustries MHK
Moody's
MCO
MorganStanley MS
NACCO Inds
NC
NL Industries
NL
NewRelic
NEWR
NextEraEnergyUn NEEpQ
NextEraEnergyUn NEEpR
NextEraEnergy NEE
NortelInversora NTL
NuvDow30Dyn DIAX
OaktreeSpecNts24 OSLE
OwensCorning
OC
PPG Ind
PPG
PVH
PVH
PampaEnergia
PAM
ParkerHannifin PH
PennyMacPfdB PMTpB
Pentair
PNR
Penumbra
PEN
Petrobras
PZE
Pfizer
PFE
PolyOne
POL
Praxair
PX
ProPetro
PUMP
35.78
77.70
63.93
26.02
146.49
43.47
37.51
27.86
47.50
125.88
157.28
95.33
96.30
151.04
25.56
25.46
58.70
99.99
105.50
144.35
29.00
0.67
102.15
42.35
41.22
42.53
26.49
66.20
123.85
51.08
196.50
6.21
76.32
10.69
55.76
125.08
129.16
40.76
63.33
66.50
48.90
53.65
672.64
33.20
21.50
265.98
146.22
51.10
44.29
13.80
52.74
69.61
57.19
154.70
41.89
17.63
25.18
81.06
117.91
133.24
70.27
184.76
25.44
71.44
97.65
13.60
36.78
41.98
143.96
15.71
0.8
-0.3
-1.3
0.2
0.4
0.5
-0.2
8.4
-0.1
-0.8
0.3
0.3
-0.2
-0.1
0.1
0.8
-0.3
-0.2
0.1
0.9
-8.9
3.3
0.1
0.9
-0.9
0.6
0.3
1.9
-0.6
0.5
7.3
-0.5
0.1
3.7
-0.7
-1.3
-0.2
...
0.9
-0.2
0.9
0.3
-0.2
1.8
-1.2
-0.1
0.3
-0.1
2.9
4.2
-1.8
0.5
0.3
0.1
4.3
0.2
0.2
0.1
-0.7
1.1
4.9
-0.9
0.2
-0.5
-0.1
5.2
-0.1
...
-0.5
-1.2
But Mr. Flannery appears to
be going deeper, aiming to exit
$20 billion in business and
shedding executive perks.
When he took over on Aug. 1,
one of his first belt-tightening
moves was to ground GE’s entire fleet of six business jets.
52-Wk %
Sym Hi/Lo Chg Stock
Prudential
PUK
PulteGroup
PHM
PzenaInvtMgmt PZN
RH
RH
Raytheon
RTN
RedHat
RHT
Renren
RENN
Rockwell
ROK
RockwellCollins COL
RoperTech
ROP
RoyalDutchA
RDS.A
RoyalDutchB
RDS.B
S&P Global
SPGI
SPX FLOW
FLOW
Salesforce.com CRM
ScorpioTankNt20 SBNA
SeaspanPfdE
SSWpE
SeaspanPfdH
SSWpH
SensataTech
ST
ServiceNow
NOW
SkechersUSA
SKX
SmithAO
AOS
SpiritAeroSys
SPR
StanleyBlackDck SWK
Steris
STE
STMicroelec
STM
Stryker
SYK
TE Connectivity TEL
TRI Pointe
TPH
TeekayOffshorePf TOOpA
TeekayOffshrPfB TOOpB
TelecomArgentina TEO
TeledyneTech
TDY
ThermoFisherSci TMO
Thermon
THR
3M
MMM
Toll Bros
TOL
Torchmark
TMK
TransUnion
TRU
Travelers
TRV
Trex
TREX
Tronox
TROX
TsakosEngyNavPfdE TNPpE
Unifi
UFI
UnitedHealth
UNH
VF
VFC
VarianMed
VAR
VistraEnergy
VST
VMware
VMW
Wal-Mart
WMT
WarriorMetCoal HCC
Waters
WAT
WellsFargoPfdV WFCpV
WestAllianceBcp WAL
WestRock
WRK
Winnebago
WGO
ZayoGroup
ZAYO
Zoetis
ZTS
49.87
28.19
12.70
88.54
189.98
122.95
11.50
188.95
135.38
256.06
61.43
63.41
163.11
43.27
99.44
25.03
25.49
24.96
50.83
129.56
34.87
61.94
81.07
160.19
92.20
20.91
151.88
88.92
15.70
24.10
25.90
33.80
166.34
195.92
22.16
222.78
44.77
83.74
51.04
134.47
90.14
27.42
25.77
39.21
208.45
71.95
108.78
19.58
119.55
88.92
27.89
190.64
26.78
56.51
61.12
48.45
36.79
66.35
0.6
-0.4
1.3
1.0
0.1
0.3
-5.1
-0.4
...
-0.4
-0.1
0.1
0.3
-1.6
-0.5
0.1
-1.0
-0.1
0.7
-0.7
-0.1
-0.1
-1.1
-1.2
...
4.0
-0.4
-0.4
-0.3
1.6
1.0
6.6
0.4
0.3
1.9
0.1
0.3
0.7
-0.1
0.8
0.7
0.9
0.4
-0.1
-0.2
5.4
0.6
2.4
0.7
1.4
-0.4
-0.3
...
-1.4
0.4
-1.5
-1.1
-1.0
NYSE lows - 53
43.34
2.19
31.40
13.25
52.47
9.70
9.71
13.74
11.18
11.75
AmCampus
ACC
AvonProducts
AVP
BakerHughes
BHGE
BlueCapReins
BCRH
BuckeyePtrs
BPL
CapitolInvIV A
CIC
CenterCoastMLP CEN
ClearBridgeEnMLPFd CEM
ClearbridgeEngyMLP EMO
ClearbridgeEnMLPTR CTR
-0.4
-3.1
-5.4
1.8
-1.6
0.1
-1.5
-0.9
-0.4
-1.3
Continued from page B1
one person familiar with the
situation said.
“Whirlpool has sought to
use its dominant position in
the marketplace to make demands that would have prohibited us from offering Whirlpool products to our members
at a reasonable price,” Sears
told employees Friday in the
internal memo, a copy of
which was reviewed by The
Wall Street Journal.
Sears has marketed itself
for years as being the only retailer to sell all of the top U.S.
appliance brands. Even as rivals such as Home Depot,
Lowe’s Co. and Best Buy Co.
gained share in the appliance
market, the company held exclusive control over its Kenmore brand. But earlier this
year, Sears agreed to start
selling Kenmore appliances on
Amazon.com Inc., loosening its
grip on one of its historic
product lines in a gamble to
boost sales.
Monday evening, a Sears
customer-service representative tried to interest a caller in
a Kenmore or GE appliance,
saying: “We don’t carry any
Whirlpool appliances anymore.”
52-Wk %
Sym Hi/Lo Chg Stock
ComstockRscs
CRK
Volaris
VLRS
Corts JCPen JBR JBR
DeutscheMuniIncmTr KTF
Duff&PhelpsSelEn DSE
EP Energy
EPE
EastmanKodak KODK
EdgewellPersonal EPC
EldoradoGold
EGO
EnduroRoyalty
NDRO
EnergyTransfer ETP
FivePoint
FPH
FootLocker
FL
GenesisEnergy GEL
GS MLPEnergyRen GER
GS MLP IncmOpp GMZ
GranitePointWi GPMTw
HCP
HCP
HormelFoods
HRL
KayneAnMLPInv KYN
KeyEnergySvcs KEG
KinderMorgan
KMI
KinderMorganPfdA KMIpA
Mack-Cali
CLI
MacquarieInfr
MIC
Mallinckrodt
MNK
Netshoes
NETS
NewellBrands
NWL
NuSTAREnergy NS
NuSTAR GP
NSH
NuvEnerMLPTR JMF
OFGBancorp
OFG
PQ Group
PQG
PrecisionDrilling PDS
Qudian
QD
RangerEnergySvcs RNGR
SanchezEnergy SN
TortoiseEnerInf TYG
TortoiseMLPFund NTG
WeatherfordIntl WFT
WesternGasPtrs WES
WideOpenWest WOW
Yext
YEXT
4.12
10.24
12.52
12.10
5.82
2.54
6.18
65.31
1.55
2.75
17.07
12.70
30.40
23.43
6.11
8.53
17.50
25.91
30.19
16.14
9.66
18.04
38.26
22.52
68.49
30.77
9.92
39.99
33.35
17.15
11.07
8.10
16.45
2.37
26.30
12.61
3.70
26.37
16.75
3.26
47.73
13.97
11.46
-5.5
-1.5
-2.2
-0.2
-1.8
-6.2
-2.3
-1.6
-28.6
1.7
-1.7
-1.1
1.1
-0.6
-2.8
-2.4
-1.1
-1.4
-1.0
-1.3
-8.4
-1.6
-2.4
1.0
-3.2
-5.0
10.7
-0.5
-3.4
-3.3
-0.4
-1.8
-1.2
-2.5
-19.4
-3.1
-4.7
-1.0
-0.6
-4.0
-2.7
-2.2
-1.3
NYSE Arca highs - 269
AIPoweredEquity AIEQ
ALPS EqSecWgh EQL
ALPSIntlDivDogs IDOG
ALPSSectorDivDogs SDOG
ARKIndlInnovation ARKQ
AdvShFocusedEqu CWS
AdvShWilshireBuybk TTFS
S&PVEQTOR
VQT
Barrons400ETF BFOR
BluStrTABIGIIsrael ITEQ
BuzzUSSentLdrs BUZ
CambriaShareholder SYLD
ClearSharesOCIO OCIO
ColumbiaIndiaInfr INXX
ColumbiaSustGlb ESGW
ColumbiaSustIntl ESGN
ColumbiaSustUSEqu ESGS
DeepValueETF
DVP
DiamondHillVal DHVW
DirexAeroBl3
DFEN
DirexFinlBull3
FAS
DirexHlthcrBull3 CURE
DirexHmbldrBull3 NAIL
DirexJapanBl3
JPNL
DirexMcBull3
MIDU
25.99
67.43
28.53
45.30
33.00
29.89
68.50
153.02
40.58
32.46
31.34
36.31
26.18
15.29
30.61
30.59
30.66
30.12
30.68
42.87
60.80
49.62
67.41
69.37
43.13
-0.9
-0.2
-0.2
-0.4
-1.0
0.2
-0.3
0.6
-0.6
...
-0.5
-0.1
...
0.9
0.4
-0.1
1.2
1.0
-0.3
-1.9
-0.7
-0.6
0.3
0.7
-1.4
52-Wk %
Sym Hi/Lo Chg Stock
DirexS&P500Bl3 SPXL
DirexS&P500Bull2X SPUU
DirexS&P500Bl1.25 LLSP
DirexSemiBl3
SOXL
DirexTechBull3
TECL
DirexNasd100EW QQQE
ETRACS2xLevxEn LMLP
EthoClimateLeader ETHO
FidelityCoreDiv FDVV
FidelityDivRising FDRR
FidelityLowVol
FDLO
FidelityMSCIFinls FNCL
FidelityMSCIHlthCr FHLC
FidelityMSCIIndls FIDU
FidelityMSCIIT
FTEC
FidelityMSCIMatls FMAT
FidelityQualFactor FQAL
FidelityValFactor FVAL
FinSelSectorSPDR XLF
FT ConsDscAlpDx FXD
FT Dow30EW
EDOW
FT IndlsAlpDx
FXR
FT Long/Short FTLS
FT MatAlpDX
FXZ
FT TechAlphaDEX FXL
FT USEquityOpp FPX
FT ValDivFd
FVD
FlexShQualDivDef QDEF
FlexShQualityDiv QDF
GlbX GuruIndex GURU
GlbXSciBetaJapan SCIJ
GlbXSciBetaUS SCIU
GSActiveBetaUSLC GSLC
GuggDefEqty
DEF
GuggDJIA Div
DJD
GuggS&P500EW RSP
GuggS&P500EWHlthcr RYH
GuggS&P500EWIndl RGI
GuggS&P500EWMat RTM
GuggS&P500EWTech RYT
GuggS&P500PureGr RPG
GuggS&P500PrVal RPV
GuggS&P400PrGrwth RFG
GuggS&P400PureVal RFV
GuggGlbTimber CUT
GuggMC Core
CZA
GuggMultiC
GMFL
GuggS&P500Top50 XLG
GuggS&PSpinOff CSD
GuggSolar
TAN
41.07
46.32
34.46
137.48
99.39
42.26
16.88
33.17
27.86
29.89
29.49
39.15
40.61
37.49
48.10
34.30
30.70
31.28
26.70
38.98
21.05
38.30
38.20
41.91
50.31
65.98
30.49
42.50
43.28
28.77
31.39
30.20
51.26
45.21
33.01
97.61
180.57
115.73
107.73
141.23
103.16
63.32
149.00
65.61
31.04
64.98
25.75
181.98
51.96
23.08
-1.0
-0.6
-0.3
1.6
-1.2
-0.5
-1.2
-0.4
-0.1
-0.1
0.1
-0.3
-0.3
-0.6
-0.4
-0.1
-0.2
-0.2
-0.1
-0.4
...
-0.4
-0.1
-0.6
-0.1
-0.7
-0.1
...
-0.3
-0.7
0.8
...
-0.2
...
-0.3
-0.3
-0.2
-0.3
-0.4
0.1
-0.4
-0.5
-0.3
-0.4
0.2
-0.3
0.3
-0.4
-0.7
2.1
ETF
Monday, October 23, 2017
Closing Chg YTD
Symbol Price (%) (%)
AlerianMLPETF
CnsmrDiscSelSector
CnsStapleSelSector
DBGoldDoubleLgETN
DBGoldDoubleShrt
AMLP
XLY
XLP
DGP
DZZ
10.63
90.74
53.86
24.36
5.57
–1.57 –15.6
–0.68 11.5
4.2
–0.07
... 21.1
0.32 –18.7
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+ ! !
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PUBLIC NOTICES
(0#! (1 "2#! +"!0#(
(2.3 5 67 -8 41 46-4 34-. $.8.4 8-48 -5 12 , 946 :#&;< 7 -.8 -1.= 46
$55 46.8 46 1$55 46.8 -.8 4536 -.> 54 1-.7 3-5 921,7 >.1?. -5 -.>5
54 1-.7< -5 54 9?6. -34.= . 536 3--347 46 :0&;< $. -3318-.3 ?46 46 -,3-, 1@51.5
12 46 $.8.4 -.8 46 .21 13-, 18 -5 . 2234 . 46 4-4 12 #? +1> 46 21,,1?.= -5545 ?,, 51,8 9.8@8-,,7 1 1. - 1421,1 -55< 41 46 6=654 A-,B8 8895< -4 &,3 341.5 41 6,8 1. 46 8-45
-.8 45 54 2146 ,1?C
!
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% *
%
!%
!
%
0.2
-0.3
-0.2
0.8
-1.0
-0.1
-0.2
-0.4
-0.5
-0.4
0.9
0.4
0.1
-0.2
-0.2
-0.4
0.1
...
-0.1
0.1
0.4
0.8
0.2
-0.5
-0.2
-0.4
-0.1
-0.3
-0.6
-0.1
-0.4
-0.4
-0.5
-0.4
-0.4
-0.4
-0.4
-0.6
-0.3
-0.2
-0.4
-0.4
-0.5
-0.3
-0.2
-0.2
-0.6
-0.4
-0.3
-0.3
52-Wk %
Sym Hi/Lo Chg
JanusVelTailLC TRSK
HancockIndustrials JHMI
HancockLC
JHML
HancockMatls
JHMA
HancockMC
JHMM
HancockTech
JHMT
JPM DivRetGlEq JPGE
JPM DivRetIntl JPIH
JPM DivRetUS Eq JPUS
KraneMSCIChinaEnv KGRN
MatlsSelSectorSPDR XLB
NationRiskBasedUS RBUS
OShFTSEAsiaPacQlty OASI
OShFTSEUSQuality OUSA
OppESGRevenue ESGL
OppenheimFclsSect RWW
OppenheimerLgCpRev RWL
OppenheimerMdCpRev RWK
PIMCOEnhShMaturity MINT
PIMCO DynMultUS MFUS
PwrShAerospace PPA
PwrShContrarian CNTR
PwrShDynBldg&Con PKB
PwrShDynLCValue PWV
PwrShDynSemicon PSI
PwrShDynSoftware PSJ
PwrShFTSE US1000 PRF
PwrShDynLC Grwth PWB
PwrShRuss1000EqWt EQAL
PwrShRussTop200G PXLG
PwrShS&P500Down PHDG
PwrShS&P500EnhVal SPVU
PwrShS&P500xRate XRLV
PwrShS&P500HiBeta SPHB
PwrShS&P500Mom SPMO
PwrShS&P500Qual SPHQ
PwrShS&PIntlDev IDMO
PwrShS&P400LowVol XMLV
ProShS&P500xEner SPXE
ProShS&P500xTech SPXT
ProShShtVIXST SVXY
ProShrUltraDow30 DDM
ProShUltFTSEEurope UPV
ProShrUltraFnl UYG
ProShrUlHlthCr RXL
ProShrUltraInd UXI
ProShrUltraJapan EZJ
ProShrUMdCp400 MVV
ProShrUltraS&P SSO
30.40
33.97
33.78
34.25
33.14
41.20
61.06
29.98
69.05
25.93
59.17
25.53
29.95
30.95
29.72
66.11
48.82
58.44
101.84
26.47
53.19
31.76
32.70
38.67
52.81
65.60
109.38
40.30
30.08
44.20
26.80
33.60
32.53
40.72
32.85
29.58
27.62
45.16
53.88
50.23
109.05
117.62
57.65
118.85
90.43
68.48
120.68
114.67
101.46
0.3
-0.2
-0.4
-0.2
-0.4
-0.4
-0.2
-0.2
-0.2
1.0
-0.2
1.0
-1.3
-0.1
0.4
-0.1
-0.2
-0.5
...
-0.1
-0.1
1.1
...
-0.2
0.3
-0.5
-0.3
-0.2
-0.2
-0.3
0.2
...
-0.1
-0.6
-0.2
-0.3
1.1
-0.2
0.1
0.5
-3.1
-0.5
-0.3
-0.5
-0.3
-0.9
1.1
-1.1
-0.8
Continued on Page B10
Largest 100 exchange-traded funds, latest session
Legal Notices
PUBLIC NOTICES
29.78
84.31
28.15
21.80
34.08
33.43
87.24
259.22
183.21
59.03
29.46
26.15
32.39
177.00
115.29
156.29
174.50
30.78
81.31
96.70
62.75
41.99
57.84
95.46
107.55
53.46
85.92
154.67
149.83
102.15
179.19
194.50
129.01
143.44
152.91
201.90
86.48
69.94
59.12
50.99
113.92
208.40
147.45
148.37
114.82
110.30
155.11
161.78
128.99
116.82
Exchange-Traded Portfolios | WSJ.com/ETFresearch
ADVERTISEMENT
52-Wk %
Sym Hi/Lo Chg Stock
HartfordMultiUSEqu ROUS
HealthCareSelSect XLV
HullTacticalUS
HTUS
IQ50%HdgFTSEJapan HFXJ
InnovatorIBD50Fd FFTY
iShCoreDivGrowth DGRO
iShCoreHiDividend HDV
iShCoreS&P500ETF IVV
iShCoreS&PMdCp IJH
iShS&PTotlUSStkMkt ITOT
iShCurrHdgNikk400 HJPX
iShCurrHdgMSCICda HEWC
iShCurrHdMSCIJapan HEWJ
iShUSHealthcare IYH
iShUS Finls
IYF
iShU.S.Technology IYW
iShUSMedDevices IHI
iShEdgeMSCIMultUSA LRGF
iShEdgeMSCIUSASize SIZE
iShIntRtHdgCorpBd LQDH
iShJPX-Nikkei400 JPXN
iShMSCIAllPeruCap EPU
iShMSCIJapanETF EWJ
iShMSCIKLD400Soc DSI
iShMSCIUSAESGSelct SUSA
iShMSCIUSAEqWeight EUSA
iShMSCIWorldETF URTH
iShMorningstarLC JKD
iShMornLCGrowth JKE
iShMornLCValue JKF
iShMorningstarMC JKG
iShMornMCGrowth JKH
iShRussell1000Gwth IWF
iShRussell1000ETF IWB
iShRussell3000ETF IWV
iShRussellMid-Cap IWR
iShRussellMCValue IWS
iShRussellTop200Gr IWY
iShRussellTop200 IWL
iShRussellTop200Vl IWX
iShS&P100
OEF
iShS&PMC400Growth IJK
iShS&P500Growth IVW
iShGlobalTechETF IXN
iShGlobalHealthcr IXJ
iShS&P500ValueETF IVE
iShS&PMC400Value IJJ
iShNorthAmerTech IGM
iShDowJonesUS IYY
iShRussellMCGrowth IWP
!"#$ #"% &#'
BUSINESS OPPORTUNITIES
It wasn’t immediately clear
how Whirlpool’s loss of Sears’s
retail floor space would affect
the Michigan-based appliance
maker.
Longbow Research analyst
David MacGregor estimates
Whirlpool sells approximately
$600 million of its branded appliances through Sears each
year. But his estimate doesn’t
include Kenmore-branded products, many of which have been
manufactured by Whirlpool.
Retail floor space has been
repeatedly raised as an issue
in a heated trade battle over
washing machines that Whirlpool has been waging against
LG Electronics Inc. and Samsung Electronics Co. Whirlpool
in part has complained that
underselling by its South Korean rivals has edged it out of
prime floor space.
Whirlpool dominates the
U.S. market for washers, with
35% of retail dollars spent on
the appliances in the second
quarter of this year, according
to TraQline data.
Whirlpool will continue to
make products for Sears’s
Kenmore brand, a person familiar with the matter said.
And Sears will continue to sell
appliances from LG, Samsung,
GE, Frigidaire, Electrolux, and
Bosch, some of which also
make Kenmore products.
%&'
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1 5 A8 7 -,3-, ,-? 41 81 51C 9-< 41 5434 46 1534@ 885 1. 1 36-55 12 -.7 12 46 -1@
.148 -5545 41 51,8 41 4615 51.5 ?61 9< 5.4 -.8 ?--.4 46-4 467 - - :A-,B8 .54441.-, 7;
-5 536 4 5 8B.8 . (, 9-<9< 1,=-48 7 46 .8 46 345 34 12 % -5 -.88 946
:34;< -.8 - :A-,B8 36-5; 21 155 12 341. 93<9< 12 46 .48 4-45 $.@54.4 1-.7 34
12 % -5 -.88G -.8 9< -= 46-4 467 ?,, .14 5,, 536 -5545 ?4614 31,-.3 ?46 46 =54-41.
A.45 12 46 34 -.8 -,3-, 54-4 5345 ,-?5 1 5-.4 41 @-,8 H41.5 4621 -.8 9< 41
15 536 146 ,4-41.5 1 31.841.5 . 31..341. ?46 465 &,3 341. -5 46 54 85 .355-7 1
-8@5-, . 18 41 31,7 ?46 46 34 1 -.7 146 -,3-, ,-?
LEGALNOTICES
(800) 366-3975 | sales.legalnotices@wsj.com
Place an ad at: wsj.com/classifieds
© 2017 Dow Jones & Company, Inc. All Rights Reserved.
ETF
Closing Chg YTD
Symbol Price (%) (%)
EnSelectSectorSPDR
FinSelSectorSPDR
GuggS&P500EW
HealthCareSelSect
IndSelSectorSPDR
iShIntermCredBd
iSh1-3YCreditBond
iSh3-7YTreasuryBd
iShCoreMSCIEAFEETF
iShCoreMSCIEmgMk
iShCoreMSCITotInt
iShCoreS&P500ETF
iShCoreS&PMdCp
iShCoreS&PSmCpETF
iShS&PTotlUSStkMkt
iShCoreUSAggBd
iShSelectDividend
iShEdgeMSCIMinEAFE
iShEdgeMSCIMinUSA
iShGoldTr
iShiBoxx$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
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
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
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
67.42
26.62
97.08
83.67
72.50
109.94
105.26
123.11
64.78
55.31
61.74
257.86
182.01
74.61
58.70
109.42
95.43
71.63
51.50
12.33
121.18
88.59
115.94
106.86
69.98
41.23
69.19
62.19
45.89
43.26
57.66
327.74
111.13
128.04
142.57
120.31
180.25
148.86
124.41
151.93
200.77
85.95
207.23
146.40
109.84
38.61
113.42
84.29
106.14
124.20
116.22
101.83
147.74
46.74
23.16
37.28
121.80
33.84
62.00
61.20
232.65
331.80
256.11
93.54
60.81
54.89
23.14
157.37
128.79
97.28
43.84
44.41
58.21
53.38
134.59
155.43
83.05
84.49
87.97
117.69
149.71
107.41
83.33
235.30
79.68
80.03
142.72
81.76
54.70
55.51
131.86
71.84
102.24
64.97
56.77
–0.52 –10.5
–0.08 14.5
–0.34 12.0
–0.25 21.4
–0.63 16.5
1.6
0.06
0.3
0.07
0.5
0.08
–0.22 20.8
–0.74 30.3
–0.31 22.3
–0.38 14.6
–0.52 10.1
8.5
–0.49
–0.41 14.4
1.3
0.11
7.7
–0.15
–0.21 17.0
–0.08 13.9
0.24 11.3
3.4
0.10
2.4
–0.11
5.2
–0.09
0.5
0.08
–0.48 18.3
–2.44 23.7
–0.22 19.9
–0.22 24.8
–0.80 31.1
–0.30 25.0
0.24 18.0
–1.22 23.5
2.7
0.04
–0.49 22.1
–0.38 14.6
7.4
–0.27
–0.63 17.1
–0.75 10.4
4.6
–0.81
–0.43 14.3
–0.37 12.2
6.9
–0.41
–0.39 13.7
–0.50 20.2
8.3
–0.16
3.8
0.05
0.2
0.01
... –0.2
1.3
0.09
4.3
0.18
–0.33 19.3
0.5
0.04
–0.65 24.7
–0.20 12.4
0.09 –0.9
2.3
–0.11
0.16 11.1
–0.21 22.3
–0.39 14.4
–0.39 14.9
–0.21 17.8
–0.53 10.0
–0.39 14.6
9.3
–0.12
–0.47 25.7
13.0
0.05
–0.39 10.6
–0.36 29.5
6.4
–0.63
0.07 14.2
–0.25 20.0
–0.89 24.1
–0.34 21.4
–0.34 20.8
–0.59 20.7
–0.31 22.6
9.6
–0.24
1.7
0.11
2.6
0.11
–0.36 15.0
–0.35 13.7
–0.32 10.5
1.0
–0.38
–0.36 14.6
0.3
0.04
0.8
0.04
–0.61 10.7
1.2
0.09
0.8
0.07
–0.27 21.0
–0.42 14.3
–0.39 17.8
9.9
–0.23
–0.11 13.2
0.05 14.6
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | B7
NY / NE
OCTOBER 27-30, 2017
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October 27
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Saturday
October 28
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Sunday
October 29
11:00am – 7:00pm
Monday
October 30
11:00am – 4:00pm
GENERAL ADMISSION TICKET
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THE WALL STREET JOURNAL.
B8 | Tuesday, October 24, 2017
MARKETS DIGEST
EQUITIES
Dow Jones Industrial Average
S&P 500 Index
Last Year ago
23273.96 t 54.67, or 0.23%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio 21.38 19.93
P/E estimate *
19.58 17.26
Dividend yield
2.21
2.61
All-time high 23328.63, 10/20/17
Nasdaq Composite Index
Last
2564.98 t 10.23, or 0.40%
High, low, open and close for each
trading day of the past three months.
Year ago
Trailing P/E ratio 24.52 24.41
P/E estimate *
19.56 18.05
Dividend yield
1.95
2.15
All-time high: 2575.21, 10/20/17
Last Year ago
6586.83 t 42.23, or 0.64%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio * 26.35
24.13
P/E estimate *
21.29
19.51
Dividend yield
1.10
1.23
All-time high: 6629.05, 10/20/17
Current divisor 0.14523396877348
23500
2560
6600
23000
2530
6500
22500
2500
6400
22000
2470
Session high
UP
Close
t
DOWN
Session open
Open
t
Close
Session low
6300
65-day moving average
21500
2440
6200
2410
6100
65-day moving average
65-day moving average
21000
Bars measure the point change from session's open
20500
July
Aug.
Sept.
Oct.
6000
2380
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
Industrial Average
23368.37 23273.96 23273.96 -54.67
Transportation Avg 10008.34
9934.88
750.73
745.87
Utility Average
Total Stock Market
Barron's 400
9939.39 -32.71
6581.15
6061.08
23328.63 17888.28
27.7
17.8
-0.33
10038.13
7967.02
23.4
9.9
5.4
754.80
625.44
14.0
13.6
9.1
26697.94 21514.15
691.35
521.59
19.5
26.2
14.2
14.3
9.4
10.1
0.05
0.34
749.55
-0.45
26727.54 26572.48 26578.90 -119.04
692.68
687.50
687.79 -3.55
Nasdaq Stock Market
Nasdaq Composite
6641.57
Nasdaq 100
6122.24
-0.23
-0.51
-0.64
6586.83 -42.23
6067.83 -40.98
6629.05
6122.61
-0.67
5046.37
4660.46
24.0
23.6
11.7
22.4
24.8
13.9
14.8
Standard & Poor's
500 Index
2578.29
2564.33
2564.98 -10.23
-0.40
2575.21
2085.18
19.2
14.6
9.6
MidCap 400
SmallCap 600
1836.28
915.42
1824.55
908.32
1824.91
908.77
-9.38
-4.98
-0.51
-0.55
1834.29
918.72
1476.68
703.64
18.9
22.8
9.9
8.5
10.0
12.1
Other Indexes
Russell 2000
1511.48
1497.34
1497.49 -11.75
-0.78
1512.09
1156.89
22.1
10.3
10.3
NYSE Composite
-0.37
12443.80 12383.36 12384.42 -46.10
546.77
542.89
4253.06
4202.26
Value Line
NYSE Arca Biotech
16.9
12.0
5.6
-3.02
-0.55
545.98
455.65
14.1
7.3
4.5
4204.23 -38.83
-0.92
4304.77
2834.14
38.1
36.7
9.5
542.96
12430.52 10289.35
NYSE Arca Pharma
563.16
558.55
558.68
-1.43
-0.25
560.52
463.78
14.0
16.0
2.7
KBW Bank
101.27
100.66
100.79
-0.38
-0.38
101.17
73.36
36.1
9.8
13.6
84.77
83.75
84.17
-0.84
-0.98
96.72
73.03
-1.2
6.7
3.3
-1.63
117.79
-19.8
802.88 49.1
9.19 -15.0
PHLX§ Gold/Silver
PHLX§ Oil Service
PHLX§ Semiconductor
CBOE Volatility
132.37
129.36
129.56
-2.15
1243.93
11.08
1231.64
9.94
1237.14
11.07
5.80
1.10
192.66
0.47
1237.14
22.51
11.03
Philadelphia Stock Exchange
Region/Country Index
Close
Volume, Advancers, Decliners
DJ Americas
617.79
Sao Paulo Bovespa 75413.13
S&P/TSX Comp
15855.76
S&P/BMV IPC
49548.13
Santiago IPSA
4220.14
YTD
% chg
–0.27
–0.27
–0.11
17.0
17.4
20.7
–2.76 –0.44
–977.38 –1.28
–0.01
–1.46
–440.58 –0.88
27.01
14.3
25.2
3.7
8.6
30.9
–8.08
–1.03
–0.28
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
390.74
391.30
4089.84
5386.81
13003.14
1440.59
22379.16
545.96
1131.08
10161.40
591.86
9248.49
7524.45
0.61
0.38
6.86
14.43
11.86
–4.87
32.31
1.33
–3.37
–61.30
–1.46
11.36
1.22
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
S&P/ASX 200
5894.00
Shanghai Composite 3380.70
Hang Seng
28305.88
S&P BSE Sensex
32506.72
Nikkei Stock Avg
21696.65
Straits Times
3349.80
Kospi
2490.05
Weighted
10735.21
–13.00
2.05
–181.36
116.76
239.01
9.07
0.51
6.33
Company
Symbol
Volume
(000)
0.64
0.16
0.10
0.17
0.27
0.09
–0.34
–0.30
–0.60
–0.25
–0.22
–0.64
0.14
0.24
0.12
0.02
0.06
0.36
1.11
0.27
0.02
0.06
8.1
11.7
13.4
10.8
13.3
–2.1
16.3
13.0
–1.8
8.7
10.7
12.5
5.3
4.0
8.9
28.7
22.1
13.5
16.3
22.9
16.0
Global X Robotics AI
BOTZ
7,640.6
23.42
0.03
0.13
23.42
23.05
General Electric
GE
4,978.9
22.21
-0.11
-0.49
22.85
22.10
4,724.0
23.14
…
unch.
23.18
23.04
CMCSA 4,273.2
36.52
-0.03
-0.08
36.84
36.43
PwrShrs QQQ Tr Series 1 QQQ
3,596.6 147.67
-0.07
-0.05 148.71 147.55
Intel
INTC
2,423.1
40.88
0.05
0.12
41.00
40.43
iPath S&P 500 VIX ST Fut VXX
2,299.5
35.05
0.20
0.57
35.33
34.79
VanEck Vectors Gold Miner GDX
Comcast Cl A
0.07
0.03 257.29 255.96
Percentage gainers…
Knoll
KNL
22.9
22.25
2.25
11.25
22.50
20.00
Impax Laboratories
IPXL
43.5
21.40
1.05
5.14
22.60
20.35
67.4
2.91
0.10
3.56
3.00
2.74
7.5
86.50
2.89
3.46
86.50
83.61
6.6
3.00
0.09
3.09
3.09
2.93
57.7
4.20
-1.00
-19.23
5.20
4.20
9.6
35.50
-6.79
-16.06
42.30
34.07
Tandem Diabetes Care TNDM
Crane Co
CR
Destination Maternity DEST
...And losers
IMDZ
HNI Cp
HNI
-29.5 -19.3
Whirlpool Corp
WHR
36.5 26.9
-21.2 -12.5
Scorpio Bulkers
SALT
8.6
8.20
-0.50
-5.75
8.70
8.20
uniQure
QURE
89.0
17.70
-0.82
-4.43
18.60
17.35
Company
Symbol
Exactech
Aimmune Therapeutics
HTG Molecular Diagnostics
PetMed Express
ReneSola ADR
EXAC
343.8 170.98 -11.52
-6.31 184.00 166.02
Destination Maternity
KalVista Pharmaceuticals
Seagate Technology
Fuling Global
BeyondSpring
DEST
U.S. Global Investors A
Veritone
Tandem Diabetes Care
Netshoes (Cayman)
Chicken Soup Soul Ent A
GROW
HTGM
PETS
SOL
KALV
STX
FORK
BYSI
VERI
TNDM
NETS
CSSE
High
52-Week
Low
% chg
Symbol
General Electric
Bank of America
SPDR S&P 500
Advanced Micro Devices
Weatherford International
GE
iShares MSCI Emg Markets
Finl Select Sector SPDR
Dextera Surgical
Eldorado Gold
Seagate Technology
EEM
SPY
AMD
WFT
30.78
28.37
23.56
18.15
17.11
42.55 22.20
37.50 14.87
13.25 1.20
50.90 18.90
5.04 2.12
55.0
94.7
14.9
119.4
-43.7
DBV Technologies ADR
Eldorado Gold
Qudian ADR
Aytu BioScience
Helios Matheson Analy
DBVT
2.91
13.02
39.35
4.55
32.50
0.42
1.76
4.41
0.50
3.51
16.87
15.63
12.62
12.35
12.11
8.42 1.02
15.80 5.48
50.96 30.60
6.00 1.70
48.49 16.55
-60.6
78.8
14.0
122.0
...
Aqua Metals
PAVmed
Dragon Victory Intl
Social Reality Cl A
MiMedx Group
AQMS
2.43
39.64
2.81
11.27
7.82
0.25
3.97
0.28
1.09
0.66
11.47
11.13
11.07
10.71
9.22
2.75
74.92
68.00
26.96
13.26
51.9
...
-95.8
...
...
Digital Ally
Myomo
Chanticleer Holdings
RumbleON Cl B
Arconic
DGLY
1.25
7.76
2.27
9.92
6.79
DXTR
EGO
STX
A consumer rate against its
benchmark over the past year
New car loan
Volume % chg from Latest Session
(000) 65-day avg Close % chg
297.0
5.3
-14.0
-14.7
198.5
22.32
27.16
256.11
14.10
3.40
-6.34
-0.04
-0.39
2.10
-3.95
52-Week
High
Low
32.38 22.10
27.43 16.28
257.51 208.38
15.65
6.22
7.09
3.26
-2.9 45.89 -0.80
-16.5 26.62 -0.08
713.0 0.22 17.84
506.6 1.55 -28.57
512.2 39.35 12.62
46.82
26.70
2.33
3.91
50.96
33.94
19.40
0.11
1.55
30.60
4.00%
3.50
3.00
t
t
2.00
1.89%
800-288-3425
Hilltop National Bank
Casper, WY
2.24%
307-265-2740
TrustCo Bank
Orlando, FL
2.37%
407-422-7129
Lake City Bank
Warsaw, IN
2.49%
888-522-2265
Cambridge Savings Bank
2.59%
Cambridge, MA
888-418-5626
3.00
Monday
One year ago
1
3 6
month(s)
1 2 3 5 710
years
maturity
10%
WSJ Dollar index
5
2.25
0
1.50
–5
0.75
–10
0.00
–15
30
s
Euro
s Yen
Federal-funds rate target
1.00-1.25 1.00-1.25
Prime rate*
4.25
4.25
Libor, 3-month
1.35
1.37
Money market, annual yield
0.32
0.32
Five-year CD, annual yield
1.46
1.47
30-year mortgage, fixed†
3.86
3.93
15-year mortgage, fixed†
3.15
3.24
Jumbo mortgages, $424,100-plus† 4.31
4.33
Five-year adj mortgage (ARM)† 3.57
3.39
New-car loan, 48-month
3.07
3.01
HELOC, $30,000
5.22
5.20
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
2.81
l
4.23
l
3.13
l
2.85
l
4.57
1.25
4.25
1.37
0.36
1.47
4.33
3.50
4.88
4.03
3.36
5.30
1.00
1.00
1.13
-0.10
-0.04
-0.06
0.11
0.04
0.10
-0.21
0.76
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
Corporate Borrowing Rates and Yields
Bond total return index
Close
Yield (%)
Last Week ago
52-Week
High
Low
Total Return (%)
52-wk
3-yr
1456.556
2.127
2.078
2.237
1.482 –1.778 1.820
10-yr Treasury, Ryan ALM 1728.943
DJ Corporate
379.729
Aggregate, Barclays Capital 1937.810
High Yield 100, Merrill Lynch 2872.977
Fixed-Rate MBS, Barclays 1984.410
Muni Master, Merrill
522.729
2.375
3.034
2.600
5.046
2.880
1.907
2.309
3.004
2.560
5.154
2.800
1.890
2.609
3.390
2.790
6.448
3.120
2.516
1.758
2.654
2.060
4.948
2.190
1.677
1.296
2.034
0.391
7.296
0.314
2.104
804.200
5.459
5.413
6.290
5.279
4.438 5.783
Treasury, Ryan ALM
EMBI Global, J.P. Morgan
AYTU
HMNY
PAVM
LYL
SRAX
MDXG
MYO
HOTR
RMBL
ARNC
High
52-Week
Low
% chg
28.32 -19.75 -41.09
1.55 -0.62 -28.57
26.59 -6.41 -19.42
4.57 -1.08 -19.10
13.30 -2.98 -18.30
50.57 22.33
3.91 1.55
35.45 26.30
6.82 0.17
38.86 2.20
-19.8
-56.6
...
173.7
35.7
-52.3
-61.5
...
-40.8
42.8
4.41
4.56
11.50
3.80
12.32
-0.96
-0.89
-2.17
-0.68
-1.58
-17.88
-16.33
-15.87
-15.18
-11.37
22.75
12.12
14.99
7.00
17.47
2.35
2.89
2.32
4.61
24.35
-0.30
-0.36
-0.27
-0.54
-2.82
-11.32
-11.08
-10.55
-10.49
-10.38
6.45 2.15 -63.3
23.20 2.74
...
9.00 1.90 -50.6
10.00 3.40 1781.6
30.69 16.75
20.7
4.36
2.54
6.00
1.11
7.64
Ranked by change from 65-day average*
Company
Symbol
Exactech
PIMCO 1-3 US Trea Idx
DBV Technologies ADR
BroadSoft
Aimmune Therapeutics
EXAC
FT Asia Pacific ex Japan
Global X MSCI Norway ETF
RumbleON Cl B
Xunlei ADR
Deltic Timber
FPA
Country/currency
TUZ
DBVT
BSFT
AIMT
NORW
RMBL
XNET
DEL
Volume % chg from Latest Session
(000) 65-day avg Close % chg
52-Week
High
Low
2,948
701
13,112
15,807
8,298
9680
9264
6503
4158
2971
41.85 30.78
50.55 -0.02
28.32 -41.09
54.80 1.67
32.94 28.37
42.55
51.58
50.57
54.90
37.50
141
1,785
184
4,136
694
1651
1566
1312
1277
1071
34.72 0.43
13.56 -0.88
4.61 -10.49
6.11 -7.14
92.77 4.10
34.83 26.99
13.86 10.63
10.00 3.40
7.39 3.11
96.65 53.21
US$vs,
YTDchg
Mon
in US$ per US$ (%)
Americas
Argentina peso
.0574 17.4120
Brazil real
.3088 3.2379
Canada dollar
.7907 1.2648
Chile peso
.001578 633.60
Colombia peso
.0003390 2950.22
Ecuador US dollar
1
1
Mexico peso
.0524 19.0814
Peru new sol
.3088 3.239
Uruguay peso
.03381 29.5800
Venezuela b. fuerte .100100 9.9901
1.638
3.846
2.298
4.220
2.054
2.710
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Australian dollar
.7808 1.2807
China yuan
.1506 6.6401
Hong Kong dollar
.1282 7.8004
India rupee
.01537 65.050
Indonesia rupiah .0000739 13538
Japan yen
.008816 113.43
Kazakhstan tenge .002977 335.93
Macau pataca
.1242 8.0524
Malaysia ringgit
.2359 4.2385
New Zealand dollar
.6966 1.4355
Pakistan rupee
.00950 105.300
Philippines peso
.0194 51.486
Singapore dollar
.7343 1.3619
South Korea won .0008843 1130.83
Sri Lanka rupee
.0065058 153.71
Taiwan dollar
.03305 30.257
22.20
50.17
22.33
33.85
14.87
9.7
–0.5
–5.9
–5.4
–1.7
unch
–8.0
–3.4
0.8
–0.1
Track the Markets
Compare the performance of selected global stock
indexes, bond ETFs, currencies and commodities at
WSJ.com/TrackTheMarkets
–7.8
–4.4
0.6
–4.3
0.1
–3.1
0.7
1.7
–5.5
–0.6
0.9
3.8
–5.9
–6.4
3.6
–6.8
US$vs,
YTDchg
Mon
in US$ per US$ (%)
Country/currency
.03014 33.180 –7.3
.00004401 22724 –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
.04579 21.837 –15.0
.1578 6.3356 –10.4
1.1751 .8510 –10.5
.003813 262.25 –10.9
.009471 105.58 –6.5
.1250 8.0016 –7.4
.2780 3.5978 –14.1
.01739 57.511 –6.1
.1220 8.2000 –10.0
1.0151 .9851 –3.3
.2691 3.7163 5.5
.0376 26.5800 –1.9
1.3197 .7577 –6.5
Middle East/Africa
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6521 .3771 –0.03
.0567 17.6425 –2.7
.2862 3.4939 –9.2
3.3091 .3022 –1.1
2.5987 .3848 –0.04
.2644 3.782 3.9
.2666 3.7504 –0.01
.0730 13.7062 0.1
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 87.09
0.10 0.11 –6.29
Sources: Tullett Prebon, WSJ Market Data Group
Commodities
COMMODITIES
Monday
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
QD
Latest Session
Close Net chg % chg
Asia-Pacific
2016 2017
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Yield/Rate (%)
Last (l)Week ago
* 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.
U.S.-dollar foreign-exchange rates in late New York trading
Yen, euro vs. dollar; dollar vs.
major U.S. trading partners
t
2.50
Think Mutual Bank
Rochester, MN
NYSE Arca
Currencies
Forex Race
3.75%
3.01%
Nasdaq
Total volume*1,789,320,304 192,310,586
Adv. volume* 731,300,266 48,197,838
Decl. volume*1,037,052,834 143,246,281
Issues traded
3,040
1,290
Advances
947
405
Declines
1,951
857
Unchanged
142
28
New highs
172
269
New lows
39
36
Closing tick
379
111
Closing Arms†
0.69
1.14
Block trades*
7,256
981
* 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
* Volumes of 100,000 shares or more are rounded to the nearest thousand
notes and bonds
Bankrate.com avg†:
EGO
Volume Movers
46,730
42,767
37,187
36,972
33,476
XLF
Symbol
9.85
7.28
0.53
6.67
0.40
182,309
68,133
54,025
49,330
47,938
BAC
Company
41.85
32.94
2.78
43.41
2.76
Most Active Stocks
Company
Total volume* 756,321,238 10,697,320
Adv. volume* 183,368,418 2,333,825
Decl. volume* 557,034,567 8,178,940
Issues traded
3,070
328
Advances
1,011
99
Declines
1,928
214
Unchanged
131
15
New highs
203
1
New lows
53
14
Closing tick
263
9
Closing Arms†
1.65
1.19
Block trades*
6,470
96
Percentage Losers
Latest Session
Close Net chg % chg
AIMT
t
Selected rates
WSJ
.COM
Low
9,854.6 256.18
s
U.S. consumer rates
Interest rate
After Hours
% chg
High
Immune Design
Benchmark
Yields
Treasury
yield
curve
andtoRates
Yield
maturity of current bills,
Consumer Rates and Returns to Investor
N D J FMAM J J A S O
2016 2017
Net chg
SPY
CREDIT MARKETS & CURRENCIES
New car loan
Last
SPDR S&P 500
Sources: SIX Financial Information; WSJ Market Data Group
Prime rate
NYSE NYSE Amer.
Most-active issues in late trading
Percentage Gainers...
Latest
% chg
Net chg
2961.39
382.82
258.13
The Global Dow
DJ Global Index
DJ Global ex U.S.
Americas
Brazil
Canada
Mexico
Chile
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.
Sources: SIX Financial Information; WSJ Market Data Group
International Stock Indexes
World
Late Trading
TR/CC CRB Index
Crude oil, $ per barrel
Natural gas, $/MMBtu
Gold, $ per troy oz.
596.68
2.34
184.71
51.90
2.991
1277.70
0.59
0.06
0.076
0.30
0.39
600.13
527.06
0.32 195.14
54.45
0.12
3.93
2.61
0.02 1346.00
166.50
42.53
2.56
1127.80
% Chg
10.17
YTD
% chg
5.19
-2.50 -4.05
2.73 -3.39
5.65 -19.68
1.24 11.10
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.
Tuesday, October 24, 2017 | B9
COMMODITIES
Futures Contracts
Open
Metal & Petroleum Futures
Contract
Open
High hi lo
Low
Settle
Chg
Copper-High (CMX)-25,000 lbs.; $ per lb.
Oct
3.1450
3.1750
3.1450
3.1740 0.0225
Dec
3.1700
3.1895
3.1520
3.1880 0.0225
Gold (CMX)-100 troy oz.; $ per troy oz.
Oct
1274.70 1280.80
1271.50 1277.70
0.30
Dec
1281.50 1284.70
1273.60 1280.90
0.40
Feb'18
1283.40 1288.30
1277.70 1285.10
0.50
April
1285.00 1291.00
1281.90 1288.90
0.40
June
1288.60 1295.70
1285.70 1292.90
0.60
Dec
1301.00 1308.00
1298.30 1305.20
0.80
Palladium (NYM) - 50 troy oz.; $ per troy oz.
Oct
985.00
985.00 s t 985.00
951.05 –19.90
Dec
973.15
973.15
948.45
949.95 –19.90
March'18 959.70 960.35
941.20
941.25 –20.05
Platinum (NYM)-50 troy oz.; $ per troy oz.
Oct
921.10
925.10
917.50
924.50
0.40
Jan'18
925.30
929.30
916.00
927.20
0.40
Silver (CMX)-5,000 troy oz.; $ per troy oz.
Oct
16.920
16.920
16.870
17.024 0.002
Dec
17.035
17.130
16.870
17.075 –0.003
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl.
Dec
52.07
52.30
51.68
51.90
0.06
Jan'18
52.29
52.48
51.86
52.08
0.04
Feb
52.33
52.61
51.98
52.19
0.02
March
52.46
52.67
52.05
52.26
…
June
52.48
52.58
52.00
52.18 –0.05
Dec
51.77
51.84
51.27
51.43 –0.10
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal.
Nov
1.8107
1.8146
1.7857
1.7878 –.0174
Dec
1.8103
1.8155
1.7874
1.7896 –.0158
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal.
Nov
1.6841
1.6915 s
1.6725
1.6783 .0002
Dec
1.6498
1.6550 s
1.6337
1.6390 –.0045
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
Nov
3.001
3.017
2.948
2.991
.076
Dec
3.180
3.198
3.127
3.156
.043
Jan'18
3.300
3.316
3.254
3.280
.039
Feb
3.305
3.321
3.257
3.284
.035
March
3.264
3.279
3.213
3.240
.032
April
3.010
3.010 s
2.975
2.992
.013
Contract
High hilo
Low
Settle
Open
interest
Chg
Agriculture Futures
Open
interest
Corn (CBT)-5,000 bu.; cents per bu.
Dec
344.25
351.75
343.00
351.25
6.75 792,898
March'18 358.25 365.75
357.00
365.25
6.75 300,109
Oats (CBT)-5,000 bu.; cents per bu.
Dec
268.50
275.00
266.75
273.50
3.75
4,947
March'18 271.25 275.00
270.75
274.75
3.50
1,746
Soybeans (CBT)-5,000 bu.; cents per bu.
Nov
977.00
982.75
975.00
980.75
2.00 219,793
Jan'18
987.50
993.25
985.50
991.00
1.75 251,660
Soybean Meal (CBT)-100 tons; $ per ton.
Dec
316.50
317.90
315.00
315.90 –1.20 144,933
Jan'18
318.70
320.00
317.30
318.00 –1.30 88,764
Soybean Oil (CBT)-60,000 lbs.; cents per lb.
Dec
34.16
34.65
34.04
34.63
.47 170,384
Jan'18
34.32
34.79
34.21
34.77
.46 98,987
Rough Rice (CBT)-2,000 cwt.; $ per cwt.
Nov
1210.00 1210.00
1197.00 1197.50 –10.00
3,922
Jan'18
1239.50 1240.00
1228.00 1228.00 –10.50
5,908
Wheat (CBT)-5,000 bu.; cents per bu.
Dec
426.25
438.25
423.75
436.75 10.75 272,808
March'18 445.00 456.25
t 442.50
455.00 10.50 107,810
Wheat (KC)-5,000 bu.; cents per bu.
Dec
422.50
434.75
421.25
433.50 10.75 147,088
March'18 440.50 452.50
439.25
451.50 10.75 83,798
Wheat (MPLS)-5,000 bu.; cents per bu.
Dec
610.00
620.00
609.25
615.00
3.75 35,985
March'18 624.25 632.50
622.25
627.75
3.50 24,222
Cattle-Feeder (CME)-50,000 lbs.; cents per lb.
Oct
152.025 153.700
151.650 153.625
…
3,676
Jan'18
148.350 151.400
148.175 150.875 –.450 22,526
Cattle-Live (CME)-40,000 lbs.; cents per lb.
Oct
110.750 112.250
110.675 111.525 –.150
4,272
Dec
115.050 117.375
115.000 116.750
.150 141,978
Hogs-Lean (CME)-40,000 lbs.; cents per lb.
Dec
64.900
65.325
63.450
63.525 –1.325 116,461
Feb'18
68.650
69.450 s
68.100
68.225 –.875 48,730
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft.
Nov
424.10
437.50 s
424.10
435.60
8.10
3,117
Jan'18
416.70
428.90 s
416.50
428.50
9.60
3,273
Milk (CME)-200,000 lbs., cents per lb.
Oct
16.61
16.62
16.61
16.61
.01
3,787
Nov
15.85
16.00
15.74
15.98
.26
4,581
944
175,739
686
398,173
71,979
15,451
12,766
10,707
1
30,528
3,464
52
68,719
233
143,585
608,176
299,750
126,950
238,393
198,710
256,908
48,067
112,208
58,498
141,382
75,253
270,968
200,877
81,636
173,661
125,522
Cash Prices | WSJ.com/commodities
Monday, October 23, 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.
Monday
Monday
16.9950
12872
(U.S.$ equivalent)
Coins,wholesale $1,000 face-a
Energy
0.9310
1.0525
2.940
2.890
2.880
2.680
2.810
0.950
2.860
55.500
11.750
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
Metals
Other metals
LBMA Platinum Price PM
*919.0
Platinum,Engelhard industrial
916.0
Platinum,Engelhard fabricated
1016.0
Palladium,Engelhard industrial
970.0
Palladium,Engelhard fabricated
1070.0
Aluminum, LME, $ per metric ton
*2159.0
Copper,Comex spot
3.1740
Iron Ore, 62% Fe CFR China-s
60.3
Shredded Scrap, US Midwest-s,w
286
Steel, HRC USA, FOB Midwest Mill-s
n.a.
Fibers and Textiles
Gold, per troy oz
1276.82
1372.58
1274.90
1415.13
*1280.25
*1281.20
1331.10
1343.90
1343.90
1551.18
1257.56
1343.90
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
Silver, troy oz.
16.9200
20.3040
16.9850
21.2310
£12.9000
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA spot price
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
0.6972
*77.60
n.a.
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
n.a.
71
3.1750
80.8
467.8
228
86
228
2.9850
374.00
24.00
7.8350
Monday
312.40
9.3650
7.5500
4.2350
3.6550
5.3500
SoybeanMeal,Cent IL,rail,ton48%-u
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
Food
Beef,carcass equiv. index
choice 1-3,600-900 lbs.-u
select 1-3,600-900 lbs.-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
176.27
167.08
0.8421
2.3200
166.00
171.25
75.50
2400
1.2375
1.4315
0.8850
15.20
0.77
65.11
n.a.
0.9459
111.00
162.00
Fats and Oils
34.5500
0.2300
n.a.
0.3326
0.2500
0.3100
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
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 10/20
Source: WSJ Market Data Group
October 23, 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.
Week
Latest ago
Sept. index
level
Chg From (%)
Aug. '17 Sept. '16
246.819
252.941
0.53
0.19
2.2
1.7
International rates
Latest
Week
ago
52-Week
High
Low
4.25 4.25 4.25 3.50
3.20 3.20 3.20 2.70
1.475 1.475 1.475 1.475
Policy Rates
Euro zone
Switzerland
Britain
0.00
0.50
0.25
0.00
0.50
0.25
1.50
1.50
0.00
0.50
0.25
1.19
1.20
U.S.
1.38
U.S. government rates
0.00
0.50
0.25
1.105 1.090 1.180 0.340
1.245 1.240 1.245 0.475
13 weeks
26 weeks
Secondary market
1.75
1.75
1.00
Federal funds
1.1700
1.3125
1.0500
1.1600
1.1700
1.1700
1.3125
1.0300
1.1600
1.1700
1.2000
1.3125
1.1600
1.1700
1.1900
0.3500
0.5625
0.2400
0.3000
0.3200
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.
Federal funds (effective)
1.16
1.16
0.40
1.12
1.17
1.19
1.14
1.17
1.22
0.40
0.50
0.56
Commercial paper
Nonfinancial
1-month
2-month
3-month
Financial
1-month
2-month
3-month
1.14
1.17
1.21
1.18
1.22
1.28
1.15
1.20
1.26
1.19
1.22
1.28
0.44
0.57
0.66
Discount window primary credit
1.75
1.75
1.75
1.00
n.a.
n.a.
Conventional mortgages
n.a.
n.a.
Treasury yields at constant
maturities
1-month
3-month
6-month
1-year
2-year
3-year
5-year
7-year
10-year
20-year
0.99
1.10
1.25
1.42
1.57
1.70
1.98
2.18
2.33
2.61
1.01
1.09
1.26
1.41
1.51
1.65
1.94
2.16
2.33
2.62
52-Week
High
Low
Treasury yields (secondary market)
1.16
1.07
1.13
1.26
1.42
1.57
1.70
2.08
2.37
2.55
2.91
0.21
0.32
0.47
0.64
0.82
0.97
1.25
1.54
1.76
2.17
1-month
3-month
6-month
0.96
1.08
1.23
0.99
1.07
1.24
1.05
1.11
1.24
0.21
0.32
0.47
0.29
0.44
0.49
0.74
0.79
0.19
0.37
0.45
0.74
0.78
0.29
0.49
0.63
0.97
0.97
-0.30
-0.13
0.08
0.48
0.51
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
1.41
1.59
1.94
TIPS
5-year
7-year
10-year
20-year
Long-term avg
Interest rate swaps
1-year
2-year
3-year
4-year
5-year
7-year
10-year
30-year
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Corporate bonds, Moody's seasoned
Aaa
Baa
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Week
ago
Latest
118,802
60,069
430,183
126,384
2,538
829
118,426
72,879
1,600
5,310
Currency Futures
Japanese Yen (CME)-¥12,500,000; $ per 100¥
Nov
.8795
.8829
t
.8773
.8801 –.0017
Contract
High hilo
Low
Open
Settle
Chg
Open
interest
Dec
.8809
.8852
.8785
.8814 –.0017 265,614
Nov
Dec
.7914
.7921
.7928
.7931
.7901
.7901
.7912 –.0010
568
.7913 –.0010 175,232
Nov
Dec
1.3200
1.3210
1.3234
1.3249
1.3173
1.3179
1.3209
1.3221
Dec
March'18
1.0187
1.0255
1.0206
1.0274
1.0156
1.0226
1.0171 –.0019
1.0241 –.0019
.7817
.7811
.7804
.7812
.7801
.7870
.7831
.7829
.7827
.7824
.7823
.7870
.7796
.7791
.7791
.7789
.7787
.7865
Canadian Dollar (CME)-CAD 100,000; $ per CAD
British Pound (CME)-£62,500; $ per £
Swiss Franc (CME)-CHF 125,000; $ per CHF
.0008
918
.0008 178,601
Australian Dollar (CME)-AUD 100,000; $ per AUD
Nov
Dec
Jan'18
Feb
March
June
t
.7805
.7801
.7800
.7797
.7795
.7790
Mexican Peso (CME)-MXN 500,000; $ per MXN
.05210
.05224
Dec
March'18 .05142 .05194
Euro (CME)-€125,000; $ per €
1.1787
1.1789
Nov
Dec
1.1808
1.1812
59,254
171
–.0008
1,179
–.0008 134,268
–.0008
486
–.0008
335
–.0008
672
–.0008
242
.05182
.05123
.05185 –.00027 182,543
.05109 –.00028
598
1.1739
1.1760
1.1751 –.0042
6,098
1.1773 –.0042 430,428
Index Futures
Mini DJ Industrial Average (CBT)-$5 x index
Dec
March'18
23302
23278
23320 s
23303 s
23214
23205
2575.00
2576.90 s
2562.20
S&P 500 Index (CME)-$250 x index
Dec
Mini S&P 500 (CME)-$50 x index
23228
23213
–49 156,147
–50
1,453
2563.40 –10.60
58,855
2572.75 2577.25 s
2562.00 2563.50 –10.50 3,086,207
Dec
March'18 2573.50 2577.25 s 2562.00 2563.75 –10.75 38,137
Mini S&P Midcap 400 (CME)-$100 x index
1833.50 1837.00 s
1823.30 1824.20 –9.30 92,047
Dec
Mini Nasdaq 100 (CME)-$20 x index
6109.5
6128.0
6060.5
6064.8 –46.3 275,492
Dec
March'18 6125.0 6137.8
6074.0
6077.3 –46.3
1,115
Mini Russell 2000 (ICE-US)-$100 x index
1509.10 1513.10
1496.40 1497.50 –13.00 63,756
Dec
Mini Russell 1000 (ICE-US)-$100 x index
1427.10 1427.30 s
1420.80 1420.80 –4.70
258
Dec
U.S. Dollar Index (ICE-US)-$1,000 x index
93.64
93.90
93.56
93.81
.23 47,791
Dec
March'18
93.49
93.57
93.27
93.52
.23
1,931
Source: SIX Financial Information
2,427
Bonds | WSJ.com/bonds
Tracking Bond Benchmarks
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
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
3.1
1937.81
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
Mortgage-Backed Bloomberg Barclays
Broad Market Bloomberg Barclays
2.600 2.060 2.790
U.S. Aggregate
U.S. Corporate Indexes Bloomberg Barclays
1984.41
2.2
Mortgage-Backed
1952.56
1.7
Ginnie Mae (GNMA) 2.840 2.080 3.090
2.880 2.190 3.120
3.160 2.890 3.520
1163.42
2.4
Fannie mae (FNMA) 2.900 2.240 3.120
3.9 Intermediate
2.690 2.320 3.010
1792.09
2.5
Freddie Mac (FHLMC) 2.910 2.250 3.130
3831.78
9.0 Long term
4.160 4.110 4.710
522.73
4.8
Muni Master
1.907 1.677 2.516
566.62
4.0 Double-A-rated
2.630 2.250 2.870
365.78
5.3
7-12 year
1.934 1.674 2.618
3.440 3.250 3.870
410.03
6.3
12-22 year
2.345 2.114 3.047
395.06
6.4
22-plus year
2.851 2.567 3.622
5.5
2776.27
2621.88
U.S. Corporate
6.2
717.10
Triple-B-rated
High Yield Bonds Merrill Lynch
7.6
418.22
High Yield Constrained 5.376 5.376 6.858
541.79
5.046 4.948 6.448
751.90
Global High Yield Constrained 4.937 4.937 6.450
369.60
Europe High Yield Constrained 2.121 2.121 3.814
708.15
7.1
High Yield 100
379.42
7.7
6.8
306.40
Global Government J.P. Morgan†
10.203 9.584 13.189
9.0 Triple-C-rated
419.16
2872.98
U.S Agency Bloomberg Barclays
0.9
Global Government 1.460 1.020 1.560
-0.2
Canada
2.090 1.390 2.190
0.2
EMU§
1.135 0.692 1.363
0.2
France
0.880 0.430 1.210
507.99
-1.3
Germany
0.480 0.090 0.620
1638.12
2.0
U.S Agency
1.970 1.330 1.980
287.15
-0.4
Japan
0.430 0.170 0.460
1466.01
1.3
10-20 years
1.800 1.140 1.810
560.24
-1.1
Netherlands
0.620 0.200 0.760
3341.83
6.9
20-plus years
2.970 2.640 3.460
916.68
U.K.
1.620 1.340 1.790
2.800 2.430 3.090
804.20
4.7 Yankee
2454.61
0.4
8.8 Emerging Markets ** 5.459 5.279 6.290
*Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds
** EMBI Global Index
† In local currency § Euro-zone bonds
Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan
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
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
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
Country/
Coupon (%) Maturity, in years
1.375
2.250
52-Week
high
low
0.100
2.750
Call money
3.00
3.00
2.25
Spread Under/Over U.S. Treasurys, in basis points
Latest
Prev
Year ago
1.572
2.385
1.435
2.255
0.828
1.738
1.952 s
2.808 s
l
1.949
1.973
1.671
37.9
37.6
l
2.789
2.802
2.298
43.3
40.4
56.1
France 2 -0.527 t
10 0.713 t
l
-0.523
-0.472
-209.5
-144.1
l
0.736
0.733
-0.614 -210.0
0.280
-166.3
-164.9
-145.7
Germany 2 -0.717 t
10 0.436 t
l
-0.717
-0.673
-228.9
-148.4
l
0.455
0.449
-0.656 -229.0
0.007 -194.0
-193.0
-173.1
Italy 2 -0.162 t
10 2.008 t
l
-0.147
-0.114
-0.077
-173.5
-171.9
-90.5
l
2.046
2.103
1.371
-36.8
-33.9
-36.7
Japan 2 -0.134 s
10 0.070 t
l
-0.138
-0.130
-0.254
-170.6
-171.0
-108.2
l
0.073
0.028
-0.053 -230.6
-231.2
-179.1
Spain 2 -0.287 t
10 1.623 t
l
-0.278
-0.321
-0.208
-186.0
-185.0
-103.5
l
1.662
1.619
1.105
-75.3
-72.3
-63.2
0.440 t
1.315 t
l
0.444
0.438
0.244
-113.3
-112.8
-58.4
l
1.331
1.357
0.987
-106.1
-105.4
-75.0
10
2.050
Year ago
l
Australia 2
0.050
Month ago
l
2.750
0.000
Yield (%)
Latest(l) 0 20 40 60 80 100 120 Previous
U.S. 2 1.573 s
10 2.376 t
2.750
1.450
1.750
U.K. 2
4.250
10
Commercial paper (AA financial)
1.30
1.26
1.30
84.3
Source: Tullett Prebon
0.62
Corporate Debt
in that same company’s share price.
1.23788 1.23666 1.23889 0.53044
1.36742 1.35389 1.36742 0.87567
One month
Three month
Six month
1.56078 1.53316 1.56078 1.24267
1.83511 1.80956 1.83511 1.55622
One year
Euro Libor
-0.405 -0.405 -0.376 -0.405
-0.379 -0.375 -0.319 -0.381
-0.315 -0.312 -0.212 -0.317
One month
Three month
Six month
One year
-0.220 -0.230 -0.071 -0.230
Euro interbank offered rate (Euribor)
One month
Three month
Six month
-0.373 -0.371 -0.366 -0.375
-0.329 -0.329 -0.311 -0.332
-0.274 -0.274 -0.210 -0.275
One year
-0.183 -0.182 -0.069 -0.183
Latest
Value
Traded
52-Week
High
Low
DTCC GCF Repo Index
Treasury
MBS
n.a.
n.a.
State and local bonds
1 month
3 month
6 month
97,997
93,615
Dec
152-030 152-200
151-280 152-110
5.0 746,705
March'18 150-230 151-120
150-230 151-050
5.0
220
Treasury Notes (CBT)-$100,000; pts 32nds of 100%
124-250 125-000
124-230 124-295
3.0 3,049,567
Dec
March'18 124-140 124-220
124-130 124-190
3.5 11,559
5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
117-025 117-070
117-015 117-057
2.7 2,980,932
Dec
2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
107-215 107-230
107-210 107-227
1.2 1,717,493
Dec
March'18 107-157 107-177
107-157 107-175
1.5
2,115
30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg.
98.848
98.848
98.845
98.845
… 233,238
Oct
Jan'18
98.635
98.640
t 98.630
98.635 –.005 354,158
10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
100.781 100.938
100.750 100.844
.078 28,796
Dec
1 Month Libor (CME)-$3,000,000; pts of 100%
98.7625 98.7625
98.7625 98.7575
…
828
Nov
Dec
98.5800 98.5825
t 98.5800 98.5675
…
2,264
Eurodollar (CME)-$1,000,000; pts of 100%
98.5825 98.5900
98.5825 98.5875 .0025 102,329
Nov
Dec
98.4950 98.4950
98.4900 98.4950 .0050 1,833,564
March'18 98.3550 98.3650
98.3450 98.3600 .0100 1,280,648
Dec
98.0600 98.0850
98.0450 98.0750 .0200 1,599,330
0.100
Libor
Week Ended
Oct 20 Oct 13
Open
interest
Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
0.500
Other short-term rates
3.00
0.995 1.015 1.300 0.240
Key Interest Rates
52-Week
High
Low
Chg
Interest Rate Futures
0.000
3.483 3.406 3.865 2.960
3.507 3.429 3.899 2.990
30 days
60 days
Treasury bill auction
4 weeks
Settle
Cocoa (ICE-US)-10 metric tons; $ per ton.
Dec
2,134
2,147
2,105
2,124
–14
March'18
2,129
2,140
2,102
2,120
–12
Coffee (ICE-US)-37,500 lbs.; cents per lb.
Dec
125.10
126.50
123.85
124.35
–.90
March'18 129.00 130.20
127.60
128.10
–.90
Sugar-World (ICE-US)-112,000 lbs.; cents per lb.
March
14.02
14.12
13.84
13.88
–.12
May
14.10
14.19
13.95
14.00
–.11
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb.
March
26.99
27.00
26.95
26.97
–.03
July
27.02
27.02
27.00
27.01
.10
Cotton (ICE-US)-50,000 lbs.; cents per lb.
Dec
66.89
69.79
66.89
69.72
2.84
March'18
66.83
69.25
66.83
69.19
2.42
Orange Juice (ICE-US)-15,000 lbs.; cents per lb.
Nov
155.70
159.05
151.70
152.75 –3.25
Jan'18
154.90
157.00
151.80
152.95 –2.25
2.750
Fannie Mae
90 days
Week Ended
Oct 20 Oct 13
—52-WEEK—
High Low
30-year mortgage yields
1.75
Effective rate
High
Low
Bid
Offer
Week
Latest ago
0.15
Discount
Prime rates
U.S.
Canada
Japan
—52-WEEK—
High Low
Overnight repurchase
U.S. consumer price index
All items
Core
1.50
1.50
Australia
Contract
High hilo
Low
Open
Global Government Bonds: Mapping Yields
Borrowing Benchmarks | WSJ.com/bonds
Money Rates
Inflation
WSJ.com/commodities
1.177
1.203
46.510 1.366 0.244
88.130 1.506 0.257
Open Implied
Settle Change Interest Rate
DTCC GCF Repo Index Futures
Treasury Oct
Treasury Nov
Treasury Dec
98.850 0.005 4712 1.150
98.850 unch. 6026 1.150
98.720 unch. 2002 1.280
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.
Investment-grade spreads that tightened the most…
Spread*, in basis points
One-day change
Stock Performance
Close ($)
% chg
Issuer
Symbol Coupon (%)
Tech Data
Kraft Heinz Foods
Royal Bank of Scotland
Royal Bank of Canada
TECD
KHC
RBS
RY
4.950
2.800
8.625
2.150
Feb. 15, ’27
July 2, ’20
Aug. 15, ’49
Oct. 26, ’20
186
36
196
33
–16
–15
–11
–11
206
52
239
n.a.
90.35
…
7.41
80.19
–1.72
…
–1.20
–0.09
Enel Finance International NV*
General Motors
Deutsche Bank AG*
Delphi Automotive
ENELIM
GM
DB
DLPH
2.875
4.875
4.500
3.150
May 25, ’22
Oct. 2, ’23
April 1, ’25
Nov. 19, ’20
65
116
193
58
–10
–9
–8
–8
70
126
199
65
...
45.15
16.63
97.77
...
–1.01
–2.06
0.96
–88
310
n.a.
37
99.34
14.13
…
…
–0.17
–0.70
…
…
n.a.
22
n.a.
32
6.43
145.92
...
...
–4.03
0.39
...
...
Maturity
Current
Last week
…And spreads that widened the most
JPMorgan Chase
Pitney Bowes
US Bank NA
GE Capital Intl Funding Unlimited
JPM
PBI
USB
GE
7.900 April 30, ’49
4.625 March 15, ’24
2.050 Oct. 23, ’20
2.342 Nov. 15, ’20
–88
284
30
40
Nabors Industries
Honeywell International
Reckitt Benckiser Treasury Services
Santander UK
NBR
HON
RBLN
SANUK
4.625 Sept. 15, ’21
1.400 Oct. 30, ’19
2.375 June 24, ’22
2.375 March 16, ’20
301
26
58
35
54
22
18
11
9
7
7
7
High-yield issues with the biggest price increases…
Bond Price as % of face value
Current
One-day change
Issuer
Symbol
Concordia International
Endo Finance
Seagate HDD Cayman
McClatchy
CXRCN
ENDP
STX
MNI
9.000
April 1, ’22
5.750 Jan. 15, ’22
4.250 March 1, ’22
6.875 March 15, ’29
86.750
89.500
101.500
84.500
Cenveo
EP Energy
Sprint Communications
GameStop
CVO
EPENEG
S
GME
8.500 Sept. 15, ’22
6.375 June 15, ’23
6.000 Nov. 15, ’22
6.750 March 15, ’21
22.250
59.000
107.224
105.400
Coupon (%)
Maturity
2.75
2.00
1.63
1.50
1.25
1.00
0.93
0.89
Last week
Stock Performance
Close ($)
% chg
80.000
86.880
99.755
79.500
...
…
…
8.75
...
…
…
1.04
25.250
59.500
107.438
n.a.
1.52
...
…
20.28
–4.40
...
…
0.75
102.125
99.750
112.375
74.760
…
61.00
...
1.89
…
2.78
...
–3.08
110.250
93.750
101.000
59.750
3.40
...
...
...
–3.95
...
...
...
…And with the biggest price decreases
Avon International Operations
DaVita
Vertiv
Windstream Services
AVP
DVA
CORTNP
WIN
7.875
5.125
9.250
7.500
Aug. 15, ’22
July 15, ’24
Oct. 15, ’24
June 1, ’22
102.125
101.100
110.500
74.250
Weatherford International
Albertsons
Midas Intermediate Holdco II
Fresh Market
WFT
ALBLLC
SVKING
TFM
9.875
6.625
7.875
9.750
Feb. 15, ’24
June 15, ’24
Oct. 1, ’22
May 1, ’23
108.124
92.000
100.500
59.000
–2.25
–2.15
–2.06
–2.00
–1.88
–1.38
–0.75
–0.75
*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
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.
B10 | Tuesday, October 24, 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.
Stock
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.
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.
Net
Sym Close Chg
Net Stock
Sym Close Chg s BerkHathwy A BRK.A 284198845.50
s BerkHathwy B BRK.B 189.39 0.35
s BerryGlobal BERY 59.52 -0.36
BestBuy
BBY 56.02 0.19
ABB
ABB 25.28 -0.18
Bio-RadLab A BIO 223.57 1.63
AES
AES 11.13
...
Bio-RadLab B BIO.B 223.00 4.70
Aflac
AFL 84.32 0.47
BlackKnight BKI 45.05 -0.90
AT&T
T
35.25 -0.29
BlackBerry BB 11.00 -0.12
s AbbottLabs ABT 56.08 -0.24
BlackRock BLK 474.39 -2.23
AbbVie
ABBV 94.51 -1.59
s Accenture ACN 139.33 -0.16 BlackstoneGroup BX 34.72 0.26
BoardwalkPipe BWP 14.67
...
AcuityBrands AYI 159.95 -0.95
s Boeing
BA 262.32 -2.43
Adient
ADNT 85.00 -0.10
BorgWarner BWA 52.13 -0.07
AdvanceAuto AAP 85.91 -0.87
BostonProperties BXP 122.88 -0.05
AdvSemiEngg ASX 6.26 0.06
s BostonScientific BSX 29.61 -0.08
Aegon
AEG 5.86 0.04
Braskem
BAK 28.55 -0.95
AerCap
AER 52.55 -0.51
Bristol-Myers BMY 63.75 -0.67
Aetna
AET 161.47 0.63
s AffiliatedMgrs AMG 195.85 -1.69 BritishAmTob BTI 64.25 0.06
s BroadridgeFinl BR 84.33 -0.03
AgilentTechs A
67.02 -0.23
AgnicoEagle AEM 44.91 0.55 BrookfieldMgt BAM 42.53 -0.36
Agrium
AGU 107.79 0.14 BrookfieldInfr BIP 43.23 -0.29
AirProducts APD 153.60 -0.62 Brown&Brown BRO 49.65 0.33
AlaskaAir ALK 78.74 -0.95 Brown-Forman A BF.A 57.17 0.68
s Albemarle ALB 138.53 -2.25 Brown-Forman B BF.B 56.36 0.28
t
Alcoa
AA 47.93
... BuckeyePtrs BPL 52.53 -0.88
BG 71.12 -0.05
AlexandriaRealEst ARE 121.96 -0.30 Bunge
Alibaba
BABA 173.13 -4.19 BurlingtonStores BURL 90.09 1.55
CBD
Pao
CBD 24.50 -0.45
Alleghany Y
565.04 0.39
Allegion
ALLE 87.31 -0.71 CBRE Group CBG 39.60 -0.64
CBS
A
CBS.A 58.57 -0.90
Allergan
AGN 187.77 -0.51
CBS 57.95 -0.97
AllianceData ADS 239.33 -0.04 CBS B
CF
Industries
CF
36.31 -0.68
AllianceBernstein AB 25.20 -0.15
AlliantEnergy LNT 43.77 -0.10 CGI Group GIB 53.56 0.56
CIT
Group
CIT
49.42 -0.49
AllisonTransm ALSN 39.63 0.10
Allstate
ALL 92.97
... CMS Energy CMS 48.21 0.03
CNA
Fin
CNA
50.35 -0.14
s AllyFinancial ALLY 24.62 -0.27
CEO 126.40 -0.79
AlticeUSA ATUS 25.60 -0.42 CNOOC
CPFLEnergia
CPL
16.90 -0.21
Altria
MO 64.50 -0.50
CRH 36.98 0.29
AlumofChina ACH 21.43 -0.57 CRH
Ambev
ABEV 6.52 -0.19 CVS Health CVS 75.91 -0.08
COG 25.23 -0.30
s Ameren
AEE 61.72 0.16 CabotOil
AmericaMovil AMX 18.83 -0.41 CamdenProperty CPT 92.23 -0.03
CampbellSoup
CPB 46.45 0.48
AmericaMovil A AMOV 18.63 -0.43
CM 89.13 -0.09
t AmCampus ACC 43.46 -0.16 CIBC
CanNtlRlwy
CNI
81.78 0.20
AEP
AEP 73.92 -0.06
AmericanExpress AXP 92.38 0.29 CanNaturalRes CNQ 32.54 -0.48
CanPacRlwy
CP
177.11
-0.50
AmericanFin AFG 105.41 0.15
CAJ 35.90 0.12
AIG
AIG 64.96 0.09 s Canon
CapitalOne
COF
89.72
0.05
AmerTowerREIT AMT 138.75 -0.32
AmerWaterWorks AWK 87.73 -0.03 CardinalHealth CAH 66.65 -0.06
Carlisle
CSL
104.48
0.68
Amerigas APU 45.03 0.15
KMX 74.39 -0.75
s Ameriprise AMP 154.18 0.06 CarMax
CCL 66.10 0.22
AmerisourceBrgn ABC 82.53 -0.68 Carnival
CUK 66.27 0.25
s Ametek
AME 68.49 -0.09 Carnival
Amphenol APH 86.35 -0.22 s Caterpillar CAT 131.68 0.32
AnadarkoPetrol APC 48.10 -0.91 Celanese A CE 105.17 -0.43
CX
8.08 0.12
Andeavor ANDV 105.85 -0.71 Cemex
AB InBev BUD 125.10 -0.39 CenovusEnergy CVE 9.69 -0.22
CNC 97.99 1.49
AnnalyCap NLY 12.09 -0.20 Centene
AnteroResources AR 19.08 -0.38 CenterPointEner CNP 29.67 -0.03
Anthem
ANTM 195.64 0.95 CentraisElBras EBR 6.87 0.12
s Aon
AON 151.94 0.40 CenturyLink CTL 18.80 -0.24
Apache
APA 40.30 -1.23 Chemours CC 55.95 0.06
CVX 118.93 0.29
ApartmtInv AIV 44.11 0.04 Chevron
ApolloGlobalMgmt APO 32.15 0.12 ChinaEastrnAir CEA 25.37 -0.11
ChinaLifeIns
LFC 16.17 -0.05
AquaAmerica WTR 35.88 -0.14
Aramark
ARMK 42.73 -0.56 ChinaMobile CHL 50.70 -0.33
ChinaPetrol
SNP 72.53 -0.89
s ArcelorMittal MT 30.09 0.25
ArcherDaniels ADM 43.57 0.08 ChinaSoAirlines ZNH 34.76 -0.16
ChinaTelecom
CHA 51.00 -0.66
Arconic
ARNC 24.35 -2.82
AristaNetworks ANET 191.57 -0.11 ChinaUnicom CHU 14.31 -0.04
CMG 320.45 -4.31
ArrowElec ARW 83.19 -0.39 Chipotle
CB 155.19 1.19
AstraZeneca AZN 34.39 -0.23 Chubb
...
Athene
ATH 53.95 0.23 ChunghwaTelecom CHT 33.82
AtmosEnergy ATO 86.58 -0.29 Church&Dwight CHD 46.19 0.01
CI 193.38 1.96
Autohome ATHM 59.48 0.34 s Cigna
Autoliv
ALV 122.87 -0.10 CimarexEnergy XEC 114.28 -3.06
C
73.53
...
AutoZone AZO 589.00 -1.06 Citigroup
Avalonbay AVB 181.98 0.79 CitizensFin CFG 38.50 0.17
CLX 128.57 0.80
Avangrid
AGR 48.27 -0.03 Clorox
COH 39.80 -0.55
AveryDennison AVY 99.01 -0.70 Coach
AxaltaCoating AXTA 29.38 0.07 Coca-Cola KO 46.32 -0.06
Coca-Cola
Euro
CCE 41.75 -0.18
BB&T
BBT 47.41 -0.09
BCE
BCE 46.86 -0.09 Coca-Cola Femsa KOF 70.42 -1.02
Colgate-Palmolive
CL 72.19 -0.13
BHPBilliton BHP 41.22 -0.05
BHPBilliton BBL 36.43 -0.04 ColonyNorthStar CLNS 12.51 0.01
s
CMA 78.54 -0.53
BP
BP 38.79 0.04 Comerica
SBS 9.42 -0.21
BRF
BRFS 13.60 -0.24 SABESP
BT Group BT 18.27 0.15 ConagraBrands CAG 34.21 0.30
s BWX Tech BWXT 60.12 0.26 ConchoRscs CXO 131.70 -2.41
t BakerHughes BHGE 31.47 -1.79 ConocoPhillips COP 50.26 0.01
ED 85.10 0.24
s Ball
BLL 42.91 0.61 ConEd
BancoBilbaoViz BBVA 8.41 -0.16 ConstBrands A STZ 211.71 0.46
BancodeChile BCH 90.85 -1.53 ContinentalRscs CLR 37.47 -0.43
COO 237.31 1.96
s BancoMacro BMA 135.46 10.46 Cooper
GLW 30.01 -0.05
BcoSantChile BSAC 30.77 -0.04 Corning
COTY 15.45 -0.40
BancoSantander SAN 6.46 -0.10 Coty
BAP 207.35 -1.27
BanColombia CIB 43.27 -0.22 Credicorp
s BankofAmerica BAC 27.16 -0.01 s CreditSuisse CS 16.04 -0.06
BankofMontreal BMO 78.22 -0.02 CrestwoodEquity CEQP 23.95 -0.10
BankNY Mellon BK 52.51 -0.61 CrownCastle CCI 103.95 -1.04
BkNovaScotia BNS 64.27 0.12 CrownHoldings CCK 60.91 0.04
Barclays
BCS 10.27 -0.04 Cullen/Frost CFR 97.90 -1.27
s Bard CR
CMI 177.23 0.13
BCR 328.14 -2.02 s Cummins
BarrickGold ABX 16.15 0.12 DTE Energy DTE 113.05 0.81
BaxterIntl BAX 64.12 0.53 DXC Tech DXC 91.49 -0.40
s BectonDickinson BDX 211.03 -0.80 s Danaher
DHR 90.47 -0.32
DRI 82.35 -0.42
Berkley
WRB 70.04 -0.09 Darden
Monday, October 23, 2017
Stock
NYSE
Stock
Net
Sym Close Chg
DaVita
DVA 61.00
Deere
DE 129.59
s DellTechnologies DVMT 82.71
DelphiAutomotive DLPH 97.77
DeltaAir
DAL 52.28
DeutscheBank DB 16.63
DevonEnergy DVN 34.65
Diageo
DEO 135.96
DigitalRealty DLR 120.22
DiscoverFinSvcs DFS 66.84
Disney
DIS 98.70
DolbyLab
DLB 59.84
s DollarGeneral DG 83.92
DominionEner D
80.38
Domino's
DPZ 182.63
Donaldson DCI 47.14
DouglasEmmett DEI 39.83
s Dover
DOV 95.54
s DowDuPont DWDP 71.55
DrPepperSnap DPS 90.33
DrReddy'sLab RDY 36.25
DukeEnergy DUK 87.54
DukeRealty DRE 28.74
ENI
E
32.45
EOG Rscs EOG 96.97
EQT
EQT 62.97
EQT Midstream EQM 71.22
EastmanChem EMN 88.67
Eaton
ETN 78.48
s EatonVance EV 51.29
Ecolab
ECL 132.60
Ecopetrol
EC
9.84
EdisonInt
EIX 80.01
EdwardsLife EW 114.11
s EmersonElectric EMR 66.10
EnbridgeEnPtrs EEP 14.77
Enbridge
ENB 39.05
Encana
ECA 11.15
EnelAmericas ENIA 10.87
EnelChile
ENIC 5.97
EnelGenChile EOCC 27.24
EnergyTrfrEquity ETE 16.91
t EnergyTransfer ETP 17.24
s Entergy
ETR 85.23
EnterpriseProd EPD 25.10
Equifax
EFX 109.36
EquityLife ELS 86.98
EquityResdntl EQR 66.67
EssexProp ESS 259.64
EsteeLauder EL 109.07
EverestRe RE 235.85
EversourceEner ES 62.37
Exelon
EXC 39.74
ExtraSpaceSt EXR 81.87
ExxonMobil XOM 83.24
FMC
FMC 94.21
s FactSet
FDS 186.35
FederalRealty FRT 126.61
FedEx
FDX 225.34
Ferrari
RACE 113.71
FiatChrysler FCAU 16.55
FibriaCelulose FBR 16.40
FidelityNatlFin FNF 35.46
FNFV Group FNFV 17.80
s FidelityNtlInfo FIS 95.71
58.com
WUBA 66.57
s FirstData
FDC 18.91
FirstRepBank FRC 99.26
FirstEnergy FE 32.13
FleetCorTech FLT 164.67
Flowserve FLS 44.61
Fluor
FLR 42.58
FomentoEconMex FMX 88.70
FordMotor F
12.04
ForestCIty A FCE.A 24.74
Fortis
FTS 36.98
Fortive
FTV 72.09
s FortBrandsHome FBHS 67.54
Franco-Nevada FNV 79.92
FranklinRscs BEN 44.54
Freeport-McMoRan FCX 14.81
FreseniusMed FMS 48.82
GGP
GGP 21.31
Gallagher AJG 62.96
Gap
GPS 27.20
Gartner
IT 124.78
Gazit-Globe GZT 9.82
GeneralDynamics GD 212.51
GeneralElec GE 22.32
GeneralMills GIS 51.67
GeneralMotors GM 45.15
Genpact
G
29.57
GenuineParts GPC 89.27
Gerdau
GGB 3.55
s Gildan
GIL 31.46
GlaxoSmithKline GSK 40.62
GlobalPayments GPN 97.44
GoDaddy
GDDY 44.98
Goldcorp
GG 13.03
GoldmanSachs GS 242.13
s Graco
GGG 127.23
Grainger
GWW 209.50
GreatPlainsEner GXP 31.99
GpoAvalAcciones AVAL 8.86
GpFinSantandMex BSMX 8.89
GrupoTelevisa TV 23.58
GuidewireSoftware GWRE 78.16
HCA Healthcare HCA 80.75
1.65
0.44
0.47
0.93
-0.99
-0.35
-0.28
0.65
-3.17
0.27
-0.70
0.07
0.31
0.38
-3.48
-0.03
0.02
0.59
0.37
1.30
-0.43
-0.39
-0.11
-0.27
0.13
-0.38
-0.74
-0.15
-0.45
-0.61
-0.20
-0.10
0.41
1.03
0.32
-0.22
-0.26
-0.23
...
0.03
0.13
-0.35
-0.30
-0.43
-0.15
-0.61
-0.41
0.53
0.30
0.27
-0.82
0.24
0.16
0.10
0.13
-0.34
0.59
0.81
0.27
-0.89
-0.17
0.16
-0.24
-0.20
0.43
-0.51
-0.17
-1.03
...
-0.01
-0.77
-0.61
-2.01
-0.06
-0.24
-0.11
0.08
0.54
0.25
-0.53
-0.02
-0.07
0.14
0.04
0.24
-0.50
0.05
-1.35
-1.51
-0.34
-0.46
-0.12
0.64
-0.08
-0.22
-0.22
0.27
-0.02
-0.06
-2.60
-0.73
1.69
-0.08
-0.14
-0.10
-0.26
0.39
-0.30
t HCP
HCP 25.98 -0.38
HDFC Bank HDB 94.66 -1.34
s HP
HPQ 22.12 0.10
HSBC
HSBC 48.88 -0.66
Halliburton HAL 42.24 -1.09
Hanesbrands HBI 22.86 -0.63
HarleyDavidson HOG 48.51 -0.99
s Harris
HRS 136.82 0.09
HartfordFinl HIG 54.06 -2.43
HealthcareAmer HTA 29.49 -0.28
Heico
HEI 91.62 -0.67
s Heico A
HEI.A 77.15 -0.20
Herbalife
HLF 73.69 -0.93
Hershey
HSY 109.12 0.10
Hess
HES 45.21 0.18
HewlettPackard HPE 14.25 0.21
s Hexcel
HXL 62.90 -0.86
Hilton
HLT 70.42 -0.62
HollyFrontier HFC 36.27 -0.44
HomeDepot HD 164.74 1.31
HondaMotor HMC 30.37 0.14
s Honeywell HON 145.92 0.57
t HormelFoods HRL 30.43 -0.31
s DR Horton DHI 42.87 0.20
HostHotels HST 19.33 -0.13
HuanengPower HNP 25.21 0.04
Hubbell
HUBB 121.32 -1.75
Humana
HUM 246.13 0.32
HuntingtonIngalls HII 234.58 -0.84
Huntsman HUN 28.75 -0.22
HyattHotels H
61.33 -0.52
ICICI Bank IBN 7.97 0.06
ING Groep ING 18.51 -0.18
s Invesco
IVZ 37.26 -0.08
s IDEX
IEX 124.74 -1.03
s IllinoisToolWks ITW 155.51 0.48
Infosys
INFY 14.83 0.27
s Ingersoll-Rand IR
93.76 0.25
Ingredion
INGR 124.77 0.79
ICE
ICE 65.69 -0.43
InterContinentl IHG 53.76 0.10
IBM
IBM 159.55 -2.52
s IntlFlavors IFF 150.16 -0.20
IntlPaper
IP
58.25 0.04
Interpublic IPG 20.63 -0.25
InvitationHomes INVH 22.66 -0.18
IronMountain IRM 40.06 -0.86
IsraelChemicals ICL 4.19 -0.06
ItauUnibanco ITUB 13.43 -0.33
s JPMorganChase JPM 99.34 -0.17
JacobsEngineering JEC 58.34 -0.48
JamesHardie JHX 14.80 0.08
JanusHenderson JHG 35.17 -0.10
s J&J
JNJ 143.62 1.22
JohnsonControls JCI 41.61 -0.01
JonesLangLaSalle JLL 129.49 -1.15
JuniperNetworks JNPR 25.76 -0.27
KAR Auction KAR 47.54 -0.30
KB Fin
KB 50.38 0.18
KKR
KKR 20.37 -0.01
KT
KT 14.28 -0.07
KSCitySouthern KSU 106.01 0.82
Kellogg
K
61.48 0.03
KeyCorp
KEY 18.45 -0.04
KeysightTechs KEYS 42.53 -0.33
KilroyRealty KRC 71.52 -0.70
KimberlyClark KMB112.53 -0.91
KimcoRealty KIM 18.87 0.10
t KinderMorgan KMI 18.12 -0.30
Knight-Swift KNX 40.23 -0.05
Kohl's
KSS 44.16 -0.33
s KoninklijkePhil PHG 41.96 0.39
KoreaElcPwr KEP 17.81 -0.41
Kroger
KR 21.35 0.33
s Kyocera
KYO 66.13 1.23
LATAMAirlines LTM 13.64 -0.17
L Brands
LB 43.92 0.17
LG Display LPL 12.94 -0.38
LINE
LN 36.34 -0.14
L3 Tech
LLL 189.20 -0.22
LabCpAm LH 151.77 0.05
s LambWeston LW 50.90 0.27
LasVegasSands LVS 63.13 0.44
Lazard
LAZ 45.54 -0.49
Lear
LEA 172.31 -1.43
Leggett&Platt LEG 49.08 0.16
Leidos
LDOS 61.78 -0.40
Lennar A
LEN 57.30 -0.20
Lennar B
LEN.B 48.30 -0.24
s LennoxIntl LII 193.43 13.13
LeucadiaNatl LUK 25.55 -0.46
Level3Comms LVLT 53.19 -0.32
LibertyProperty LPT 41.55 0.15
EliLilly
LLY 87.18 -0.05
s LincolnNational LNC 75.62 0.07
LionsGate A LGF.A 29.59 -0.50
LionsGate B LGF.B 28.44 -0.60
LiveNationEnt LYV 43.14 -0.06
LloydsBanking LYG 3.60 -0.02
LockheedMartin LMT 320.73 0.73
Loews
L
48.70 -0.30
Lowe's
LOW 80.41 0.37
LyondellBasell LYB 98.56 -0.38
M&T Bank MTB 164.94 -0.26
MGM Resorts MGM 30.90 -0.13
MPLX
MPLX 33.44 -0.66
MSCI
MSCI 121.70 -0.30
Macerich
MAC 57.58 0.82
t MacquarieInfr MIC 68.64 -2.24
Macy's
M
21.33 0.16
MagellanMid MMP 67.59 -0.52
s MagnaIntl MGA 54.99 -0.40
s Manpower MAN 121.13 -1.61
ManulifeFin MFC 20.54 -0.07
MarathonOil MRO 13.63 -0.30
MarathonPetrol MPC 56.34 -1.15
Markel
MKL 1077.42 -0.81
Marsh&McLennan MMC 84.28 -0.16
MartinMarietta MLM 213.25 -2.91
s Masco
MAS 40.11 0.02
Mastercard MA 145.56 0.18
McCormick MKC 99.22 -0.04
McCormickVtg MKC.V 99.12 -0.25
McDonalds MCD 163.34 -2.96
McKesson MCK 148.30 -2.48
Medtronic MDT 79.02 0.68
Merck
MRK 63.40 -0.48
s MetLife
MET 53.44 0.15
s MettlerToledo MTD 667.37 -1.35
MichaelKors KORS 49.44 -0.51
s MicroFocus MFGP 33.05 0.60
New Highs and Lows | WSJ.com/newhighs
Continued From Page B6
Stock
52-Wk % Stock
Sym Hi/Lo Chg SPDR DJIA Tr
ProShrUlSemi
USD
ProShrUlTech
ROM
ProShUltDow30 UDOW
ProShUltraProFin FINU
ProShUltMC400 UMDD
ProShUltS&P500 UPRO
RenaissanceIPOETF IPO
SPDRGlobalDow DGT
SPDRMFSSysGrowth SYG
SPDRMFSSysValueEqu SYV
SPDRMSCIWorldStrat QWLD
SPDR NYSE Tech XNTK
SPDRPortfolioLC SPLG
SPDRS&P500Value SPYV
SPDRS&P500Growth SPYG
SPDRS&P500HiDiv SPYD
SPDR Ptf TSM SPTM
SPDRRuss1000Mom ONEO
SPDR S&P500MidGr MDYG
SPDR S&P400MidVl MDYV
SPDR Aero & Dfns XAR
SPDRS&PCapitalMkts KCE
SPDRS&P500Buyback SPYB
SPDRS&P500Fossil SPYX
SPDRS&PSft&Svs XSW
SPDRS&PTechHardwr XTH
SPDRGenderDivers SHE
SPDR US SC LowVol SMLV
SPDRSSgAIncmAllctn INKM
SchwabFundUSBrd FNDB
SchwabFundUSLrgCo FNDX
Schwab1000Index SCHK
SchwabUS BrdMkt SCHB
SchwabUS Div SCHD
SchwabUS LC
SCHX
SchwabUS LC Grw SCHG
SchwabUS LC Val SCHV
SchwabUS MC SCHM
114.89
81.65
79.28
92.33
104.05
125.11
27.93
82.42
77.11
63.93
73.90
82.11
30.28
29.81
31.87
36.91
32.04
74.39
151.65
100.55
82.95
54.40
59.52
62.50
68.59
79.91
71.42
97.73
33.56
35.70
35.91
25.39
62.34
48.67
61.54
67.59
53.27
51.28
1.5
-1.1
-0.4
-0.5
-0.9
-1.1
-1.0
-0.4
-0.3
-0.1
0.1
-0.4
-0.3
-0.1
-0.5
-0.1
-0.4
-0.3
-0.4
-0.5
-1.0
-0.6
0.1
-0.3
-0.7
-0.1
-0.3
-0.4
-0.1
-0.3
-0.2
-0.4
-0.4
0.1
-0.4
-0.5
-0.2
-0.4
52-Wk %
Sym Hi/Lo Chg Stock
DIA
SPDR S&PMdCpTr MDY
SPDR S&P 500 SPY
SPDR S&P Div SDY
SPDR S&P Home XHB
SPDR S&P Semi XSD
TechSelectSector XLK
VanEckAgribus MOO
VanEckMornWideMoat MOAT
VanEckSemiconduc SMH
VangdExtMkt
VXF
VangdMatrls
VAW
VangdInfoTech VGT
VangdDivApp
VIG
VangdFinls
VFH
VangdGrowth
VUG
VangdHlthCr
VHT
VangdHiDiv
VYM
VangdLC
VV
VangdMegaCap MGC
VangdMegaVal MGV
VangdMC
VO
VangdMCGrowth VOT
VangdMC Val
VOE
VangdS&P500 VOO
VangdS&P500 Grw VOOG
VangdS&P500Val VOOV
VangdS&PMC400 IVOO
VangdS&P400Grwth IVOG
VangdS&P400Val IVOV
VangdSC
VB
VangdTotalStk
VTI
VangdTotlWrld VT
VangdValue
VTV
VelocityShVIXShrt XIVH
VirtusWMCGlb VGFO
WBIPwrFactorHiDiv WBIY
WBITacticalHiIncm WBIH
WBITacticalLCS WBIL
WBITacticalLCV WBIF
233.58
333.83
257.51
93.96
41.46
68.42
61.25
60.14
41.14
99.27
109.00
133.29
158.42
97.55
67.32
135.65
156.54
83.41
118.30
88.39
73.92
150.67
124.97
108.06
236.49
132.30
106.24
123.76
129.19
119.14
143.78
132.68
72.14
102.66
68.35
25.31
25.43
24.88
26.09
27.32
-0.2
-0.5
-0.4
-0.1
0.1
0.6
-0.5
-0.2
-0.4
0.4
-0.7
-0.3
-0.4
0.1
-0.3
-0.6
-0.3
-0.2
-0.4
-0.4
-0.2
-0.3
-0.5
-0.3
-0.4
-0.5
...
-0.5
-0.4
-0.6
-0.6
-0.4
-0.4
-0.2
-2.5
0.6
0.5
-0.1
0.3
0.3
Stock
52-Wk %
Sym Hi/Lo Chg
WBITacticalLCY WBIG
WBITacticalSMG WBIA
WisdTrJpnCapGds DXJC
WisdTrJpnHdgQuDiv JHDG
WisdTrJapanHdg DXJ
WisdTrUSDivxFin DTN
WisdTrUSEarn500 EPS
WisdTrUSHiDiv DHS
WisdTrUSLCDivFd DLN
WisdTrUSLCValueFd EZY
WisdTrUSMCEarn EZM
WisdTrUSTotalDivFd DTD
XtrkrsJpnJPXNik400 JPN
XtrkrsMSCIAWxUS DBAW
XtrkrsMSCIEAFE DBEF
XtrkrsMSCIJapan DBJP
XtrkrsRussell1000 DEUS
24.41
24.95
27.72
28.61
57.25
86.58
89.73
71.57
89.09
78.01
37.97
89.83
28.29
27.89
31.78
42.60
31.02
AdvShRangerEqBear HDGE
PathS&P500VIXMT VXZ
iPathS&P500VIXST VXX
BarclaysETN+Select ATMP
CTrksETNsMillerHwd MLPC
DirexFinlBear3
FAZ
DirexMcBear3
MIDZ
DirexS&P500Br3 SPXS
DirexSemiBear3 SOXS
DirexTechBear3 TECS
ETRACS Alerian MLP AMU
ETRACS2xMLvAlerian MLPQ
ElemntsGrain
GRU
IQMacKayShMuni MMIN
InfraCapMLPETF AMZA
JPM AlerianMLP AMJ
KraneEMCnsTech KEMQ
ProShShtDow30 DOG
ProShShtFinls
SEF
ProShShtMC400 MYY
8.23
19.13
33.54
20.31
15.12
13.35
15.14
33.78
17.61
8.02
16.90
35.16
3.40
25.04
8.29
26.83
24.71
15.87
12.08
11.64
0.1
1.3
3.1
-1.3
-1.4
0.6
1.5
1.1
-1.5
1.0
-1.3
-3.4
-0.1
-0.1
-2.0
-1.5
-1.0
0.2
0.2
0.3
Data provided by
Monday, October 23, 2017
Net YTD
Net YTD
NAV Chg % Ret Fund
NAV Chg % Ret Fund
WshA p
-0.17 25.7 Baird Funds
AggBdInst
-0.15 17.2 CorBdInst
-0.15
-0.05
+0.02
-0.15
-0.15
-0.01
-0.22
-0.26
...
-0.22
-0.08
-0.12
-0.18
-0.16
-0.17
...
13.3
11.5
3.3
12.1
20.1
28.3
17.2
19.8
6.9
14.5
10.6
25.7
29.8
27.8
21.8
4.9
45.17 -0.11 14.5 IntSmVa
10.90
11.26
BlackRock Funds A
20.27
GlblAlloc p
BlackRock Funds Inst
EqtyDivd
23.01
20.40
GlblAlloc
HiYldBd
7.87
StratIncOpptyIns 9.98
Bridge Builder Trust
10.19
CoreBond
Dimensional Fds
11.02
5GlbFxdInc
30.05
EmgMktVa
EmMktCorEq 22.26
14.12
IntlCoreEq
IntlVal
19.75
21.33
IntSmCo
US CoreEq1
+0.01
+0.01
52-Wk %
Sym Hi/Lo Chg Stock
31.40
15.02
23.47
9.67
12.83
9.83
29.63
18.09
23.95
28.80
44.46
11.42
23.15
27.86
6.26
23.30
0.4
6.4
0.5
-0.9
1.2
0.3
-0.6
-0.5
-2.3
-0.7
0.8
-1.3
1.2
3.2
1.9
-1.6
CET
26.71
0.1
NYSE Arca lows - 36 NYSE American lows - 14
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.
American Century Inv
43.86
Ultra
American Funds Cl A
31.46
AmcpA p
41.13
AMutlA p
BalA p
27.24
12.95
BondA p
63.03
CapIBA p
CapWGrA
51.86
56.70
EupacA p
62.61
FdInvA p
GwthA p
50.35
10.51
HI TrA p
41.00
ICAA p
IncoA p
23.45
44.41
N PerA p
46.68
NEcoA p
NwWrldA
65.77
56.00
SmCpA p
13.04
TxExA p
MidAmApt MAA 104.41 -0.40
MitsubishiUFJ MTU 6.50 -0.01
MizuhoFin MFG 3.56 -0.02
MobileTeleSys MBT 10.43 -0.09
s MohawkIndustries MHK 264.14 -0.38
MolsonCoors B TAP 83.61 0.36
Monsanto MON 122.00 -0.15
s Moody's
MCO 146.06 0.40
s MorganStanley MS 50.61 -0.07
Mosaic
MOS 21.03 -0.38
MotorolaSolutions MSI 89.94 -0.06
NRG Energy NRG 24.89 -0.51
NTTDoCoMo DCM 23.55 -0.03
NVR
NVR 3190.04-33.21
NationalGrid NGG 62.55 0.54
NatlOilwell NOV 33.80 -0.29
NatlRetailProp NNN 41.61 -0.11
NewOrientalEduc EDU 93.97 1.22
NY CmntyBcp NYCB 12.71 -0.14
t NewellBrands NWL 40.16 -0.21
NewfieldExpln NFX 28.52 -1.26
NewmontMining NEM 37.37 -0.42
s NextEraEnergy NEE 154.38 0.22
NielsenHoldings NLSN 41.38 -0.38
Nike
NKE 53.66 0.60
NiSource
NI
26.82 0.16
NobleEnergy NBL 27.30 -0.46
Nokia
NOK 6.03 -0.05
NomuraHoldings NMR 5.78 -0.01
Nordstrom JWN 41.77 -0.38
NorfolkSouthern NSC 131.87 -0.88
NorthropGrumman NOC 294.05 -0.55
Novartis
NVS 85.91 0.17
NovoNordisk NVO 50.20 -0.35
Nucor
NUE 59.45 -0.55
t NuSTAREnergy NS 33.60 -1.17
OGE Energy OGE 37.23 0.14
ONEOK
OKE 55.05 -0.95
OccidentalPetrol OXY 65.05 -0.42
Och-Ziff
OZM 3.39 -0.07
Olin
OLN 34.55 -0.58
OmegaHealthcare OHI 31.85 -0.35
Omnicom OMC 73.01 -0.68
Oracle
ORCL 49.31 0.06
Orange
ORAN 16.00 -0.01
OrbitalATK OA 132.95 0.26
Orix
IX
84.98 -0.02
Oshkosh
OSK 87.09 -0.04
s OwensCorning OC 80.22 0.11
PG&E
PCG 57.26 -0.60
PLDT
PHI 32.81 0.01
PNC Fin
PNC 136.77 -0.18
POSCO
PKX 73.65 -0.75
s PPG Ind
PPG 116.89 -0.87
PPL
PPL 38.13 0.38
s PVH
PVH 129.68 1.37
PackagingCpAm PKG 118.14 -0.22
PaloAltoNtwks PANW 148.23 -1.38
ParkHotels PK 28.03 -0.45
s ParkerHannifin PH 182.87 -1.63
ParsleyEnergy PE 24.33 -1.54
Pearson
PSO 9.10
...
PembinaPipeline PBA 32.82 -0.04
s Pentair
PNR 70.82 -0.35
PepsiCo
PEP 111.69 0.08
PerkinElmer PKI 71.64 -0.09
Perrigo
PRGO 86.32 -1.12
PetroChina PTR 63.33 -0.90
PetroleoBrasil PBR 10.21 -0.14
PetroleoBrasilA PBR.A 9.98 -0.15
s Pfizer
PFE 36.40 -0.02
PhilipMorris PM 109.36 -0.16
Phillips66 PSX 91.24 0.44
PinnacleFoods PF 56.02 -0.03
PinnacleWest PNW 88.81 0.03
PioneerNatRscs PXD 143.93 -0.82
PlainsAllAmPipe PAA 19.88 -0.51
PlainsGP
PAGP 20.18 -0.57
PolarisIndustries PII 106.92 0.46
Potash
POT 19.30 0.03
s Praxair
PX 142.44 -0.70
PrincipalFin PFG 68.27 0.52
Procter&Gamble PG 87.30 -0.95
Progressive PGR 48.90 -0.01
Prologis
PLD 64.46 0.02
PrudentialFin PRU 110.79 0.01
s Prudential PUK 49.43 0.29
PublicServiceEnt PEG 48.98 -0.02
PublicStorage PSA 214.78 -0.31
s PulteGroup PHM 27.90 -0.10
t Qudian
QD 26.59 -6.41
QuestDiag DGX 95.20 0.12
QuintilesIMS Q
102.16 -0.87
RELX
RENX 21.85 -0.07
RELX
RELX 22.65 -0.05
RPM
RPM 52.08 -0.09
RalphLauren RL 89.56 -0.81
RaymondJames RJF 86.32 -0.31
s Raytheon RTN 189.07 0.17
RealtyIncome O
55.47 -0.07
s RedHat
RHT 122.13 0.33
RegencyCtrs REG 63.74 0.09
RegionsFin RF 15.12 -0.10
ReinsuranceGrp RGA 144.71 -0.29
RepublicServices RSG 64.14 -0.05
ResMed
RMD 79.82 0.82
RestaurantBrands QSR 66.65 -0.78
RiceEnergy RICE 28.09 -0.03
RioTinto
RIO 47.96 -0.41
RobertHalf RHI 50.84 -0.81
s Rockwell
ROK 187.67 -0.83
s RockwellCollins COL 134.99 -0.01
RogersComm B RCI 53.10 0.09
Rollins
ROL 47.62 -0.08
s RoperTech ROP 253.74 -1.08
RoyalBkCanada RY 80.19 -0.07
RoyalBkScotland RBS 7.41 -0.09
RoyalCaribbean RCL 121.74 1.03
s RoyalDutchA RDS.A 61.01 -0.06
s RoyalDutchB RDS.B 63.11 0.08
SAP
SAP 112.32 0.29
s S&P Global SPGI 162.10 0.55
SINOPECShanghai SHI 61.54 -1.01
SK Telecom SKM 25.65 -0.25
SLGreenRealty SLG 97.92 0.52
s Salesforce.com CRM 98.44 -0.46
Sanofi
SNY 49.62 0.11
Sasol
SSL 28.65 -0.21
Scana
SCG 48.35 -0.69
Schlumberger SLB 61.91 -1.24
SchwabC
SCHW 44.47 -0.21
NYSE American highs - 1
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.
Fund
Net
Sym Close Chg
Stock
ProShShrtS&P500 SH
ProShUltVIXST UVXY
ProShUltShtDow30 SDOW
ProShUltraProShFnl FINZ
ProShUltProShS&P SPXU
ProShUltShDow30 DXD
ProShrUSHlthCr RXD
ProShrUSInd
SIJ
ProShrUS MSCI EAFE EFU
ProShrUS MSCI Jpn EWV
ProShUltShtS&P500 SDS
ProShrUSSemi SSG
ProShsVIXMTFut VIXM
ProShsVIXSTFut VIXY
TeucriumWheatFund WEAT
E-TRACS AlrInfr MLPI
0.2
...
0.9
0.6
0.1
-0.3
-0.3
-0.3
-0.1
0.1
-0.4
-0.2
0.3
-0.3
-0.1
0.1
... CentralSecs
Mutual Funds | WSJ.com/fundresearch
Explanatory Notes
Net
Sym Close Chg
3.7 US CoreEq2
4.2 US Small
US SmCpVal
... 11.5 US TgdVal
USLgVa
Net YTD
NAV Chg % Ret
23.30
21.91
20.83
36.35
38.93
25.00
38.84
-0.04
-0.09
-0.09
-0.25
-0.28
-0.19
-0.09
-0.04 12.7 Dodge & Cox
... 11.7 Balanced
109.25 -0.26
... 7.8 GblStock
14.02 -0.04
... 4.3 Income
13.83 +0.02
46.88 +0.05
Intl Stk
+0.01 3.7 Stock
201.96 -0.93
DoubleLine Funds
... 2.2 TotRetBdI
NA
...
-0.17 27.2 Edgewood Growth Instituti
-0.11 30.1 EdgewoodGrInst 29.21 -0.16
-0.02 23.3 Federated Instl
-0.04 20.6 StraValDivIS
NA
...
-0.02 24.7 Fidelity
23.2
15.0
13.2
8.2
4.6
5.0
12.3
9.2
17.7
4.0
23.0
12.7
NA
31.5
NA
Daxor
DXR
EMX Royalty
EMX
GoldenMinerals AUMN
JRjr33
JRJR
Myomo
MYO
NanoViricides
NNVC
NorthernOil&Gas NOG
ParamountGoldNV PZG
RegionalHlthPfdA RHEpA
RegionalHlthProp RHE
SamsonOil&Gas SSN
TanRoyExplr
TRX
VolitionRX
VNRX
VoltInfoSci
VISI
4.06
0.73
0.40
0.20
2.74
0.94
0.65
1.19
10.05
0.44
0.32
0.25
2.11
2.15
-8.3
-1.1
-0.3
-10.4
-11.1
-5.9
-4.9
1.6
-15.1
2.8
-2.1
-0.4
-3.1
-2.2
Nasdaq highs - 172
AGNCN 26.71
ASML 179.28
ABMD 177.76
Fund
Net YTD
NAV Chg % Ret Fund
500IdxInst
500IdxInstPrem
500IdxPrem
ExtMktIdxPrem r
IntlIdxPrem r
SAIUSLgCpIndxFd
TMktIdxF r
TMktIdxPrem
USBdIdxInstPrem
89.76
89.76
89.76
62.42
43.08
13.76
74.48
74.47
11.60
Fidelity Advisor I
32.89
NwInsghtI
Fidelity Freedom
16.64
FF2020
14.39
FF2025
FF2030
18.02
Freedom2020 K 16.64
Freedom2025 K 14.39
Freedom2030 K 18.02
Freedom2035 K 15.11
Freedom2040 K 10.62
Fidelity Invest
23.56
Balanc
85.23
BluCh
124.14
Contra
124.13
ContraK
10.29
CpInc r
DivIntl
41.13
178.61
GroCo
178.56
GrowCoK
InvGB
7.93
11.28
InvGrBd
52.58
LowP r
LowPriStkK r 52.54
104.03
MagIn
105.54
OTC
Puritn
22.90
SrsEmrgMkt 21.12
SrsGroCoRetail 17.54
SrsIntlGrw
16.11
10.83
SrsIntlVal
10.67
TotalBond
-0.36
-0.35
-0.35
-0.42
-0.01
-0.05
-0.34
-0.33
+0.01
0.3
1.6
0.8
16.4
16.4
16.4
13.7
22.1
16.4
15.9
15.9
3.1
-0.18 23.2
-0.03 12.8
-0.04 13.7
-0.05 16.0
-0.03 NS
-0.03 NS
-0.05 NS
-0.05 NS
-0.03 NS
-0.10
-0.61
-0.78
-0.78
-0.02
-0.06
-1.30
-1.30
+0.01
+0.01
+0.10
+0.10
-0.52
-1.18
-0.07
-0.14
-0.12
-0.03
-0.02
...
13.5
29.1
26.9
27.0
10.4
23.5
30.6
30.7
3.5
3.8
14.7
14.8
20.6
32.5
14.8
34.5
31.3
25.9
18.2
3.8
ScottsMiracleGro SMG 98.57
SealedAir SEE 44.86
SemicondctrMfg SMI 6.83
SempraEnergy SRE 114.43
s SensataTech ST 50.30
ServiceCorp SCI 34.16
ServiceMaster SERV 46.71
s ServiceNow NOW 123.99
ShawComm B SJR 21.71
SherwinWilliams SHW 386.58
ShinhanFin SHG 44.16
Shopify
SHOP 102.91
SimonProperty SPG 165.44
s SmithAO
AOS 61.55
Smith&Nephew SNN 37.93
Smucker
SJM 104.79
Snap
SNAP 14.97
SnapOn
SNA 162.15
SOQUIMICH SQM 59.40
Sony
SNE 37.51
Southern
SO 52.20
SoCopper SCCO 43.42
SouthwestAirlines LUV 58.76
SpectraEnerPtrs SEP 42.39
SpectrumBrands SPB 109.36
s SpiritAeroSys SPR 80.10
Sprint
S
6.86
Square
SQ 32.53
s StanleyBlackDck SWK 158.19
StarwoodProp STWD 21.74
StateStreet STT 96.17
Statoil
STO 20.42
s Steris
STE 91.27
s STMicroelec STM 20.71
s Stryker
SYK 149.92
SumitomoMits SMFG 7.81
SunCommunities SUI 88.78
SunLifeFinancial SLF 39.59
SuncorEnergy SU 33.19
SunTrustBanks STI 59.49
SynchronyFin SYF 32.68
Syngenta SYT 92.12
Sysco
SYY 54.95
TAL Education TAL 33.65
s TE Connectivity TEL 88.08
Telus
TU 35.88
Ternium
TX 31.65
TIM Part
TSU 18.49
TJX
TJX 72.20
TableauSoftware DATA 79.15
TaiwanSemi TSM 41.21
TargaResources TRGP 42.77
Target
TGT 62.58
TataMotors TTM 32.16
TechnipFMC FTI 24.99
TeckRscsB TECK 22.93
s TelecomArgentina TEO 33.80
TelecomItalia TI
9.10
TelecomItalia A TI.A 7.27
s TeledyneTech TDY 166.15
Teleflex
TFX 242.99
TelefonicaBras VIV 15.72
Telefonica TEF 10.29
TelekmIndonesia TLK 31.24
Tenaris
TS 26.20
Teradyne
TER 38.94
TevaPharm TEVA 14.54
Textron
TXT 53.70
s ThermoFisherSci TMO 194.37
ThomsonReuters TRI 47.54
ThorIndustries THO 130.52
s 3M
MMM 221.55
Tiffany
TIF 93.67
TimeWarner TWX 101.33
s Toll Bros
TOL 44.36
s Torchmark TMK 83.70
Toro
TTC 62.32
TorontoDomBk TD 56.55
Total
TOT 54.07
TotalSystem TSS 68.15
ToyotaMotor TM 122.77
TransCanada TRP 48.59
TransDigm TDG 267.58
s TransUnion TRU 50.69
s Travelers
TRV 134.45
TurkcellIletism TKC 9.45
TurquoiseHill TRQ 3.15
Twitter
TWTR 17.37
TylerTech TYL 177.78
TysonFoods TSN 71.52
UBS Group UBS 17.33
UDR
UDR 38.55
UGI
UGI 47.80
US Foods USFD 27.52
UltraparPart UGP 24.13
UnderArmour A UAA 16.85
UnderArmour C UA 15.22
Unilever
UN 55.89
Unilever
UL 54.28
UnionPacific UNP 113.19
UnitedContinental UAL 59.10
UnitedMicro UMC 2.57
UPS B
UPS 119.68
UnitedRentals URI 141.48
US Bancorp USB 54.13
US Steel
X
27.99
UnitedTech UTX 120.89
s UnitedHealth UNH 207.01
UniversalHealthB UHS 112.96
UnumGroup UNM 52.36
VEREIT
VER 7.97
s VF
VFC 69.95
Visa
V
107.53
VailResorts MTN 229.24
Vale
VALE 10.05
ValeroEnergy VLO 77.40
Vantiv
VNTV 69.86
s VarianMed VAR 107.37
Vedanta
VEDL 20.30
VeevaSystems VEEV 60.27
Ventas
VTR 62.50
Verizon
VZ 48.99
s VistraEnergy VST 19.48
s VMware
VMW 119.11
VornadoRealty VNO 74.57
VoyaFinancial VOYA 39.77
VulcanMaterials VMC 121.08
WABCO
WBC 151.57
WEC Energy WEC 66.80
W.P.Carey WPC 69.40
Wabtec
WAB 76.39
s Wal-Mart WMT 88.65
WasteConnections WCN 70.71
WasteMgt WM 77.72
s Waters
WAT 187.55
Watsco
WSO 161.71
Wayfair
W 67.10
WellCareHealth WCG 181.36
WellsFargo WFC 54.91
Welltower HCN 67.49
WestPharmSvcs WST 92.51
WestarEnergy WR 52.89
s WestAllianceBcp WAL 55.10
WesternGasEquity WGP 39.29
t WesternGasPtrs WES 47.87
WesternUnion WU 20.20
WestlakeChem WLK 83.26
WestpacBanking WBK 26.00
s WestRock WRK 60.76
Weyerhaeuser WY 34.82
WheatonPrecMetals WPM 20.99
Whirlpool WHR 182.50
Williams
WMB 28.84
WilliamsPartners WPZ 37.78
Wipro
WIT 5.43
WooriBank WF 45.10
Wyndham WYN 108.27
XPO Logistics XPO 67.69
XcelEnergy XEL 49.27
Xerox
XRX 33.28
Xylem
XYL 63.68
YPF
YPF 24.21
YumBrands YUM 75.55
YumChina YUMC 42.23
ZTO Express ZTO 15.38
s ZayoGroup ZAYO 36.12
ZimmerBiomet ZBH 121.70
s Zoetis
ZTS 65.28
1.13
-0.10
-0.03
-0.50
0.45
-0.02
-0.10
0.13
-0.29
-0.05
-0.33
-0.63
-0.69
-0.43
-0.51
0.20
-0.80
-0.01
-0.08
-2.92
0.04
-0.44
-0.04
-0.48
0.11
0.07
-0.09
3.57
-0.02
0.73
-0.23
-0.14
0.51
0.68
0.09
-0.73
-0.50
-0.54
0.45
0.77
0.07
-0.38
-0.53
-3.09
-0.01
-0.34
-0.48
1.21
0.11
-0.01
-0.59
1.42
-0.94
0.84
-0.01
-0.68
-1.33
-0.10
-0.80
-0.31
-1.33
-0.11
-0.56
-0.27
0.23
-0.46
0.08
0.04
-0.49
-0.70
...
-1.30
-0.73
0.08
0.01
-0.10
-0.55
1.25
-0.62
0.08
-0.22
-0.40
-0.65
-0.66
Net
Sym Close Chg
Stock
NASDAQ
AGNC Invt AGNC 21.63 -0.16
Ansys
ANSS 131.22 0.28
s ASML
ASML 178.07 2.85
s Abiomed
ABMD 176.00 1.38
ActivisionBliz ATVI 61.46 -1.17
AdobeSystems ADBE 172.16 -3.48
AkamaiTech AKAM 51.46 -0.41
AlexionPharm ALXN 135.20 -3.82
s AlignTech ALGN 202.76 1.88
Alkermes ALKS 49.47 -1.11
AlnylamPharm ALNY 115.57 0.87
Alphabet A GOOGL 985.54-19.53
Alphabet C GOOG 968.45-19.75
Altaba
AABA 66.51 -1.00
Amazon.com AMZN 966.30-16.61
Amdocs
DOX 65.94 -0.13
Amerco
UHAL381.33 6.04
AmericanAirlines AAL 50.98 -0.95
Amgen
AMGN 180.53 -2.43
AnalogDevices ADI 88.77 -0.16
Apple
AAPL 156.17 -0.08
s AppliedMaterials AMAT 56.37 0.28
s ArchCapital ACGL 102.38 0.23
Atlassian
TEAM 49.00 -1.17
Autodesk ADSK 118.99 -1.82
ADP
ADP 117.01 1.08
s BOK Fin
BOKF 89.85 -1.06
Baidu
BIDU 266.13 1.23
BankofOzarks OZRK 45.71 -1.38
Biogen
BIIB 328.55 -9.55
BioMarinPharm BMRN 86.46 -1.29
Bioverativ BIVV 58.92 -1.30
s bluebirdbio BLUE 140.35 -2.20
BrighthouseFin BHF 61.73 -0.39
Broadcom AVGO 244.27 0.03
CA
CA 34.29 0.19
CDK Global CDK 65.58 0.14
CDW
CDW 69.56 -0.06
CH Robinson CHRW 78.43 0.13
CME Group CME 134.61 -0.52
CSX
CSX 54.12 -0.40
CadenceDesign CDNS 42.15 -0.13
Carlyle
CG 23.88 -0.48
s CboeGlobalMkts CBOE 110.69 0.70
Celgene
CELG 122.37 1.04
Cerner
CERN 72.45 -0.56
CharterComms CHTR 345.07 -5.69
CheckPointSftw CHKP 117.52 -0.98
s ChinaLodging HTHT141.02 6.50
CincinnatiFin CINF 76.12 -0.34
Cintas
CTAS 151.49 -0.71
s CiscoSystems CSCO 34.35 0.10
CitrixSystems CTXS 83.15 -0.34
s Cognex
CGNX 122.68 0.24
s CognizantTech CTSH 74.40 -0.40
Coherent
COHR 262.41 0.61
Comcast A CMCSA 36.55 -0.67
CommerceBcshrs CBSH 57.72 -0.28
CommScope COMM 32.49 -0.16
Copart
CPRT 36.15 -0.33
CoStarGroup CSGP 283.70 1.14
Costco
COST 162.04 1.27
Ctrip.com CTRP 48.43 0.08
DISH Network DISH 48.98 -0.32
DentsplySirona XRAY 61.82 -0.02
DiamondbackEner FANG 100.35 -2.18
t DiscoveryComm B DISCB 23.60 -0.05
DiscoveryComm A DISCA 19.62 -0.67
DiscoveryComm C DISCK 18.66 -0.60
s DollarTree DLTR 91.72 -0.65
E*TRADE ETFC 42.75 -0.45
s EastWestBancorp EWBC 60.91 -0.46
eBay
EBAY 36.83 -0.78
ElbitSystems ESLT 149.30 -1.44
ElectronicArts EA 113.66 0.04
Equinix
EQIX 458.81 -9.95
Ericsson
ERIC 6.44 -0.01
ErieIndemnity A ERIE 123.78 -0.06
Exelixis
EXEL 26.98 -0.19
Expedia
EXPE 150.68 -2.12
ExpeditorsIntl EXPD 59.19 0.27
Company
Amount
Yld % New/Old Frq
Symbol
Payable /
Record
Increased
AVX Corp
Carolina Financial
CONE Midstream Partners
Hubbell
Manhattan Bridge
Permian Basin Royalty Tr
Potlatch REIT
Tower International
VF Corp
AVX
CARO
CNNX
HUBB
LOAN
PBT
PCH
TOWR
VFC
2.4
0.5
7.7
2.5
7.5
7.1
3.0
1.7
2.6
.115 /.11
.05 /.04
.3025 /.2922
.77 /.70
.11 /.1025
.054 /.04023
.40 /.375
.12 /.11
.46 /.42
Q
Q
Q
Q
Q
M
Q
Q
Q
Nov16 /Nov02
Jan05 /Dec14
Nov14 /Nov03
Dec15 /Nov30
Jan15 /Dec29
Nov14 /Oct31
Dec29 /Dec08
Dec08 /Nov10
Dec18 /Dec08
5.1 .44 /.54 Q
11.4 .0727 /.21668 M
Nov06 /Oct30
Nov14 /Oct31
Reduced
Blackstone Group
San Juan Basin Royalty Tr
BX
SJT
Initial
PowerShares PB US Agg Bd
.05272
PBND
Oct31 /Oct24
Funds and investment companies
Alpine Glbl Dynamic Div
Alpine Tot Dyn Div
AlpnGlblPrProp
Barings Corp Investors
Barings Part Investors
ChineseYuanDimSumBd
FundInvGradeCorpBdPort
PowerSh CA AMT-Fr Mun Bd
PowerSh Natl AMT-Fr Muni
PowerSh NY AMT-Fr Mun Bd
PowerSh Taxable Mun Bd
PowerShares DWA Tactical
AGD
AOD
AWP
MCI
MPV
DSUM
PFIG
PWZ
PZA
PZT
BAB
DWIN
52-Wk %
Sym Hi/Lo Chg Stock
91.47
37.50
205.99
60.29
56.73
24.99
102.60
66.49
8.43
92.08
93.95
21.60
145.70
54.90
29.49
12.50
72.00
36.90
111.04
27.78
21.90
33.00
141.85
34.68
6.84
123.57
75.00
25.13
63.65
33.55
93.68
14.99
61.58
12.80
16.71
27.30
30.90
42.55
15.32
261.41
37.80
19.04
-0.2
28.4
0.9
0.2
0.5
-0.1
0.2
-0.4
0.6
-1.2
-0.6
0.7
-1.5
1.7
-0.5
-1.1
2.1
1.7
0.6
-0.6
-1.7
6.6
4.8
0.3
3.4
0.2
-0.5
2.1
1.0
2.0
-0.7
-15.9
-0.7
8.5
3.5
1.1
...
30.8
-0.9
-0.6
0.1
1.8
ShtDurIncmA p
29.0 Lord Abbett F
ShtDurIncm
9.4
NA
5.3
3.2
8.0
15.6
7.9
3.8
14.7
3.9
NA
NA
NA
7.9
12.6
15.9
11.8
9.9
3.4
23.9
7.0
.065
.0575
.05
.30
.27
.07198
.05475
.04859
.06356
.05533
.09907
.10782
M
M
M
Q
Q
M
M
M
M
M
M
M
Nov30 /Nov22
Nov30 /Nov22
Nov30 /Nov22
Nov10 /Oct30
Nov10 /Oct30
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
52-Wk %
Sym Hi/Lo Chg Stock
FT APxJapan
FPA
FT CapStrength FTCS
FT DorseyDyn5 FVC
FT DorseyFoc5 FV
FT NasdTechDiv TDIV
FT JapanAlpha FJP
FT LC CoreAlpha FEX
FT LC GrwthAlpha FTC
FT LC US Equity RNLC
FT LC Value
FTA
FT LowBetaIincm FTLB
FT MegaCap
FMK
FT MC CoreAlpha FNX
FT NasdCleanEdge QCLN
FT Nasd100Tech QTEC
FT NasdSemicon FTXL
FT Nasd100 EW QQEW
FT RBAQualIncm QINC
FT USEquityDiv RNDV
FirstUnited
FUNC
FiveBelow
FIVE
Flex
FLEX
FlexShUSQualLC QLC
FlirSystems
FLIR
Garmin
GRMN
GilatSatellite
GILT
GladstoneInvt
GAIN
GlbXConsciousCos KRMA
GlbX Robotics&AI BOTZ
GpoFinGalicia
GGAL
HeritageFin
HFWA
HollysysAuto
HOLI
Hurco
HURC
ICU Medical
ICUI
II-VI
IIVI
IPG Photonics
IPGP
IRSA Prop
IRCP
Illumina
ILMN
IntegratedDevice IDTI
Intel
INTC
Intuit
INTU
IntuitiveSurgical ISRG
Net YTD
NAV Chg % Ret Fund
10.9
7.3
7.6
8.9
7.6
7.3
3.7
2.6
2.2
3.0
2.7
3.9
4.8
34.83
48.99
25.16
26.97
33.80
56.74
56.41
59.80
20.93
52.34
22.82
32.81
63.39
20.16
72.02
30.25
56.67
25.13
21.00
17.34
58.07
17.88
31.85
44.18
55.98
7.15
10.37
18.72
23.45
58.61
31.00
23.13
46.00
195.20
43.70
205.97
64.49
214.50
28.74
41.04
148.89
378.32
0.4
...
-0.2
-0.3
0.4
0.7
-0.2
-0.3
-0.1
-0.2
-0.7
0.5
-0.5
-0.2
0.2
0.4
-0.4
-0.6
0.6
...
-0.9
0.1
0.7
1.0
...
1.4
1.3
-0.1
1.3
5.9
0.3
2.4
1.6
1.0
-0.2
1.6
4.9
0.8
1.5
1.0
-0.4
1.1
ExpressScripts ESRX 58.65
F5Networks FFIV 118.27
Facebook
FB 171.27
Fastenal
FAST 48.92
FifthThirdBncp FITB 28.43
Fiserv
FISV 127.99
s Flex
FLEX 17.79
s FlirSystems FLIR 43.76
Fortinet
FTNT 40.17
Gaming&Leisure GLPI 36.56
s Garmin
GRMN 55.80
GileadSciences GILD 80.17
Goodyear GT 33.91
Grifols
GRFS 21.35
HD Supply HDS 36.41
Hasbro
HAS 89.75
HenrySchein HSIC 82.85
Hologic
HOLX 37.20
JBHunt
JBHT 107.41
HuntingtonBcshs HBAN 14.11
IAC/InterActive IAC 123.67
IdexxLab
IDXX 164.43
IHSMarkit INFO 43.96
INC Research INCR 54.40
s IPG Photonics IPGP 205.71
s IRSA Prop IRCP 64.49
IcahnEnterprises IEP 56.68
Icon
ICLR 113.49
s Illumina
ILMN 211.55
Incyte
INCY 113.48
s Intel
INTC 40.83
InteractiveBrkrs IBKR 50.55
s Intuit
INTU 147.32
s IntuitiveSurgical ISRG 373.52
IonisPharma IONS 62.80
JD.com
JD 38.43
JackHenry JKHY 106.40
JazzPharma JAZZ 140.16
JetBlue
JBLU 19.88
KLA Tencor KLAC 107.80
KraftHeinz KHC 77.06
LKQ
LKQ 37.06
s LamResearch LRCX 205.89
LamarAdvertising LAMR 66.90
LibertyBroadbandA LBRDA 90.93
LibertyBroadbandC LBRDK 92.71
LibertyGlobal A LBTYA 31.35
LibertyGlobal C LBTYK 30.40
LibertyLiLAC A LILA 21.83
LibertyLiLAC C LILAK 21.86
LibertyQVC A QVCA 23.16
LibertyVenturesA LVNTA 56.42
LibertyFormOne A FWONA 37.48
LibertyFormOne C FWONK 39.19
LibertyBraves A BATRA 24.62
LibertyBraves C BATRK 24.63
LibertySirius A LSXMA 43.25
LibertySirius C LSXMK 43.19
LincolnElectric LECO 97.21
LogitechIntl LOGI 37.15
LogMeIn
LOGM 121.05
lululemon LULU 63.83
MarketAxess MKTX 191.24
Marriott
MAR 115.31
s MarvellTech MRVL 18.47
MatchGroup MTCH 25.13
MaximIntProducts MXIM 52.00
MelcoResorts MLCO 23.78
MercadoLibre MELI 226.35
MicrochipTech MCHP 92.61
s MicronTech MU 41.56
Microsemi MSCC 52.04
s Microsoft MSFT 78.83
Middleby
MIDD 117.05
Momo
MOMO 31.58
Mondelez MDLZ 41.04
MonsterBeverage MNST 56.36
Mylan
MYL 38.47
s NXP Semi NXPI 116.40
Nasdaq
NDAQ 73.49
NatlInstruments NATI 43.90
NetApp
NTAP 44.74
Netease
NTES 275.09
Netflix
NFLX 192.47
...
4.27
...
Metropolitan West
10.66
...
TotRetBd
10.66
...
TotRetBdI
10.03
...
TRBdPlan
MFS Funds Class I
41.04 -0.07
ValueI
MFS Funds Instl
25.40 +0.02
IntlEq
Mutual Series
32.87 -0.10
GlbDiscA
Oakmark Funds Invest
33.88 -0.14
EqtyInc r
84.03 -0.45
Oakmark
29.00 -0.03
OakmrkInt
Old Westbury Fds
14.81 -0.03
LrgCpStr
Oppenheimer Y
41.78 -0.30
DevMktY
42.82 +0.02
IntGrowY
Parnassus Fds
43.66 -0.09
ParnEqFd
PIMCO Fds Instl
NA
...
AllAsset
TotRt
10.29 +0.01
PIMCO Funds A
IncomeFd
NA
...
PIMCO Funds D
NA
...
IncomeFd
PIMCO Funds Instl
NA
...
IncomeFd
PIMCO Funds P
NA
...
IncomeP
Price Funds
94.73 -0.75
BlChip
CapApp
29.59 -0.08
34.87 -0.09
EqInc
EqIndex
68.93 -0.27
68.60 -0.47
Growth
HelSci
74.52 -0.40
2.3 InstlCapG
2.7
3.0
3.0
14.5
25.4
9.3
11.4
15.9
27.8
15.4
30.7
23.5
12.0
NA
4.9
NA
NA
NA
NA
30.5
13.0
12.3
16.2
28.8
26.1
-0.86
-1.21
-3.71
0.53
-0.17
-0.45
0.01
0.44
-0.15
-0.15
...
-1.04
-0.03
-0.27
-0.34
-8.44
-1.68
0.19
0.83
-0.08
-1.05
-0.28
-0.07
-1.45
3.16
2.99
-0.81
-0.14
1.67
-0.71
0.40
1.16
-0.65
3.94
-1.59
-0.57
0.62
-3.89
-0.47
-0.54
0.35
-0.28
0.55
-1.41
-1.05
-0.79
-0.28
-0.28
-0.16
-0.18
-0.22
-1.30
-1.22
-1.23
-0.26
-0.20
-0.51
-0.59
1.31
0.44
1.90
0.54
0.98
0.29
0.06
-0.56
-0.09
-0.13
-9.38
-0.12
0.06
0.43
0.02
-4.06
-0.31
0.02
-0.10
-0.04
0.52
0.57
-0.22
0.18
-1.54
-1.69
Net
Sym Close Chg
Stock
NewsCorp A NWSA 13.75
NewsCorp B NWS 14.00
Nordson
NDSN 125.49
NorthernTrust NTRS 95.41
NorwegianCruise NCLH 53.72
NVIDIA
NVDA 196.62
OReillyAuto ORLY 205.65
s OldDomFreight ODFL 111.80
ON Semi
ON 20.08
OpenText OTEX 33.89
PTC
PTC 60.76
s Paccar
PCAR 74.65
PacWestBancorp PACW 48.37
Paychex
PAYX 64.34
PayPal
PYPL 69.80
People'sUtdFin PBCT 18.75
s PilgrimPride PPC 30.87
Priceline
PCLN 1934.55
Qiagen
QGEN 34.14
Qorvo
QRVO 69.80
Qualcomm QCOM 53.39
RandgoldRscs GOLD 98.23
RegenPharm REGN 432.76
RossStores ROST 64.31
Ryanair
RYAAY104.61
SBA Comm SBAC 147.99
SEI Investments SEIC 62.68
Sina
SINA 111.09
s SS&C Tech SSNC 42.10
SVB Fin
SIVB 186.80
ScrippsNetworks SNI 83.54
Seagate
STX 39.35
SeattleGenetics SGEN 62.37
Shire
SHPG 144.78
SignatureBank SBNY 133.62
SiriusXM
SIRI 5.70
Skyworks SWKS 104.77
Splunk
SPLK 64.23
Starbucks SBUX 54.27
SteelDynamics STLD 38.83
Stericycle SRCL 72.64
Symantec SYMC 32.22
Synopsys SNPS 84.28
TD Ameritrade AMTD 48.14
TESARO
TSRO 113.64
T-MobileUS TMUS 61.47
TRowePrice TROW 96.13
TakeTwoSoftware TTWO 105.01
Tesla
TSLA 337.02
s TexasInstruments TXN 96.21
TractorSupply TSCO 58.43
Trimble
TRMB 40.78
21stCenturyFoxA FOXA 26.69
21stCenturyFoxB FOX 26.01
UltaBeauty ULTA 202.36
UltimateSoftware ULTI 193.13
UniversalDisplay OLED 134.85
VEON
VEON 3.91
VeriSign
VRSN 107.96
VeriskAnalytics VRSK 84.77
VertxPharm VRTX 151.06
Viacom A VIA 33.20
Viacom B VIAB 26.31
Vodafone VOD 28.86
WPP
WPPGY 89.81
WalgreensBoots WBA 67.51
Weibo
WB 96.07
WesternDigital WDC 87.99
s WillisTwrsWatson WLTW 164.02
Workday
WDAY 107.75
WynnResorts WYNN 144.76
Xilinx
XLNX 71.68
Yandex
YNDX 30.77
ZebraTech ZBRA 111.46
Zillow A
ZG 40.75
Zillow C
Z
40.93
ZionsBancorp ZION 46.39
0.04
-0.10
0.83
0.14
-0.01
-0.28
-0.25
-0.70
0.01
0.10
0.04
-0.27
0.38
0.30
-1.17
-0.14
-0.17
-7.56
0.01
-0.12
1.37
0.65
-0.22
0.08
-2.25
0.10
-1.02
0.61
0.12
-2.67
-0.96
4.41
-1.49
-0.47
-0.51
-0.05
-0.38
0.14
-0.30
-0.07
-0.05
-0.44
-0.04
-0.13
-2.76
1.01
-0.73
0.08
-8.08
1.03
-0.46
-0.34
-0.81
-0.83
-2.48
-0.29
0.55
-0.09
-0.98
-0.08
-3.57
-0.80
-0.39
-0.12
-0.88
-0.55
0.59
1.58
1.20
-0.81
0.32
-0.49
-0.39
0.08
-0.35
-0.32
-0.37
NYSE AMER
CheniereEnergy LNG
CheniereEnerPtrs CQP
CheniereEnHldgs CQH
ImperialOil IMO
Amount
Yld % New/Old Frq
45.52
27.98
25.38
30.98
-0.66
-0.24
-0.10
-0.32
Payable /
Record
PGF
PGHY
KBWD
KBWY
XRLV
BKLN
VRP
LDRI
SPLV
VRIG
PCF
PIM
PMO
PPT
PMM
XSHD
PVI
PLW
PCEF
PGX
PCY
PHB
PEY
PICB
SPHD
5.3
5.0
9.3
7.4
1.7
3.6
3.9
1.8
2.2
2.2
3.8
6.5
5.1
5.8
5.1
4.4
0.6
2.0
6.4
5.7
4.8
3.9
3.4
1.5
2.9
.08407
.1015
.18695
.2302
.045
.07
.08561
.03831
.084
.04602
.0283
.026
.0541
.026
.0318
.09157
.01282
.05351
.12778
.07189
.11764
.06233
.049
.03388
.10114
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Dec01 /Nov24
Dec01 /Nov24
Dec01 /Nov24
Dec01 /Nov24
Dec01 /Nov24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
Oct31 /Oct24
SCCO
UL
2.3
3.1
.25
.4217
Q
Q
Nov22 /Nov08
Dec13 /Nov03
THFF
2.1
1.50
Foreign
Southern Copper
Unilever ADR
Special
First Financial Indiana
Dec01 /Nov17
KEY: A: annual; M: monthly; Q: quarterly; r: revised; SA: semiannual;
S2:1: stock split and ratio; SO: spin-off.
53.84
51.88
53.47
95.85
69.69
56.44
153.63
168.34
25.76
38.00
36.59
55.76
26.60
2.20
56.52
208.41
31.11
26.48
5.18
23.42
12.26
38.02
18.88
14.45
42.19
79.34
8.97
115.34
14.60
116.44
81.22
12.59
31.26
112.96
31.83
75.68
9.70
25.39
31.42
56.35
50.36
25.33
-1.8
-0.5
-0.2
-0.1
0.8
0.1
-0.3
0.5
0.9
...
-0.1
-0.7
-1.6
2.1
0.3
0.3
-0.3
0.2
-0.6
0.1
-1.7
0.2
0.3
-0.7
0.1
...
2.2
0.6
0.3
0.4
0.3
2.5
2.7
-0.6
0.9
-0.4
...
-0.5
-0.5
-0.9
-0.1
...
31.9
25.0
19.8
21.6
6.8
27.6
3.6
24.7
NA
NA
NA
NA
NA
14.8
24.0
25.6
NA
16.4
52-Wk %
Sym Hi/Lo Chg Stock
PwrShDynIndls PRN
PwrShDynTech PTF
PwrShUS1500 PRFZ
PwrShGlbWater PIO
PwrShHY EqDiv PEY
PwrShRuss1000Low USLB
PwrShWaterRscs PHO
PrincipalContVal PVAL
PrincipalPriceSet PSET
PrincipalSustMom PMOM
RF Industries
RFIL
ROBOGlblRobotics ROBO
RichardsonElec RELL
SG Blocks
SGBX
SS&C Tech
SSNC
SprottFocus
FUND
StarBulkNts2019 SBLKL
Strattec
STRT
Synalloy
SYNL
TechTarget
TTGT
TexasInstruments TXN
TheBancorp
TBBK
TriumphBancorp TBK
TwoRiverBancorp TRCB
2U
TWOU
UFP Tech
UFPT
uniQure
QURE
UniversalForest UFPI
VangdRuss1000 VONE
VangdRuss1000Grw VONG
VangdRuss1000Val VONV
VangdRuss3000 VTHR
VSInverseVIXSTerm XIV
VicShDivAccel
VSDA
VicShUS500EnhVol CFO
VicShUS500Vol CFA
VirtusInvtPfdD VRTSP
WillisTwrsWatson WLTW
WisdTrJapanHdgSC DXJS
WisdTrUSQltyDiv DGRW
Woodward
WWD
Xunlei
XNET
Net YTD
NAV Chg % Ret Fund
38.57 -0.27
19.12 -0.06
15.34 -0.07
91.67 -0.22
MCapGro
31.03 -0.12
MCapVal
N Horiz
55.26 -0.20
9.50 +0.01
N Inc
11.31 -0.03
OverS SF r
NA
...
R2020
R2025
NA
...
NA
...
R2030
NA
...
R2035
NA
...
R2040
Value
38.63 -0.09
PRIMECAP Odyssey Fds
35.52 -0.20
Growth r
Principal Investors
DivIntlInst
13.82 -0.07
Prudential Cl Z & I
NA
...
TRBdZ
Schwab Funds
S&P Sel
40.06 -0.16
TIAA/CREF Funds
19.23 -0.08
EqIdxInst
IntlEqIdxInst 20.18 -0.05
Tweedy Browne Fds
28.37 -0.03
GblValue
VANGUARD ADMIRAL
237.01 -0.94
500Adml
BalAdml
33.93 -0.08
11.85
...
CAITAdml
CapOpAdml r 155.08 -1.01
36.89 -0.26
EMAdmr
EqIncAdml
76.31 -0.09
ExtndAdml
82.01 -0.55
GNMAAdml 10.51 +0.01
69.27 -0.42
GrwthAdml
HlthCareAdml r 90.99 -0.35
HYCorAdml r 5.99
...
25.67 +0.02
InfProAd
93.67 -0.48
IntlGrAdml
ITBondAdml 11.43 +0.01
IntlStk
2.4 IntlValEq
Symbol
PowerShares Finl Pfd
PowerShares Gl Shrt Tm
PowerShares KBW Hi Div
PowerShares KBW REIT
PowerShares S&P 500 xRate
PowerShares Sr Loan Ptf
PowerShares Variable Rate
PS LadderRite 0-5 Yr Corp
PS S&P 500 Lo Voltl Prtf
PS Variable Rate Inv Grd
Putnam High Income Sec
Putnam Mas Inco
Putnam Muni Opportunities
Putnam Premier Income Tr
Putnam Tr
PwrSh S&P SC Hi Div Low
PwrSh VRDO Tax-Free Wkly
PwrShrs 1-30 Laddrd Treas
PwrShrs CEF Inco Comp Ptf
PwrShrs Preferred
PwrShs Emrg Mkts Sov Debt
Pwrshs Fundm H Y F Cp Bd
PwrShs Hi Yld Eqty Dv Ach
PwrShs Intl Corp Bd Ptf
PwrShs S&P 500 High Divd
52-Wk %
Sym Hi/Lo Chg Stock
iRhythmTechs
IRTC
iShCoreS&PUSGrowth IUSG
iShCoreS&PUSValue IUSV
iShSelectDividend DVY
iShGlbTimber
WOOD
iShMSCIUSAESGOpt ESGU
iShMornMCValue JKI
iShPHLXSemicond SOXX
iShRuss1000PureUS AMCA
IturanLocation
ITRN
JanusSCGrwAlpha JSML
KLX
KLXI
KellyServices A KELYA
KingoldJewelry KGJI
LGI Homes
LGIH
LamResearch
LRCX
LeggMasonLowVol LVHD
LeggMasonSCQualVal SQLV
LimelightNetworks LLNW
MCBCHoldings MCFT
MDC Partners
MDCA
MainSourceFncl MSFG
MarvellTech
MRVL
MercerIntl
MERC
MicronTech
MU
Microsoft
MSFT
MitelNetworks MITL
MonolithicPower MPWR
NMI Holdings
NMIH
NXP Semi
NXPI
Neogen
NEOG
NewStarFinancial NEWS
NovaMeasuring NVMI
OldDomFreight ODFL
OrganicsETF
ORG
Paccar
PCAR
PacificMercBncp PMBC
PennNational
PENN
PilgrimPride
PPC
Potlatch
PCH
PwrShDWA Mom PDP
PwrShDivAch
PFM
Net YTD
NAV Chg % Ret Fund
4.28
Net
Sym Close Chg
Stock
Company
Dividend announcements from October 23.
Fidelity Selects
224.61 -2.97
First Eagle Funds
60.18 -0.08
GlbA
FPA Funds
35.25 -0.18
FPACres
FrankTemp/Frank Adv
IncomeAdv
NA
...
FrankTemp/Franklin A
7.48
...
CA TF A p
Fed TF A p
12.01 +0.01
2.39 -0.01
IncomeA p
60.36 -0.15
RisDv A p
FrankTemp/Franklin C
2.42 -0.01
Income C t
FrankTemp/Temp A
GlBond A p
12.17 -0.03
27.02 -0.06
Growth A p
FrankTemp/Temp Adv
GlBondAdv p 12.12 -0.03
Harbor Funds
NA
...
CapApInst
NA
...
IntlInst r
Harding Loevner
IntlEq
NA
...
Invesco Funds A
11.27 -0.03
EqIncA
John Hancock Class 1
15.90 -0.04
LSBalncd
17.03 -0.06
LSGwth
John Hancock Instl
24.00 -0.14
DispValMCI
JPMorgan Funds
MdCpVal L
40.01 -0.13
JPMorgan R Class
11.65 +0.01
CoreBond
Lazard Instl
19.67 +0.01
EmgMktEq
Loomis Sayles Fds
14.22 -0.02
LSBondI
Lord Abbett A
Biotech r
-0.13
-0.36
0.19
0.30
0.34
-0.17
-0.45
-0.83
-0.02
-3.12
-0.49
0.81
0.72
-0.04
-0.35
0.57
-0.59
2.03
0.10
-0.04
-0.01
0.29
-0.61
-0.44
-0.67
-0.86
-0.07
0.03
-1.93
-0.20
-2.95
-0.01
0.03
0.79
-0.57
-0.06
-0.66
-0.03
-0.14
-0.53
-0.36
0.05
0.06
-1.26
-0.39
0.20
-0.17
-0.65
0.11
0.37
0.09
-1.01
0.82
-0.59
0.03
0.19
2.10
-0.02
-0.08
0.73
-0.07
-0.40
-0.09
-0.37
-0.09
-0.17
-0.36
-0.04
0.51
-0.13
-1.21
0.23
-0.87
-0.50
0.15
0.58
-1.13
-0.27
-0.09
0.27
-0.94
-0.44
-1.02
-0.04
Net
Sym Close Chg
Stock
Dividend Changes
AdvEnergyInds AEIS
AimmuneTherap AIMT
AlignTech
ALGN
AnikaTherap
ANIK
AppliedMaterials AMAT
ArchCapitalPfdE ACGLP
ArchCapital
ACGL
AspenTech
AZPN
AudioCodes
AUDC
BOK Fin
BOKF
Blackbaud
BLKB
BlueBird
BLBD
bluebirdbio
BLUE
BroadSoft
BSFT
CNB FinPA
CCNE
CalamosStratTot CSQ
CambridgeBncp CATC
CarolinaFinancial CARO
CboeGlobalMkts CBOE
CenterStateBank CSFL
ChefsWarehouse CHEF
ChinaInternet
CIFS
ChinaLodging
HTHT
CiscoSystems
CSCO
Co-Diagnostics CODX
Cognex
CGNX
CognizantTech
CTSH
Cohu
COHU
ColumbiaSportswr COLM
Diodes
DIOD
DollarTree
DLTR
DragonVictory
LYL
EastWestBancorp EWBC
EducDev
EDUC
ElectroScientific ESIO
EntegraFin
ENFC
Entegris
ENTG
Exactech
EXAC
Ferroglobe
GSM
FidelityNasdComp ONEQ
FirstInternetBncp INBK
FirstSouthBancorp FSBK
AGNC InvPfdC
ASML
Abiomed
Net
Sym Close Chg
Stock
60.39
53.12
127.63
25.38
17.53
30.16
29.36
25.20
30.82
25.25
2.75
39.90
6.88
6.48
42.27
7.92
25.59
46.20
14.92
12.30
96.74
8.64
33.00
20.24
62.05
30.80
21.35
110.50
118.25
132.32
105.65
118.54
113.59
26.86
46.82
46.84
109.21
164.58
43.98
39.47
81.78
7.39
...
-0.4
-0.7
-0.6
-0.1
-0.2
-0.5
0.7
0.6
0.9
...
0.2
1.2
1.1
0.3
-0.1
...
4.7
2.9
0.8
1.1
1.5
-0.5
...
-0.8
-0.8
-3.9
0.9
-0.4
-0.5
-0.3
-0.4
-3.1
1.2
-0.2
-0.1
-2.5
0.7
0.1
-0.1
-0.7
-7.1
ZAGG
15.9
21.9 VANGUARD FDS
26.37
DivdGro
215.69
13.3 HlthCare r
INSTTRF2020 22.43
16.4 INSTTRF2025 22.69
10.7 INSTTRF2030 22.87
5.0 INSTTRF2035 23.06
24.8 INSTTRF2040 23.24
26.3 INSTTRF2045 23.38
39.01
13.8 IntlVal
32.96
13.7 LifeGro
26.81
1.9 LifeMod
PrmcpCor
26.86
22.0
32.97
20.0 SelValu r
27.04
7.3 STAR
10.68
1.7 STIGrade
39.1 TgtRe2015
15.86
3.9 TgtRe2020
31.47
+0.01
+0.01
-0.74
...
...
...
...
...
-0.71
-0.48
-0.44
...
...
+0.01
+0.02
-0.10
-0.28
-0.03
-0.10
-0.19
+0.03
-0.07
-0.17
4.2
8.8
14.9
7.0
4.7
5.8
2.7
1.4
24.0
3.8
11.7
1.4
2.2
3.2
1.6
23.2
16.0
22.3
12.1
11.8
7.8
11.2
15.1
...
-0.82
-0.04
-0.05
-0.06
-0.07
-0.08
-0.08
-0.12
-0.10
-0.05
-0.10
-0.14
-0.06
...
-0.02
-0.05
14.3
20.0
11.4
12.8
14.1
15.3
16.5
17.1
22.9
15.3
12.1
21.1
14.6
15.0
2.1
9.3
11.4
ZAGG
17.75
1.5
Nasdaq lows - 39
ADOMANI
ADOM
AduroBiotech
ADRO
AdvaxisWt
ADXSW
Advaxis
ADXS
Aemetis
AMTX
AquaMetals
AQMS
AvenueTherap
ATXI
AxovantSciences AXON
CHF Solutions
CHFS
CardiomePharma CRME
Catasys
CATS
ConcordiaIntl
CXRX
Connecture
CNXR
DBVTechnologies DBVT
DiscoveryComm B DISCB
FFBW
FFBW
FTD
FTD
FT LowDurOpp LMBS
FlexPharma
FLKS
HabitRestaurants HABT
iShMSCIQatarCapped QAT
KrystalBiotech
KRYS
LexiconPharm
LXRX
MYndAnalytics MYND
NabrivaTherap
NBRV
NovelionTherap NVLN
OasmiaPharm
OASM
OxbridgeRe
OXBR
ProfDiversity
IPDN
RennovaHealth RNVA
RexEnergy
REXX
StrataSkinSci
SSKN
Synaptics
SYNA
TrinityBiotech
TRIB
US Gold
USAU
VS2xVIXMedTerm TVIZ
VS2xVIXShortTerm TVIX
VSVIXShortTerm VIIX
WMIH
WMIH
Net YTD
NAV Chg % Ret Fund
ITIGradeAdml 9.82
LTGradeAdml 10.58
MidCpAdml 185.35
MuHYAdml
11.42
14.22
MuIntAdml
11.70
MuLTAdml
MuLtdAdml
10.99
MuShtAdml 15.80
PrmcpAdml r 134.96
REITAdml r 118.09
SmCapAdml 68.37
STBondAdml 10.44
STIGradeAdml 10.68
10.77
TotBdAdml
TotIntBdIdxAdm 21.85
TotIntlAdmIdx r 29.76
64.16
TotStAdml
TxMIn r
14.08
ValAdml
39.88
69.00
WdsrllAdml
65.12
WellsIAdml
73.61
WelltnAdml
79.03
WndsrAdml
52-Wk %
Sym Hi/Lo Chg
TgtRe2025
TgtRe2030
TgtRe2035
TgtRe2040
TgtRe2045
TgtRe2050
TgtRetInc
TotIntBdIxInv
WellsI
Welltn
WndsrII
3.81
8.70
1.25
3.48
0.53
4.36
4.50
5.48
6.53
1.57
3.54
0.47
0.25
22.33
19.80
11.00
11.22
51.83
2.90
11.95
14.90
9.01
10.88
2.80
6.00
5.82
0.82
3.25
3.22
0.65
1.84
1.10
35.31
4.79
1.20
10.84
8.20
14.20
0.78
-3.1
-4.9
-3.8
-7.7
-4.9
-17.9
...
-3.0
-0.7
-7.3
-1.4
-6.5
-40.8
-41.1
-0.2
2.1
0.3
-0.1
-9.7
-1.2
0.1
-6.8
-2.3
6.3
-4.1
-9.2
-12.6
-9.6
-3.6
-13.4
-2.6
-15.6
-3.6
-6.1
-3.7
2.5
6.5
3.3
-5.3
Net YTD
NAV Chg % Ret
18.44 -0.04
33.30 -0.09
20.45 -0.06
35.20 -0.12
22.11 -0.08
35.57 -0.12
13.53 -0.01
10.93 +0.01
26.88 +0.01
42.62 -0.05
38.88 -0.11
VANGUARD INDEX FDS
236.99 -0.94
500
202.37 -1.37
ExtndIstPl
SmValAdml
55.30 -0.37
10.73 +0.01
TotBd2
17.79 -0.06
TotIntl
TotSt
64.13 -0.29
VANGUARD INSTL FDS
33.94 -0.08
BalInst
DevMktsIndInst 14.10 -0.03
DevMktsInxInst 22.04 -0.05
82.00 -0.56
ExtndInst
69.28 -0.41
GrwthInst
InPrSeIn
10.46 +0.01
233.84 -0.92
InstIdx
233.85 -0.93
InstPlus
InstTStPlus
57.55 -0.26
40.95 -0.16
MidCpInst
201.94 -0.80
MidCpIstPl
SmCapInst
68.36 -0.44
...
STIGradeInst 10.68
10.77 +0.01
TotBdInst
TotBdInst2
10.73 +0.01
10.77 +0.01
TotBdInstPl
TotIntBdIdxInst 32.79 +0.03
TotIntlInstIdx r 119.02 -0.38
TotItlInstPlId r 119.05 -0.37
64.17 -0.28
TotStInst
ValueInst
39.88 -0.09
Western Asset
NA
...
CorePlusBdI
12.8
14.0
15.3
16.5
17.0
17.0
6.9
1.6
7.8
11.1
11.7
16.3
13.7
7.7
3.1
23.1
15.8
10.7
22.4
22.4
13.7
22.0
1.7
16.4
16.4
15.9
14.9
14.9
11.7
2.2
3.2
3.2
3.2
1.7
23.2
23.2
16.0
12.1
NA
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.
Tuesday, October 24, 2017 | B11
* * * * *
MONEY & INVESTING
GE Isn’t Alone in Long-Term-Care Woes
Conglomerate reviews
reinsurance obligations
amid wider concerns
about sector’s reserves
BY LESLIE SCISM
Worries about the health of
the long-term-care insurance
industry have nettled investors for years. General Electric Co.’s comments show the
problem isn’t going away
soon.
The Boston company on
Friday cut its earnings fore-
cast for the year, citing poor
results at units including its
power division.
The company also said results could be hit by a reassessment of an insurance
unit’s prospects, a remark that
came as a surprise to some,
given that GE years ago spun
out a business closely identified with long-term care, now
known as Genworth Financial
Inc.
A GE executive on the company’s conference call Friday
said the firm has actuaries
combing through its longterm-care insurance reserves
in “a very complex exercise” to
figure out if they are deficient.
GE still has billions of dollars in reinsurance obligations
on its books from coverage it
sold to other insurers that had
sold policies to consumers. By
doing so, GE took on some of
those carriers’ responsibilities
for paying claims, according to
analysts. The risk for GE and
others is whether carriers that
sold long-term-care policies
have adequate reserves to pay
future claims.
If GE proceeds with an outsize charge, it “may result in a
negative read across” a wide
range of other companies with
long-term-care reserves, said
analysts at securities firm
Evercore ISI in a recent report.
Their report followed GE’s
disclosure this summer of the
review, when it noted “adverse
claims experience.”
Evercore said long-term
care is “one of the larger balance-sheet concerns” at insurers including Genworth, Manulife Financial Corp. and Unum
Group. The three companies
declined to comment.
Evercore said its analysis of
GE’s regulatory filings indi-
Mongolia Returning to Debt Market With $650 Million Offshore Bond
cates the company likely has
“a deficiency of 20% or more”
in its long-term-care reserves,
which could mean a charge of
$2.5 billion or more.
Until its review is completed, GE is halting dividends
from its GE Capital unit to the
parent, which has fueled concerns about whether the company will maintain its common-stock dividend. GE is
aiming to conclude the review
before year-end.
Long-term-care insurance
took off in the early 1990s.
In general, the policies pay
for nursing homes, assisted
Hartford to Buy
Unit From Aetna
matures in 2018, the person
said.
This will be Mongolia’s second visit to the offshore dollarbond market in 2017. In March,
Ulaanbaatar—the capital city,
above—raised $600 million by issuing seven-year bonds. The latest bonds have received an initial credit rating of B-minus
from S&P Global Ratings and
Fitch Ratings, meaning they are
rated as junk debt. The country
agreed to a $5.5 billion bailout
package with the International
Monetary Fund this year to help
deal with its existing debt load.
This month’s issuance comes
in a strong year for bond sales
by emerging countries. Last
month, Tajikistan raised $500
million in its first-ever international bond sale, paying a 7.125%
interest rate.
Speculative-grade bond issuance in the developing world has
topped $200 billion so far in
2017, according to data from J.P.
Morgan Chase & Co. and Dealogic, up 60% from a year earlier.
Junk-rated bonds issued by
sovereign nations this year have
been some of the best performers in credit markets. Mongolia’s
bonds issued in March have
given double-digit-percentage returns to investors.
Credit Suisse Group AG,
Deutsche Bank AG and J.P. Morgan are joint lead managers and
joint bookrunners.
—Manju Dalal
HEARD ON THE STREET
China Feeding Frenzy Will Need Shrewd Play
BY STEPHEN WILMOT
AND JACKY WONG
Selling baby food should
be a steady business, but in
China it has been anything
but. The world’s largest infant
formula market is booming
again. It probably won’t last.
Last week global dairy
company Danone posted
organic growth in its thirdquarter formula sales of more
than 20%, with an increase of
more than 50% in China,
which accounts for two-fifths
of global sales. Rivals Mead
Johnson, which has belonged
to consumer group Reckitt
Benckiser since mid-June,
and Nestlé also noted
improvements in China.
An uptick in births has
created a rosier picture.
Chinese births rose 8% to 17.9
million last year, the highest
point since 2000. How much
of the rise is due to the
relaxation of the infamous
one-child policy is a matter of
debate. The jump may have
more to do with a quirk of
the Chinese zodiac calendar.
The Year of the Monkey,
Bouncing Babies
Value of infant formula sales
in China
$20 billion
15
10
5
0
2012 ’13
’14
’15
’16
’17*
*Projection
Source: Euromonitor International
THE WALL STREET JOURNAL.
beginning in 2016, was an
auspicious year in which to
be born. The longer-term
outlook for births is negative.
Last year there were 225
million Chinese ages 23
through 32 but only 176
million ages 13 through 22,
notes Deutsche Bank.
Demographics won’t generate
sustainable growth in China.
The other big reason for
the third-quarter improvement is also temporary:
Distributors are no longer
running down inventory.
Following a succession of
health scandals, China last
year said that formula
products, of which there were
more than 2,000, would need
to be registered with the
nation’s food and drug
regulator as of 2018. Not
knowing which brands would
be allowed, distributors held
off buying. Meanwhile, lowquality brands that couldn’t
hope for approval cleared
their warehouses. Western
groups found it hard to
compete.
Now that some brands have
received approval, distributors
seem to be buying again.
Another likely factor is a delay
in the government’s clampdown on cross-border ecommerce, a loophole for
unlicensed imports that has
become a major conduit for
cut-price formula sales.
Authorities were going to
close it at the end of this year;
now it looks like it will remain
open another 12 months. This
may have encouraged importers to place orders.
Danone’s emergence as the
key beneficiary is rooted in
crisis. Two years ago its
mainstream brand, Dumex,
was drawn into a health scare
by a big supplier, New
Zealand dairy company
Fonterra Co-Operative
Group.
Danone responded by
unloading Dumex and betting
big on the cross-border ecommerce channel. Management expects a strong fourth
quarter, but stressed that
“volatility is still to be
expected.”
Stable sales trends could
eventually emerge if the
regulatory situation settles
down. As they do, big global
players should flourish in a
more concentrated and
disciplined market. Their
brands also typically have
better reputations for food
safety than domestic ones.
But investors shouldn’t get
their hopes up too early. For
the foreseeable future,
feeding babies in China will
remain a tricky affair.
Hartford Financial Services Group Inc. has agreed to
pay $1.45 billion to health insurer Aetna Inc. for a unit
that provides life-, disabilityincome and other insurance
products to employers’ benefits programs in the U.S.
The acquisition will nearly
double the Connecticut company’s business of selling benefits to employers, one of its
main operations outside of
property-casualty insurance.
Hartford Chairman and
Chief Executive Christopher
Swift said in an interview that
the acquisition “will make us
one of the top two players” in
sales of the group-benefits
products. Hartford’s annual
premium in the business will
expand to about $5 billion
from $3.15 billion in 2016, and
there will be more than 20
million people insured by the
combined operation.
Property-casualty insurance
will remain Hartford’s dominant business with more than
$10.5 billion in annual premium.
The deal marks another sign
of Hartford’s turnaround from
struggles during the 2008-09
global markets meltdown. It
was among the hardest-hit insurers, when a long marketleading position in sales of a
stock-market-linked
retirement-income product proved
riskier than anticipated. It took
$3.4 billion in U.S. government
aid, since repaid.
In a news release, Aetna
President Karen S. Lynch said
the divestiture allows “a
stronger focus on our strategy
of creating a personalized approach to improving member
health.” Aetna said options for
deploying sales proceeds include internal investments,
share repurchases and debt repayment.
Hartford doesn’t intend to
issue debt or equity to fund
the purchase. It said it would
use some money allocated for
share buybacks and that the
transaction would add to its
2018 earnings.
Hartford President Doug Elliot said the acquisition comes
with important digital technology. Hartford will use Aetna’s
claims data in its advanced analytics to try to find ways to
speed up recoveries of people
drawing on disability-income
and workers’ compensation
policies.
The deal includes a multiyear arrangement in which
Aetna’s sales team will offer
Hartford’s group-insurance
products to clients.
At Hartford during the financial crisis, then newly installed Chief Executive Liam
McGee faced pressure from
hedge-fund manager John
Paulson to focus on its property-casualty business, possibly by spinning it off. Mr. McGee divested some operations
to narrow Hartford’s focus.
$1.45B
Amount Hartford agreed to pay
for the Aetna business
Hartford continues to wind
down the precrisis book of
variable annuities, which it
quit selling after the crisis. In
the interview, Mr. Swift said:
“We’ve told our investors we’re
not the natural long-term
owner [of the runoff unit], but
we’re happy running it off…It
produces decent earnings.” In
2014, Mr. Swift succeeded Mr.
McGee, who died of cancer the
following year.
Hartford has shown up on
some Wall Street analysts’ lists
as both a buyer and seller in potential merger-and-acquisition
activity. It is viewed as attractive as a target partly because it
is a leading seller of propertycasualty insurance to small and
midsize companies. This is an
area many large insurers consider ripe for increased use of
algorithms in sizing up risk.
But at about $21 billion in
market capitalization, Hartford is a size at which there is
a limited number of potential
acquirers.
“We are in attractive aspects
of the market—property-andcasualty and benefits—with
good execution, innovation…I
feel like we can control our
destiny,” Mr. Swift said.
Amazon Throws Etsy for a Loop
CHRIS BRONSON/ASSOCIATED PRESS
TAYLOR WEIDMAN/GETTY IMAGES
BY LESLIE SCISM
Mongolia is planning to raise
up to $650 million in an offshore
bond sale this week, a person
familiar with the situation said.
The government plans to issue a 5½-year bond with a yield
of about 6%, which is roughly
where its existing dollar bonds
due in 2022 and 2024 are trading, the person said Monday.
Proceeds from the latest
bond offering will be used to retire, or buy back, U.S. dollar- and
yuan-denominated debt that
living facilities or health-care
aides in people’s private residences. Such care generally
isn’t paid by the Medicare
health-insurance program for
older people.
But by the middle part of
the last decade, many insurers
were rapidly ratcheting back
the benefits, concluding they
had badly miscalculated how
many people would file claims
and how long they would draw
benefits before dying, among
other things.
Industrywide, insurers have
taken billions of dollars of
charges over the past decade.
Treasury, CFPB Clash Over Arbitration Rule
BY YUKA HAYASHI
WASHINGTON—The Treasury Department on Monday
criticized a rule governing how
banks resolve disputes with consumers, part of an effort by the
White House to thwart a plan
initiated under the Obama administration.
The dispute relates to a regulation issued in July by the Consumer Financial Protection Bureau, which continues to be run
by an Obama-appointed official.
The rule makes it easier for con-
sumers to bring class-action
lawsuits against financial companies by banning arbitration
requirements written in the fine
print of financial-services contracts.
Senate Republicans are preparing to vote on a bill that
would overturn the rule, which
is unpopular in the financial industry. Senate GOP leadership
has told Democrats to expect a
vote this week.
The Office of the Comptroller
of the Currency, an independent
banking regulator affiliated with
the Treasury Department and
headed by an acting Trump official, earlier in October released
an analysis saying that the rule
would increase the cost of credit
for consumers. The CFPB disputed the OCC analysis, saying
it was “based on flawed statistics and is contradicted by publicly available historical data.”
The Treasury report released
Monday predicted that the new
rule would generate more than
3,000 additional class-action
lawsuits over the next five
years, resulting in more than
$500 million in additional legaldefense fees for the financial industry.
The CFPB said the Treasury
report rehashes industry arguments. “Our rigorous analysis
of the costs and benefits of the
rule found that mandatory arbitration clauses allow companies
to avoid accountability for
breaking the law and cost consumers billions of dollars by
blocking group lawsuits,” a
CFPB spokesman said.
—Siobhan Hughes
contributed to this article.
The Amazon effect’s long
shadow again fell on Etsy Inc.
Shares of the online crafts
marketplace declined 62 cents,
or 3.8%, to $15.76 Monday after
Amazon.com Inc. unveiled a new
way for shoppers to seek out
handcrafted wares.
Amazon’s Handmade Gift
Shop allows users to search for
tchotchkes under categories
such as “for her” and “for baby,”
as well as by price range.
Etsy shares fell as much as
6.8% after the opening Monday.
Etsy reported $11.7 million in
earnings on revenue of $101.7
million in the most recent
quarter.
—Chris Dieterich
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B12 | Tuesday, October 24, 2017
THE WALL STREET JOURNAL.
* ***
MARKETS
Glum Company News Hits Stocks
A flurry of downbeat updates from American companies dragged down U.S. stocks
Monday.
Major indexes were little
changed in early trading and
then slid into
MONDAY’S
the
close,
MARKETS
with the Dow
Jones Industrial Average
ending at its session low.
Still, stocks have been generally resilient. Monday’s
modest decline of 0.2% for the
blue-chip index was its biggest since early September.
Analysts and investors
have attributed the stability
to a period of solid earnings
and economic growth.
Many expect corporate
news to drive much of the action in the coming days, with
nearly 200 companies in the
S&P 500 on this week’s earnings calendar, according to
FactSet.
“Listening to companies on
their earnings calls, I think
the general trend is still looking pretty positive,” said Jeremy Bryan, a portfolio manager at Gradient Investments.
While some sectors like the
insurance industry are expected to report weaker results than in previous years,
partially because of damage
from hurricanes earlier this
year, “we’re looking through
the one-time hits and still expecting robust growth into
2018,” Mr. Bryan said.
The Dow industrials fell
54.67 points to 23273.96. The
S&P 500 dropped 10.23 points,
or 0.4%, to 2564.98, and the
Nasdaq Composite declined
42.23 points, or 0.6%, to
6586.83. All three indexes
closed at records on Friday.
Hasbro shed $8.44, or 8.6%,
to $89.75, after the toy maker
posted earnings and sales results that beat analysts’ expectations, but gave a downbeat projection for sales in
the key holiday period.
Mattel, a rival toy maker,
dropped 51 cents, or 3.2%, to
15.46.
State Street, which posted
better-than-expected earnings
but reported foreign-exchange
trading results that disappointed some analysts, fell
2.95, or 3%, to 96.17.
General Electric slid 1.51,
or 6.3%, to 22.32, and posted
its biggest one-day percentage decline since August 2011
after several analysts cut
their price targets for the
stock following the company’s
latest earnings report, which
slashed 2017 projections.
GE’s stock has fallen 29%
so far this year, putting it on
pace for its worst year since
2008.
Elsewhere, the Stoxx Europe 600 rose 0.2% as gains in
technology companies offset
declines in the banking sector.
Investors this week will be
watching closely for the European Central Bank’s plans to
announce the fate of its giant
bond-buying program at its
meeting Thursday.
This “may be a potential
turning point in the timeline
for withdrawing accommodation,” said Holly MacDonald,
chief investment strategist at
Bessemer Trust, noting the
ECB faces constraints on continuing its program of quantitative easing.
Still, with the move welltelegraphed to markets and
no interest-rate increase on
the horizon for some time,
the ECB’s October meeting is
unlikely to ruffle bond markets much, she said.
BY DANIEL KRUGER
ALWYN SCOTT/REUTERS
BY AKANE OTANI
AND RIVA GOLD
Investors
Seek More
Clarity on
Fed Chief
Shares of conglomerate General Electric posted their biggest one-day percentage drop since 2011.
U.S. government bonds
strengthened Monday, with
the yield on the 10-year Treasury note falling to 2.375%
from 2.381% on Friday. Yields
fall as bond prices rise.
In Asia, Japan’s Nikkei
Stock Average rose 1.1%,
rounding out its longest-ever
winning streak with a 15th
session of consecutive gains,
after Japanese Prime Minister
Shinzo Abe won a national
election by a landslide. The
Nikkei was down slightly
early Tuesday.
Hong Kong’s Hang Seng Index reversed its opening gains
to trade down 0.6% as investors turned cautious on Chinese banks ahead of their
earnings releases this week. It
was down 0.2% early Tuesday.
Downbeat
Shares of toy makers fell after Hasbro gave a cautious outlook for
the holiday sales period.
0%
S&P 500
–2
Mattel
–4
–6
Hasbro
–8
–10
9:30 10
11
noon
Source: FactSet
1
2
3
4
THE WALL STREET JOURNAL.
Japanese Shares Extend Winning Streak
BY STEVEN RUSSOLILLO
Japanese stocks refuse to
go down.
The Nikkei Stock Average
has risen each day this month,
and closed 1.1% higher Monday. It was the 15th consecutive day the Nikkei recorded
gains, the longest-ever streak.
Prime Minister Shinzo Abe’s
clear victory in Sunday’s general election has only added to
the bullish sentiment engulfing
the market.
Mr. Abe’s Liberal Democratic Party and its coalition
partner retained a two-thirds
majority following a lowerhouse election on Sunday.
The victory for Mr. Abe, 63
years old, puts him on course
to become the longest-serving
Japanese prime minister. In
turn, investors are relieved
that his government’s policy
Bouncing Back
Japan's Nikkei Stock Average has jumped
to its highest level since 1996.
40000
30000
Monday
21696.65
20000
10000
0
1987 1990
2000
Source: FactSet
mix of loose monetary policy
and corporate governance reform is likely to continue.
“The result is fundamentally
positive for the equity market,” said Shusuke Yamada,
2010
THE WALL STREET JOURNAL.
chief Japan FX and equity
strategist at Bank of America
Merrill Lynch. “Political stability should be restored and
Abe’s economic policy will
likely continue.”
The Nikkei is up 13% this
year, nearly all of it since early
September after having vastly
underperformed most global
equity markets in 2017.
Analysts and investors cite
strengthening domestic corporate earnings and signs of a
strengthening economy as catalysts for the Japanese market’s recent surge to its highest level since 1996. It isn’t
overly expensive, either. The
Nikkei trades at about 17 times
projected earnings over the
next 12 months, roughly
around its five-year average,
according to FactSet. By comparison, many other markets,
including the U.S., sport valuations that are much higher
than average.
The Bank of Japan’s annual
¥6 trillion ($53 billion) of purchases in exchange-traded
stock funds provide a steady
source of liquidity and support
for the stock market.
But monetary policy might
not be as favorable as it once
was, as recent moves suggest
Japan’s central bank might
have already started tightening.
The BOJ bought just ¥7.7
trillion ($68.8 billion) worth of
Japanese government bonds in
September, according to J.P.
Morgan.
The figure represents its
smallest monthly amount of
outright buying, which doesn’t
account for maturing bonds,
since October 2014.
But that isn’t stopping equity investors now. The 15 days
of consecutive gains appears
to be one of the longest
streaks on record of any stock
market.
—Saumya Vaishampayan
contributed to this article.
Prices of Treasurys edged
higher Monday as investors
paused to wait for clarity over
whom President Donald Trump
will nominate to lead the Federal Reserve.
The yield on the benchmark
10-year U.S. Treasury note fell
to 2.375% from 2.381% Friday,
posting its second decline in
three days. Bond yields fall
when prices rise.
Some analysts said the implications for monetary policy
may be signifiCREDIT
cantly different
MARKETS depending
on
which candidate
Mr. Trump selects. Potential nominees John
Taylor, a Stanford University
economics professor, and
Kevin Warsh, a former Fed
governor, are seen by investors
as likely to favor raising interest rates at a faster pace than
the central bank has suggested
it will take.
Others in the running are
current Fed Chairwoman Janet
Yellen and central-bank governor Jerome Powell, both of
whom are seen as more likely
to maintain the status quo as
the Fed has projected three
rate increases in 2018. A fifth
possibility, White House economic adviser Gary Cohn, has
no record in central banking.
Mr. Trump has said he would
like to name his pick before his
Nov. 3 trip to Asia.
“People are a little wary of
getting out ahead” of a decision about the Fed’s leadership, said Thomas Simons, a
money-market economist at
Jefferies Group LLC.
Investors are also awaiting
the European Central Bank meeting Thursday, looking for signs
about whether policy makers
there will move to slow or curtail
the bank’s €60 billion ($70.5 billion) in monthly bond purchases.
The ECB’s three-year policy of
negative interest rates and its
huge bond purchases have
driven sovereign-bond yields in
the bloc to near record lows.
AUCTION RESULTS
Here are the results of Monday'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
Applications
$134,345,850,900 $115,607,926,000
Accepted bids
$42,000,076,800 $36,000,038,000
" noncomp
$563,800,900
$468,276,000
" foreign noncomp
$976,000,000
$993,000,000
99.720681
99.370583
(1.105%)
(1.245%)
Auction price (rate)
Coupon equivalent
1.123%
1.270%
Bids at clearing yield accepted
57.71%
51.38%
912796NP0
912796LX5
Cusip number
Both issues are dated Oct. 26, 2017. The 13-week bills
mature on Jan. 25, 2018; the 26-week bills mature on
April 26, 2018.
Hurricanes Don’t Slow Down the Economy for Long
BY CHELSEY DULANEY
The economy is bouncing
back from Hurricanes Harvey
and Irma more rapidly than
many analysts expected, a sign
that the “Goldilocks” environment that has propelled U.S.
stock indexes to dozens of records this year is still intact.
“Incoming data suggest
Hurricanes Harvey and Irma
had slightly less of a negative
impact on economic activity in
the third quarter than we had
previously assumed,” said analysts at Macroeconomic Advisers last week.
The firm raised its estimate
for third-quarter growth to
2.7% from 2.6%.
Barclays PLC also raised its
forecast for gross domestic
product last week to 2.5%
from 1.5%, saying that U.S.
economic activity had returned to normal sooner than
the bank had anticipated.
The upgrades come ahead
of the Commerce Department’s
estimate for third-quarter GDP,
to be released Friday.
Economists anticipate a
2.5% increase in GDP in the
quarter, slowing from 3.1%
ALVIN BAEZ/REUTERS
Some analysts have
raised their estimates
for third-quarter
economic growth.
Analysts were surprised by the speed with which the economy has rebounded from storms that hit Florida and Puerto Rico, seen here.
growth in the prior quarter.
The data are expected to
confirm that while the economy is expanding at a steady
pace, growth hasn’t accelerated enough to prompt a
faster unwind of stimulus
from the Federal Reserve. That
should help sustain this year’s
market moves, analysts say,
with U.S. stocks continuing to
climb higher while the U.S.
dollar and Treasury yields remain soft.
Hurricane Harvey battered
the Texas coast in August,
shutting ports and oil refineries and leading to a spike in
gasoline prices.
Hurricanes Irma and Maria
followed in early September,
hitting the Florida coast and
Puerto Rico.
Economists had warned
that the storms could disrupt
a wide swath of the economy,
from housing construction to
factory production.
While the storms did indeed take a toll, recent data
have suggested that the economic impact has been more
subdued than previously forecast.
A recent report from the
Fed showed industrial production—a measure of output at
factories, mines and utilities—
rebounded 0.3% in September
after a sharp decline in the
prior month.
The report, which also included an upward revision to
August’s data, indicated that
disruptions from the storm
were less severe than initially
reported.
Data on U.S. trade—which
economists feared would be
hurt by port closures—and
jobless claims also have been
surprisingly upbeat, analysts
say.
The data are “strongly suggesting that the distortions
caused by the hurricanes in
the Gulf states will prove to be
a short-lived phenomenon,”
said analysts at Jefferies
Group.
The resilience of the economy should confirm the Federal Reserve’s case for raising
interest-rates again this year,
analysts say.
Markets are pricing in a
98% chance of another U.S.
rate increase by December, according to CME Group Inc.
data.
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Tuesday, October 24, 2017 | B13
THE WALL STREET JOURNAL.
MARKETS
Palladium Soars on Hopes for Growth
Investors believe
rising auto production
will fuel demand for
year’s top commodity
Driving Gains
Bets that rising global growth will increase
automobile production have helped fuel a
surge in prices for palladium, a rare metal
used in emission filters for gasoline engines.
BY IRA IOSEBASHVILI
AND AMRITH RAMKUMAR
Palladium prices are at
their highest level in nearly
two decades as investors bet
that rising global growth will
buoy automobile production
and stoke demand for the rare
metal.
Prices for palladium, a key
ingredient in emission filters
for gasoline engines, crossed
$1,000 a troy ounce earlier
this month for the first time
since 2001. They closed Monday at $949.95 a troy ounce
and are up 39% in 2017, making it the year’s best performing major commodity.
“Nobody really predicted
this big move,” said Edward
Meir, a strategist at brokerage
INTL FCStone. “It’s really
quite staggering.”
Driving the rally are expectations that robust demand for
gasoline-powered cars will
continue as the global economy picks up steam. That is
expected to create more need
for palladium, a silvery-white
metal that is already much
scarcer than gold, silver or
platinum.
Car sales in China, the
world’s largest auto market,
rose 4.3% in the first eight
months of this year, according
to the China Association of
Automobile Manufacturers. Although sales have cooled from
last
year’s
double-digit
growth, analysts said demand
has still been healthy enough
to boost palladium prices.
Brokerage Johnson Matthey
projected in May that palladium demand will top supply
by 792,000 ounces this year,
from 163,000 ounces in 2016.
Some investors believe the
metal will receive an additional boost from a continuing
Annual car sales in China
2013
22 million cars
2014
23
2015
40
25
2016
28
2017*
29
30
Sept. 28
China says it will force auto
makers to accelerate production
of electric vehicles by 2019.
20
Metal prices in 2017
Palladium
Gold
Platinum
July 26
The U.K. says it will ban the sale of
cars powered by traditional internalcombustion engines by 2040.
0
Gap between demand and supply widens again
Net bets on higher palladium prices
Global hybrid electric car stocks
8.0 million ounces
30,000 contracts
900 thousand cars
800
25,000
700
7.5
600
20,000
Demand
7.0
500
15,000
400
300
10,000
6.5
200
5,000
Supply
6.0
100
0
2013
’14
’15
’16
’17
0
2013 ’14
’15
’16
’17
2010
’11
’12
’13
*Projection for 2017 based on year-over-year growth this year through August
Sources: China Association of Automobile Manufacturers (sales); FactSet (prices); Johnson Matthey (demand); Commodity Futues Trading Commission (net bets); International Energy Agency (growth)
switch to hybrid vehicles,
which primarily use gasoline
rather than diesel. China in
September said it would force
auto makers to accelerate production of hybrids and electric
vehicles by 2019, the latest
signal that officials across the
globe are determined to phase
out traditional internal-combustion engines altogether.
Meanwhile, sales of dieselpowered cars have declined in
Europe, after Volkswagen AG,
the world’s biggest auto maker
by sales, was caught rigging
diesel engines to dupe emissions tests two years ago.
Electric cars and hybrids are
expected to grab 4% of the European market this year, up
from 2.3% before the diesel
scandal, according to research
group LMC Automotive.
That has hurt the price of
platinum, which is often
mined together with palladium
but used mainly in diesel engines, driving prices for palladium above platinum prices in
September for the first time in
16 years.
Some analysts believe at
least part of the rapid run-up
in palladium prices has come
from investors eager to catch
a piece of the rally. Those
same investors are likely to be
just as quick to abandon the
metal as soon as prices lose
momentum. Palladium’s rise
this year has been punctuated
by sharp drops as investors
locked in profits on big moves.
A stronger dollar could be
another obstacle. Palladium is
priced in the U.S. currency and
becomes more expensive to
foreign investors when the
dollar rises.
In the longer term, the
auto industry may consider
switching to platinum in gasoline engines if the price of palladium continues to climb,
some market participants said.
Shree Kargutkar, portfolio
manager at Sprott Asset Management, said he thinks platinum provides a better long-
HEARD ON THE STREET
FINANCIAL ANALYSIS & COMMENTARY
A Lost Opportunity for Allergan
Swelling
Allergan’s quarterly net debt
$40 billion
RICHARD DREW/ASSOCIATED PRESS
30
20
10
0
2016
’17
Source: S&P Global Market Intelligence
Allergan CEO Brent Saunders
THE WALL STREET JOURNAL.
2016 after the Treasury Department changed the tax
rule that was driving the
deal.
But a big source of Allergan’s trouble, a weak balance
sheet, is self-inflicted. Allergan sold its generics unit to
Teva Pharmaceutical Industries last year for about $40
billion in cash and Teva
stock.
The deal was announced
in 2015, when generic drug
stocks were white-hot. Aller-
gan got out just before
prices starting falling. That
deal pushed Allergan’s net
debt down to $5.4 billion as
of last September, according
to S&P Global Market Intelligence.
Allergan hasn’t spent the
money as wisely as it could
have, though. It has paid
down a chunk of debt and
spent about $7 billion on acquisitions. Those deals may
pay off, but Allergan’s biggest financial move after the
deal was buying back some
$15 billion in stock. Unfortunately for Allergan, the intense buying didn’t push the
stock any higher even as net
debt has swelled back up to
$24.4 billion as of June 30.
Allergan could improve its
cash flow by raising prices
on its existing products, a
standard tactic in the industry. But the company has
some self-imposed limits
there. Chief Executive Brent
Saunders pledged in 2016
that Allergan would limit itself to one price rise a year
on its medicines and limit
those increases to less than
10% as part of a “social contract” with patients.
The company’s pipeline
could still churn out some
new hits, which would relieve pressure on the balance
sheet. For example, Allergan
presented favorable latestage data on an investigational treatment for uterine
fibroids Monday.
But Allergan’s capital allocation choices mean that
pipeline has a lot to live up
to.
—Charley Grant
OVERHEARD
Which one of these states
doesn’t belong?
As the deadline passed for
cities to submit plans for
Amazon.com’s second headquarters, it received a surprising number of bids.
The 238 proposals it received from North America
seemed like a lot given that
its criteria called for a metropolitan area with at least one
million residents, a condition
met by only about 54 U.S.
cities.
There were only seven U.S.
states that failed to bid. Four
states—North Dakota, South
Dakota, Wyoming and Vermont—don’t have one million
people in the entire state, and
two, Montana and Hawaii,
aren’t far above that mark.
The outlier is Arkansas,
with nearly three million residents in the state, which
probably abstained from submitting a bid for a different
reason.
It is home to Amazon’s rival, Wal-Mart Stores, which
recently said it would build a
new headquarters in Bentonville.
Prices for Natural Gas Are Poised to Surprise This Winter
After nine years of booming production of natural
gas, this winter could be one
of the rare instances when
supply and demand conspire
to drive up prices.
Those expecting prices to
rise have had plenty to point
to on the demand side of the
equation: Scores of industrial plants have sprung up
to take advantage of cheap
fuel, the U.S. has become a
major exporter of gas and
coal plants are closing in
droves in favor of environmentally friendlier and more
flexible gas-fired generators.
The supply side of the ledger has been just as dynamic, though. The recent
boom in oil drilling in shale
10
2017
Email: heard@wsj.com
Last year Allergan did
one of the best deals in drug
industry history. The drug
company has been busily
squandering the benefits
ever since.
Shares are down nearly
25% over the past three
months and more than 40%
from the high set in 2015.
The latest blow came last
week after a federal judge invalidated a patent on the
dry-eye drug Restasis. That
could pave the way for generic competition on Allergan’s second best-selling
product. Allergan says it will
appeal the ruling.
To make things worse,
Judge William Bryson wrote
in his decision that he has
“serious concerns” about the
“legitimacy” of Allergan’s recent sale of Restasis patents
to a Native American tribe to
beat back a separate challenge.
That rebuke aside, some
of the issues that have
pushed the stock lower, such
as the patent decision,
weren’t Allergan’s fault. A
planned merger with Pfizer,
for instance, was scuttled in
50%
Aug. 25
Hurricane Harvey makes landfall
in Texas, destroying hundreds of
thousands of vehicles.
Tank Half Empty
Natural gas in U.S.
underground storage
4 trillion cubic feet
3
2
1
0
2014
’15
’16
’17
Source: Energy Information Administration
basins such as the Permian
has unlocked cheap gas almost as a byproduct. New
pipelines will make it easier
for the fuel to reach market.
U.S. natural-gas production
is seen rising for the eighth
month in a row in November
to a record.
Even so, this winter could
see prices go up. No matter
how much gas is being produced, the heating season,
which runs roughly from November through April, sees
underground gas inventories
depleted far faster than supply can replenish it. The “injection season,” which unofficially ends in two weeks, is
when the surplus is built up.
Last Thursday, the U.S. Energy Information Administration reported that gas in underground storage stood at
3.646 trillion cubic feet, or
4.7% less than the same week
a year ago. That isn’t a huge
difference, but it might be if
this winter is extra cold because of La Niña conditions,
as some climatologists predict. Analysts at the Natural
Gas Supply Association,
Plants have sprung
up to use cheap fuel,
while new pipelines
are easing transport.
American Gas Association and
Barclays all have noted the
possibility of a frigid winter.
For some perspective, the
winter of 2015-2016 was re-
markably mild and saw
prices crash to their lowest
this century in February.
Stored gas fell by just 1.4
trillion cubic feet. But the
cold winter of 2013-2014 saw
a draw of 2.95 trillion cubic
feet. Prices soared in February 2014 to nearly double
their price a year earlier.
Gas prices, at roughly $3 a
million British thermal units,
are about where they were
at this time last year. But
storage is starting this heating season around where it
was during the 2013-14 winter. The margin of safety in
the gas market shouldn’t be
taken for granted before the
glut resumes in the spring.
—Spencer Jakab
’14
’15
’16
THE WALL STREET JOURNAL.
term value alternative to
palladium given palladium’s
sharp rise.
Still, changes in the automotive industry don’t pose an
immediate threat to the rally,
he said. Those shifts and mining companies’ efforts to bring
more areas of supply on line
to capitalize on higher prices
are likely to take years.
“We’re not at a point where
the palladium bulls have
something to worry about,” he
said.
WSJ.com/Heard
In China,
Banks Need
Careful Check
Chinese bank stocks have
been on a tear this year. As
lenders start reporting earnings this week, it is time for
a more realistic assessment.
China’s banks have been
vital forces behind the explosive growth of credit across
the economy, with corporate
debt now estimated at about
250% of gross domestic
product.
For investors, the question is where this leaves
banks’ asset quality, a driver
of their share prices. Over
the past 4½ years, Chinese
banks have recognized some
5 trillion yuan ($755 billion)
of bad loans. Even so, official
estimates of nonperforming
loans in the overall banking
system still put them at 1%
to 2% of assets; the most
bearish independent analysts
reckon the real figure could
be up to 20%.
Even though state-owned
enterprises’ profitability has
edged up, their debt has, too,
and at a higher interest rate,
hampering their ability to
repay. Their liabilities continue to rise as well, up 11%
in the first half of this year.
Meanwhile, the amount of
“special mention loans”—
those that are overdue but
haven’t been written off—
that banks record has been
rising sharply.
Any correction in China’s
frothy property market could
spark a rise in nonperforming loans. When property
prices in Wenzhou, a
wealthy coastal town that
has seen significant housingprice fluctuations, dropped
almost 50%, the nonperforming loan ratio for banks
there surged more than 4
percentage points, according
to Deutsche Bank analysts.
It is time for investors to
go back to basics and question banks’ balance sheets
harder.
—Anjani Trivedi
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B14 | Tuesday, October 24, 2017
THE WALL STREET JOURNAL.
EMERGING MARKETS
ARE ON THE MOVE.
We see a rising middle class in Southeast Asia move from
motorcycles to cars. Frontier economies leap into the digital era,
adopting fintech faster than developed nations. Trade and travel
surge between emerging nations.
The monolithic view of emerging markets is obsolete. At PGIM,
we see new opportunities for alpha across emerging market
sectors and themes.
And every day, our 1,100 investment professionals around the
world seek out such opportunities.1
Partner with PGIM to see the investable implications.
Get our perspective at pgim.com/EM
The Global Investment Management
Businesses of Prudential
FIXED INCOME | EQUITIES | REAL ESTATE | ALTERNATIVES | PRIVATE DEBT
1
Data as of 6/30/17.
© 2017 Prudential Financial, Inc. (PFI) and its related entities. PGIM Inc. is the principal asset management business of PFI. PGIM is a trading name of PGIM Inc. and its global
subsidiaries. Prudential Financial, Inc. of the United States is not affiliated with Prudential plc, which is headquartered in the United Kingdom. The PGIM logo and the Rock design are
service marks of PFI and its related entities, registered in many jurisdictions worldwide.
Alpha indicates the performance, positive or negative, of an investment when compared against an appropriate standard, typically a group of investments known as a market index.
This information is not intended as investment advice and is not a recommendation about managing or investing assets. Investing is subject to investment risk, including the loss of the
principal amount invested.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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JOURNAL REPORT
THE WALL STREET JOURNAL.
© 2017 Dow Jones & Company. All Rights Reserved.
Tuesday, October 24, 2017 | R1
Katzenberg on Weinstein
A SPOTLIGHT ON MEDIA
AND TECHNOLOGY
The Hollywood icon also talks about his plan to revolutionize TV
NIKKI RITCHER/DOW JONES (2)
‘The problem is
there’s a pack of
wolves. He is not a
lone actor in this.’
It has been a difficult period
for Hollywood, as the Harvey
Weinstein scandal has focused
attention on an uncomfortable
issue for the entertainment
business: ongoing sexual
abuse.
Wall Street Journal Editor
in Chief Gerard Baker spoke
with industry giant and former
colleague of Mr. Weinstein,
Jeffrey
Katzenberg.
Mr.
Katzenberg, a former chairman of Walt Disney Studios,
co-founder of DreamWorks
and now partner at WndrCo,
spoke about the crisis and
what it means for Hollywood,
as well as his own efforts to
explore new territory in shortform television. Here are edited excerpts of the conversation.
The abuse question
MR. BAKER: I want to start
with a topic that’s on everybody’s mind, what happened
with Harvey Weinstein. Now
you, Jeffrey, last week in a
very powerful statement spoke
out in response to a direct
communication from Harvey
Weinstein asking for you to
support him. You responded to
him in no uncertain terms. You
said he had done terrible
things to women, and you
went on to say there appear to
be two Harvey Weinsteins: one
that I’ve known well, appreciated and admired, and another that I’ve not known at
all.
How on Earth could powerful people, yourself included,
not have known that he was
behaving like this?
MR. KATZENBERG: I do a lot of
soul searching about it. I don’t
have a good answer. I’ve had
hundreds of meetings with
Harvey Weinstein—my office,
his office, on sets, on locations, the south of France, the
Sundance Festival, the Peninsula Hotel. And literally not a
single time had Harvey been
abusive to somebody in my
presence, other than, “Why’s
the car not here?” “I thought
that script was supposed—.”
You know, that’s not abusive
behavior. That’s why I said
there are two Harveys, because somehow or another
this behavior was masked
from me by him, but more important, that these women
masked it from all of us too,
because they were intimidated, they were scared, they
were humiliated.
And it literally took the
New York Times and the
bravery of these women to
speak out about something
that has been around from the
beginning of Hollywood. The
casting couch has been in Hollywood from the beginning.
The complicity around the acceptance of it and the silence
about it is the crime.
Harvey Weinstein, make no
mistake about it, he is a monster. The problem is there’s a
pack of wolves, he is not a
lone actor in this. That’s the
challenge that I think all of us
now really have to find a way
to deal with.
MR. BAKER: You say in all your
encounters with Mr. Weinstein
directly, you’ve never seen behavior like this. But you must
have heard about it?
MR. KATZENBERG: Unfortunately, the answer is no. From
1994 on, I had no business engagements or dealings with
him whatsoever. Did I hear
stories about Harvey abusing
Some of the biggest names in media and technology assembled in Laguna Beach, Calif., last week for The Wall
Street Journal’s fourth annual WSJ D.Live conference. The
event kicked off with Arianna Huffington, founder of the
Huffington Post and Thrive Global, discussing corporate culture issues at Uber Technologies, where she is a director.
Jeffrey Katzenberg, DreamWorks co-founder and partner at
WndrCo, spoke about Hollywood’s “casting couch” problems
in the wake of Harvey Weinstein’s downfall.
Other highlights included Barry Diller, chairman of IAC/
InterActiveCorp, discussing the likelihood of more regulation
for tech giants; Marc Lore, Wal-Mart Stores Inc.’s U.S. ecommerce chief, explaining its acquisition strategy; and
Peggy Johnson, Microsoft Corp.’s executive vice president of
business development, and Jennifer Nason, J.P. Morgan
Chase & Co. global chairman of investment banking, talking
about the outlook for tech M&A.
A trio of venture capitalists—GGV Capital’s Jenny Lee, Y
Combinator’s Sam Altman and Section 32’s Bill Maris—foreshadowed the future of tech investing, and executives including Intel Corp. Chief Executive Brian Krzanich and Baidu
Inc. CEO Robin Li discussed the importance of artificial intelligence. Plus there were interviews with BuzzFeed founder
Jonah Peretti, Oracle Corp. CEO Mark Hurd, Alibaba Group
Executive Vice Chairman Joe Tsai, and Pershing Square Capital Management head William Ackman. Here are selected
excerpts.
—Jason Dean
women and people? The answer is no. Is that because
there was never a forum, that
I never opened myself to
somebody to be able to have
that conversation? Guilty. But
I’m not going to do it again. I
don’t think our industry is. I
think you will see in these
coming weeks and months real
action. We cannot go on this
way.
MR. BAKER: One thing that
would clearly, presumably
change the culture would be if
there were a lot more women
in senior positions in media
WSJ
.COM
companies generally, but in
Hollywood perhaps in particular.
MR. KATZENBERG: That’s a
long-term solution. I’m talking
about something that has to
bring this to a stop immediately.
In movies, in television, in
live entertainment, in Las Vegas, on Broadway shows, in
the news industry, actors and
actresses, men and women,
must audition on an ongoing,
regular basis for their work.
So the question is: How do we
address that moment and add
Please turn to the next page
FULL WSJ D.LIVE COVERAGE
See videos and complete coverage of the
WSJ D.Live conference at wsj.com/wsjdlive.
It’s Time to End the Culture of Stress and Burnout
Arianna Huffington says that Uber could have
been as successful without its ‘brilliant jerks’
Arianna Huffington, founder of
the Huffington Post and Thrive
Global, spoke with Dennis K.
Berman, financial editor of
The Wall Street Journal, about
a range of topics, from her experience as an Uber board
member to the perils of an
economy driven by social-media platforms. Edited excerpts
follow.
Importance of culture
MR. BERMAN: Take us back to
your arrival on the Uber board
in April 2016. What was going
on? What did you see?
MS. HUFFINGTON: The growth
was the most amazing thing.
Then, though, what I began to
see is that the growth was
also achieved at the expense
of an incredible burnout in the
company. Working hard is
great, but the data is very
clear that working longer and
working smarter contradict
each other.
MR. BERMAN: Was there a moment where you said, “This is
crazy”?
MS. HUFFINGTON: I think there
was a moment when I said,
“We need to do something
about this culture.”
We produced a series of
workshops to help everybody
understand that even though
we claim to be in a datadriven culture, we are forgetting the data—which is that
when you are operating in a
culture of burnout and constant stress there are going to
be consequences. Burned-out
people act out again and
again. They make mistakes.
MR. BERMAN: So is there a mo-
ment now, where you have
various board members in litigation with other board members, alliances being struck,
chaos reigning, where you say,
“This is crazy”?
MS. HUFFINGTON: No. We have
a great CEO. I chaired the
search committee and I’m
very, very thrilled with the results. Dara Khosrowshahi is
really somebody who has the
perfect combination of talents
for this time in Uber’s history,
‘We are recognizing
that what’s happening
in the culture has
direct consequences
to the bottom line.’
including being unflappable,
which I consider the greatest
trait of leadership.
MR. BERMAN: Could Uber have
been what it became without,
to use a term I know you like,
a bunch of brilliant jerks?
MS. HUFFINGTON: Oh, yes. One
of the things I said in my first
all-hands when I spoke to the
employees was that with
growth forward we would end
the cult of the top performer.
This is not just a Silicon
Valley cult. Why did Harvey
Weinstein last that long? The
cult of somebody who delivers
results. When you deliver results, somehow a lot is forgiven. And that is particularly
prevalent in the Valley. So I
called the top performers brilliant jerks and I said, “We’re
going to have zero tolerance
for them.”
We are recognizing that
what’s happening in the culture has direct consequences
to the bottom line. A culture is
not nice to have, it’s absolutely essential. Especially
right now, in the world of social media, companies can no
longer hide behind expensive
ads what’s happening in the
company.
On social media
MR. BERMAN: What do you
view as the moral responsibility of Facebook, Google, Twitter, YouTube, social-media
platforms, to the people and
the countries that they serve?
MS. HUFFINGTON: I think there
is a moral responsibility, as
[Facebook COO] Sheryl Sand-
berg said last week, not to allow foreign powers to come in
and use fake names and be
able to infiltrate the platform.
She said if these were from
real accounts, as opposed to
fake accounts, they would only
Please turn to the next page
INSIDE
Wal-Mart Takes Aim at Amazon
Marc Lore, Wal-Mart’s U.S. e-commerce
chief, explains its acquisition strategy, R2
Baidu Sees AI as Key to Its Future
CEO Robin Li on the company’s tech
expertise, autonomous cars, and the battle
against fake information, R4
The Thinking Behind Alibaba’s Expansion
Executive Vice Chairman Joseph Tsai says
the company can compete with all the tech
giants, R4
Is Regulation Ahead for Titans of Tech?
Barry Diller says it’s inevitable. He also thinks
unicorn valuations are absurd, R5
At Oracle, It’s All About the Cloud
CEO Mark Hurd says moving to the cloud is
in customers’ best interest, R6
GM’s Strategy for the Autonomous Car
President Dan Ammann on the company’s
role, what the timetable is, and what the
driverless car means for the industry, R6
In Defense of an Ad Model
BuzzFeed’s Jonah Peretti talks about social
media, algorithms and fake news, R9
The Outlook for Tech M&A
Peggy Johnson and Jennifer Nason talk
about the prospect for big deals, R7
Where the Money Will Come From
Sam Altman, Jenny Lee and Bill Maris on
startup funding, the most exciting
technologies, and increased regulation, R11
The View of an Activist Investor
Pershing Square founder William Ackman
explains why he’s battling with ADP, R8
Where Wearable Tech Is Headed
Chip Bergh, Levi Strauss’s CEO, says the
possibilities are endless, R12
Self-Flying Plane Wins Startup Showcase
Israel-based Eviation was the audience
favorite at the WSJ D.Live conference, R8
Qualcomm’s Game Plan
CEO Steven Mollenkopf on smart cars and
5G technology, R12
Companies Must Use AI—Or Else
Intel CEO Brian Krzanich says companies
that don’t use artificial intelligence will be
left behind, R9
The Big Benefits of Smart Cities
Cisco CEO Chuck Robbins says cities can
no longer do things the way they always
have, R13
Facebook Opens Up on Messenger
VP of messaging products David Marcus on
how the company’s new channel for advertisers works, R14
PLUS: Voices From the Conference
Affirm’s Max Levchin on the dangers lenders
face, R2
CrowdStrike’s George Kurtz pleads for better
password practices, R4
Paradigm’s Joelle Emerson on tech’s meritocracy problem, R5
Uncharted Play’s Jessica O. Matthews on
Africa’s tech rush, R10
Samsung’s David Eun on the integration
between hardware and software, R13
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.
R2 | Tuesday, October 24, 2017
JOURNAL REPORT | WSJ D.LIVE
Wal-Mart Takes Aim at Amazon
Marc Lore, the company’s U.S.
e-commerce chief, explains its
acquisition strategy
Elevating the brand
MR. ANDERS: Wal-Mart re-
cently acquired ShoeBuy,
Bonobos, ModCloth, Moosejaw
and delivery company Parcel.
But you aren’t done shopping,
right? There’s more to come?
MR. LORE: That’s right. We’re
looking at a lot of different
things right now. Everything
in every sector—technology,
retailers, digitally native
brands. We’re looking a lot.
MR. ANDERS: The brands you
bought are all established,
well-known names. What’s the
overall strategy? Do you plan
to integrate these things
closely into Walmart.com or
keep them as their own
brands?
MR. LORE: There are two different strategies that we are
pursuing simultaneously. The
retail specialists such as ShoeBuy
and
Moosejaw—we
bought those companies to really help us accelerate in the
long tail. They have an amazing assortment, amazing relationships with brands. The
teams are great, product content is much better than what
we had before. So being able
to take that product content
and those relationships and
bring that to Walmart.com and
Jet is really the reason to do
it.
We’ve also empowered the
leaders of these companies to
basically run the category
across the entire entity. We
didn’t just buy them and say,
“Just keep doing what you’re
doing.” Instead we told them,
“We want you to run and manage this category.” It’s worked
out really well.
MR. ANDERS: Are these types
of brands helping to elevate
Wal-Mart overall, make it
cooler?
MR. LORE: It’s about bringing
in a better, more unique, specialist assortment to the site.
We’re working on a couple of
partnerships now that will be
announced in the next few
months to help bring an even
more premium assortment
onto the site. We’re also redesigning the website, investing
heavily in vertical experiences
in both home and fashion, to
make it less about transaction
and more about browse and
discovery. So yes, we’re definitely making a push to elevate the brand.
Importance of scale
MR. ANDERS: Wal-Mart is fa-
mous for paying attention to
the bottom line. Jet.com came
up not having that same sort
of restraint. Can you do this in
a way on Jet.com that is ultimately profitable?
MR. LORE: Absolutely. E-commerce is a scale game. And the
great thing here is that we get
to combine the scale of both
Walmart.com and Jet together
on a common infrastructure.
So it isn’t looking at each of
them in isolation. We actually
get the ability of each one to
leverage from the other.
MR. ANDERS: When do you
think Jet.com will become
profitable?
MR. LORE: I haven’t talked
about profitability, although at
the analysts’ meeting last
week, I did say that this year
would be the peak in losses.
We expect a slight reduction
of losses next year.
MR. ANDERS: When we polled
audience members about
which company they think is
going to dominate e-commerce
in five years, they didn’t pick
Wal-Mart.
NIKKI RITCHER/DOW JONES (2)
Wal-Mart Stores Inc. has
been on a buying spree over
the past year, seeking to better
position itself for an intensifying e-commerce battle with
Amazon.com Inc.
Leading the effort is Marc
Lore, who became Wal-Mart’s
U.S. e-commerce chief last
year after the Bentonville,
Ark.-based retailer acquired
his startup, Jet.com, for $3.3
billion.
Mr. Lore sat down with The
Wall Street Journal’s Jason
Anders to discuss the megaretailer’s plans for e-commerce.
Edited excerpts follow:
‘We get to combine
the scale of both
Walmart.com and
Jet together on a
common
infrastructure.’
Chasing Amazon
In an e-commerce market projected to grow by nearly 50% over the next four years, Wal-Mart is chasing market leader Amazon
Leading e-commerce retailers in the
U.S. in 2016, in billions of dollars
Unique monthly visitors to the most popular retail websites
in the U.S. as of March 2017, in millions
Projected retail e-commerce sales
in the U.S., in billions of dollars
Amazon
200
$700
150
600
$46.66
Wal-Mart
$12.73
Apple
$6.11
Home Depot
$5.37
Liberty Interactive
$4.89
100
500
50
400
0
Amazon eBay Wal- Apple Target Home Etsy Kohl’s Best Wish
sites
Mart sites
Depot
Buy
300
2017
MR. LORE: It will be interesting
to ask that question 50 years
from now, or 20, because WalMart has some really unique
assets that no one else has. To
date, we haven’t fully leveraged the scale of Wal-Mart,
specifically its 4,600 stores
within 10 miles of 90% of the
population. Fresh, frozen, over
100,000 general-merchandise
skews are in that proximity.
That product gets there in
full truckloads—not cases and
pallets—and those 4,600
warehouses are profitable.
They’re already covering their
entire fixed expense. So each
marginal dollar that ships out
of there comes out at an incredible profit.
Already, [customers can
pick up online orders] of fresh
grocery at 1,000 stores. We’re
rolling that out to over 2,000
stores next year. And from
each of those stores, we will
have the ability to deliver. We
are testing grocery deliveries
now in 22 stores, using a combination of our own associates, Uber drivers, Deliv, and a
bunch of other players.
MR. ANDERS: There is a big
arms race under way right
now with groceries. Certainly,
Amazon and Whole Foods are
getting a lot of attention. Up
to now, Wal-Mart has been
banking heavily on its vast
physical store network and
making that better.
MR. LORE: The hard part is
done. We have forward-deployed inventory, full truckloads, warehouses making
money. We have pickup capability for online orders at
1,000 stores, which will be
2,000 stores by the end of
next year and eventually 3,000
and 4,000 stores. Now, it’s just
about that last-mile delivery
piece, and there are plenty of
partners we can work with to
do that.
MR. ANDERS: Amazon has
plowed a ton of money into
the logistics side. Are you saying that Wal-Mart can go
head-to-head with Amazon
and offer the exact same services that they’re offering?
MR. LORE: We have a little bit
Ending Stress and Burnout
Continued from the prior page
a level of protection for what
is an imperative part of the
creative process?
Continued from the prior page
have taken them down if the
language was violent or hatefilled. Otherwise, they, on the
grounds of free speech, would
have kept them up. So that’s
the question that we need to
discuss, in terms of platforms.
For me, the more significant question has to do with
what’s happening with the hi
jacking of people’s attention. I
think in the attention economy, companies like Facebook
or YouTube, especially, the
part of Alphabet that is directly about people’s attention, the goal is to get as
much of your attention as
possible through an enormous
amount of persuasive techniques.
If you look at the “like,” it’s
a way to keep you hooked, to
keep you returning to see how
many likes the picture of your
salad got. And among teenagers especially, and college
kids, this has become a symbol of validation.
It cannot be in our interest
to have persuasive techniques
hijacking our attention in
such a way. And I think that’s
going to be the big, existential
issue we need to discuss.
And if you think, “Oh, don’t
worry, I have incredible will
power and I’m only going to
The short-form future
MR. BAKER: Let’s move on to a
happier topic, which is the future of TV. You’ve got a plan
to revolutionize TV, WndrCo.
Tell us why there’s space for
another major initiative in the
TV field.
MR. KATZENBERG: We’ve hit a
moment in time in which
there’s a fantastic opportunity
to innovate storytelling and to
evolve it.
Ten years ago, two things
happened. One, everybody
now has a television with
them all the time. At the same
time, a little earlier than that,
there was a platform called
YouTube. And out of YouTube
came this amazing new form
and format. Short form, under
10 minutes.
And in a very short period
of time, that platform gets a
size and a scale that is unprecedented as a media platform. And Google comes
along, buys it, does a fantastic
job investing in the platform
itself and the creators in it,
creates a business model for
monetization. Out of that, the
platform evolves. There starts
MR. BAKER: Without being too
flippant, isn’t it all skateboarding, ducks and puppies,
falling down stairs, and all
this kind of stuff?
MR. KATZENBERG: No. It’s
what people can afford to
make. I believe that if you
create short-form content
that can be consumed in these
chapters of under 10 minutes,
it will revolutionize the storytelling opportunity.
I’ll point to another medium where somebody capitalized on this. Traditionally,
a chapter in a novel is 20 to
40 pages long. Fifteen years
ago, two great authors came
along and realized that as a
society and a world we’re
ADD. James Patterson and
Dan Brown changed the architecture, the formatting, of the
way in which they told a
story. So “The Da Vinci Code”
was 464 pages long, 105 chapters.
Now the quality of that
story, the arc of the story, the
quality of the characters, the
richness of it, the excitement
of it, it was one of the great
reads. What he did is, he al-
lowed a different consumption habit, which is if you had
10 minutes you could read a
chapter or two. If you had an
hour you could read five or
six.
MR. BAKER: Give us a sense of
how it’s going.
MR. KATZENBERG: This is as
hard as anything I’ve ever
done for many reasons, not
the least of which is that anytime anybody has started a
new media platform, at its
foundation was library content. The challenge for new
TV is there isn’t any. Everything has to be created from
scratch, because you cannot
take an episode of “Game of
Thrones” and cut it up into
six 10-minute pieces.
It’s a Catch-22. For people
to pay for a subscription service, there needs to be not
just supreme quality but there
also needs to be quantity. You
have to deliver on both of
those.
So I have spent the last
year in conversations with all
of the major suppliers of television and created a business
model, a licensing model. I’ve
talked with many of the best
show runners to talk about
creatively how they’re going
to interpret this.
VOICES FROM THE CONFERENCE
“It’s a great time to be a lender, but it’s
also a terrible time to be a lender if
you’re overconfident. If you’re not reserving enough, if you’re not thinking of risk
management, if you’re not considering
scenarios of your losses doubling or tripling, which is a rare event but it does
happen, as we saw in 2008.”
Max Levchin,
Founder and CEO, Affirm
’19
’20
’21
of a second-mover advantage.
We were able to build a logistics network from scratch.
We’ve got the warehouses in
place at the right size, with
the right amount of automation. And today, we can hit
87% of the country overnight
and 99% in two days, via
ground shipping.
Over the next two years,
you’ll start to see dramatic improvements. You’ll see the new
design rollout at Walmart.com.
You’ll start to see more sameday and two-hour delivery.
You’re going to see a lot of
changes.
And I think two years from
now, it will be interesting to
ask the same question to see
how people think.
Katzenberg on Weinstein
to be professionally produced
content there, some of it incredibly imaginative, very
compelling.
’18
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Source: Statista
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spend as much time as I really
want on this,” think again.
MR. BERMAN: In your testing,
what is the average social-media consumption?
MS. HUFFINGTON: Stunning.
There are people who are totally addicted and they spend
over 10 hours [a day]. But
normal people, who are not
completely addicted, may
spend seven hours on Instagram or Facebook a week.
MR. BERMAN: Should a 12-
year-old have a smartphone?
MS. HUFFINGTON: The closer
you get to the Valley, to people who are part of these
companies and actually producing this product, the later
the kids get the phones and
the stricter they are about
how much time they allow
them on their phones. Over
70% of people sleep with their
phones. With the best will
power, if you wake up in the
middle of the night and you
can’t go right back to sleep,
you are going to be tempted
to look at your phone, to look
at texts. And then your whole
sleep cycle is interrupted.
None of us would be here
without all that technology
has brought us. It’s basically
about setting boundaries and
reconnecting with ourselves.
Gender issues
MR. BERMAN: Based on your
experience on the Uber board,
what are some practical
things that a company should
be thinking about as it relates
to gender in the workplace?
MS. HUFFINGTON: When workplaces are fueled by this culture of burnout, where people
wear this like a badge of
honor, it disproportionately
affects women.
First of all, women internalize stress differently. The
numbers show that women in
stressful jobs have a 40%
greater risk of diabetes and a
60% greater risk of heart disease. So that’s something we
need to be working on ourselves. Also, there’s more sexist behavior when people are
burned out. They act out. We
all know that when we are
running on empty, when we’re
exhausted, we operate at our
worst.
MR. BERMAN: If you were to
give mindfulness training in
the White House, what would
be your prescription?
MS. HUFFINGTON: To take the
president’s phone away at
night. That might change the
course of world history.
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JOURNAL REPORT | WSJ D.LIVE
Baidu Sees AI as
Key to Its Future
‘We’re going to
deliver a fully
autonomous
bus by the end
of next year.’
CEO Robin Li on the company’s technology
expertise, its autonomous-driving program and
the battle against fake information
The search future
MR. DEAN: You’re placing a
huge bet on artificial intelligence. Why do you think that
could help you regain your
edge?
MR. LI: First, every company
has its own DNA. Baidu is a
technology company. During
the desktop age, in order to
serve the users better, you just
needed to come out with the
best technology to rank contents on the internet. I think
that’s what we are good at.
But when the world moved
into mobile, the landscape
changed. The market involvement changed. For mobile, you
need to build your own ecosystem. You need to enable
people to create content for
you, and we don’t have access
to that content anymore.
We’re still dominating in
mobile search, but we need to
figure out what’s next. Luckily,
we have entered the age of AI,
and technology is important
again. You need to have the
best natural-language processing technology, the best voicerecognition technology, the
best image or computer-vision
technology. You need to analyze a lot of data.
I think we are good at that,
and there are a lot of new opportunities for AI. If you think
about search, it’s the most
natural AI application. When
you type in a keyword or
query, we will try to guess
what you mean and provide
the best answer for that query.
That’s pretty much the definition of AI. Let computers understand humans and provide
answers or provide services.
MR. DEAN: A big part of what
you’re doing related to your AI
is your autonomous-driving
program. You just announced
a new deal with BAIC, which is
one of the biggest Chinese
state-owned auto makers in
Beijing. Tell us about that
deal.
MR. LI: We have a very solid
plan. The plan is to mass produce level-three cars by 2019
and mass produce level-four
cars by 2021.
Asleep at the wheel
MR. DEAN: Level-four autono-
mous is where the person
doesn’t need to be awake, basically, and the car drives itself. What is your involvement
in this?
MR. LI: We don’t manufacture
cars. They do. We provide
technologies so that they can
drive automatically. We also
provide technology and content for people to be entertained in the car. When a passenger gets into the car, our
vision is that you will never
need to touch your phone anymore. The car can provide all
the things—the screen, the
songs, the microphone. Everything can be better than the
mobile experience.
MR. DEAN: Where would you
say your technology ranks in
autonomous driving against
Waymo [the driverless-car division of Google parent Alphabet Inc.]?
MR. LI: It’s a question of open
versus closed. Apollo [Baidu’s
autonomous-car software system] is a very open system,
and the first day, we had
about 50 partners join us, including companies like Ford
and Daimler, Bosch, Continental and many in China. I think
history has also proved that
an open system has better momentum.
We published Apollo 1.0 in
July, and we published 1.5 in
September on GitHub. If you
go there and check it out, it’s a
very active community. Lots of
people are contributing to the
Apollo technology, because the
world believes we will be moving into an autonomous-driving society.
I think a lot of people are
participating, and they are
providing signals to us. They
are providing data to us. They
are providing requests or demands for us. We know more
about the real market demand.
That gives us an edge.
MR. DEAN: So if I’m a potential
partner to you, and then
Waymo’s coming over and
they want to talk to me, why
would I go with Baidu over
them?
MR. LI: Because you will have
much better control over your
destiny.
Apollo is open, and you can
see everything, and you can
contribute data to us, and we
can provide you simulation
technology, security technol-
NIKKI RITCHER/DOW JONES (3)
Baidu is the search titan in
China, but with its mobile efforts, it stumbled relative to
the competition.
The Wall Street Journal’s
global technology editor, Jason Dean, spoke with the cofounder, chairman and chief
executive of Baidu, Robin Li,
about the company’s plans for
reclaiming its advantage, as
well as its push into autonomous vehicles. Here are edited
excerpts.
ogy, and we can provide you
data too.
Growing Smartly
MR. DEAN: How are you going
Projected growth of the artificialintelligence market
to make money on this opensource autonomous-driving
platform?
MR. LI: We can sell simulation
systems, and we can sell data.
We can sell high-definition
maps. We can even in the future write insurance policies.
There are lots of things you
can do. It’s a very large market. I think auto represents
about one-sixth of the total
Chinese GDP, and it’s growing
fast, too.
$60 billion
50
40
30
20
10
0
2017 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25
Source: Statista
Getting there first
THE WALL STREET JOURNAL.
MR. DEAN: Fake news has been
a big issue in the U.S. It’s been
an issue in China, too. You re-
cently took some measures to
address them that stirred
some controversy. How do you
see the role and responsibility
of big internet companies like
yourself in balancing the need
to safeguard against bad information versus the risk of
censorship?
MR. LI: We want to provide the
best way for people to find information, and that means we
need certain kinds of control
over information so that we
provide people with true information instead of fake information or fake news. The
fake-news issue became more
and more serious as social media became more popular.
MR. DEAN: The BAIC deal, is
the goal to be first with the
level-four autonomous car? Do
you think you’ll beat the competition to delivering that to
market?
MR. LI: That’s not the first
level-four vehicle we’re working on. We issued another announcement with King Long,
which is one of the larger bus
manufacturers in China. We’re
going to deliver a fully autonomous bus by the end of next
year. It’s going to be run in
designated areas, but it’s going to be fully autonomous.
There’s no fact checking.
There’s no editorial control.
We recently set up a platform to clarify a lot of things
in collaboration with the government and quite a few other
companies. We also integrated
in our existing products features like Baidu Encyclopedia.
It’s one of the most authoritative information sources in
Chinese.
From time to time, there
are things that are unverified.
People are curious about the
authoritative explanation of
those kind of topics. We use
our technology to extract the
main topics from every article
and provide a Baidu Encyclopedia entry right after the
news text.
MR. DEAN: The concern in
China is that partly what is
fake news can be dictated by
the government. How do you
balance that into your equation?
MR. LI: The government cares
more about politically sensitive content. But we, as a general information provider,
need to do a lot more with rumors about scientific issues,
rumors about entertainment,
all kinds of things.
We need to do a lot more
work, and we’re doing that,
using technology, using editorial control.
The Thinking Behind Alibaba’s Expansion
Executive Vice Chairman Joseph Tsai says the
company can compete with all the tech giants
‘Our international
expansion really
focuses on our
customers, who are
doing business in
China, as they expand
abroad.’
China’s Alibaba has grown
into one of the world’s biggest
tech giants. As it has grown, it
has spread into many different
areas of tech and has begun to
bump against U.S. tech giants
like Amazon and Google.
The Wall Street Journal’s
global technology editor, Jason Dean, discussed Alibaba’s
strategy with Joseph Tsai, the
company’s executive vice
chairman. Here are edited excerpts.
What now, what next?
MR. DEAN: Let’s talk about
your ambition. You started off
in e-commerce. You’re now directly or indirectly in cloud
computing, media and entertainment, logistics, payments
and others as well. Your vision
is that customers will meet,
work and live at Alibaba,
which is pretty much everything. Where does the ambition end, and what’s the unifying vision?
MR. TSAI: Since 1999, we
started the company with a
mission to make it easy to do
business anywhere. We want
to make sure we help businesses, companies, especially
small companies, to be able to
reach their markets and reach
consumers.
Today, we run the largest
retail platform in China. There
are over 500 million consumers on that platform. And
most of them are mobile. So
whenever we think about expanding into a new space, we
ask ourselves, “Is that consistent with our mission? Are we
staying true to that mission?”
MR. DEAN: You’ve been called
the Amazon of China. You’ve
competed in China against
them and won. But increasingly, you’re competing headto-head globally, particularly
in the cloud business. What is
the strategy there? Are you
trying to take them on outside
China, as well as Microsoft
and Google in the cloud?
MR. TSAI: If you look at Amazon and Alibaba, the two companies grew up in very different environments. We grew up
in China. Amazon grew up in
the United States. We started
as e-commerce companies. You
can say that we’re from the
same genus but grew up as
two different species because
we have our own environment.
China is a developing economy. It’s an environment
where the economy is shifting
from investment and exports
to consumption.
If you look at China today,
it exhibits a lot of the developing-economy characteristics,
whereas Amazon is in a very
well-developed economy. Ecommerce is actually very,
very tough. It’s not about just
doing an app or launching a
website. It’s about figuring out
the entire supply chain. We
have to worry about putting
merchants together. We have
to worry about logistics. We
have to worry about payment.
There is going to be some
competition at the fringe. But
in China today, the cloud market is probably what the U.S.
was like maybe seven, eight
years ago. It’s about to take
off. We’re very excited by it.
We’re very happy to continue to grow our business in
China. Our international expansion really focuses on our
customers, who are doing
business in China, as they expand abroad. We help them
expand.
We also have an effort in,
for example, Southeast Asia,
outside of China, where a lot
of Southeast Asian companies
are looking at cloud solutions.
So that’s where we are.
The push for AI
MR. DEAN: In that world, you
have to be going up against
them head-to-head, at least in
some cases. And you’re targeting multinationals as well,
you’re advertising in the U.S.
What’s your competitive advantage against Amazon when
you go head-to-head with
them?
MR. TSAI: In the cloud you really compete on technology
and products. And we have areas we feel we are excellent in.
We’re very good in database,
we’re very good in middleware
as well as security. We’re not
just competing with Amazon,
we’re competing with Google,
we’re competing with Microsoft, great, great technology
companies. But we feel like we
have both the wherewithal and
the technology and the people
to compete.
MR. DEAN: You announced last
week you’re ramping up R&D
spending to a total of $15 billion over the next three years.
What’s driving that?
MR. TSAI: As a percentage of
revenue, historically, we’ve
been spending
roughly
around 10%, 11% of our revenues on R&D. So with this effort, $15 billion over three
years, roughly on average
about $5 billion a year, you’re
looking at midteens revenue
percentage spending. I don’t
think that’s a huge stretch.
This just shows our commitment to put more resources into the talent as well
as the technology develop-
ment as we see the future.
With this effort we’re going
to be focused a lot on very advanced areas like quantum
computing, machine learning,
computer vision, voice recognition, natural-language processing.
MR. DEAN: Several of those
categories that you mentioned
fall under the rubric of artificial intelligence. It’s hard to
separate the hype from the reality. Where do you have an
advantage in AI technology?
MR. TSAI: I have a cigar theory
on AI; you look at Cuba, C-UB-A. Those are the four important elements. C stands for
cloud computing, which means
low-cost computing to train
the machines and manage
massive amounts of data. U
means use case. We serve hundreds of millions of consumers
every day. We’re seeing their
behavior. We have fresh data
every day. B means big data. A
is algorithm. You need to have
smart people, the scientists,
the mathematicians, to develop the good algorithms.
We are one of the top companies that have all those elements in place.
A question of trust
MR. DEAN: You and Google and
Facebook have an enormous
amount of data on people.
Why should people trust the
big tech companies to treat
that data responsibly?
MR. TSAI: It’s because it’s good
for business to be a responsible custodian of consumer
data. If you lose that trust,
why would anybody want to
use your service the next day?
That’s the basic principle
there. It’s very, very important
that those that preside over
these large troves of data, the
companies, are very mindful of
that consumer trust, the difference between the trust and
nontrust is a very thin wall.
So, we feel like we’re treading
on thin ice all the time.
MR. DEAN: Alibaba founder
Jack Ma told President Trump
in January that Alibaba would
create a million jobs in the
U.S. over five years. That
pledge was met with some
skepticism. Can you tell us
what you’re doing to make
that a reality?
MR. TSAI: We take our China
experience. There are over 10
million small merchants that
are selling on our platform.
Whenever you try to help a
merchant to sell more, grow
their business, it creates jobs.
We have studies that show
that the Alibaba platform has
created over 30 million jobs in
China just from merchants hiring people. The logistics industry is hiring a lot of people.
We believe that we can
bring the same idea, create a
platform here to let American
companies, especially small
businesses, sell to Chinese
consumers.
Remember, we have access
to 500 million consumers in
China. That is a huge job-creation opportunity.
VOICES FROM THE CONFERENCE
“We’re still dealing with crappy passwords
over the last 25 years. Literally every conference, we talk about all this crazy security
and big-data analytics, and we still can’t
get the passwords right. So, as a consumer
one of the biggest things that seems simple is at least have a different password for
each site.”
George Kurtz,
Co-Founder and CEO, CrowdStrike
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | R5
JOURNAL REPORT | WSJ D.LIVE
Is Regulation Ahead
For Giants of Tech?
‘Google is the
true monopolist
in terms of
advertising.’
Barry Diller says it’s inevitable. Also: He talks
about the absurd valuations put on ‘unicorns.’
MR. BAKER: You’ve created tremendous value for shareholders by acquiring or developing
internet businesses and then
spinning them off. Tell us how
that model works.
MR. DILLER: How it happened
originally was we owned Ticketmaster, and one day the guy
who ran Ticketmaster came in
and said he would like to make
a greater investment the next
year. And therefore, he would
take his earnings way down.
And he said, “So can I do it?”
And I said, “So you’re, like,
coming to Daddy to ask?
You’re in a false environment.”
It occurred to me that companies, once they got up to being
a substantial business, should
not rely on a corporate for
capital or for telling them
what’s right or wrong.
So we started spitting these
companies out. I believe that
companies that have multiple
and disparate operating divisions are really suboptimal.
MR. BAKER: What was the
threshold at which you—
MR. DILLER: There is none.
MR. BAKER: There is none?
MR. DILLER: No. It’s feel. Every
one worked better when they
were independent. If you really
want a company to continue to
innovate, they’ve got to be on
their own melting ice cube.
MR. BAKER: What do you think
of the virtues of going public
versus going private? You’ve
spun off a lot of companies
that are now public.
MR. DILLER: They’re all public.
MR. BAKER: But they are con-
fronting all of those challenges
public companies face: tougher
regulation and scrutiny and
reporting requirements. What
would your advice be to an
Uber or an Airbnb as they go
through this process?
MR. DILLER: If you don’t have
to, don’t do it. Meaning the
reason that you would take a
company public is liquidity, for
all the obvious reasons. However, unless you need capital,
there’s utterly no purpose so
long as you can provide some
liquidity to people who need
it. I’ve never sold a share of
my company.
By the way, I think that the
pressure of venture capital to
force companies to go public
because they’ve got to return
money to shareholders isn’t a
very good process.
MR. BAKER: These valuations
for so-called unicorns, do you
think that the aura of being a
tech company somehow bestows on them some kind of
VOICES FROM THE CONFERENCE
“We know that bias prevents us from being
a meritocracy, but research shows that
when you say you’re a meritocracy, when
you design an organization and you say
that it is meritocratic, it leads to spikes in
bias. It leads you to be more biased. Because basically it frees people up from
thinking that they have to try hard to be
fair in their decision making.…And I think
that’s one thing we’re seeing going on in
tech.”
Joelle Emerson,
Founder and CEO, Paradigm
NIKKI RITCHER/DOW JONES (2)
Barry Diller, after a long and
successful career in traditional
entertainment, has reinvented
himself as chairman of IAC/
InterActiveCorp, owner of
such popular digital properties
as Angie’s List and Expedia.
Wall Street Journal Editor in
Chief Gerard Baker spoke with
Mr. Diller about the fierce
competition and harsh realities in today’s digital business
world. Edited excerpts follow.
magical valuation?
MR. DILLER: Well, yeah. A company isn’t dealing with basics
when VCs in a room with
three or four people make up
a valuation when they do additional rounds of financing.
It has no reality. It’s just a
bunch of guys saying, “Oh, we
were worth $300 million. Oh,
let’s make it $700 million.”
And if they get enough people
to buy it, “Let’s make it $5 billion.” Or in Uber’s extreme
case, “Let’s make it $65 billion.”
MR. BAKER: How do we do
that? Can you give us a clue?
MR. DILLER: Let me tell you,
it’s very easy. You and I sit in
a room and say, “We’re going
to get this dope over here to
put some money in. Let’s just
make up a good figure and if
he’s going to buy it, fine with
us.” These valuations don’t
bear reality.
MR. BAKER: Really?
MR. DILLER: It isn’t possible.
There’s no pricing power. You
have two monopolists. One, really. Google is the true monopolist in terms of advertising.
No one is going to enter it and
take share away from that. It’s
just not possible. Not that
there won’t be other forms of
advertising channels.
MR. BAKER: So you don’t think
anything can be done about
the duopoly or the monopoly
as you call it?
MR. DILLER: Eventually.
on advertising in the current
environment, unless your
name is Google or Facebook,
is pretty challenging, right?
MR. DILLER: There’s no hope.
MR. BAKER: You think regulators are going to tackle it?
MR. DILLER: As we now see
these companies, these four or
five, having more hegemony
over more areas, inevitably, it
has to bring regulation. The
track is so clear. This is a different situation than the standard fear that down the street,
in a garage somewhere, will be
your competitor that will destroy you. These main tracks
have been laid now. And the
dominant companies in them
do not really have fundamental competition.
MR. BAKER: No hope?
MR. DILLER: If you’re going to
MR. BAKER: What about video?
MR. DILLER: Everybody and
MR. BAKER: Being dependent
build a business based upon
advertising, purely advertising
is your sole source of revenue,
I would say go home.
their mother is trying to do
video. Mostly, defensively.
Two companies are doing it
offensively, Netflix and Ama-
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zon, interestingly, with two
different business models. The
Netflix model is very clear.
They have 100 million subscribers. Their next closest
competitor has 35 million or
40 million. They are so far
ahead of everyone else, it’s impossible at a mass communication scale to compete with
them. And it’s unlikely they’re
going to lose it, because
they’re overprogramming way
beyond the water line.
The other model, which is
completely weird if you’re in
the program business, or entertainment, is Amazon, because Amazon isn’t particularly in the business of saying,
“We’d like you to like our programming for its sake.” Meaning, to the degree that people
watch it, you do well. Amazon
is doing it to build Prime, because they want to sell you
more things. That’s a business
model entertainment has
never had to compete with.
From the beginning of time,
incumbents never invent anything new. Incumbents protect
their ground. Other people
come in with new ideas. And
up until the last couple of
years, the methodology was
that HBO would be created by
Time Inc., a publisher, and
would eventually be bought.
Guess what? They are not
buying Amazon and they’re
not buying Netflix.
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THE WALL STREET JOURNAL.
R6 | Tuesday, October 24, 2017
JOURNAL REPORT | WSJ D.LIVE
At Oracle, It’s All
About the Cloud
‘There is a possibility
that all of development
testing, which is a third
of the IT market, will
be done in the cloud.’
Chief Executive Officer Mark Hurd says the
move is in the customers’ best interest
Generational change
MR. BERMAN: Let’s talk about
year-end compensation, about
how you are being incentivized. That has changed at Oracle, and I think that says a lot
about the company.
MR. HURD: The compensation
has always been about stock
options, and people would
only make money if the company was performing.
The problem with that
methodology—low salaries,
low bonuses, lots of stock options—has always been that
when you do a Black-Scholes
model against that, it gets you
to crazy numbers, but you
don’t get anything unless the
stock performs. What we have
done is tried to evolve that.
We’re sticking with the mentality of options-related comp,
but aligning it to performance
incentives, some of which are
around our transition to the
cloud. It’s a big deal.
MR. BERMAN: So the way you
are paid is changing simply
because you need to push the
company to the cloud?
MR. HURD: Yeah. Our industry
is going through a secular
change that’s generational.
This will be a 10- to 15-year
run to get there. And what’s
happened over the last 20 to
25 years in tech is all being
challenged now. So for us,
we’re cannibalizing ourselves.
MR. BERMAN: Was there a mo-
ment inside when you were
like, “We’ve just got to do this
differently? We have to make
a change?”
MR. HURD: No. Nothing like
that. It took us a bit to figure
out where the market is
headed. So we started with,
“Here’s where this thing is going to land.” And if we are
right, there’s a possibility that
there isn’t a data center that a
company owns in 2025. There
is a possibility that all of development testing, which is a
third of the IT market, will be
done in the cloud. These numbers are gargantuan.
If you don’t prepare for that
now, you won’t get there. You
have to internalize that and
say, “I can kick this can down
the road for a couple of years
or I can go do what we decided to do.”
Right now,
you’re doing a blend of cloud
services, on-premise systems,
all kinds of custom brew for
customers. What will that look
like in 2020?
MR. HURD: Right now, Silicon
Valley does a good job of providing a bunch of individual
parts—servers, operating systems, databases—all of this
stuff. You send it all to the
customer basically a la carte.
The customer creates a huge
IT staff and then tries to put it
together like a Lego set. The
stuff that they put together
like a Lego set is really hard to
upgrade, it’s really hard to
MR.
BERMAN:
maintain, and frankly, it’s really hard to secure. All of this
is going to move toward a
simpler, more flexible, more
variable market.
MR. BERMAN: Is the future really a fully vertically integrated IBM of the 21st century?
MR. HURD: That’s a great question. If you went back into the
‘80s, there was a rebellion
against exactly that model,
which was, “We want to procure our way to more leverage
with all of these vendors.” I
think what has happened is
you’ve gotten a lot of that, and
what you’ve gotten in return is
a very complicated, very difficult environment out there. I
think you’ll see a rotation to a
degree back to more optimization, more integration. The
cloud is a lot of that.
MR. BERMAN: Isn’t there sort
of a great kind of Greek mythological irony that the IBM destroyer becomes IBM in the
end?
MR. HURD: I’m going to stay
out of mythology. But the environment in IT today isn’t
sustainable. Forget anything to
do with IT’s performance. The
simple risk from a security
perspective has to change. It
isn’t sustainable.
MR. BERMAN: What do you
mean by that?
MR. HURD: Let’s pretend we
got attacked. Oracle would see
something today in the marketplace that would try to
penetrate something. We
would create a piece of software to fix that. That’s called
a patch. You’ll hear this term
“patch” used a lot. A patch is
simply a new piece of code
NIKKI RITCHER/DOW JONES (2)
Business software giant Oracle Corp. is in the midst of a
massive transition, taking on
Amazon.com Inc. and others
in selling cloud-computing services. Helping lead the shift is
Mark Hurd, the company’s
chief executive officer.
In an interview with Wall
Street Journal Financial Editor
Dennis K. Berman, Mr. Hurd
discussed Oracle’s strategy
and why shifting software operations to the cloud is in
companies’ best interest.
Edited excerpts follow.
that fixes another piece of
code. We would fix it immediately in our cloud. But by the
time it rippled its way through
our on-premise customers, it
would be one year.
This is now becoming an issue for CEOs, for boards.
issues with everything in the
cloud, having all of that valuable data in one place?
MR. HURD: I don’t think so.
Equifax to me was an absolutely perfect target. I don’t
mean this to be derogatory toward them, but they’re a relatively small company, their resources are aligned to the size
of company, and they have an
incredible treasure trove of in-
‘Really flipping hard’
MR. BERMAN: Have we sort of
gotten over that psychological
barrier where a CEO says, “I’m
willing to risk myself and my
reputation and my company
by doing all this work in the
cloud”?
MR. HURD: Do you want to be
in front of the U.S. Congress
and say, “Listen, I put all this
software and my IT staff
missed a patch”? Or do you
want to say, “I did exactly
what Oracle said.”
If I’m a CEO, not Oracle’s
CEO, I like the second talk
track. I’d much rather say,
“Listen, I got the best guys in
the world doing this for me”
as opposed to, “I tried to do it
myself.”
This patching thing, while it
may sound trivial, when you
have tons of configurations,
tons of operating systems and
tons of databases, this is really, really flipping hard.
formation.
To be able to fight every
day, you need the best to fight
for you. We do things that
other people can’t do. Simple
things, like all of your data, if
it was in our cloud, would be
encrypted. We wouldn’t even
have your data. So if anyone
got through, what they would
get would be a set of encrypted files.
Getting Cloudier
Projected global public cloud services market
$500 billion
Management and
security services
450
Application
infrastructure
services (PaaS)
400
350
Business process
services (BPaaS)
300
System
infrastructure
services (IaaS)
250
200
Application
services
(SaaS)
150
100
Advertising
50
0
2017
MEMBER: Aren’t
there a lot of serious security
AUDIENCE
2018
2019
2020
2021
THE WALL STREET JOURNAL.
Source: Gartner
GM’s Strategy for the Autonomous Car
President Dan Ammann on what the company
is doing—and what the timetable is
‘I think the
promise of what
the technology
can do will help
from a regulatory
perspective.’
Will auto makers or tech companies lead the way to the era
of the autonomous car?
Dan Ammann is helping
chart General Motors Co.’s
course. The company’s president for nearly four years, he
spoke with Jamie Heller, The
Wall Street Journal’s business
editor, about the company’s
strategy of developing the
whole autonomous-car ecosystem and whether the new era
will benefit auto makers. Here
are edited excerpts of their
conversation.
Ready to scale
MS. HELLER: About a decade
ago, GM’s CEO was talking
about leading the way in autonomous cars. And history intervened—the financial crisis,
GM’s struggles. Why should we
believe now is the time for GM
to succeed in robot cars?
MR. AMMANN: No. 1, the technology is here today to enable
this to happen. No. 2, we think
that with the advent of transportation as a service, and the
change in consumer behavior
that we’re seeing with ride
sharing and so on, that now is
the time for autonomous tech-
nology to move to a point
where it can be deployed in
commercial scale.
MS. HELLER: So it’s a technology play, and Google’s been
out there with Waymo, and
has logged many more hours
of test-driving on public roads
than GM. Why do you think
you can succeed as the leader?
MR. AMMANN: A demonstration-level capability or smallscale deployment doesn’t have
the impact on the world that
we think this technology can.
Our goal is to get to the point
where we can launch a truly
driverless car, with all of the
safety validation and everything that needs to go with
that, at large commercial scale.
We’re making sure we have
control of all of the capabilities necessary to do that, from
the advanced software-engineering capability for the selfdriving brain of the car, all the
way through the integration of
that into all of the sensors on
the vehicle, the electrical architecture, the automotivegrade safety validation, and
then the ability to reliably
build these cars at large scale
once we believe we’re ready to
do that.
That all lets us think about
this as one big integrated system, rather than just working
on one piece of it or another.
So we can move quickly and iterate the entire system continuously through development.
MS. HELLER: You played with
some partnerships, and there
seem to be a lot of frenemy relationships between Detroit
and Silicon Valley. Is the new
message “We got this”?
MR. AMMANN: The message is
that this technology will
change the world for the better in a really significant way.
It will have a huge impact on
safety and our roads. It will
have a huge impact on the
consumer experience. It will
create time for people.
So we think therefore we
have an obligation to work as
fast as we can, to bring it to
commercial reality as quickly
and as safely as we can. So
that’s what we’re working on.
MS. HELLER: You just said in
The Wall Street Journal that
you’re now going to be testing
environments, which are the
same environments in which
we ultimately think the technology should be deployed, we
won’t get the level of performance that we need.
in lower Manhattan.
MR. AMMANN: We’re currently
testing in San Francisco, in
Scottsdale, Ariz., and in Michigan. There’s a different rate of
learning and a different experience operating in each of
these environments.
As you would expect, downtown San Francisco is a significantly more complex environment than Scottsdale, for
example. As a rule of thumb,
our cars experience about as
much in one minute of San
Francisco driving as they do in
one hour of Scottsdale driving,
just given the number of interactions with other players, between pedestrians, cyclists,
other vehicles, and things going on.
In the more complex environment, our cars can learn
more quickly, and we learn
more quickly about the problems we need to solve. Now
we’re taking that a step further, to Manhattan, which
most of us would agree is the
most complex and difficult
driving environment in the U.S.
Attracting talent
MS. HELLER: A lot of people
here talk about competing for
talent. How are you attracting
the people you need to GM?
MR. AMMANN: When we began
to see the change in the transportation landscape a few
years ago, we saw we were
missing some of the specific
software-engineering capability that we needed, particularly in the self-driving area.
So we learned what was out
there, and we ended up acquiring a company called
Cruise Automation, which was
a very small but very talented
engineering team.
And with that team we not
only bought capability at the
time, but we bought the ability to recruit more talent. People see what we’re doing, and
often reach the conclusion
that if you want to come to
the place where your technical
contribution will actually be
commercialized in large scale,
then this is the place to come.
MS. HELLER: Is that just a tech-
nical thing, or is there also a
messaging and branding element in taking it to New York,
where Wall Street is?
MR. AMMANN: It’s all about
getting the technology ready
as fast as we can. Until we’re
testing in the most complex
MS. HELLER: What’s happening
on the regulatory front? How
much of an impediment or
help is that going to be?
Speedy Growth
Share of global
market in 2024
Forecast size of the market for self-driving cars
$20 billion
t
North America
Asia-Pacific
Europe
Rest of world
15
29.7%
5
27.3%
0
’18
’19
Source: Variant Market Research
’20
’21
Industry impact
MS. HELLER: Let’s say you succeed and we’re all getting
driven around by robots. Is
this going to be good or bad
for the car industry long term?
Will we just need fewer cars?
MR. AMMANN: We think by
making transportation more
accessible, lower cost, safer, we
actually create the opportunity
for more vehicle miles to be
traveled. We think transportation becomes more readily
available in general to people.
So total vehicle miles traveled
or total passenger miles traveled probably goes up.
While autonomous cars are
seen out on the road in testing, what we still haven’t seen
is what we’re aiming to
achieve, which is a truly driverless car deployed in large
commercial scale. But once
you’ve deployed, the technology will only continue to improve. So we view that on-off
switch of the beginning of
commercial deployment as just
the beginning of a really interesting journey, and changing
that total customer experience.
40.8%
10
2017
MR. AMMANN: It’s still being
formulated, but I think the
promise of what the technology can do will help from a
regulatory perspective. Every
year 40,000 people are killed
in traffic accidents in the U.S.
Regulators will tell you 95% of
those fatalities are caused by
human error.
So if we can make a significant impact by replacing the
human driver with a better
driver, then it almost becomes
an obligation to deploy this
technology for the betterment
of society.
’22
’23
’24
2.2%
THE WALL STREET JOURNAL.
MS. HELLER: The big question
is when that on-off switch gets
flipped.
MR. AMMANN: We and others
are working on this as fast as
we possibly can.
MS. HELLER: You said the last
prediction was five years from
2016. Are we still in that timetable?
MR. AMMANN: I think inside of
that time frame we will see
some pretty interesting developments.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | R7
JOURNAL REPORT | WSJ D.LIVE
The Outlook for Tech M&A
Peggy Johnson and Jennifer
Nason talk about past deals
and the prospect for more deals
MS. KIM: What is the outlook
for big acquisitions?
MS. NASON: I am bullish about
2018 for activity. Money is still
virtually free. The equity market has been very responsive
to M&A. Prices are still high,
so we’re seeing very high valuations. That is tough. But increasingly companies are looking at assets and saying, “This
is just strategic for me. I need
to make a move.”
MS. KIM: Peggy, one of your
partnerships came as a surprise this year: the partnership
with Amazon on digital assistants. You have Cortana and
Alexa working together.
MS. JOHNSON: They’re talking
to each other.
MS. KIM: What was the logic
behind that deal?
MS. JOHNSON: It started with a
conversation that Jeff Bezos
and Satya Nadella had at our
CEO Summit about how we’re
really operating in different
spaces.
Jeff’s all about shopping,
and that experience. We’re all
about productivity and that
experience. I think there was a
recognition that there will be
a multitude of personal
agents, and could ours talk to
each other?
When it was handed off to
the engineering teams, then
the hard work began. They figured out how you can have a
seamless experience between
your two devices. I think you’ll
see more of that going forward.
MS. KIM: Are you open to
working with companies like
Apple and Google in the AI
space as well?
MS. JOHNSON: We are. We try
not to look at everything
through a competitive lens. Is
there some shared value that
together we can build more
for our joint customers?
Rather than fighting over a
piece of the pie, can we grow
the pie, is really our model.
MS. KIM: This partnership is an
example of a potential expansion in the AI space?
MS. JOHNSON: Yes, AI is a big
area for a lot of people right
now. If we can take out some
of the friction in the development process, I think we’ll
start to see some of the outcomes that we’ve all been talking about and envisioning.
MS. KIM: Jennifer, a lot of ri-
vals in tech are partnering and
working on emerging technologies. Will this be a trend?
MS. NASON: It’s certainly more
capital efficient. Sometimes
you just can’t go out and buy
everything. M&A is hard, timeconsuming, and it doesn’t always work. So some of these
partnerships can be a good
way to have a bet in a certain
area and see how it plays out.
MS. KIM: We’re seeing a lot of
software companies going after hardware, and hardware
companies going after software. Jennifer, will that trend
continue in the industry?
NIKKI RITCHER/DOW JONES
Tech companies aren’t sticking
to their bread and butter when
it comes to acquisitions. In
2016, Microsoft Corp. surprised the market with its $26
billion acquisition of LinkedIn.
And this year, Amazon.com
Inc. purchased Whole Foods
for more than $13 billion. Wall
Street Journal Senior Editor
Yun-Hee Kim talked about
mergers and acquisitions and
strategic investments with
Peggy Johnson, Microsoft’s executive vice president of business development, and Jennifer Nason, global chairman,
investment banking at J.P.
Morgan Chase & Co. Edited
excerpts follow.
Jennifer Nason (left) and Peggy Johnson
MS. NASON: Yes, there are
many examples. But the big
hardware of the future is going to be the autonomous vehicle, and the networks that
are going to those vehicles,
the software, all the technology, the content.
MS. KIM: Which companies are
in best position?
MS. NASON: I would never un-
derestimate the big OEMs
[original equipment manufacturers], so Ford and General
Motors. We know there’s a lot
going on there. Thousands of
companies are trying to raise
private equity for elements of
the autonomous vehicle.
MS. KIM: What is Microsoft do-
ing in this space?
MS. JOHNSON: We’re enabling
that space. We’ve come out
with our connected-vehicle
platform, which takes care of a
lot of the plumbing, if you
will, that the car needs to go
through; the aggregation of
data from all of the different
sensors, off-loading it, and analyzing it in the cloud. We’ve
looked at a set of tools that
can enable OEMs in the space.
It's a Deal
Merger, acquisition and buyout activity involving venture-backed
information-technology companies headquartered in the U.S.
Number of deals
Total amount paid
300
$40 billon
250
200
150
100
50
0
2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17*
35
30
25
20
15
10
5
0
2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17*
*2017 figures are for first three quarters of the year
Source: Dow Jones VentureSource
MS. KIM: What is Microsoft’s
next big growth opportunity?
MS. JOHNSON: We have a big
focus in AI. Just over a year
ago we announced a reorganization. We’ve had AI on our
campus for about 25 years, so
we’ve put a lot energy into
that, and this reorganization
will help refocus even more.
MS. KIM: You are both rare fe-
THE WALL STREET JOURNAL.
male senior leaders in your industries. What can companies
do to promote more women
into senior roles?
MS. NASON: Well, if they could
just send an email out tomorrow, and promote a bunch of
people. (LAUGHTER) I hope
Jamie Dimon is listening.
I’ve invested more time and
effort in diversity committees
and panels, and generally it’s
women talking to other
women about how to fix it. I
think that’s been a big tactical
mistake on our part to talk to
each other, rather than to involve the men, and particularly the men who are typically in power at a lot of these
organizations.
MS. JOHNSON: I’m an electrical
engineer, and when I first
started out, there was nobody
who looked like me out there.
I worked at Qualcomm, and I
remember coming into meeting rooms, and I could never
get the floor. I could never get
my opinion across. And I
thought at one point, “I’m just
going to drop out.”
My manager at the time
said, “Don’t do that. How can
we fix things?” And I said,
“Well, just throw me the ball.
I have something to say, but
it’s hard to interject.” And he
started doing that. That’s
when my career really took
off. So I’ve tried to do that
over and over, you know, going forward with any team or
group of people, make sure everybody is heard. It’s very important, whether you’re a
quiet man, or a quiet woman.
We’re taught in school, “If you listen, your patient will tell you what they need.” The truth is, patients
share a lot of valuable information that cannot be captured. That’s why I’m collaborating with health
and technology leaders to make meaningful patient data accessible and actionable. Our patients are
still telling us what they need, but in the future, technology will help us hear them even better.
Join the AMA in unleashing a new era of better, more effective patient care through the Integrated
Health Model Initiative at ama-assn.org/ihmi
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THE WALL STREET JOURNAL.
R8 | Tuesday, October 24, 2017
JOURNAL REPORT | WSJ D.LIVE
The View of An Activist Investor
William Ackman explains why he’s battling with ADP
In fact I think it is dangerous not to have opposing
points of view in a board
room. ADP is operating in a
world that has changed dramatically in the last five or six
years because of technology,
because of cloud-based software. And they’ve missed the
market as a result.
‘Once the owner
is gone, there is a
real risk that a
company will lose
its innovation.’
Risk of disruption
NIKKI RITCHER/DOW JONES (2)
MS. HELLER: You recently said
Activist investor William Ackman, the founder of Pershing
Square Capital Management,
has spent the past few months
locked in battle with Automatic Data Processing after
taking a stake in the humanresources software firm and
having his request for board
seats rebuffed.
In an interview with The
Wall Street Journal’s business
editor, Jamie Heller, Mr. Ackman laid out his case for
board changes at ADP and for
shareholder activism in general. Edited excerpts follow.
Replacing the founders
MS. HELLER: What do you think
about this new proposal out of
Silicon Valley for a new U.S.
stock exchange, where the longer you hold a stock, the more
voting rights you get? And no
earnings guidance. Is that a
world you would welcome?
MR. ACKMAN: I think a lot of
companies make the mistake
of giving guidance to their
shareholders on earnings.
When you have companies
very focused on meeting numbers, it causes them to miss
opportunities.
ADP is the classic example
of a company that has met its
numbers but missed the market. We’ve heard stories from
former employees that ADP
had an opportunity to build a
competitive product to Workday, but there just wasn’t
room in the budget for it.
They couldn’t make the numbers if they had to make a big
capital expense on a new program. That decision has cost
them tens of billions of dollars, and created competitors.
You get the shareholders
you deserve. If you have earnings guidance, you’re going to
have shareholders who are
very focused on the short
term. If you don’t, you’re going to attract investors who
take a longer-term view.
MS. HELLER: You haven’t done
that much investing in tech, so
how did you pick ADP?
MR. ACKMAN: ADP is sort of
the classic example of a company started by a founder,
built up over decades to become the dominant company
in payroll processing. It was
an innovative company that
helped with an important task.
Then, the founder dies and
the stock gets disseminated
out to children, and estates,
and foundations, and then to
the market, to the government
to pay taxes. And then the
board becomes comprised of
what I call professional directors. If you look at the board
of ADP today, only one director in the last 14 years has
bought a share of stock.
Owners are willing to make
bold decisions. Once the
owner is gone, there is a real
risk that a company will lose
its innovation. So activism is
sort of a replacement for the
founders. Because we own 8%
of the company, we’re seeking
representation on the board.
Once we’re there, we can think
like an owner. We can help
make decisions like an owner.
MS. HELLER: One of the criti-
cisms of your ADP campaign is
that there aren’t specifics. Its
just “let’s improve margins.”
What’s your response to that?
MR. ACKMAN: What companies
do when they want to defend
against activists, and they
don’t have a good response, is
they will attack the activist.
They say that bringing the activist on the board is extremely risky.
that as an investor, you need
to be looking at what the venture capitalists are looking at,
and what the startups are doing because you never know
who is going to come in and
blow up your business. Yet
you’re investing in a business
that seems to be on the defensive from rivals like Workday
and Paychex. How did you decide to make that leap?
MR. ACKMAN: I’m a pretty active small investor in venture
capital personally. It helps me
think about the risk of disruption. The most important
thing a long-term investor
needs to think about is the
risk of someone in a garage
coming out with the next new
thing.
ADP has some of those
kinds of risks. But we think as
long as ADP is open to change,
it still has a strong enough
market position, a strong
enough balance sheet, enormous resources, that it can
mitigate competitive threats.
What’s fascinating is, ADP
has a $50 billion market cap.
It spends $860 million a year
on systems development and
R&D. They have 9,000 developers, technologists, working
for the company. They spend
more than the entire industry
does developing products and
software. And much smaller
competitors, with a fraction of
the resources, have better
products than ADP.
[In response to Mr. Ackman’s comments, ADP said in
a statement that while it understands the value of diverse
perspectives on a board, none
of Pershing Square’s nominees
had the “relevant technology”
experience or skills to “be additive” to ADP’s board. It also
said the company had transitioned 83% of clients to the
cloud and was delivering longterm value for shareholders.]
MS. HELLER: Does this mean
we’re going to see more of Bill
Ackman in tech?
MR. ACKMAN: The reason we
haven’t been an investor in
technology generally is that
most true technology companies are so dynamic that it’s
hard to predict the future. If a
business is dynamic and subject to so much change, I can’t
predict what it’s worth. And if
I can’t predict what it’s worth,
I’m not going to be an investor
in the company.
ADP’s business model is a
little bit different. It’s really a
business service company. It
tends to have very long-term
relationships with its customers, as switching costs are
very high.
MS. HELLER: Let’s go back to
this idea that more companies
in Silicon Valley are moving
away from one vote, one
share. Is that a good trend?
MR. ACKMAN: I think super
voting is dangerous unless it’s
in the hands of an incredibly
talented entrepreneur. Look at
what Uber Technologies is
going through now, where Travis Kalanick was the greatest
CEO of all time, and then all of
a sudden the board soured on
him. But by virtue of ownership, he’s got enormous influence and ability to elect people to the board.
Fundamentally I prefer one
vote, one share. But if it’s
Steve Jobs, you can probably
give him control. The risk is
really in the next generation.
If a company goes public with
supervoting stock, after the
founder retires, it should convert to one vote, one share.
Self-Flying Plane Wins
Startup Showcase
Eviation was the audience choice, while the
judges favored a comedy-streaming service
The Wall Street Journal would
like to thank the sponsors of
D.LIVE Laguna 2017 for their
generous support.
Eviation co-founder and CEO Omer Bar-Yohay at The Wall Street Journal’s D.Live conference
For more information, please visit DLIVE.wsj.com.
© 2017 Dow Jones & Co. Inc. All rights reserved. 3DJ6029
EVIATION, A STARTUP developing self-flying, electric passenger planes, was crowned
the audience choice for the
most promising startup at The
Wall Street Journal’s D.Live
technology conference.
The Israel-based startup is
hoping to build a company it
describes as “Uber meets
Tesla in the sky,” using self-piloting, lightweight aircraft
that can whisk up to nine passengers each at 280 miles an
hour on demand.
With the aircraft still in
planning, it is an ambitious vision that would require rapid
changes to U.S. aviation, a
highly regulated and crowded
industry where self-flying and
electric planes are still
thought by many to be far off.
Eviation won out in the audience choice over five other
young companies that made
up the Startup Showcase at
the conference.
Founders from each of the
startups faced off in pitches
before three judges—Levi
Strauss & Co. Chief Executive
Chip Bergh; Philip Krim, CEO
of mattress seller Casper; and
Jenny Lee, managing partner
at venture-capital firm GGV
Capital.
Sitting on director’s chairs
on an outdoor stage overlooking the Pacific Ocean, the
judges peppered the founders
with questions on their business models.
Eviation describes
its vision as ‘Uber
meets Tesla in the
sky’
Judges choose Laughly
Other contenders
In the end, the judges unanimously went with a different
choice than Eviation, all three
favoring Laughly, a comedystreaming service that claims
30,000 monthly active users
who pay for something akin to
a Netflix of stand-up comedy.
But Eviation, helmed by
Omer Bar-Yohay, won over the
crowd.
Mr. Bar-Yohay spoke about
the plane in epoch-shifting
terms, comparing it to the
shift from horses to highways.
Highways, he said in a slide
presentation “gave us traffic,
and they gave us the suburbs…is this the last paradigm
shift?”
Eviation’s planned aircraft,
shaped similar to many military drones, is designed to be
about 36 feet long, and very
low-cost, Mr. Bar-Yohay said.
Others in the Startup Showcase included:
KinTrans, a sign-language
translator that aims to read
sign language made by a human, transcribe it, and play it
back with voice.
Hurdl, which makes lowcost, wirelessly connected LED
wristbands meant for concerts
and other live events, aimed at
allowing more ways for musicians to interact with the audience.
Bounce Imaging, a company that makes throwable
cameras for law enforcement
to see into rooms or around
corners.
My Jomo, which makes
small, round digital screens
worn by retail salespeople that
can flash discount promotions
or a person’s name to help
draw in consumers.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | R9
JOURNAL REPORT | WSJ D.LIVE
Companies Must
Use AI—or Else
‘Now that we have
enough data, we
can start to think
about artificial
intelligence.’
Artificial intelligence is the latest Holy Grail for the tech industry. What is the potential
for this technology? And how
close are companies to achieving it?
To get a report on the state
of play, The Wall Street Journal’s chief news editor, Jason
Anders, spoke with Intel Chief
Executive Brian Krzanich.
Here are edited excerpts of
their conversation.
The smart revolution
MR. ANDERS: AI is everywhere.
You’ve had a front-row seat to
some of the biggest innovations in computing. How big is
this moment?
MR. KRZANICH: We’re just at
the beginning of a transformation. Artificial intelligence is
going to be similar to what the
internet was back in the ’90s.
You remember back in the
’90s everybody said, “If you’re
not going to be an internet
company, you’re not going to
be around.”
The same thing is going to
be true. Almost every company you can think of, every
application, it’s going to be affected by artificial intelligence.
You’re going to be using artificial intelligence, or you’re going to be outpaced by people
who are.
MR. ANDERS: What are the real
applications that you’re most
excited about today?
MR. KRZANICH: Today I think
you already see it in some applications and social media,
where your news feeds, or
what you’re shopping for, or if
you listen to one of the music
systems, they’ll send you
weekly suggestions.
What they look at is things
like what you listen to, what
are the word patterns, things
like that. But where you’re
starting to see it break
through that’s really exciting
are things like health care.
There’s already data that suggests that using machine
learning, looking at MRIs, they
can detect Alzheimer’s years
earlier than what humans can
detect. So imagine the transformation if Alzheimer’s,
which can be slowed down by
drugs, could be detected five,
10 years earlier.
MR. ANDERS: To be able to do
that, you have to be a company that has both the AI tech,
but also access to the MRIs?
MR. KRZANICH: You’d be surprised at how many companies
actually have access to data
but don’t put the investment
in place.
I went to the National Retail Federation in January. I
talked about how brick and
mortar needs to think about
one of the differences between
brick and mortar and online
shopping. Online shopping has
all the data about you. They
see what you searched, they
What's It Good For?
Some of the ways surveyed
companies are using or plan to
use artificial-intelligence
technology
37% | Improve efficiencies in IT
operations
34% | Improve data, analytics
or insights platforms
33% | Improve business
automation
33% | Mitigate security risk
32% | Test new products
31% | Gain better customer
insights
30% | Innovate product design
and development
30% | Create and deliver a
better customer experience
30% | Improve efficiencies in
business operations
Source: Responses from 1,476 data and
analytics decision makers whose firms are
planning to use or currently use AI
technologies, surveyed in Forrester's Global
Business Technographics Data and Analytics
Survey, 2017
THE WALL STREET JOURNAL.
see what you put in your basket and then don’t buy. They
understand what colors you
choose. All of that data is then
tuned to what they send to
you. Brick and mortar should
be doing that same thing.
They have cameras in there already, they can put in small
[radio-frequency identification
tracking tags].
We did a project with
Levi’s. They can now track
what goes into the changing
room and never comes out,
never goes out of their store.
Do you pick up red things, but
you only buy white things. All
of that data could really transform brick-and-mortar retail
as well.
MR. ANDERS: You have a new
Nervana platform, a different
way of designing chips. What
is different about this?
MR. KRZANICH: In industry,
five, seven years ago, people
started saying, artificial intelligence is going to take off, really it’s the advent of the
cloud. The cloud allowed aggregation of data. Now that
we have enough data, we can
start to think about artificial
intelligence.
We started to think about
what we call neural processing, which is that you’re starting to look at very large data
sets with a very different architecture that allows for
much larger data sets to be
worked on at one time.
We have a goal by 2020 to
be 100 times better than the
best artificial-intelligence systems out there today using
this neural processing.
MR. ANDERS: How do you mea-
sure 20 times better than the
best artificial intelligence, or
100 times better? What’s the
metric?
MR. KRZANICH: There are algorithms that you can test
against. So you show it a set
of pictures, or a set of data
sets that are large, and you
say, how long does it take to
find the five patterns that are
‘We try to not think
too much about the
algorithm. We’re
always looking at,
what is the actual job
the content’s doing?’
In Defense of an Ad Model
Jonah Peretti of BuzzFeed talks about social
media, algorithms and fake news
The world of online news is in
flux, facing any number of
questions. Where’s the money
going to come from? How do
you attract readers who have
so many options? And how
can you keep inaccurate news
from taking hold? For insight
into these issues, The Wall
Street Journal’s deputy technology editor, Christina Passariello, spoke with the
founder and chief executive of
BuzzFeed, Jonah Peretti. Here
are edited excerpts.
Who pays for it?
MS. PASSARIELLO: Barry Diller
said that anybody who was
building an ad-based business
should go home. What are you
doing to make BuzzFeed less
reliant on ads?
MR. PERETTI: If you’re reaching
a really large audience, advertising is a good model. We
reach more than half of the
millennials in the U.S. I agree
that diversification of revenue
is also important. We, like a
lot of media companies, have
expanded into areas like merchandise, show development,
commerce, a bunch of other
areas.
MS. PASSARIELLO: You’re very
dependent on social-media
platforms. Do you see it as a
crutch to be so reliant on platforms that can change their
strategy?
MR. PERETTI: When BuzzFeed
started, Facebook was how
you hooked up with friends to
go places. The iPhone hadn’t
launched yet. We were trying
to understand, “What does it
mean for content to become
social?” We didn’t realize
these platforms were going to
get so huge.
We saw these three trends
come together: digital video,
mobile and social. That has
created the largest audience
that the world has ever seen.
You’re able to reach literally
billions of people.
We feel like we’ll be able to
build on top of these platforms and reach many more
people and build a great business by reaching people where
they’re consuming media today.
MS. PASSARIELLO: Does it give
Please see PERETTI page R10
NIKKI RITCHER/DOW JONES (2)
If a company isn’t using artificial intelligence,
says Intel CEO Brian Krzanich, it is going to be
outpaced by another company that is
inside there? And you can look
at those speeds.
What we’re talking about
here is being able to do those
much faster, but it isn’t only
about speed. It’s going to be
the amount of data that we
can look at.
Look at things like weather
prediction. One of the biggest
things that limits accuracy is
the amount of data that can be
absorbed into the system
when you look at all of the
temperature measurements
and wind speeds and all. What
we’ll do is massively expand
the amount of data that can be
used by these systems.
The big players
MR. ANDERS: Who besides Intel
is doing things that you find
absolutely are just blowing
you away?
MR. KRZANICH: The place
where we see probably the
most innovation is with the
cloud-service providers. That’s
the Googles, the Facebooks,
the Amazons, the Alibabas.
Those companies, because of
their large access to data, are
really helping drive. They’ve
been great partners back to
us, saying this is the kind of
engine that we need.
Nervana’s a good example.
We’re partnering with companies like Facebook. They’re
one of the people who are
starting to take a look at it in
its early phase and saying,
“Hey, this really could change
the way we think about artificial intelligence, and help us
steer how we develop the software and the hardware.”
MR. ANDERS: Any company you
talk to, any startup you talk
to, any established company
you talk to, they’re all an AI
company. How do we tell
who’s really doing stuff, versus who’s just talking about
doing stuff?
MR. KRZANICH: I think it comes
down to, can you show a case
that is genuinely shifting how
that company does something.
Let me give you a real-life
example within Intel. Intel’s
one of the largest manufactur-
ers in the world. We produce
about a million chips a day,
roughly. For each one of those
million chips we take about 1.6
million pictures as it progresses through the production line.
Why didn’t this chip work?
Well, we have to go back
through the 1.6 million photos
in order to try and find where
the defect is. We now use artificial intelligence to compare
against known images, and
what that image really is, to
go through those 1.6 million
images. What used to take
three weeks, now takes a couple of hours. And so our ability to shift how fast we can
solve issues.
I think when you ask a company, are you an artificial-intelligence company, you have
to ask them, what’s your use?
What have you shifted? What
have you changed? What have
you improved? What’s running
more efficiently? Or, what are
you delivering to the customer
that shifts what makes their
life better?
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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.
R10 | Tuesday, October 24, 2017
JOURNAL REPORT | WSJ D.LIVE
Peretti
“I think what’s going to define Africa’s tech
rush is whether or not it is controlled by
the people of Africa or it’s simply happening to the people of Africa. Ultimately,
what’s going to yield the most synergy is if
we’re taking advantage of all the resources
and the untapped opportunities of the continent, which includes the individuals on the
ground as well. And the way that they’re
thinking about building businesses there
and building businesses that not only address the needs of the continent, but the
global diaspora and I think, honestly, humanity in general.”
Jessica O. Matthews,
Founder and CEO, Uncharted Play
NIKKI RITCHER/DOW JONES
VOICES FROM THE CONFERENCE
Continued from the prior page
you whiplash when one of
these platforms suddenly
changes, like away from live
video news content to focus on
something else?
MR. PERETTI: BuzzFeed started
as a lab. We’re continually innovating. The more change
there is in the media industry,
the better it is for us. I worry
about the opposite, which
would be if Facebook and
Google became the only two
platforms, and they decided to
stop innovating and they lost
their paranoid fear of other
people taking share from
them, and they just did the
same, boring thing. Then
BuzzFeed would get less of a
benefit from all of our innova-
tion and ability to switch platforms and to connect with audiences in a deeper way.
Meeting the audience
MS. PASSARIELLO: How do you
tweak your content based on
changes to the algorithms on
Facebook or Google that
change how content appears
in search or the news feed?
MR. PERETTI: We try to not
think too much about the algorithm. We’re always looking
at, what is the actual job the
content’s doing? How do we
make content that actually is
serving a job in someone’s life
in a deep and meaningful way,
and gives them a reason to
connect with other people?
Facebook or Google or whoever is building these algorithms, they’re trying to surface great content, get more
user engagement, get people
to spend more time on the
platforms. But the algorithms
are always flawed, and they’re
always changing. If you are a
company that’s trying to figure out the algorithm or game
the algorithm, you’re going to
have whiplash, as you said
earlier. The best thing is to
not think that way, to think
about the user and consumer.
MS. PASSARIELLO: What is your
prediction of what’s going to
be performing well six months
from now?
MR. PERETTI: I think that all
great companies go back to
the customer or the consumer
or the audience and they try
to understand them in a deep
way. Facebook had a program
where they had people look at
their news feed and then answer survey questions, and
then they could use that data
to improve the algorithm.
There are a lot of weird
things. For example, we do
D.I.Y. content. We have a brand
called Nifty, all about hacks
and things you can build. People will see a Nifty video, then
a large chunk of them will
spend their entire weekend
building a project. Or with
Tasty, a food brand that we
created. People will watch,
make the thing and post their
version of it.
Then we’ll post something
that maybe is a fun piece of
entertainment that gets the
same number of views, but
people see it and then they
forget about it. It doesn’t have
a longer impact. The algorithm
might see the same number of
shares, the same amount of
engagement, but not be able
to tell that someone did a
project with their kids or
cooked a meal with their family. There’s a lot of things that
are hard to measure.
When we see those signals,
of people actually posting responses of them making or
cooking it, we know we’re on
to something and we know
that’s a deeper, more meaningful thing. We know that will
drive brand affinity, so people
will start to associate the
brand with things that really
matter in their life, which will
cause more page likes, and
start to show up in the metrics. Even if the algorithm
can’t measure it, we stay on it
and keep pushing toward it.
The fake-news problem
MS. PASSARIELLO: You’re com-
peting against fake news, so
how do you approach that?
MR. PERETTI: The dystopian
view is that The Wall Street
Journal and the New York
Times and the Washington
Post will prioritize subscriptions and move behind a paywall. A very small percentage
of elites will get the quality
journalism that those organizations produce.
If you’re thinking about an
electorate and people being informed, the subscription
model in media doesn’t help
inform the public. If Facebook
can’t find ways to support
quality content in their news
feed, that would be bad for democracy. Facebook is going to
find more ways to allow publishers to generate revenue on
their platform.
It’s a huge question for society and democracy. If Google
and Facebook take all of the
revenue but don’t want to pay
for the fact checking, reporting, more-intensive investigations, who does that work? If
it’s only subscription services,
that’s a big challenge. Google
and Facebook are going to
have to fix that. It isn’t tenable that the only people getting quality news will be 2% or
5% or even 20% of the public.
MS. PASSARIELLO: Is there a
way that tech platforms
should be solving fake news
more aggressively with algorithms?
MR. PERETTI: The challenge
with the big tech platforms is
they’re places where people
are getting news and entertainment. And they’re kind of
the telephone company, where
people communicate with
their friends. It’s hard to do
both. We don’t want the telephone company interrupting a
phone call when someone says
something fake or incorrect on
the phone. Speech should be
open.
Big tech platforms need to
lean more on organizations
where we have brands that we
stand behind. They’re going to
need more help from media
partners to say, “OK, different
media sources can vouch for
the information that’s circulating.” They’re not necessarily
going to be able to do that
themselves.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | R11
Sam Altman
Jenny Lee
Bill Maris
Where the Money Will Come From
Sam Altman, Jenny Lee and Bill Maris offer their
thoughts on startup funding, the most exciting
technologies and increased regulation
Ideas about investing and politics were bubbling as Wall
Street Journal reporter Rolfe
Winkler met with Sam Altman,
president of the accelerator
and seed-money investor Y
Combinator, Jenny Lee, managing partner at GGV Capital,
and Bill Maris, founder of the
venture fund Section 32, and
the founder and former CEO of
Google Ventures. Edited excerpts follow.
MR. WINKLER: Sam, are you
considering running for governor of California next year?
MR. ALTMAN: No.
MR. WINKLER: Willie Brown,
the former California Assemblyman and San Francisco
mayor, wrote back in May [in
the San Francisco Chronicle]
that you are “looking at running for governor in 2018.”
What did you and Willie
Brown talk about?
MR. ALTMAN: A lot of people
have suggested that I run. But
I love my current job. The
state is extremely, badly broken and it would be good to
try some new ideas. But there
are so many important things
to do right now on my list that
are higher than that, I am not
going to do it.
MR. WINKLER: Let’s talk about
Y Combinator: Is it now 250
companies a year that you invest seed money in?
MR. ALTMAN: In our main program, it’s probably about 280.
But we started this online version. We did 3,000 companies.
We did an online version of Y
Combinator that we called
Startup School this spring. Up
to that date, Y Combinator
had funded, let’s say, 1,700 or
1,800 companies ever, and advised that many too. We advised 3,000 companies at once
in this one thing.
MR. WINKLER: That’s a lot.
MR. ALTMAN: It worked really
well. We used our alumni to
advise them. We had companies all around the world, we
had meetups all around the
world. It worked so well that
we’re going to expand that.
MR. WINKLER: Is it too many?
How do you sort through all of
these companies?
MR. MARIS: I don’t think it’s
too many. We can’t invest in
everything. Sam has a different mission and job, which is
coming at this startup ecosystem from a different place. I’m
looking for 15 to 20 companies
a year that I feel like I or my
network can help grow.
MS. LEE: I spend time talking
to a lot of companies. But the
way we play is, if you are a
hunter who’s looking for elephants, you have to have the
skill set to identify, “Is this an
elephant, or is this a zebra?”
We have to have partners who
know how to identify, have the
right skill sets, and the resources and tools to go hunt
them down and then help
them to grow.
MR. ALTMAN: There is some
limit of how many good companies there are to fund. We’re
not anywhere close to that.
And until we get there, I’d
rather figure out how to structure our organization so that
we’re not spread too thin.
MR. WINKLER: What are the
best companies right now? The
technologies you’re most excited about?
MS. LEE: We think technology
is going to come back around
and bring with it new inventions in the form of new products, new planes, new autonomous cars, hardware.
MR. MARIS: It wouldn’t surprise me if the sun is setting
on the golden age of Silicon
Valley. I mean, the companies
that used to be fun and disruptive and interesting and
benevolent, that were largely
viewed that way, now we’re
concerned that they’re disrupting our elections.
They’re hoarding our personal information and using it
for profit, and so forth. And I
think the tide, the populism
that sort of helped get Trump
elected, may be turning
against the concentration of
wealth that’s happening in Silicon Valley in a similar way.
MR. WINKLER: Do you guys see
a coming wave of regulation
that’s going to break up these
big tech companies?
MR. MARIS: I wouldn’t be surprised. These companies are
more powerful than AT&T
ever was. If you think the system is broken, the people with
power and money are the ones
people will look to to say, “We
need to disrupt that. This isn’t
working for us.”
MS. LEE: I have a different
perspective. Entrepreneurs out
there, don’t focus on the politics. Your world should be
consumed with trying to figure out a way to deliver value
and services to your target audience. It could be consumers,
it could be enterprises. And
that world doesn’t have to be
in the U.S. If it isn’t going to
work here, look elsewhere.
MR. WINKLER: SoftBank Group
Corp. is an 800-pound gorilla.
Bill, what impact is it having?
MR. MARIS: Turbulence. I think
it’s unprecedented to have a
fund that size [the tech-focused Vision Fund has close to
$100 billion]. It creates some
turbulence and probably compresses returns over time because you have a large fund
that needs to do large deals at
high prices to deploy capital.
MR. WINKLER: Why did you
leave Google Ventures so
abruptly?
MR. MARIS: It wasn’t abrupt
from my point of view. I went
in there kind of voluntarily to
do an experiment for a year.
And by the time I got to almost 10 years, it felt like it
was time to go do something
new, learn something new.
MR. WINKLER: Were you trying
to raise money for Section 32,
your new venture-capital fund,
while you were still at GV?
MR. MARIS: No. I left GV thinking I was going to become a
magician. I didn’t know what I
wanted to do. I was really just
enjoying taking a break.
NIKKI RITCHER/DOW JONES (3)
JOURNAL REPORT | WSJ D.LIVE
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THE WALL STREET JOURNAL.
R12 | Tuesday, October 24, 2017
JOURNAL REPORT | WSJ D.LIVE
Where Wearable Tech Is Headed
Chip Bergh, Levi Strauss’s CEO, says the
company wants to see what new functions
consumers want. But the possibilities are endless.
NIKKI RITCHER/DOW JONES (2)
Wearing the internet
MS. PASSARIELLO: Levi’s just
unveiled its first connected
item of clothing, this $350
jacket that you’re wearing.
How are consumers starting to
use it?
MR. BERGH: We have a line of
product called Commuter,
which really is for bike riders.
It’s a little bit niche, but getting more mainstream. So we
decided to use the Commuter
line. This allows cyclists to get
directions, listen to their music, change their playlist without ever needing to look at
their phone.
MS. PASSARIELLO: How do you
see the use of the product
evolving?
MR. BERGH: Where this specific
product goes and how much
more functionality we build
into this is one question. The
other big question is where
does wearable technology go?
Right now devices kind of
control our life, and the picture for the future is that
technology is embedded in our
life, into the clothing that we
wear, perhaps into the sheets
in our bed at home, and anything that’s a fabric will be
able to have conductive fiber
in it that can do just about
anything.
MS. PASSARIELLO: Do you plan
to roll this fabric out across
many other products in your
lineup?
MR. BERGH: Yeah. We have a
lot to learn from the consumer. What other kinds of
functionality do they want
built into this? And then we’ll
go there. We’re already working with Google on 2.0.
MS. PASSARIELLO: What do you
have in mind already for 2.0?
MR. BERGH: If you think about
all the different ways or times
you need to take your phone
out to use an app, imagine replacing more of that. Scroll
through your phone and look
at the apps and say, “Do I really need to look at the screen
for this?” And if not, if I can
control it with a swipe, it’s
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there’s no such thing as a real
failure. It’s just an opportunity
to learn.
Learning from Google
Working with Amazon
MS.
‘Anything that’s a
fabric will be able
to have conductive
fiber in it that can
do just about
anything.’
Levi Strauss & Co. has 164
years of history behind it—and
the challenge of remaining
competitive in the digital age
ahead of it. The company is
addressing that challenge in
part by using big data to better understand its customers
and cater to them. But it’s also
taking a higher-profile tack
with cutting-edge wearable
technology, an internet-connected jacket it developed with
Alphabet Inc.’s Google unit.
The Wall Street Journal’s
deputy technology editor,
Christina Passariello, sat down
with Chip Bergh, Levi’s president and chief executive, to
discuss high-tech clothing, the
blending of Levi’s and Google’s
work cultures, and the pros
and cons of working with Amazon.com Inc. Edited excerpts
follow.
something that we’re going to
be able to build in from a
functionality standpoint.
PASSARIELLO:
Tell us
about working with Google.
Different cultures. What’s it
like to go through this innovation process with them?
MR. BERGH: We’re perfectionists. Everything we sell has
got to have quality embedded
in it. It’s got to be perfect before we launch something.
When we launch a new fit, the
team travels around the world
to make sure it fits all the different body types around the
world.
We really focus on perfection and really failure is not
an option. Google embraces
mistakes.
We had one instance where
the sleeve actually caught fire.
That’s not a good thing for a
consumer, right? But they
loved it. They were like, “That
gives us a problem to solve.”
And so it was two very, very
different cultures coming together trying to solve a common problem. And I think we
learned a lot from it. We’re
now embracing failure a lot
more readily, willing to fail
fast, fail early, but just keep
moving forward because
MS. PASSARIELLO: You’ve had
an official supplier relationship between Levi’s and Amazon for several years. What do
you gain from having Amazon
as an official supplier?
MR. BERGH: They’ve got enormous scale in the online space.
They attract the most eyeballs
for consumers who are shopping.
We do have our own website. We do work with our
other wholesale customers like
Macy’s, like J.C. Penney, like
Kohl’s on their e-commerce
sites.
We’re trying to innovate in
the e-commerce space, so we
just launched a chat bot that
is a virtual stylist. If you go to
levi.com, you can experience
that.
As we develop these capabilities and prove them out,
we’re willing to share them
with all of our online partners.
But Amazon’s one of our biggest
customers
globally.
They’re one of our fastestgrowing customers.
MS. PASSARIELLO: Amazon
gathers a lot of information
about how Levi sells. Do you
get access to that data?
MR. BERGH: Some of it. I’m
sure we don’t get all of it. But
we try to have a productive
working relationship, and not
just with Amazon here in the
U.S. I met with Alibaba this
morning. We’re working with
Wal-Mart as well. All of these
e-commerce players are collecting a lot of data, and I
think we can partner together
to do a better job of targeting
consumers.
MS. PASSARIELLO: Amazon has
launched a lot of its own lines
to compete with others, and
now they have all this data
about how well they sell your
product. When do you expect
them to go head-to-head with
you with their own denim line?
MR. BERGH: I would be the
first to argue that they
shouldn’t go there, but a lot of
our customers have their own
private label and we’ve been
dealing with this for 30 years.
I don’t want to say it’s inevitable, because they’re really
happy with our business and
they’ve got other brands as
well. But if they launch a private label, competition’s a
good thing. It will make us
take our game up to the next
level.
Qualcomm’s Game Plan
CEO Steven Mollenkopf talks about smart cars
and 5G technology
‘All of the things
that have to be
done to support
5G products in
2019 are
happening.’
Qualcomm Inc. isn’t a big consumer name, but it’s one of the
companies most responsible
for what consumers can do
with their smartphones and increasingly smart cars.
The company’s chief executive, Steven Mollenkopf, spoke
with Jason Anders, The Wall
Street Journal’s chief news editor, about what’s around the
corner for Qualcomm and consumers as technology continues to shake things up. Here
are edited excerpts.
MR. ANDERS: Last fall you announced one of your biggest
deals, to buy NXP Semiconductors, a Dutch company, for
something like $39 billion plus
a fair amount of debt. This
would be not only a huge deal
for Qualcomm, but also a really big push deeper into automotive technology. How’s that
going? Regulators are still
looking at it, right?
MR. MOLLENKOPF: We’re on
track to close this year. I think
it’s the second-largest tech
deal in history. NXP has a
strong footprint in Europe and
other places, so it’s natural
that people ask a lot of questions. But nothing unusual.
MR. ANDERS: How will this
deal change Qualcomm? What
will you be able to do that you
can’t do right now? And does
it fundamentally change the
mission of the company?
MR. MOLLENKOPF: The mission
of the company has always
been to take technology, invest
in it ahead of the industry, and
then put it in a way that it can
be used at scale. And for the
past 30 years, we’ve been doing that in the cellphone
space. That’ll continue—you
have 5G [wireless technology]
on the horizon.
The NXP deal accelerates
our strategy of driving the
mobile road map into new industries at the time when the
industry is being disrupted by
those new technologies. Estimates are that 20% of the economic value of 5G will accrue
to the automobile industry—
which may seem unusual at
first glance, but in reality, if
you think about the connected
car and all its implications it’s
immense.
MR. ANDERS: NXP is in a lot of
the parts of the car, and a lot
is not about autonomous driving—it’s in a lot of core tech
systems that make cars hightech today in ways most of us
don’t fully appreciate.
MR. MOLLENKOPF: Our portfolio, independent of NXP, is already pretty strong. If you
look at our position in telematics, in infotainment, we’ve
shipped hundreds of millions
of devices into cars in the past
15 years. Now, what’s happening in the car space is that
there’s a big change in the architecture of the car.
The car is getting smarter,
so all of these distributed
smarts in the car, it’s essentially consolidating into a number of smarter subsystems that
are all connected in a coherent
way. And they’re all being connected to the internet. And so
our goal—and we’ll be able to
do this quite well with NXP—is
to have a piece of all of those
subsystems.
If you look at the combination of those two portfolios—
the computing power and connectivity from Qualcomm with
all of the other parts of the car
coming from NXP—we’re in a
pretty strong position.
MR. ANDERS: Do you see Qual-
comm being a major player in
self-driving cars?
MR. MOLLENKOPF: We do. First
of all, it’s probably a 30-year
next wave. If you look at
where the car is going, we are
just starting to scratch the
surface. My guess is the industry isn’t thinking far enough
ahead in terms of the implications to transportation, of
having the car connected and
smart.
MR. ANDERS: Let’s change
gears and talk about Apple.
Qualcomm and Apple are
locked in an epic battle right
now. You’ve both sued each
other, and lots of allegations
are flying around. Can this relationship be saved?
MR. MOLLENKOPF: This is fundamentally a discussion about
pricing over the fundamental
technology that makes the
phone the phone. We have a
long history of providing value
and settling these issues.
Sometimes they get more publicity than others, but I think
we’ll get through it. We have a
very strong product relationship with them.
MR. ANDERS: Let’s talk about
5G. You had a bit of a milestone yesterday [Oct. 16] on
this front, which was the first
call. You made the first call?
MR. MOLLENKOPF: We had an
event in Hong Kong where we
made the first call on a real
chip. Not a prototype, but a
real chip.
MR. ANDERS: Who did you
call?
MR. MOLLENKOPF: It was a
data connection—everything’s
in data these days. But it’s a
milestone. All of the things
that have to be done to support 5G products in 2019 are
happening.
MR. ANDERS: What exactly will
I be able to get in 2019?
MR. MOLLENKOPF: You will get
a device, a phone in your
pocket, that will access 5G
networks, in addition to devices that I think you’re going
to start seeing in the home
and in cars that get access to a
tremendous amount of data at
lower latency.
You’re also going to see tremendous capacity for the distribution of video. Part of that
is coming from 5G. Part of that
is coming from access to new
spectrum. And I think that’s
going to be disruptive not only
to the cellular industry, but to
how the cable industry delivers data over the top or how it
is delivered.
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THE WALL STREET JOURNAL.
Tuesday, October 24, 2017 | R13
JOURNAL REPORT | WSJ D.LIVE
The Big Benefits
Of Smart Cities
‘Lower cost should
result in lower
taxes or at least
more efficient use
of your taxes or
greater services.’
Cities have long been doing things the same way.
No longer, says Chuck Robbins, CEO of Cisco.
MR. ANDERS: Why do we need
smarter cities?
MR. ROBBINS: Some statistics
say that 30% of traffic is created by people looking for
parking, so that’s a problem
that technology can solve and
is solving. We have 70% of the
world’s energy usage in cities;
20% of global energy usage is
lighting, so connect to LED
lighting and leverage technology to actually make them
more efficient. You can cut
50% to 75% out of it. There are
environmental opportunities.
There are efficiency and citizen-service
opportunities.
There are lots of great oppor-
MR. ANDERS: What are some of
tunities.
MR. ANDERS: Where exactly do
you come in? How does this
get off the ground?
MR. ROBBINS: It does require
infrastructure. Security has to
be dealt with up front. The
partnerships required to actually make this work are pretty
significant.
MR. ANDERS: Some of this isn’t
quite Jetsons-level stuff. Garbage pickup doesn’t sound
that high tech. But what’s the
future of waste management?
MR. ROBBINS: We’ve done
things the same way forever.
Waste-management vehicles
leave, they have a route. They
pick up receptacles, and they
empty receptacles even if
they’re empty. The ability to
put sensors inside those—
there are applications that
have been written now that
actually understand where
that needs to occur. You can
actually put sensors in that
measure the presence of toxic
materials so safety issues can
be addressed.
the big cities that you’re involved in?
MR. ROBBINS: We’re involved
in 120 around the world today.
Hamburg has gone all in, particularly in the port. Collaboration between their employees running the dock,
communicating to vehicles
that are waiting, managing the
traffic
congestion—everything’s connected, all the sensors, so that they can actually
make that seamless.
They’ve increased the productivity of the port and improved the efficiency by 20%
just by implementing this
technology.
Every city has different
things going on. In 2016, I was
in Davos and the party secretary of Guangzhou, China,
said, “I’d like Cisco to come
partner with us to build a
smart city in Guangzhou.” And
15 months later, we had shovels, shoveling dirt for the
Cisco Guangzhou Smart City
Project. We’re building innovation centers. We’re partnered
with universities.
VOICES FROM THE CONFERENCE
“What you need in the future to continue
to grow and to thrive as a company is
what we call a thoughtful integration between hardware and software. In the future, what we will have to do is really think
about creating the best experiences possible, and that includes working with partners like Google and Facebook. They’re
incredibly important partners of ours.”
MR. ANDERS: Cities are ultimately businesses, and some
aren’t well run. I assume the
pitch is the technology is good
not only for society but for the
bottom line and budget. But at
the end of the day, someone
has to write the check.
MR. ROBBINS: Yeah. I was in a
major city last week talking to
the mayor, and the discussion
quickly got to, “The first-use
case has to really create hard
dollar savings so that we can
then invest those in some of
the other things going on. But
we need to create money and
then show people.”
So investing in, perhaps, reduction of lighting cost to
then fund the fundamental
change in how citizen services
are delivered is how they tend
to think about these things.
MR. ANDERS: How does technology bring the city together?
MR. ROBBINS: Chicago’s another example where they’ve
aggregated lots of data
sources, and they bring that
data together and they’re encouraging these hyperlocal applications. We create opportunities for people to live more
efficiently, to get to where
they’re trying to get to more
efficiently, to engage in different
conversations
about
what’s going on locally. And
that can extend to social issues, social opportunities.
MR. ANDERS: Is the primary
goal of a smarter city to empower me as the citizen or to
more closely manage and control and observe me as a customer of city services?
MR. ROBBINS: In general, I
think it’s the former, because
lower cost should result in
lower taxes or at least more
efficient use of your taxes or
greater services.
Guangzhou
obviously
moved people out of this location when they created this
spot for us to go in with some
Chinese partners and build
this smart city. But one of the
commitments they made to
the citizens was that we were
going to move them back to
this city afterward and they
were going to have a better
life as a result of it.
MR. ANDERS: This is a hacker’s
dream. Now, everything from
my garbage can to my Wi-Fi
to literally the way I’m driving
my kids to school is in a database somewhere and for some-
one to access.
MR. ROBBINS: It is a pressing
issue. We’re moving to this
massively distributed virtualized world of technology assets. The network has to actually play a very deep,
defensive role. So we’ve been
investing in new technologies.
We’ve created technology that
can determine when malware
is present in encrypted traffic
without decrypting it, then
you can quarantine it. We have
to build more of those applications, I think, for this to come
to life. But it’s very much a
forefront ambition.
MR. ANDERS: Do you worry
that you’re creating targets?
MR. ROBBINS: Every day we
are. But the way we operate
with mobile phones in the enterprise today says that we, as
a society, will take the benefit
of the technology at a pretty
significant risk. The benefits
and the productivity enhancements from that technology
were so great that we just
kind of tried to operate
around that and build and
work around. I think we’re going to build defenses here, and
then, we’re going to quickly
adapt as we see things.
© 2017 Optum,® Inc. All rights reserved.
David Eun,
President, Samsung NEXT
NIKKI RITCHER/DOW JONES (2)
The big push at networking giant Cisco Systems Inc. these
days is to create “smart cities,” where wireless networks
with enough sensors and computers to process the data will
attempt to make services more
efficient and lower costs. Cisco
Chief Executive Chuck Robbins
spoke with Jason Anders, chief
news editor of The Wall Street
Journal, about how it’s going.
Edited excerpts follow.
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THE WALL STREET JOURNAL.
R14 | Tuesday, October 24, 2017
JOURNAL REPORT | WSJ D.LIVE
Facebook Opens Up on Messenger
David Marcus on how the company’s new
channel for advertisers works, and why he
thinks consumers won’t be put off by it
MS. PASSARIELLO: Messenger
recently introduced advertising. What did you test in terms
of monetization that didn’t
work before you settled on advertising?
MR. MARCUS: It isn’t like we
tested a lot of things, but we
thought about a lot of things.
If you turn to Asia and you
look at different messaging
platforms that are thriving,
they tend to use a completely
different approach to monetization. They use sticker-package sales, game monetization.
All kinds of different things.
We decided that we wanted
to take a completely different
stance, because the setup, notably in places where Messenger is the preferred messaging
app, is really different. You
have apps for almost everything you do daily, and we
needed to find what problem
we could actually fix for businesses and people alike to actually generate a decent revenue stream for Facebook.
We started trying to figure
out how we could completely
reinvent interactions between
people and businesses. Sixtyfive percent of the interactions
we have with companies are
over the phone, which is a
thing I never want to do. You
can’t put the phone down, go
about your life and wait for
someone to respond, because
they’ll hang up on you. And it
basically doesn’t preserve context of all past interactions.
Messaging [in Messenger]
has those two abilities. It’s instant and preserves the context of all past interactions.
We talked about customer
care, but if you expand into
customer acquisition, lead
generation, businesses that
build a really great experience
inside of Messenger are seeing
massive uplift if they redirect
people from an ad on News
Feed, on Instagram, and now
more and more on Messenger,
into a conversation, versus a
mobile website.
And the reason for that is
basically that the conversation
remains forever, and you have
the context of all your past interactions, and you can retarget and re-engage because we
have ad products that enable
you to do that if you’re an advertiser.
MS. PASSARIELLO: Isn’t there a
risk that we are so inundated
with advertising in all of our
different feeds that consumers
don’t want to see it anymore?
MR. MARCUS: Well, I think that
it’s different. First, you cannot
get contacted by a business.
You have to start conversations. We have plug-ins that
enable businesses to get you
in a conversation. We have
m.me/your-business-brand
URLs that you can deploy in
emails and everywhere. We
have click-to-Messenger ads. If
you’re buying advertising on
Facebook now you can buy, basically, conversations as an objective, messages. And now
we’re testing ads inside of
Messenger. But we’re doing it
in a way that’s the least possible disruptive path for people,
because we never want to get
in the way of people getting to
their messages and doing
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what they want to do. Messaging is very transactional.
MS. PASSARIELLO: Have you
had any feedback from users
who are resisting seeing ads in
Messenger yet?
MR. MARCUS: The way we measure this is by measuring engagement. We’ve rolled out
ads inside of Messenger in a
number of countries and certain percentages of people.
And what we’re trying to track
is where there are any drops
in engagement, as in people
not going to Messenger as often, not messaging as often, et
cetera. And so far, so good.
MS. PASSARIELLO: How are you
sharing best practices in monetization with WhatsApp?
MR. MARCUS: We both have 1.3
billion monthly active users:
1.3 billion people using Messenger, 1.3 billion people using
WhatsApp. But it’s generally
very different people. If you
look at North America, it’s
mainly Messenger. Western
Europe is kind of split. All of
Latin America and India is
mostly WhatsApp. The markets and when the markets got
to free unlimited texting has
determined whether you’re using WhatsApp or Messenger
as the preferred platform.
What we’re trying to do
right now is really demonstrate that there’s a playbook
for monetizing messaging
platforms in the West.
WhatsApp is testing different things as well, enabling
smaller businesses to start experimenting with messaging
on WhatsApp. We’ll see
whether the paths converge
over time or not.
MS. PASSARIELLO: Have you
shared your experiences with
the new rollout of advertising
on Messenger with WhatsApp?
MR. MARCUS: We share every-
NIKKI RITCHER/DOW JONES
David Marcus, vice president
of messaging products for
Facebook, is head of Messenger, one of the company’s two
messaging products. He spoke
with Wall Street Journal Deputy Technology Editor Christina Passariello about the introduction of ads in Messenger
that offer the advertisers a
channel for direct communication with consumers. He also
talked about Russian use of
Facebook accounts to influence U.S. elections. Edited excerpts follow.
‘We never want to
get in the way of
people getting to
their messages.’
thing, but we’ll see. The
WhatsApp team is really starting to enable businesses to be
on the platform, and they’re
doing it in a very deliberate,
thoughtful way.
MS. PASSARIELLO: Russian entities have used Facebook and
Facebook platforms to try to
influence the American electorate during the election. What
is your best understanding
about how Messenger was
used by these Russian actors?
MR. MARCUS: The narrative
about Facebook as of late has
not been super positive. The
impact Facebook has in the
world, we don’t talk about it
anymore. It’s completely overshadowed by all of this.
If you look at the impact
we’re having every day, like
when you see people who have
an orphan disease and they
can’t find other people to talk
to, even their family can’t relate to what they’re living
through, on Facebook you can
find other people from the
other side of the world that
are living the exact same thing
and groups that are so meaningful for people. We’ve raised
more than $17 million on the
platform for Harvey victims.
We’ve been able to use Safety
Check that we activated 600
times since we launched it,
and sent one billion notifications around the world to let
people know that people are
safe. And I could go on and on.
Clearly when you design a
platform that reaches two billion people every month,
sometimes bad things happen.
And we shouldn’t tolerate
those things, and they
shouldn’t happen. Mark Zuckerberg and Sheryl Sandberg
outlined a clear plan about
how we’re going to ensure
that this isn’t going to happen
again, and we’re going to hire
thousands of people, we are,
actually, hiring thousands of
people to review ads and review all activities around, notably, elections around the
world. We tend to do well at
those things. We tend to actually take those things very seriously and execute plans
ruthlessly and get to really
good outcomes. So I’m actually confident that we’re going
to be able to deal with this.
The way the platform was
used is still being investigated.
But traditionally if you’re a
[Facebook] page, for instance,
you cannot message people.
People have to message you.
We’re collaborating with the
special counsel and Congress.
And we’ll figure out what happened, we’ll get to the bottom
of it, we’ll learn from it, and
we’ll make sure that we build
systems to prevent what happened from happening again.
MS. PASSARIELLO: On the 470
accounts that Facebook has
already identified, how many
have also been using Messenger to communicate?
MR. MARCUS: My understanding at this stage is it’s a small
number.
MS. PASSARIELLO: Facebook’s
approach often has been to be
reactive to these kinds of ways
that people are using its products in malicious ways. Does
Facebook need to be more proactive in anticipating these
kinds of uses?
MR. MARCUS: Now that we
know that we have a lot of actors that are trying to do
things, we need to continue to
be more thoughtful when we
build new product experiences, new ad products, to try
to overthink how it can be
used in ways that the platform
wasn’t designed for.
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