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 DJIA 23329.46 g 112.30 0.5% NASDAQ 6563.89 g 0.5% STOXX 600 387.13 g 0.6% 10-YR. TREAS. g 11/32 , yield 2.444% OIL $52.18 g $0.29 A Return to Harvest After California Wildfires What’s News Business & Finance T he FCC plans to eliminate or scale back limits on local ownership of TV stations and newspapers, its chairman said. A1 Franklin Resources sold its entire stake in Puerto Rico bonds, part of an exodus of investors in the wake of recent hurricanes. B1 Amazon unveiled a system that lets customers open their homes remotely for package deliveries. B2 Sprint and T-Mobile both canceled earnings calls this week, a possible sign they are near a deal. B7 The Saudi wealth fund aims to nearly double the value of its assets to about $400 billion by 2020. B11 Anthem expects its enrollment in ACA plans to fall by around 70% in 2018. B2 Visa posted an 11% profit rise, adding more fuel to its stock rally. B11 Coke said its newest diet soda helped keep soda volume flat last quarter. B3 World-Wide Republicans sparred with Trump over 401(k) plans on the eve of a House vote that is crucial to their tax-cutting ambitions. A1 Iraq’s premier said he would keep close ties with both the U.S. and Iran despite tensions between the two. A1 Iraqi Kurds offered to shelve their pursuit of statehood for now as the U.S. seeks to ease tensions. A7 China’s Communists unveiled a Politburo without a potential successor to Xi, as the party moved closer to one-man rule. A6 A bipartisan health bill in the Senate would cut the deficit nearly $4 billion over a decade, the CBO said. A4 Clinton’s campaign and the DNC helped fund research that led to a file of unverified allegations about Trump’s Russia links. A5 A data firm hired by Trump’s campaign approached WikiLeaks’ Assange before the election. A5 Airlines are alerting U.S. bound passengers of tighter screening due to new security rules. A3 A teenage migrant obtained an abortion following a legal clash with the Trump administration. A3 India and the U.S., during a visit by Tillerson, agreed to bolster security. A7 Gene researchers created a new Crispr-based system to edit RNA. B4 CONTENTS Business News B3,11 Capital Account.... A2 Crossword.............. A14 Heard on Street.. B13 Life & Arts....... A11-13 Management.......... B6 Markets............. B12-13 Opinion.............. A15-17 Sports....................... A14 Technology.......... B4-5 U.S. News............. A2-5 Weather................... A14 World News. A6-7,18 > s Copyright 2017 Dow Jones & Company. All Rights Reserved NEW SEASON: A worker carried a bucket of freshly picked Syrah grapes during a harvest on Wednesday in Kenwood, Calif., two weeks after wildfires ripped through Sonoma and Napa counties. Mutual-Fund Ratings Are Not What They Seem Morningstar’s top-ranked funds rarely sustain high performance Millions of people trust Morningstar Inc. to help them decide where to put their money. By Kirsten Grind, Tom McGinty and Sarah Krouse From pension funds to endowments to financial advisers to individuals, investors rely on Morningstar’s star ratings to help divide $16 trillion among America’s mutual funds, in much the way shoppers use Amazon’s ratings to pick products. A lot of these investors, and the people paid to guide them, take for granted that the number of stars awarded to a mutual fund is a good guide to its future performance. By and large, it isn’t. The Wall Street Journal tested Morningstar’s ratings by examining the performance of thousands of funds dating back to 2003, shortly after the company began its current system. Funds that Abadi Tells U.S. and Iran: No Fighting On My Turf BY YAROSLAV TROFIMOV Kenya’s high court failed to block a repeat election for president. A7 YEN 113.74 at a congressional hearing on Wednesday. Television station owners have complained that federal rules—originally enacted in part to ensure a diversity of views— have hindered their efforts to grow and compete at a time when online competitors have made major inroads. In recent years, the local TV station business has consolidated rapidly, driven by both the growing fees that cable and satellite companies pay for the right to retransmit broadcast signals—bigger station groups can extract higher fees—and increasing competition from the Please see RULES page A5 Trump, GOP Spar Over Tax Details JUSTIN SULLIVAN/GETTY IMAGES Boeing said it may boost output to meet demand for single-aisle jets as it posted forecast-beating earnings. B3 EURO $1.1813 FCC to Lift Limits on Media Deals WASHINGTON—The Federal Communications Commission is planning to make sweeping changes to media-ownership rules next month, eliminating or scaling back longstanding limits on local ownership of TV stations and newspapers, its chairman said Wednesday. The plan by FCC Chairman Ajit Pai, a Republican, would eliminate or reduce several regulatory barriers—including some from the 1970s—that limit ownership of multiple media outlets in the same market. Mr. Pai outlined aspects of the plan Weinstein Co.’s talks with suitor Colony Capital have stumbled and the troubled studio may seek other bidders. B1 The Dow tumbled 112 points to 23329.46, its worst day since early September, on weak earnings. B12 GOLD $1,275.40 À $0.40 BY JOHN D. MCKINNON AND KEACH HAGEY Vistra and Dynegy are in advanced talks to combine, with a deal between the two Texas power firms possible as soon as next week. B1 HHHH $4.00 WSJ.com THURSDAY, OCTOBER 26, 2017 ~ VOL. CCLXX NO. 99 * * * * * * BAGHDAD—Iraqi Prime Minister Haider al-Abadi insisted he would keep close ties with both the U.S. and Iran even as tensions rise between the two, and warned them both away from competing on Iraq’s turf as he reclaims it from the retreating forces of Islamic State and the Kurds. Mr. Abadi also said he wants U.S. forces to remain in Iraq after the last remaining Islamic State redoubts are liberated, and he pledged to disarm Iranian-backed Shiite Muslim militias that refuse to come under his control. In an interview with The Wall Street Journal and two Please see IRAQ page A7 Under fire, Kurds offer Baghdad a concession.......... A7 earned high star ratings attracted the vast majority of investor dollars. Most of them failed to perform. Of funds awarded a coveted five-star overall rating, only 12% did well enough over the next five years to earn a top rating for that period; 10% performed so poorly they were branded with a rock-bottom one-star rating. The falloff in performance was even more dramatic for domestic stock funds, the largest category of U.S. funds by assets. Billions of investor dollars hang in the balance. Nearly every asset manager in the world pays Morningstar for data services. Some 250,000 financial advisers rely on Morningstar’s data, services or ratings, according to the firm. That means Morningstar’s analysis and ratings influence investment decisions for a vast landscape of retirement plans and brokerage accounts. Please see STARS page A8 Five-Star Funds Only 14% of funds that received a ﬁve-star overall rating from Morningstar performed at that level over the next three years. Five stars Four stars Three stars Two stars One star Merged/ Liquidated Source: WSJ analysis of Morningstar data THE WALL STREET JOURNAL. At 87, a Stogie-Toting Legend Mourns the End of Trading Floors i i i Characters like ‘Cigar King’ built Hong Kong’s stock exchange—now it’s closing WASHINGTON—Republicans disagreed with the White House over tax treatment of 401(k) plans and sought to resolve differences over state By Richard Rubin, Anne Tergesen and Siobhan Hughes and local taxes on the eve of a House vote that is crucial to their tax-cutting ambitions. The jostling showed the challenge the party faces as House lawmakers prepare to lay out the fine print next week of their planned tax overhaul. Republicans have made public broad plans to reduce individual and corporate tax rates, but have left out many knotty details over who wins and who loses, and which breaks stay and which change. As those details emerge, political resistance is building in the White House and beyond. Rep. Kevin Brady (R., Texas), chairman of the House’s tax-writing Ways and Means Committee, said lawPlease see TAXES page A4 Greg Ip: Why innovation tops tax cuts......................................... A2 Bipartisan health proposal gains support............................ A4 Big Investors Bail on Puerto Rico A swath of mutual and hedge funds that own some of the island’s $70 billion of bonds are now selling, sending trading volume soaring. Franklin Mutual Advisers has sold its $294 million stake. B1 Puerto Rico’s general obligation bond maturing in 2035, closing price 100 cents on the dollar 80 60 40 20 0 2015 ’16 ’17 Trading volume in Puerto Rico bonds* $8 billion 6 4 2 0 2015 ’16 ’17 *Total face amount of bonds traded, monthly. Sources: Thomson Reuters (prices); Municipal Securities Rulemaking Board (trading) World’s First “Self-Driving” Database BY STEVEN RUSSOLILLO so much business.” As a 14 year-old from HONG KONG—David Tung Shanghai with just four years Wai recently visited the trad- of schooling, Mr. Tung started ing floor of Hong Kong’s stock in stocks in 1945 and had a exchange. He did so with the ringside seat for every peak and valley of the reverent sadness global postwar econone shows for an elomy. This March, derly friend in dewhen he hung up his clining health. red broker’s jacket “It’s changed,” after more than 70 said Mr. Tung, 87. years, he was one of “It’s different. I miss the oldest brokers it. I really miss it.” trading on any floor During its heyday anywhere, according in the early 1990s, to executives at mathe exchange was jor exchanges. among the world’s Now, the trading largest, and Mr. David Tung Wai floor will close for Tung worked among more than 1,000 shouting, jos- good on Friday, leaving oldtling and gesturing traders. school brokers like Mr. Tung “Cigar King” was his nick- with only the memories. “I’m very sad,” he said, name, a nod to the stogie he habitually chomped. “We were walking around the nearly-siPlease see TRADER page A6 so busy,” he said. “I was doing Oracle Autonomous Database No Human Labor – Half the Cost No Human Error – 100x More Reliable oracle.com/selfdrivingdb Human labor refers to tuning, patching, updating, and maintenance of database. Copyright © 2017, Oracle and/or its affiliates. All rights reserved. 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 | Thursday, October 26, 2017 THE WALL STREET JOURNAL. * **** U.S. NEWS CAPITAL ACCOUNT | By Greg Ip Why Innovation Tops Tax Cuts Circularis Power Reserve CCP317G Arizona Fine Time Scottsdale, AZ Feldmar Watch Company Los Angeles, CA Old Northeast Jewelers Tampa & St. Petersburg, FL Exquisite Timepieces Naples, FL Worthmore Jewelers Atlanta, GA Little Treasury Jewelers Gambrills, MD Danson Jewelers Hasbrouck Heights, NJ Bassano Jewelry New York, NY Martin Pulli Fine Jewelry Philadelphia, PA Saltzman’s Watches Cranston, RI You’d think from the debate raging in Washington that taxes are the key to economic growth. They aren’t. In the long run, innovation matters way more, and that depends on inspiration, experimentation and luck, not tax-law changes. Yet presidents matter for promoting innovation. Under President Donald Trump the place to look is the regulators. Two of his appointees in particular, Food and Drug Administration Commissioner Scott Gottlieb and Federal Communications Commission Chairman Ajit Pai, have prioritized reducing regulatory hurdles to private investment as a way of boosting innovation. The efforts merit more attention at a time when the growth debate is focused on steep, deficit-financed tax cuts. C onsider pharmaceutical companies. Though vocal advocates of slashing the corporate tax rate, their bigger problem is the staggering cost of development: $2.6 billion on average to bring a new drug to market, according to Tufts University’s Center for the Study of Drug Development. Between 1989 and 2011 the cost per patient of a clinical trial more than doubled, after inflation, according to one study. This in great part is because the most treatable diseases already have therapies, leaving only the toughest ones. But regulation may also play a role. “Through regulation we have imposed additional steps: There are things you need to do as part of product development that 15 years ago you didn’t need,” Mr. The March of Medicine The FDA is a major gatekeeper to medical innovation. Its approval of new drugs has stagnated, while approval of generics has shot up. Novel drug approvals* Generic drug approvals† 40 800 30 600 20 400 10 200 0 FY2000 0 ’10 ’17 2000 FY’10 ’17 *Fiscal year ended Sept. 30. †2000-09 are calendar year and the remainder are ﬁscal year ended Sept. 30. THE WALL STREET JOURNAL. Source: Food and Drug Administration Gottlieb said in an interview. That, he says, is appropriate if it means drugs are more likely to be safe and effective. But he believes costs can be cut without sacrificing safety. For instance, he wants the FDA to help drug developers narrow the information they must submit for preclinical trials, reducing the capital needed at the riskiest stage of development. Mr. Gottlieb said developers can answer some questions, such as the most effective dose, more cheaply and accurately using artificial intelligence and computer modeling rather than through multiple clinical tests. Aaron Kesselheim, a doctor specializing in drug research at Harvard Medical School, noted the FDA had been improving the efficiency of drug reviews before Mr. Gottlieb arrived. Still, Michael Yee, an analyst with Jefferies LLC., says Mr. Gottlieb has signaled important shifts. And while drug approvals last fiscal year were in line with recent trends, Mr. Yee noted that under Mr. Gottlieb’s watch, two new cancer cell therapies—Gilead Sciences Inc.’s Yescarta and Novartis AG’s Kymriah—were both approved without the usual large-scale phase 3 trial. Another company, Amicus Therapeutics, was invited to apply for approval without a trial the FDA previously demanded. S ome experts worry that speeding up the approval process may result in costly new drugs that may not be as safe or effective. Last year, before Mr. Gottlieb’s arrival, controversy erupted when the FDA approved an expensive treatment for a rare form of muscular dystrophy against its own experts’ recommendations, in part because of pressure from patients’ parents aided by a consultant to the drugmaker. And even if the new drugs are effective, their prices, which reflect what patients and insurers will pay, won’t necessarily drop. On the other hand, there is progress on generics. Approvals sped up before Mr. Gottlieb, and he’s redoubled the efforts; a record 763 generics were approved last fiscal year, which may be one reason prescription drug prices are rising more slowly this year. At the FCC, Mr. Pai has targeted the “digital divide,” the gap in broadband access, especially between rural areas and others. Mr. Pai thinks the solution is “setting rules that maximize private investment in highspeed networks.” Controversially, that includes a proposed rollback of his predecessor’s imposition of utility-like regulation so that internet service providers (ISPs) adhere to “net neutrality”—charging all content providers the same to access their networks. Without those limitations, he reckons ISPs will have more incentive to expand capacity; critics worry this will favor rich, established content providers over newcomers. Mr. Pai’s philosophy also animates lower-profile initiatives. In June, the FCC gave OneWeb Ltd. permission to use 720 cheap, low-orbit satellites to provide internet access to rural areas. Whether such efforts are enough to bolster overall economic growth remains to be seen. They come as Mr. Trump sought to slash federal spending on health research (Congress rejected the cuts). Private companies in monopolistic positions may pad their profits rather than undertake risky new investments. Still, Mr. Gottlieb’s and Mr. Pai’s theory is that if you lower the hurdles to innovation, you’ll get more of it. It offers a potentially more tangible payoff than fiddling with the tax code. U.S. WATCH Bill Targets Chinese Tech Investments daviddonahue.com Nautilo Sailing Edition www.anonimo.com/store-locator Topper Jewelers Burlingame, CA Feldmar Watch Co. Los Angeles, CA Right Time Denver & Highlands Ranch, CO Exquisite Timepieces Naples, FL ABT Time Boutique Glenview, IL Little Treasury Jewelers Gambrills, MD Schooley’s Jewelers Ithaca, NY Bassano Jewelry New York, NY WASHINGTON—Two influential Republican lawmakers plan to unveil legislation as soon as next week that would ratchet up scrutiny of foreign investment, taking aim in particular at Chinese technology deals. The identical bills from Senate Majority Whip John Cornyn (R., Texas) and Rep. Robert Pittenger (R., N.C.), a prominent anti-China hawk, would broaden the authority of the Committee on Foreign Investment in the U.S. The panel, known as CFIUS, is a multiagency body that can advise the president to block foreign deals on national-security grounds. Though the U.S. generally favors an open-investment policy, certain Chinese investments have drawn heightened scrutiny in recent months. Opponents say Chinese deals can pose disproportionate risks to national security because the companies are directed and subsidized by the government of China, an economic and military rival. The new legislation would expand CFIUS’s remit to include vetting minority investments in Silicon Valley and joint ventures involving American firms in China, according to a draft of the bill that is circulating on Capitol Hill and that was reviewed by The Wall Street Journal. The House and Senate sponsors of the bill say they want to ensure that the panel is given broad and solid backing for such decisions. The Trump administration is expected to support the measure, according to people involved in the bill. One of the bill’s key provisions would broaden the types of transactions CFIUS vets to include joint ventures and other arrangements that require U.S. technology companies to provide intellectual property and support to a foreign person, according to a copy of the bill seen by the Journal. CHRIS PIZZELLO/ASSOCIATED PRESS BY KATE O’KEEFFE HORROR SHOW: The late director George A. Romero, known for his 1968 film “Night of the Living Dead,” was honored on the Hollywood Walk of Fame on Wednesday in Los Angeles. ECONOMY TEXAS New Home Sales Up Despite Hurricanes GOP Leader Won’t Seek Re-Election U.S. new-home sales in September recorded the largest single-month increase since 1992, a sign the market remains resilient despite two major hurricanes and a continuing inventory shortage. Purchases of newly built single-family homes—a narrow slice of all U.S. home sales—increased 18.9% to a seasonally adjusted annual rate of 667,000 in September from the previous month, the Commerce Department said Wednesday. That put new home sales at the highest level since October 2007. —Laura Kusisto In a move sending shock waves through Texas politics, state House Speaker Joe Straus, a powerful centrist Republican and champion of the state’s business community, said Wednesday he won’t seek re-election. The surprise decision by Mr. Straus, seen as a moderate bulwark against the Tea Party wing of the Texas GOP, comes after a bitter legislative session during which he was often at odds CORRECTIONS AMPLIFICATIONS Professional golfer Hideki Matsuyama’s surname was given incorrectly as Maruyama in a World News article Tuesday about Japanese Prime Minister Shinzo Abe’s economic plans after his election victory. Readers can alert The Wall Street Journal to any errors in news articles by emailing email@example.com or by calling 888-410-2667. with a more socially conservative legislative bloc. Mr. Straus blocked a push by social conservatives to restrict bathroom options for transgender people, and clashed with Republican state leaders over a range of issues. Mr. Straus, 58 years old, who represents San Antonio and whose term expires after December 2018, said in a statement that he felt it was time to relinquish his position after serving five terms and that he wanted the chance to speak more freely about issues that were important to him. —Dan Frosch THE WALL STREET JOURNAL (USPS 664-880) (Eastern Edition ISSN 0099-9660) (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 Published daily except Sundays and general legal holidays. Periodicals postage paid at New York, N.Y., and other mailing offices. Postmaster: Send address changes to The Wall Street Journal, 200 Burnett Rd., Chicopee, MA 01020. All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of which are available from 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. Letters to the Editor: Fax: 212-416-2891; email: firstname.lastname@example.org NEED ASSISTANCE WITH YOUR SUBSCRIPTION? By web: customercenter.wsj.com; By email: email@example.com By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat REPRINTS & LICENSING By email: firstname.lastname@example.org; By phone: 1-800-843-0008 GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS 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. Thursday, October 26, 2017 | A3 U.S. NEWS BY ROBERT WALL AND SUSAN CAREY Airlines are telling U.S.bound passengers that they may be subject to interviews before boarding flights as part of stepped-up screening requirements Washington is demanding because of terrorism concerns. United Continental Holdings Inc. notified customers on its website that the Department of Homeland Security now requires additional security measures for all international flights to the U.S. It said the measures may include enhanced screening with questioning of some or all travelers. Electronic devices larger than a standard smartphone also could be subject to checks, the airline said, as it advised passengers to arrive at airports at least three hours before flights. Emirates Airline, the world’s biggest international carrier by traffic, is among airlines alerting passengers that U.S.-bound flights will be subject to closer checks starting Thursday. “The new directive requires passenger pre-screening interviews at the check-in counter for originating passengers and at the boarding gate for transfer and transit passengers,” the Dubaibased airline said. Homeland Security in June first said it would roll out tighter security checks on inbound international flights amid concerns terrorists were trying to bring down commercial airliners. The security measures affect about 325,000 passengers a day at 280 foreign airports with direct flights to the U.S. The new rules extend to more behavioral vetting of passengers, steps that already were in place at some European airports but now are being applied to all foreign airports that send planes directly to the U.S. Passengers now could also face questions about why they are traveling or whom they have met, a person familiar with the new protocol said. Witnesses Testify in Sgt. Bergdahl’s Sentencing Hearing SARA D. DAVIS/GETTY IMAGES Screening of Air Passengers Set to Tighten MILITARY COMMAND: U.S. Army Col. Clint Baker, Sgt. Bowe Bergdahl’s command leader in Afghanistan, was escorted from the military courthouse in Fort Bragg, N.C., after giving testimony for the prosecution during Sgt. Bergdahl’s sentencing hearing on Wednesday. State Considers Changing Time Zones BY JON KAMP As Americans get ready to turn the clocks back next month, a Massachusetts commission is exploring whether the state should spring ahead one hour for good. Winter darkness comes early in New England, which sits along the eastern edge of the Eastern Time Zone, and preserving more late-afternoon sunshine could yield some health and economic benefits, according to a draft report from a Massachusetts commission studying the issue. Although the odds of a change appear long, Massachusetts “could make a datadriven case for moving to the Atlantic Time Zone year- round,” the 11-member commission said in a draft report issued last month. Another draft will be put to a final panel vote Nov. 1, and if that vote is positive, the report will 1966 The year Congress set the dates for daylight-saving time be sent to lawmakers to inform potential bills, said Democratic state Sen. Eileen Donoghue, who chairs the panel. Federal law only allows states to opt out of daylight- saving time. They aren’t allowed to adopt it all year. But Massachusetts could get there by shifting ahead one hour into Atlantic Time, which includes eastern Canadian provinces and Puerto Rico. There is a major caveat for the effort: The report recommends against Massachusetts making a unilateral move without most of New England. Panel member Paul Frost, a Republican state representative, believes New York would also have to change zones. Daylight-saving time was historically viewed as a way to cut energy use by replacing electric lighting with sunlight, and Congress set the dates in 1966. But switching the clocks can have negative conse- quences: Losing an hour each spring has been associated with traffic deaths, workplace injuries and heart attacks, the Massachusetts draft said. “Why do we keep doing this to ourselves?” said Maine Democratic state Rep. Donna Bailey, who sponsored a failed bill to shift to Atlantic Time. The sun sets over parts of her state before 4:00 p.m. after clocks turn back. Lawmakers around the U.S. frequently pitch bills to do away with twice-yearly time changes. But the current system has decades of inertia that has proven hard to stop. “The practical matter is this is something that has been in place and does not change easily,” Ms. Donoghue said. Teen Migrant Has Abortion After Ruling BY BRENT KENDALL WASHINGTON—An undocumented teenager in U.S. custody obtained an abortion Wednesday morning following a legal confrontation between the Trump administration and abortion-rights advocates. The procedure came a day after a divided appeals court ruled that administration officials must allow the 17-yearold to leave a federally funded Texas shelter where she was being held so that she could go to an abortion clinic. The American Civil Liberties Union, which represented the teen, confirmed that the abortion took place, less than 24 hours after the court ruling. The ACLU had argued the Trump administration was violating Supreme Court precedent guaranteeing a woman’s right to choose an abortion without undue burden from the government. The teen’s lawyers had said the government wouldn’t need to pay for the procedure or transport the girl. The teen was accompanied to the clinic by a court-appointed guardian and someone from the shelter and returned to the shelter after the procedure, according to her legal team. Officials at the Department of Health and Human Services resisted the teen’s abortion request, citing a new policy of refusing to facilitate the procedure. The Justice Depart- ment contended that the government had a legitimate interest in promoting childbirth and said the administration wasn’t placing a burden on the teen because she was free to leave the U.S. and do what she wished. The Justice Department declined to comment. The Office of Refugee Resettlement, which is part of HHS and houses undocumented teens, didn’t respond to requests for comment. TOD’S WINTER GOMMINO MOCASSINO - $625 650 MADISON AVENUE NEW YORK CITY - 212 644 5945 800-457-TODS SHOP TODS.COM BARNEYS.COM NE W YORK CHICAGO B E V E R LY H I L L S BOSTON LAS VEGAS SAN FRANCISCO PHILADELPHIA S E AT T L E F O R I N S I D E R A C C E S S : T H E W I N D O W. B A R N E Y S . C O M LORO PIANA S A M E D AY D E L I V E RY AVA I L A B L E I N M A N H AT TA N A N D S E L E C T Z I P C O D E S I N T H E G R E AT E R M E T RO P O L I TA N A R E A 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 A4 | Thursday, October 26, 2017 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X **** THE WALL STREET JOURNAL. U.S. NEWS CBO Says Health Plan Would Cut Deficit BY STEPHANIE ARMOUR AND KRISTINA PETERSON A bipartisan Senate health bill would reduce the deficit by almost $4 billion over the next decade without significantly affecting the number of people who have coverage, the Congressional Budget Office found in a report released Wednesday. Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.), the bill’s co-sponsors, said the findings strongly bolster the case for their legislation. But a standoff between the White House, which wants more provisions to undo the Affordable Care Act, and Democrats, who reject such provisions, has left the measure stalled for now, with no clear path forward. The Alexander-Murray bill would restore the “cost-sharing” subsidies, federal money that helps insurers offset discounts they provide for lowincome consumers. It would also give states more say in implementing the ACA and ex- pand access to lower-cost, less-robust health plans. But the impasse between Senate Democrats, who unanimously support the bill, and President Donald Trump, who signaled his support before declaring his opposition, is showing no signs of resolution. Many lawmakers now believe negotiations will likely be pushed to the end of the year. The CBO assumed in evaluating the Alexander-Murray bill that it wouldn’t be enacted until after the ACA’s annual open-enrollment period launches Nov. 1. That means the bill would have no effect on premiums next year. “This nonpartisan analysis shows our bill provides savings and ensures that funding for two years of cost-sharing payment will benefit taxpayers and low-income Americans, not insurance companies,” Mr. Alexander and Ms. Murray said Wednesday. Many of the bill’s GOP critics describe it as a bailout for Judge Backs White House on Subsidies A California federal judge on Wednesday said he wouldn’t force the Trump administration to continue paying insurers for providing health-coverage discounts to lower-income consumers, a blow to Democrats who fear the Affordable Care Act’s exchanges will crater without the funding. U.S. District Judge Vince Chhabria in San Francisco said the case was “close and complicated” but that, at the current early stage, the administration had a stronger legal position than the Democratic-led states that filed the lawsuit seeking to keep the payments going. The government payments reimbursed insurers for providing subsidies to some low-income consumers for out-of-pocket costs, including deductibles and copays. Insurers are required by the ACA to provide these costsharing subsidies, and about seven million people who buy health plans on the ACA’s insurance exchanges get them. President Donald Trump this month said he would end the subsidies as of Oct. 18 because Congress never appropriated money for the program. The payments are estimated at $7 billion in 2017. The move was a turnabout from the Obama administration, which had argued that the costsharing payments to insurers were lawful. House Republicans sued over that interpretation in 2014 and won a court decision last year when a Washington, D.C., trial judge ruled the payments to insurers weren’t allowed. That case is pending at a Washington appeals court. After Mr. Trump said he would discontinue the payments, 18 Democratic-led states and the District of Columbia filed suit in California. They argued that the president’s move violated government administrative procedures as well as the Constitution. —Stephanie Armour and Kristina Peterson insurers, but Sens. Alexander and Murray say the payments only go to help consumers. The CBO also found that premiums for some people would drop because the legislation would expand access to health plans that have fewer benefits and lower costs. The bill would reduce the deficit, the CBO concluded, in part because it would allow wider access to health plans that cost less and have fewer benefits. That is likely to attract younger and healthier customers, which could reduce premiums and reduce the federal cost for the subsidies. Many conservative lawmakers have criticized the biparti- Democrats’ Senate Odds Still Tough in 2018 BY KRISTINA PETERSON AND JANET HOOK Democrats’ path to retaking the Senate next year remains challenging, despite the decision of two GOP incumbents to retire, but the rapidly changing landscape is scrambling both parties’ calculations. The recent announcements from GOP Sens. Jeff Flake of Arizona and Bob Corker of Tennessee that they won’t run for re-election quickly transformed both races, intensifying competition in the GOP primary for the open seats and upending expectations for who would be squaring off in the general elections. But the de- partures of Messrs. Flake and Corker don’t make either state an easy pick-up for Democrats. For Democrats hoping to take back the Senate majority, “there’s a path, it’s just far from a clear path right now,” said Nathan Gonzales, editor of the nonpartisan Inside Elections newsletter. Republicans currently hold a 52-48 majority, so Democrats would have to pick up a net of three seats next year to regain control of the Senate. That means members of the Senate Democratic caucus would have to win re-election in the 25 seats they are defending next year, including 10 in states won by President Donald Trump last fall. Republicans, meanwhile, are defending just eight seats. Democrats have hopes of taking back Nevada, where GOP Sen. Dean Heller is up for re-election next year in a state won by Democratic presidential nominee Hillary Clinton, as well as Arizona, with its growing Hispanic population. But both GOP and nonpartisan analysts said Mr. Flake’s decision not to run could help Republicans retain that seat. His move opens the door for other Republicans to enter the primary to take on current candidate Kelli Ward, a former state senator who challenged Sen. John McCain last year. Allies of Senate Majority Leader Mitch McConnell (R., Ky.) have said they plan to recruit GOP candidates who they believe will have a better shot than the conservative Ms. Ward at defeating the likely Democrat in a tight general election, Rep. Kyrsten Sinema, a young centrist. She is widely considered one of the party’s top recruits next year. But Democrats said groups working with Mr. McConnell might not be able to persuade GOP voters to coalesce around a Republican in the primary. In Alabama last month, Republicans elected former state Supreme Court Judge Roy Moore as the GOP nominee in a runoff primary election over incumbent Sen. Luther Strange, who was backed by both Messrs. McConnell and Trump. Even if Democrats were to win Arizona and Nevada, they would need to capture at least one more seat held by Republicans. That has cast the spotlight on Tennessee, where Rep. Marsha Blackburn has entered the GOP race, as has former Rep. Stephen Fincher. “It’s still a steep climb, but if former two-term Democratic Gov. Phil Bredesen runs in Tennessee, as he may well do, Republicans could plausibly lose their majority,” Charlie Cook, a nonpartisan political analyst, wrote Tuesday. TAXES WASHINGTON WIRE CENTRAL BANK Trump Mulls Keeping Yellen as Fed Chief President Donald Trump said Wednesday he is still considering offering Janet Yellen another term as Federal Reserve chairwoman when her term expires in early February. “You like to make your own mark, which is maybe one of the things she’s got a little bit against her,” Mr. Trump said in an interview on Fox Business Network. But the GOP president, who interviewed Ms. Yellen about the job in the Oval Office last week, said he thinks the central bank chief is “terrific” and that the two “had a great talk.” “And we’re obviously doing very well together; you look at the markets,” he said. —Kate Davidson TRADE Union Leaders Echo President on Nafta ALEX WONG/GETTY IMAGES Continued from Page One makers were considering changes to 401(k) plans, despite President Donald Trump’s insistence—reiterated Wednesday—that the popular break for retirement savings should be untouched. The most talked-about idea: reducing the amounts that individuals and households can contribute to these plans without being taxed. Republicans also discussed state and local tax deductions, searching for an approach that would satisfy at least some lawmakers from high-tax states such as New York and New Jersey who oppose the party’s plan to repeal the deduction. One option is replacing the deduction with a tax credit worth between 8% and 20% of a household’s property tax payments, with caps for married couples that start somewhere between income of $250,000 and $400,000, said Rep. Tom Reed (R., N.Y.). Instead of generating $1.3 trillion over a decade to offset lower tax rates, as repeal of the state and local deduction would do, the idea would yield between $600 billion and $1 trillion, he said. Some versions of the credit concept also include mortgage interest. “We’re going to have to nail this down before we get to next week with rolling out the proposal,” said Mr. Reed, the lone New York Republican on the tax-writing committee. The House is slated to vote Thursday on the fiscal 2018 budget, a procedural step that makes it possible for a tax bill to speed through Congress with only Republican votes, if no Democrats ultimately back the plan. Some lawmakers from high-tax states plan to oppose the budget, but in a sign GOP leaders expect they have enough votes, they canceled a late Wednesday meeting aimed at building support from lawmakers from high-tax states. After the budget vote, House Republicans plan to release a detailed tax bill on Nov. 1 that would fill in the blanks they have left so far, including income cutoffs for tax brackets, the size of the child tax credit, curbs on the deduction for business interest and many narrower provisions. That will dial up political pressure, as interest groups weigh in to defend or change pieces of the overhaul they view as most san plan and have urged more aggressive measures to peel back the ACA. Rep. Kevin Brady (R., Texas), who leads the influential House Ways and Means Committee, joined other GOP lawmakers this week in proposing legislation that would continue the payments to insurers, like the AlexanderMurray plan, but would do more to roll back the ACA. It would end the ACA requirement that most people have insurance or pay a fine, for example, and include other measures that the White House has said would have to be part of any bipartisan plan to get administration support. Such measures, which are opposed by virtually all Democrats, were part of GOP repeal efforts that failed to pass earlier this year. “It’s important that we lower premiums for those Americans trapped in Obamacare today, and I think it makes good fiscal sense to do that as well,” Mr. Brady said Wednesday. President Donald Trump, left, and House Ways and Means Committee Chairman Kevin Brady (R., Texas) are negotiating tax-plan details. critical to them. “There’s thousands of those ‘one provisions’ that are AllAmerican and apple pie and should be saved,” said Tim Phillips, president of Americans for Prosperity, a conservative group that favors eliminating narrow tax preferences. Mr. Trump seemed to surprise lawmakers Monday by ruling out 401(k) changes that were discussed in news stories over the weekend. The idea would impose a lower cap on pretax contributions and push people into so-called Rothstyle accounts that are funded with posttax dollars and available for tax-free withdrawals in retirement. On Wednesday, Mr. Trump said there might be negotiations but also that he wanted to shut down negotiations about 401(k) plans. “There are certain elements of deals that you don’t want to negotiate with,” he told reporters. “Kevin Brady is fantastic but he knows how important 401(k)s are.” Mr. Brady said Wednesday that Republicans were “exploring a number of ideas” in the arena of 401(k) plans and added he was working with the White House on the issue. “We think in tax reform we can create incentives for Americans to save more and save sooner,” Mr. Brady said at Broad Impact A potential annual $2,400 limit on tax-deductible 401(k) contributions would affect a large number of retirement savers. Percentage of workers contributing to 401(k)s who put in more than $2,400 annually Average employee contribution By salary $3,203 $10,000-$24,999 38% $25,000-$49,999 32 $50,000-$74,999 60 4,197 $75,000-$99,999 76 6,622 $100,000 or more 87 11,112 By age 2,710 Average employee contribution $3,169 25-34 43% 35-44 56 5,054 45-54 62 6,488 55-64 64 7,287 Source: Employee Beneﬁt Research Institute a breakfast sponsored by the Christian Science Monitor. “The president’s opinion matters on this. He’s the only person in America that can sign a bill into law and the president will get much of what he wants,” said Sen. Pat Toomey (R., Pa.), a Finance Committee member. “But we are a coequal branch of [government] and we’re going to write it.” Until this week administration officials had declared just two mandatory changes the president wants in a tax bill: a THE WALL STREET JOURNAL. 20% corporate tax rate and a middle-class tax cut. Tax committee members insist that crucial decisions about dozens of provisions haven’t been made yet. But time is running short. They have a goal of passing the bill through the House by Thanksgiving and getting it on Mr. Trump’s desk by year’s end. Democrats and some Republicans say they oppose any changes to 401(k) plans. “We are going to take this to the mat,” said Sen. Ron Wyden (D., Ore.). Lobbyists and others in the retirement and financial-services industries who have spoken to congressional staff and committee members say lawmakers are looking at proposals that would allow 401(k) participants to contribute significantly less before taxes than the $18,000 a year that is currently allowed in a traditional tax-deferred 401(k). An often mentioned amount is $2,400 a year. Currently, employees under age 50 can save up to $18,000 a year in a 401(k) before taxes, while those 50 or older can set aside up to $24,000. The 401(k) limits are scheduled to rise to $18,500 and $24,500 in 2018. Of workers contributing to 401(k)-type plans whose annual salaries are between $10,000 and $24,999, 38% currently save more than $2,400, according to Employee Benefit Research Institute, which drew on data from millions of administrative records from 401(k) record-keepers. That share falls to 32% for those earning between $25,000 and $49,999. More than half of employees in thresholds above $50,000 would be affected by a $2,400 cutoff, with an 87% share for those earning more than $100,000. —Kristina Peterson contributed to this article. Labor unions gathering in St. Louis for the annual meeting of the AFL-CIO find themselves aligned with President Donald Trump on key aspects of the hot-button trade issue of the day: renegotiating the North American Free Trade Agreement. Labor leaders have echoed the White House in saying the trade deal among the U.S., Canada and Mexico has been a job killer for more than two decades—but that terminating the pact isn’t their first choice. The White House and labor unions agree on several administration proposals for trying to revisit the deal. Those include a requirement that products sold in the U.S. under the agreement have at least minimum levels of U.S.-produced content, a demand that investor arbitration panels be scaled back and a rule that the trade agreement be revisited every five years. The administration and unions have both indicated they would rather kill the pact than continue the status quo. “There are some good things that have been put forth already,” AFL-CIO President Richard Trumka said of the administration’s proposals. “We’re hopeful, but we’re not overly confident.… No deal is better than a bad deal.” —Eric Morath HEALTH FDA Chief Discusses Fighting Drug Abuse Food and Drug Administration Commissioner Scott Gottlieb proposed Wednesday that his agency take a more active role combating opioid drug abuse in the U.S., including urging greater use of addiction-treatment medicines. Such a role for the FDA, which could include convening meetings to discuss the evidence of treatment benefits from drugs like naltrexone and buprenorphine, is a response to the seriousness of the current opioid-addiction crisis, Dr. Gottlieb said. “We’ll need to touch clinical practice in ways that may make certain parties uncomfortable,” he told members of the House Committee on Energy and Commerce. —Thomas M. Burton 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. Thursday, October 26, 2017 | A5 * * * * * U.S. NEWS Trump-Linked Firm Contacted WikiLeaks BY REBECCA BALLHAUS BY REBECCA BALLHAUS Hillary Clinton’s presidential campaign and the Democratic National Committee were among a number of political groups that paid a firm for research that led to a dossier of unverified allegations about President Donald Trump’s activities and connections in Russia, according to a person familiar with the matter. Marc Elias, a partner at law firm Perkins Coie, who was paid by both the Clinton campaign and the DNC, hired the research firm, Fusion GPS, in April 2016 and ended the contract before the election, the person said. On Wednesday, Mr. Trump called the dossier “fake” and criticized the Clinton campaign for not previously disclosing its role. “It’s a disgrace,” he said at the White House. Fusion GPS had been conducting research on Mr. Trump before then, funded by at least one Republican donor, according to a letter from Perkins Coie to a Fusion lawyer dated Tuesday and filed in court the same day. In March 2016, as the Republican presidential primary was ending, Fusion GPS approached Perkins Coie about continuing the research. The firm hired Fusion GPS a month later to “perform a variety of research services,” the letter said. The letter describing the Clinton campaign and the DNC’s role was filed in federal court in Washington, D.C., by Fusion GPS, which is fighting a subpoena of its banking records from congressional investigators seeking the identities of those who funded the research. Fusion GPS was founded in 2011 by former Wall Street Journal reporters. A Fusion representative didn’t respond to a request for comment. The chief executive of a data-analytics firm that worked for President Donald Trump’s campaign reached out to WikiLeaks founder Julian Assange to offer help organizing the Hillary Clinton-related emails the website was releasing, according to a person familiar with the effort. The outreach by the CEO of the firm, which is partly owned by a major Trump donor, came as Mr. Trump was publicly cheering the leaks of his Democratic rival’s emails and some supporters were seeking to unearth further messages. In an email sent in late July RULES Continued from Page One internet. That has led to the emergence of a handful of “super groups” like Sinclair Broadcast Group, which today reaches 45.6% of television households, according to Kagan, a media research group within S&P Global Market Intelligence. Since President Donald Trump tapped Mr. Pai as FCC commissioner, the pace of consolidation has accelerated. One of Mr. Pai’s first moves as chairman was to change how station owners count certain television stations toward their national ownership caps. In the wake of that change, Sinclair announced the purchase of many more television stations, including those owned by major station group Tribune Media. That deal is currently being reviewed by the FCC. Relaxing regulations on local TV station ownership likely would spark a “bonanza” of dealmaking among station owners, according to station broker Larry Patrick, particularly among the independent station groups that don’t share ownership with broadcast networks like ABC or Fox. For instance, the proposed rules would make it possible for 2016 and recently reviewed by the person, Cambridge Analytica CEO Alexander Nix told other employees at the firm and Rebekah Mercer, a top Republican donor, that he had recently reached out to Mr. Assange to offer help better indexing the messages WikiLeaks was releasing to make them more easily searchable. Those emails included a trove of messages stolen from Mrs. Clinton’s campaign chairman John Podesta’s account and from the Democratic National Committee. In his email, Mr. Nix said he had not heard from Mr. Assange, the person said. On Wednesday, Mr. Assange said he had rejected an approach by Mr. Nix, though he didn’t say what had been offered. A spokesman for Cambridge Analytica didn’t respond to a request for comment. Mr. Assange didn’t respond to a request for further detail. Mr. Nix’s email followed the Republican National Convention in July 2016, after which WikiLeaks began releasing its collection of Clinton-related emails. By Election Day, the site had released more than 50,000 emails stolen from Mr. Podesta and the DNC. Mr. Trump has denied any collusion by him or his campaign with Russia and has called investigations into pos- Big Picture Rapid consolidation in the local television industry has led to the rise of ‘‘super groups’’ of TV stations that reach wide swaths of the country. Local broadcast station M&A deal volume $6 billion TV U.S. TV household coverage by company* Radio 5 4 Sinclair 45.6% Tegna 3 2 27.2% NexStar 25.7% 1 Hearst 0 2015 ’16 13.3% ’17 *Household reach after the application of the ‘‘UHF discount’’ that was reinstated in April. Source: Kagan, a media research group within S&P Global Market Intelligence THE WALL STREET JOURNAL. a single company to more completely dominate a local television market by owning two of its top four stations if the FCC decides it is in the public interest—for example, if a financially strong station proposed to buy a financially weak fourth-ranked station. In an interview, Mr. Pai said the changes overall will promote the economic health of local media, including newsgathering operations, by removing what he said are arbitrary regulatory barriers. “I think the biggest impact is going to be simply that the FCC will not be pre-emptively dictating market structure in every market in the U.S.,” Mr. Pai said. “Overall I think the effect is going to be more local newsgathering…and more news for consumers.” Station groups are eager for consolidation because it would allow them to save money on overlapping functions while giving them more clout in negotiations with advertisers and payTV providers. While the relaxed rules may allow some station groups to get bigger, much of the dealmaking is likely to be in “swaps” The Face of Change sible collusion during the election a “witch hunt.” Moscow has denied meddling in the election. Cambridge Analytica began the 2016 campaign working for presidential candidate Sen. Ted Cruz (R., Texas), according to campaign finance records. The Trump campaign began paying the company in July 2016. Cambridge Analytica offers analysis related to the personalities and values of voters. The firm is partly owned by billionaire Robert Mercer, Rebekah Mercer’s father, whose family began backing Mr. Trump in the election around the same time the Trump campaign hired the company. Julian Assange of stations between groups that would give each of them more control of a market. Stations owned and operated by broadcast networks like NBC and CBS are less likely to be affected. Mr. Patrick expects major independent TV station owners like Tegna Inc., Hearst Corp., Sinclair and Nexstar Media Group, which own local affiliates of broadcast networks, would all want to look at bulking up in certain markets, if Mr. Pai’s proposed changes are approved. Hearst declined to comment. Sinclair didn’t immediately respond to a request for comment. A Tegna spokeswoman said the company is “pursuing an aggressive growth strategy.” A Nexstar spokesman said the company isn’t looking to do another large deal, but rather “surgical and select tuck-in deals.” For newspapers, relaxing local-ownership rules will have come too late to afford much economic benefit, experts said. Between 2000 and 2015, newspaper advertising revenue fell from about $60 billion to below $20 billion, according to the Newspaper Association of America, as advertisers shifted their money to online companies like Google and Facebook. The plan is sure to draw criticism from Democrats and others who worry that it will lead to more concentration of power, less diversity and a loss of locally generated content. The plan also is likely to face legal challenges. Democratic FCC Commissioner Mignon Clyburn said in prepared testimony for Wednesday’s hearing that the expected changes likely would “roll back the best elements of our media ownership rules.” She said the “already consolidated broadcast media market will become even more so, offering little to no discernible benefit for consumers.” The FCC plans to vote on the new rules at its Nov. 16 meeting and agency officials said they would take effect soon after that. One proposed change would eliminate the rule that generally prohibits a single individual or company from possessing a daily newspaper and a radio or TV station in the same market. A related change would eliminate a similar rule regarding cross-ownership of radio and TV stations. Other changes would make it easier for a company to own two TV stations in a market. For example, Mr. Pai’s plan would eliminate a rule known as the “eight-voices test” that says an owner can buy a second station in a market only if there would be eight independently owned stations following the purchase. DOMINIC LIPINSKI/ZUMA PRESS Democrats Law Firm Funded Trump Dossier Denise Klein Provider Advocate Nashville, TN Denise knows that trust must be earned every day, in every interaction. That’s her secret to building strong customer relationships. Denise works closely with her customers to address their concerns, helping to facilitate a smooth path forward. It’s just one way our people are helping to accelerate the transformation to a value-based healthcare system. Change Healthcare. Inspiring a better healthcare system. changehealthcare.com ©2017 Change Healthcare Operations, LLC. All rights reserved. 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 A6 | Thursday, October 26, 2017 THE WALL STREET JOURNAL. * *** WORLD NEWS China’s Xi Gains a Longer Lease on Power Party unveils a new top leadership without a likely successor to the president BEIJING—The future of 1.4 billion people, the world’s second-largest economy and an emerging military juggernaut now lies largely in the hands of just one man: China’s President Xi Jinping. In unveiling a new top leadership lineup without a potential successor to Mr. Xi on Wednesday, the Communist Party edged closer to resurrecting one-man rule, four decades after the death of Chairman Mao. The parade of the seven-man Politburo Standing Committee onto a red-carpeted podium in Beijing’s Great Hall of the People was the climax of a twice-adecade process that placed Mr. Xi on a par with Mao in the party constitution and positioned him as pre-eminent leader even beyond his second five-year term. Concentrating such power in Mr. Xi—who can now make policy and personnel choices virtually uncontested—draws to an emphatic end an era of collective leadership. It also represents a historic gamble. Mr. Xi is calculating that strongman rule will make it easier to add China to the ranks of rich, global powers and to project Chinese power globally. An early test of the latter comes in just a few weeks, when U.S. President Donald Trump is due QILAI SHEN/BLOOMBERG NEWS BY CHUN HAN WONG AND JEREMY PAGE WHO’S WITH XI: President Xi Jinping, center, strode by other members of the Communist Party’s new Politburo Standing Committee in Beijing on Wednesday. Pictured from left, Han Zheng, Wang Huning, Li Zhanshu, Li Keqiang, Wang Yang and Zhao Leji. to visit Beijing. In a tweet on Wednesday, Mr. Trump said he called Mr. Xi and congratulated him on his elevation. The risk is a political culture that rewards loyalty over initiative, in which it is harder for the leadership to astutely address complex challenges. “The biggest drawback of this power structure is that no one will dare to tell him the truth: There could be an emperor’s-new-clothes situation,” said Zhang Lifan, an independent historian and political commentator. “If there is a crisis in the future, he might not get the necessary information.” That would be dangerous, given China’s critical role in the standoff over North Korea’s nuclear and missile programs and its outsize influence on the global economy and world financial markets. Mr. Xi, who is 64 years old, has offered few details of how he will exercise his enormous powers. The leadership revamp effectively endorsed the revival of autocratic rule in a country where emperors wielded absolute power for centuries, and where Mao’s brutal dictatorship caused tens of millions of deaths through famine and the turbulence of political purges. After Mao’s death in 1976, Deng Xiaoping began to liberalize the economy and develop norms for retirement and power-sharing, which evolved further after the Cold War’s end to avoid the gerontocracy and bureaucratic sloth that contributed to the Soviet Union’s collapse. By the time Mr. Xi took power in 2012, the party had been thrown into disarray by a scandal. Mr. Xi became convinced that what led to the Soviet Union’s dissolution was a lack of strong party leadership. “In the end, nobody was a real man, nobody came out to resist,” he said in an internal speech shortly after taking power, people who saw an official summary of his remarks said. Most striking in the new leadership slate unveiled on Wednesday was the absence of any member of the next generation of leaders, now in their 50s. That was the strongest indication yet that Mr. Xi plans to rule for the long haul. Under recent practice at the twice-a-decade congress, the party has retired leaders over 67 and elevated to the Standing Committee at least one potential successor for the top post five years before he would take power, to ensure a smooth transition. By those norms, none of the new Standing Committee members are young enough to succeed Mr. Xi and rule for two five-year terms. “Mao Zedong and Deng Xiaoping each needed decades to achieve their accomplishments,” said Ding Xueliang, a China politics expert at Hong Kong University of Science and Technology. “Xi Jinping still needs to consolidate his gains and needs more time to achieve his goals.” Premier Li Keqiang, whose powers have been severely curtailed, remained on the top body. Three of the five new members have close ties to Mr. Xi. Mr. Xi also now has trusted lieutenants in the new Politburo, the party’s top 25 leaders, and the broader 376-member Central Committee. Mr. Xi has declared the start of a new era defined by strong leadership and more balanced development as a way to preserve party rule far into the 21st century. It will be a big task to turn these broad goals into specific guidelines that China’s bureaucracy will follow. “Xi needs local leaders to implement his policies, and he thinks that corruption crackdowns are the key to implementation, in a theory of ‘if only they would do what I say.’ ” said Ryan Manuel, an expert on Chinese politics at the University of Hong Kong. “It isn’t that simple.” Pressed Japan’s Rising Foreign Workforce Hits Wages U.S. On Tactical BY YOKO KUBOTA Labor from Abroad KEITH BEDFORD FOR THE WALL STREET JOURNAL TOKYO—Facing the tightest labor market in Japan in 43 years, Gatten Sushi recently hired two Chinese kitchen workers and a Filipino waitress who calls out “Welcome” to customers, each for about $10 an hour. “I see economic merits working here now and perhaps even more so in the future,” said Shen Xigang, one of the Chinese workers, a university student who wants to learn the sushi trade and stay in Japan after graduation. For the first time in the postwar era, Japan has opened itself to a significant though still small cohort of low-wage foreign labor. And that presents a clash between Japan’s short- and long-term goals— trying to raise wages to help spur spending and growth while expanding the workforce. Business leaders and economists in Japan have called for more immigration, saying it is the only way for a nation with a fast-aging and declining native population to add new workers. Yet such people are helping keep wages down, contradicting Prime Minister Shinzo Abe’s priority of lifting wages and productivity. “If labor costs were rising, that would put pressure on companies to boost productiv- Japan has fewer foreign workers than other developed nations... ...but the number is growing... ...which is one reason why wages aren't rising. Percentage of foreigners in workforce, 2016* Number of foreign workers in Japan Change from a year earlier in Japan’s real wages U.S. 1.00 million 16.9% U.K. 11.0% GERMANY 10.7% JAPAN BY FELICIA SCHWARTZ 2% 0.75 has repeatedly said he doesn’t want large numbers of immigrants in low-paying jobs coming to Japan for the long term. That hasn’t stopped firms from doing whatever they can to get workers from other Asian nations. Convenience store chain Family Mart Uny Holdings Co., for instance, holds recruiting sessions at language schools targeting foreign students. Mr. Hoshino says Japan will have to make up its mind whether the foreign workers, on the whole, are worth having. “On the surface, Japan is saying it won’t accept immigrants, but in reality it’s gradually become reliant on foreigners,” he says. WASHINGTON—The head of South Korea’s conservative opposition party is urging the Trump administration to redeploy tactical nuclear weapons to South Korea to help counter threats from North Korea and change the dynamics on the peninsula. Hong Joon-pyo, head of the Liberty Korea party, is making his pitch for weapons in meetings in Washington with senior state department officials and lawmakers from both parties. Mr. Hong met this week with officials including Undersecretary of State for Political Affairs Tom Shannon and Deputy Assistant Secretary of State for Korea and Japan Joseph Yun. He acknowledged that the South Korean government remains opposed to his plan and that the U.S. favors diplomacy, but said he doesn’t see another way to resolve the tensions. A recent poll by Gallup Korea found 60% of South Koreans surveyed said they believed the country should arm itself with nuclear weapons. no hope the market would ever come back.” It did, and brought more glory days. Computers began changing the milieu. “Open outcry” trading ended around 1994 after traders began having to sit at their desks to input trades into computer terminals, although brokers still could mingle. It was in the mid-1990s, when brokers were authorized to use off-floor computers to trade from their offices in addition to the trading floor, that Mr. Tung started seeing the floor lose its luster, he said. Mr. Tung assumed there would always be a place for floor trading in some shape, even after the exchange proposed closing the floor in 2006. “We fought them,” he said. The floor’s role continued to dwindle. In 2000, one-fourth of Hong Kong trades were done on the trading floor, according to HKEX. By 2014, the last year it broke out figures, it was 0.2%. In recent years, Mr. Tung spent less time on the floor, instead going to an office near the exchange because “there weren’t a lot of people anymore.” He planned to retire at 90, but health reasons prompted him to sell his seat this year. In a letter to Hong Kong’s government in August, about 30 remaining floor traders complained about the floor’s closure—to no effect. The exchange said it would turn the trading floor into an exhibition hall. Old hands are already reliving the glory days, including Mr. Cheung, whose company organized a “red jackets” party last month for brokers. “A lot of traders are eager to get together,” he said, “to revisit our glorious achievements.” Every week day before the market opens, Mr. Tung does an hour of kung fu. He still trades his own funds through another broker. The Hang Seng is up 29% this year, near a 10year high, which makes him nervous. He has raised cash to prepare for a pullback. “I still will watch the market every day,” he said. “Some things never change.” —Yifan Xie and Chester Yung contributed to this article. 0 0.50 –2 0.25 0 1.7% Nuclear Weapons –4 2012 ’13 ’14 ’15 ’16 2012 ’13 ’14 ’15 ’16 ’17 A Filipino recently waited tables at a sushi restaurant in Tokyo. *U.S. ﬁgure includes foreign-born citizens Sources: Ministry of Health, Labor and Welfare; Ministry of Internal Affairs and Communications (Japan); Bureau of Labor Statistics (U.S.); Ofﬁce for National Statistics (U.K.); THE WALL STREET JOURNAL. Federal Statistical Ofﬁce (Germany) ity,” said Takuya Hoshino, an economist at Dai-ichi Research Institute. “But the rise of foreign workers is actually placing a halt on such moves.” Japan added 400,000 foreign workers in the four years through 2016, surpassing one million for the first time, or nearly 2% of the workforce, labor ministry data show. That is low compared with the U.S.’s 17% of foreign-born workers but enough to sway the labor market in urban centers like Tokyo. Without the foreign help, “we would have to close some of our restaurants,” said Yoshiteru Fukui, the hiring manager at RDC, which runs sushi chains including Gatten Sushi. Foreign workers help bolster Japan’s workforce as its population aged 15 to 64 declines at more than 600,000 people a year. But boosting wages also is vital after 15 years of deflation in Japan that has damped economic activity. Mr. Abe has had some success with breaking out of the deflationary cycle and restoring steady growth. The economy has expanded for six straight quarters, the longest streak in more than a decade, and the unemployment rate is just 2.8%, the lowest level in 23 years. Such relative success helped propel Mr. Abe’s ruling coalition to victory in parliamentary elections on Sunday. But inflation and wage growth have been slow to follow. Core inflation stood at 0.7% in August, and real wages fell 0.1% that month over a year earlier. Minimum wage in Japan, too low to attract many nativeborn workers, is still generous for many other Asians. In 2015, Japan’s minimum wage was 21 times higher than that of Vietnam, 12 times higher than in Nepal, and triple that of China, Dai-Ichi data show. Many foreign workers come as language students, allowed to work for up to 28 hours a week. But most foreign workers can’t stay permanently owing to immigration rules. Mr. Abe TRADER Continued from Page One lent hall. “To be a true finance center, we should still have a place where buying and selling is done by people.” Mr. Tung still monitors the markets on his iPhone, but he has shifted some attention to passions such as Latin dancing and singing opera. He plays more mahjong and is proud of how he has stayed fit, sometimes asking people to feel his biceps and saying, “nice, right?” Blue-collar traders like Mr. Tung, many of them colorful characters, are being replaced around the world by mathematicians and data scientists who create software models to beat markets. Online trading for the masses has also helped usurp the floor broker’s role. Most major stock exchanges have closed traditional trading floors. At the New York Stock Exchange, an outlier, floor trading represents less than 3% of U.S. stock trading, according to research firm TABB Group. Hong Kong seemed to be a holdout until August, when its exchange’s operator, Hong Kong Exchanges & Clearing Ltd., or HKEX, said it would close its floor this month. The exchange said the decision was “a result of more and more exchange participants electing to trade at their own offices due to the advancement of technology.” Since August, traders have slowly been moving out. From about 30 this summer, numbers had dwindled to five traders last week. “I miss seeing my friends down here,” Mr. Tung said. He got his start in securities in Shanghai working for his uncle. At age 14, he gathered orders from traders, writing them on a chalkboard. Business dried up when the Communist Party came to power in 1949. Mr. Tung spent a few years trading “under the table,” he said, brokering deals for mainland-China investors who wanted to sell positions in Hong Kong-listed companies. After a stint in Germany, he moved to Hong Kong, where in BILLY H.C. KWOK FOR THE WALL STREET JOURNAL FROM PAGE ONE David Tung Wai, ‘Cigar King’ to peers, on the Hong Kong trading floor. 1969 he opened Chung Lee & Co., a brokerage firm named after his uncle. Christopher Cheung Wahfung recalls, as an 18-year-old broker in 1971, seeing Mr. Tung as a “big boss” from Shanghai. “He is quite tall and dresses like a typical wealthy Shanghainese,” said Mr. Cheung, now chief executive of Christfund Securities, a Hong Kong brokerage. Traders, he added, often addressed the broker as “Boss Tung.” Mr. Tung used his sway to bail out Mr. Cheung. “I was caught once playing poker inside the trading hall and faced the risk of temporary ban from trading,” Mr. Cheung said. Mr. Tung had a word with managers, “and settled this for me.” Back then, Mr. Tung said, with booming markets “life was good.” Then came the 1973 oil crisis, after which Hong Kong’s Hang Seng Index plunged more than 80% over a few years— more traumatic, he said, than subsequent crashes. “There was 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. NY Thursday, October 26, 2017 | A6A FINALLY, AFTER 40 YEARS, A REAL ALTERNATIVE* *THE RELATIONAL DATABASE WAS INTRODUCED OVER 40 YEARS AGO. Neither Nasdaq, Inc. nor its affiliates makes any recommendation to buy or sell any security or any representation about any company’s financial condition. Investors should undertake their own due diligence before investing. ©2017 Nasdaq, Inc. All Rights Reserved. Business.Nasdaq.com 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 A6B | Thursday, October 26, 2017 THE WALL STREET JOURNAL. NY We Deliver. Meals. Nutrition. Dignity. Hope. Love. #FoodIsMedicine godslovewedeliver godslovenyc godslovenyc God’s Love We Deliver is the New York City metropolitan area’s leading provider of nutritious, individually tailored meals to people who are too sick to shop or cook for themselves. All meals are provided free of charge, without regard to income, and we have never had a waiting list. To donate or volunteer your time, visit us at godslovewedeliver.org. If you are in the NYC metropolitan area and would like to become a client, please email email@example.com or call 212.294.8102. 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. Thursday, October 26, 2017 | A7 WORLD NEWS NEW DELHI—The U.S. and India agreed to work together more closely to strengthen regional security and prevent other nations from providing safe spaces for terrorists, during a visit here by Secretary of State Rex Tillerson. Indian Foreign Minister Sushma Swaraj said Wednesday the U.S. and India plan to hold talks with Afghanistan aimed at increasing regional stability. Ms. Swaraj said the two sides also agreed Pakistan must take immediate steps to end havens for terrorists on its soil. India and the U.S. say Pakistan harbors terrorist organizations that launch attacks in neighboring Afghanistan and India, a claim Islamabad denies. “We believe President [Donald] Trump’s new strategy can succeed only if Pakistan takes action against all terror groups,” Ms. Swaraj said, referring to the Trump administration’s approach to the Afghanistan conflict. That policy depends on ending havens for Afghan militants in Pakistan, the U.S. has said. Mr. Tillerson, who arrived in New Delhi after a visit to Islamabad, said he had told Pakistani leaders “too many terrorist organizations find a safe place in Pakistan,” and that their expansion could undermine the stability of Pakistan’s government. In Wednesday’s talks, Indian and U.S. officials also discussed efforts to boost India’s security role in the Indo-Pacific region by equipping it with advanced military technology and expanding cooperation with U.S. allies in Asia, such as Japan. “The U.S. supports India’s emergence as a leading power and will continue to contribute to Indian capabilities to provide security throughout the region,” Mr. Tillerson said. The U.S. sees India as a democratic counterweight to China and has sought to bring New Delhi closer into its orbit. In an India-focused speech last week in Washington, Mr. Tillerson referred to the world’s largest democracies as “the two bookends of stability on either side of the globe” and said they “must serve as the eastern and western beacons of the Indo-Pacific.” Although India is unwilling to enter a formal alliance with the U.S., it has shed its reluctance to building closer security and economic ties as it confronts growing Chinese power. Beijing has expanded its footprint in India’s neighborhood, with infrastructure and port projects in the region. BY MATINA STEVIS-GRIDNEFF NAIROBI, Kenya—A controversial repeat-run election scheduled to take place in Kenya on Thursday is set to go ahead, after the Supreme Court failed to decide whether to block it, saying five justices didn’t show up. The court’s inability to reach a ruling was another episode in a monthslong political saga that has thrown one of Africa’s most promising economies and democracies into crisis. “Based on assurances we have received, elections will go on as scheduled,” Wafula Chebukati, the chairman of the electoral body, said at a press conference. “Polling stations will open at 6 a.m.” The court was due Wednesday morning to decide whether the vote should be postponed, after a last-ditch petition was brought in an effort to block it, but said it lacked a quorum to make a judgment. Chief Justice David Maraga told the court that just two of the seven justices were present, with others “indisposed,” “ill” or “out of town,” and promised to rule when a quorum was reached, but didn’t specify when that might be. Kenyans voted for a new president on Aug. 8, but the Supreme Court annulled the election in September because of widespread irregularities. A date to repeat the vote was set for Oct. 26. President Uhuru Kenyatta, whose re-election was overturned, has been campaigning in recent days, rallying his supporters to vote for him again and insisting elections must be held on Thursday to avoid further uncertainty. Raila Odinga, his veteran nemesis who withdrew from the rerun this month, has been urging his supporters to boycott the elections, claiming the government plans to rig the vote. He has led a few protests in his western Kenyan strongholds, but hasn’t campaigned. Calls to postpone the election grew this week, with the International Crisis Group warning violence could break out because of the extreme rift between the two men and YASUYOSHI CHIBA/AGENCE FRANCE-PRESSE/GETTY IMAGES BY NIHARIKA MANDHANA Kenya Court Won’t Block New Vote Opposition leader Raila Odinga’s backers, who urge a boycott of the vote, run from police in Kisumu. their entrenched positions. Tensions escalated last week when the chief of Kenya’s electoral commission said he wasn’t able to deliver a credible election amid meddling from candidates and threats of violence, after a top electoral official resigned and Continued from Page One other U.S. publications, he issued a plea to Washington and Tehran not to involve Iraq in their growing confrontation over Iran’s nuclear deal and missile program, and the U.S. threat of renewed sanctions. Iraq, like Iran, is majority Shiite and Mr. Abadi’s predominantly Shiite party has been allied with Tehran for decades. “What we are telling everyone, including our Iranian neighbors and the U.S., who have become our friends by supporting us in our fight against Daesh, is that we welcome your support, we would like to work with you, both of you, but please don’t bring your trouble inside Iraq,” Mr. Abadi said in the interview, using the Arabic acronym for Islamic State. A senior U.S. official said the ball is in Iran’s court. “We have no intention of conducting a campaign against Iran in Iraq. But it will really be up to the groups that may or may not be under the control of the prime minister,” the official said, referring to Iran-backed Shiite militias. “What will happen will depend upon the actions of the proxies of Iran inside Iraq.” The conflict over an independence referendum in Kurdistan—where Iranian mediation allowed Mr. Abadi’s forces to seize the oil-rich province Tuesday that they would scale back their operations during the new vote, citing security concerns for their staff. The electoral gyrations have created a deep rift between the two parties, with no side seemingly prepared to negotiate a compromise. Under Fire, Kurds Offer Baghdad a Concession Iraqi Kurds offered to shelve their pursuit of statehood for now as pressure mounts on the leader of the country’s semiautonomous region to step aside and the U.S. seeks to ease tension between two vital allies in the fight against Islamic State. Tensions between Baghdad By Isabel Coles and Ali A. Nabhan in Erbil, Iraq, and Yaroslav Trofimov in Baghdad and the Kurds have risen since last month’s independence referendum. Prime Minister Haider al-Abadi said in an interview that the vote—which Iraq and the U.S. opposed—had set the Kurdish dream back for years. “And that was my warning to them,” he said. Washington says it isn’t taking sides in the dispute, and a senior U.S. official called for military advances to stop and negotiations to begin. Since the referendum, Iraqi forces have seized a swath of Kurdish-held territory—much of it captured from Islamic State—and Mr. Abadi has vowed to retake Kurdish-controlled border crossings. “It’s hard to argue that the Iraqi government doesn’t have the legal and constitutional right to control its border crossings,” said the U.S. official. “But it’s easy to argue that there is a better way to do it than what they are doing now.” Once military action ceases, the official said, the “United States—and I think coalition forces as well—are more than Iraqi Kurdish President Masoud Barzani voting in a disputed independence referendum in Erbil last month. willing to help with disengagement and trying to figure out what the next step will be.” U.S. Secretary of State Rex Tillerson visited Iraq this week and met with Mr. Abadi. Mr. Tillerson didn’t go to Erbil, the capital of the Kurdish region, where Western officials typically travel to speak to Mr. Barzani and other officials after visiting Baghdad. The Iraqi Kurds’ offer was aimed at starting talks with Baghdad. A Kurdish spokesman on Wednesday said the Sept. 25 referendum results would be “frozen or suspended in a way that will create an atmosphere for negotiation.” The Kurdish concession fell short of annulling the vote, something Baghdad has demanded as a precondition for talks. It came as Iraqi forces are massing, according to Iraqi and Kurdish military sources, for an incursion into other areas the Kurds control in northern Iraq. A self-ruled Kurdistan re- FROM PAGE ONE IRAQ said she feared for her life. The situation has also soured for international observers, whom the opposition blames for missing major shortcomings in the original August vote. The European Union’s election-observation mission and other observers said late AZAD LASHKARI/REUTERS U.S., India Agree to Bolster Security Mnuchin Launches Antiterror Center In Saudi Arabia RIYADH—Treasury Secretary Steven Mnuchin kicked off a week of high-level meetings across the Middle East aimed at increasing financial pressure on Iran and cracking down on terror financing in the region. On Wednesday, he launched a new regional antiterror-finance center in Saudi Arabia called the Terrorist Financing Targeting Center, which brings together the U.S., Saudi Arabia, Qatar and five other Gulf states to cut off the flow of money to terror networks in the region. In its first steps, the group said it would target eight leaders, financiers and facilitators of Islamic State and al Qaeda operations in Yemen. Through a series of meetings in Saudi Arabia, Israel, Qatar and the United Arab Emirates, Mr. Mnuchin and other senior Trump officials also are seeking to bolster a new Iran policy, announced earlier this month, which aims to confront the U.S. adversary more aggressively, particularly over its weapons programs and links to terror groups in the region. —Ian Talley and Margherita Stancati of Kirkuk this month—adds another complication. While the U.S. initially endorsed Mr. Abadi’s move, Washington is now urging his government and the Kurdish authorities to begin a dialogue. A roadside bombing north of Baghdad that U.S. officials believe was perpetrated by a pro-Iranian militia killed a U.S. service member, Spc. Alexander Missildine, on Oct. 1. Some recent rocket attacks on Baghdad’s Green Zone, which houses the U.S. Embassy, were attributed by American officials to Iranian proxies. Mr. Abadi said the U.S. and other Western troops are in Iraq on the government’s invitation and that Baghdad won’t tolerate hostile action against these coalition forces. “Any attack on them is an attack on Iraq, on the sovereignty of Iraq, the sovereignty of the state,” he said. Most of the Shiite militias, grouped under the umbrella of the Popular Mobilization Forces, with some 125,000 men, nominally came under Mr. Abadi’s authority last year. In practice, however, some of the most powerful of them still take their orders from Tehran, U.S. officials said. Iran has repeatedly said it seeks stability in Iraq. Buoyed by recent successes against Islamic State and Kurdish forces, and with national elections scheduled for May, Mr. Abadi is increasingly trying to position himself as an Iraqi nationalist leader who isn’t beholden to Tehran. In the interview, he reiterated his pledge to secure the Kurdish-controlled border crossing with Turkey and warned Kurdish forces not to fight against Iraqi troops. “Iraq must have a border with Turkey. They should not cut Iraq from Turkey,” Mr. Abadi said. “The Kurds are our citizens. My priority is to protect them, to protect the rest of Iraqis, but I’m sending a powerful message: If you continue to kill Iraqi soldiers you will be held responsible.” While Mr. Abadi secured the backing of Sunni Arab states and Turkey over his handling of Kurdistan, the issue of Iraqi Shiite militias, some of them operating as de facto subsidiaries of Iran’s Revolutionary Guard Corps, remains a sore point in relations with these neighbors—and Washington. Some of the groups reacted angrily when U.S. Secretary of State Rex Tillerson said on Sunday that Iranian militias in Iraq “need to go home.” Qais al Khazali, the head of one such Iranian-backed militia, Asaeb Ahl al-Haq, retorted by tweeting that the 5,200 American troops in the country should “get ready to immediately leave our Iraqi homeland.” In the interview, Mr. Abadi rejected such calls, saying that any decision to ask U.S. forces to leave should be up to the country’s parliament and not to individual political groups. gion, which had enjoyed considerable autonomy from Baghdad since the 1990s, was officially recognized by the 2005 Iraqi constitution. The Kurds took control of some territory outside the formal boundary of the region in the years that followed, and captured more land in the fight against Islamic State. The clash between Baghdad and the Iraqi Kurds comes as Islamic State is on the verge of defeat in Iraq. Kurdish Pesh- merga forces have been a valuable partner for both Baghdad and Washington in the fight. But the decision by Masoud Barzani, the leader of the Kurdish region, to pursue the referendum over the objections of most of the international community has undermined the good will Iraqi Kurds built during that battle. Western diplomats and some Iraqi and Kurdish politicians say constructive dialogue may only be possible if Mr. Barzani, who is 71, resigns. “It might be that the best possible thing that can happen for the Kurdistan region is for Masoud to stand down…with his dignity intact as a former president, but pass the baton on to the younger generation and away from the septuagenarians who are calling the shots,” said one Western diplomat. A spokesman for Mr. Barzani didn’t respond to requests for comment. To his most-faithful adherents, Mr. Barzani’s insistence on holding the vote was a noble endeavor thwarted by forces that would eventually have moved against the Kurds anyway. To critics, however, Mr. Barzani’s decision was a reckless gamble with the fate of his own people. Either way, the Kurds now have little option but to negotiate with Baghdad from their weakest position since 2003, when the Kurdistan region began its transformation from an impoverished backwater to a key player in the politics of Iraq and the Middle East. 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 A8 | Thursday, October 26, 2017 * **** THE WALL STREET JOURNAL. IN DEPTH ‘It’s a way to whittle down a big universe into something more manageable.’ How funds with different ratings compare Many investors treat the stars as a guide to future performance. But over time, the performance of funds with different overall star ratings converges. 3 years since initial rating TIM BOYLE/BLOOMBERG NEWS Morningstar gives funds one to ﬁve stars for past performance, with ﬁve the best. Morningstar founder Joe Mansueto on the star ratings 5 years Average rating after 10 years 3.0 2.8 2.5 2.2 1.9 How ﬁve-star funds performed over time Notes: Stars on left represent the initial overall rating. Other points on chart are star ratings for the following three, ﬁve or ten years. Funds rated by Morningstar can have up to four ratings: a three-year rating, a ﬁve-year rating, a 10-year rating, and an overall rating that is based on a combination of the others. For every fund given an overall rating of ﬁve stars, The Wall Street Journal looked at future Morningstar ratings to assess how the fund performed. STARS Continued from Page One Morningstar’s reach is so pervasive that the ecosystem for buying and selling mutual funds revolves around it. Fund firms heavily advertise their star ratings. Money typically pours into funds after they get a five-star rating from Morningstar, the Journal found. It flows out if they lose stars. There is no question that Morningstar has greatly improved the transparency and rigor of data on mutual funds’ holdings and performance, making it easier for individual investors to compare funds. Morningstar says it has never claimed its star ratings suggest how funds will do in the future. The star system is strictly backward-looking, assessing past performance, the firm says. “We have always been very clear that it’s not intended to predict future performance,” the company said in a written statement. “The star rating works well when it’s used as intended: as a first-stage screen that helps identify lower-cost, lower-risk funds with good long-term performance,” Morningstar said. “It is not meant to be used in isolation or as a predictive measure. Reversion to the mean is a powerful force that can affect any investment vehicle.” Future performance The firm sends conflicting signals about the star ratings’ predictiveness. A study published by Morningstar last month said the stars point investors to funds “likelier to outperform in the future.” Morningstar founder Joe Mansueto said in an interview that the firm’s analysis of past ratings found “some modest predictive value.” Chief Executive Kunal Kapoor, in another interview, called the star system “a better predictor than it ever has been.” In its written statement, Morningstar said its analysis has found “the Star Rating is moderately predictive,” which “conforms to what we’d expect of a backward-looking, entirely quantitative measure.” The Journal’s analysis found that most five-star funds perform somewhat better than lower-rated ones, yet on the average, five-star funds eventually turn into merely ordinary performers. Inside Morningstar, some employees have expressed discomfort about how much investors rely on the ratings. Stephen Wendel, head of behavioral science at the Chicago-based firm, wrote in the June/July issue of Morningstar magazine that part of his job was “examining whether we are contributing to abuses in the industry,” and said: “Morningstar’s star ratings for funds are clearly used in the industry to imply that funds that performed well in the past will do so in the future.” He added, “That needs to change.” Morningstar’s Mr. Mansueto, 61, said the star system “is a way to whittle down a big universe into something more manageable.” The firm said it has worked to make investors understand the star ratings should be just a starting point for their research. Since 2011, Morningstar has had a second rating system, lesser known and of limited scope, that includes analysts’ opinions. Unlike the star ratings, it is designed to be forward-looking, Morningstar says. In this system, too, the Journal found the performance of funds rated high, low and in between tended to converge after several years. Mr. Mansueto, growing up in suburban Chicago, sold lemonade by the roadside before moving up to Christmas trees. At the University of Chicago, he and a roommate sold chips and soda and advertised by hanging posters for the “Room 607 Soda Service.” He also made his first mutual-fund investment, with $250 from a restaurant job. After college, he and the exroommate, Kurt Hanson, started a business that provided market research for radio stations. It surveyed listeners and created a sheet of charts detailing their behavior. Mr. Mansueto then got a job as a financial analyst at Harris Associates LP, a Chicago money manager. Mutual funds were proliferating, and a few fund managers were becoming stars, such as John Templeton and Peter Lynch. Funds didn’t give much information about themselves, and what they provided was opaque to nonprofessionals. Mr. Mansueto told a colleague he wanted to start a fund newsletter in the mold of the radio-station fact sheets. The colleague, Ralph Wanger, cautioned that financial newsletters didn’t have a record of success. “That turned out to be the dumbest...thing I ever said,” he recalls. “What I meant to say was, ‘Joe, that’s the best idea I’ve ever heard—how about I quit and we go 50-50?’ ” Mr. Mansueto launched Morningstar from his onebedroom apartment in 1984 with $80,000, taking the name from the ending of Thoreau’s “Walden”: “The sun is but a morning star.” He later spent $50,000 to hire Paul Rand, the noted designer of IBM’s logo, who created a signature red font consisting of tall letters with an “O” looking like a rising sun. With reports obtained from fund companies, Mr. Mansueto laid out data points so they were easy to read, and advertised his reports in Barron’s. When BusinessWeek later asked him to devise rankings for an issue devoted to mutual funds, Mr. Mansueto began work on what would become his five-star rating system. He toyed with using symbols suggesting little bags of gold before deciding on stars. Since then, assets invested in U.S.-based mutual funds have multiplied more than forty-fold. Morningstar rode One star Merged Two stars Liquidated Three stars Four stars Five stars These squares represent 100% of the funds that received an overall rating of 5 stars Of funds with a ﬁve-star rating, three years later only 14% had performed at a ﬁve-star level. Morningstar rating of the same funds’ performance over the three years after they were rated ﬁve stars Morningstar rating of the same funds’ performance over the ﬁve years after they were rated ﬁve stars Morningstar rating of the same funds’ performance over the ten years after they were rated ﬁve stars Source: WSJ analysis of Morningstar data the wave and went public in 2005. Today, investors descend on Chicago for Morningstar’s annual conferences, a pilgrimage for money managers and advisers hoping to gather assets. At this year’s event, shirtless male acrobats cartwheeled and stood on each other’s shoulders while financiers sipped cocktails and mingled. Morningstar groups funds into categories based on their investing style or area, more than 100 groups in all. It compares funds not to all other funds, nor to the overall market, but to other funds with Five-star funds’ ratings for the following five years averaged three stars, the analysis found. the same investment focus. The top 10% of funds in each group receive five stars, the bottom 10% get one, and the rest get two, three or four. The ratings don’t reflect raw performance, but performance adjusted for funds’ degree of risk. For that calculation, Morningstar uses an algorithm Mr. Mansueto devised reflecting variation in month-to-month returns. The firm rates funds on how they did over three years—plus over five years and 10 years if they’re old enough—and assigns them an overall rating based on the others. A fund thus could have THE WALL STREET JOURNAL. as many as four ratings from Morningstar, though most investors see only the overall one. New star ratings come out each month. Most funds have multiple “classes,” each charging a different expense fee. Since varying expenses spell varying returns, Morningstar rates each class of each fund separately. Its star ratings covered over 10,800 mutual funds— and almost 39,000 share classes—during the 14 years studied by the Journal. The only qualification to be rated is being in business three years. The ratings include index funds, which try to mimic the performance of markets. (The Journal’s analysis didn’t include exchange-traded funds, or ETFs, which trade throughout the day like a stock. Morningstar began rating ETFs, too, late last year, after the period covered by the Journal’s analysis.) Going back to 2003, the Journal examined the rating of every investment class of every fund, in every month, and how these changed—some three million records in all. The Journal also reviewed retirement-plan data, fund ads and regulatory filings, and interviewed dozens of current and former Morningstar employees, fund officials, financial advisers and investors. For funds that had an overall five-star rating at any point, the Journal found that their average Morningstar rating for the following five years was three stars—in other words, halfway between the top and the bottom. When funds picked up a fifth star for the first time in the period included in the Journal’s analysis, half of them held on to it for just three months before their performance and rating weakened. The findings were especially stark among U.S.-based domestic equity funds. Of those with the five-star badge, a mere 10% earned five stars for their performance over the next three years. Only 7% merited five stars for the next five years, and 6% did for 10 years. For all of the measured periods—three, five and 10 years—five-star domestic equity funds were more likely to turn in a one-star performance than a top one. That means a five-star rating for the equity funds was no more an omen of success than it was one of failure. Morningstar’s ratings of taxable-bond funds proved a little more indicative of future performance. Of five-star bond funds, about 16% turned in a five-star performance over the next five years. Still, 8% of five-star taxable-bond funds did poorly enough to merit only one star. Police pensions Hickory Hills, Ill., has a small pension fund for about 50 active and retired police officers. In 2011, it moved about $2.1 million into the Nuveen Santa Barbara Dividend Growth Fund, which had a five-star Morningstar rating. The pension board paid heed to star ratings. “Our brokers thought it was one of the best measurements we had available to decide whether the fund is worth investing in,” said board secretary Mary McDonald, referring to brokers from Morgan Stanley. The fund had beaten 95% of others in Morningstar’s “large blend” category—funds that buy large-company stocks using a blend of a “value” strategy and a “growth” strategy. The following year, the fund beat only 26% of similar funds, and in 2013 just 11%. The president of the Santa Barbara fund family, John Gomez, attributed the Dividend Growth fund’s performance to its focus on stocks with growing dividends, not just the highest-yielding ones. The Hickory Hills board pulled $1.2 million from the fund in 2014, and in early 2016 $750,000 more. It has since switched to a local broker, in part because of Morgan Stanley’s reliance on Morningstar ratings, said David Wetherald, a police officer who is also the pension board’s president. It was frustrating because “we rely a lot on the financial people. We’re not completely blind and naive, but we’re smart enough to know that this is what they do,” Mr. Wetherald said. Morgan Stanley declined to comment. Morningstar said its fivestar rating of Nuveen Santa Barbara Dividend Growth in 2011 “was an accurate historical grade on the fund. It was not intended as or presented as a conclusion as to what they should do.” Morningstar also said this type of fund generally did poorly after 2011. The example “presents an underperforming fund in a badly underperforming category as if it’s representative of the full rating set, which it’s not,” the firm said. The Journal’s analysis found that investors put new money into five-star-rated funds in 69% of the months they held that rating, compared with 29% for one-star funds. Morningstar acknowledged its ratings can influence demand, though Mr. Mansueto says he believes investors typically move money mainly based on a fund’s performance, not its star rating. The Journal found over a dozen cases where well-performing funds attracted few investors until they won a fifth Morningstar star. Tiny Buffalo Emerging Opportunities Fund saw little interest despite beating many similarly focused funds, including gaining 24% in 2012. After it got a fifth star from Morningstar in spring 2013, hundreds of millions came in, quadrupling assets to above $400 million in five months. The small management team in Mission, Kan., closed the fund to new investors six months later, a step managers sometimes take when given more cash than they feel they can invest. The Journal found many instances of funds closing after an influx that followed a high star rating. At Buffalo Emerging Opportunities, fortunes soon reversed. In 2014 it lost over 7% and trailed about 95% of other funds focused on growing small companies. In the next two years its Morningstar rating fell to two stars and assets plunged to under $100 million. Buffalo Funds declined to comment. Inflows sparked by high star ratings are especially important for managers of actively managed funds now that more investors have migrated to passive ones that just try to match an index. On calls with securities analysts, fund-company chiefs often trumpet how much of their asset total is in four- and five-star funds, as a sign of the companies’ ability to attract cash. From his office in Mechanicsburg, Pa., financial adviser Donald DeMuth starts each workday by logging onto Morningstar Office, which helps him organize client portfolios. He uses Morningstar data to check on fund performance and details such as how fast fund portfolios turn over. Please turn to the next page 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. Thursday, October 26, 2017 | A9 * * * * * IN DEPTH Money In Motion Case Studies The Journal analyzed how much money ﬂowed into or out of funds over three years based on the overall ratings investors saw and how well the funds actually performed. Nuveen Santa Barbara Dividend Growth Fund* A pension fund moved $2.1 million into the Nuveen Santa Barbara Dividend Growth Fund in November 2011, when the fund had a ﬁve-star rating. Investors pour money into top-rated funds even if their performance declines. 1 2 100% Net inﬂow 50% Net outﬂow 10% THREE-YEAR PERFORMANCE 3 4 5 Buffalo Emerging Opportunities Fund A ﬁnancial adviser invested After Morningstar gave the tiny fund ﬁve stars in the clients in Permanent spring of 2013, investors Portfolio in early 2012 poured in hundreds of when it had ﬁve stars, but millions of dollars. it quickly started underperforming. Permanent Portfolio* Overall rating Stars 5 5 4 3 2 4 AVERAGE OVERALL RATING 3 1 2 2010 ’15 2005 ’10 ’15 2010 ’15 3-year rating 5 4 3 2 1 Cash in or out $60 million 1 20 0 Investors pull money from low-rated funds even if their performance improves. -20 Note: Funds rated by Morningstar can have up to four ratings: a three-year rating, a ﬁve-year rating, a 10-year rating, and an overall rating that is based on a combination of the others. Mr. DeMuth, 66, has used Morningstar so long he can’t remember when he started. “With rare exception, we would want a fund to have five stars,” he said. In early 2012 he put some of his clients’ money in a fund called Permanent Portfolio when it had a five-star Morningstar rating. The fund invests across an array of assets, including gold and silver. Its performance had already started to slip. By the end of 2012, it was 5 percentage points behind its Morningstar category benchmark, the “Morningstar Moderate Target Risk,” which is a mix of global bonds and global stocks. Mr. DeMuth moved clients out in the fall of 2013, a year when the fund trailed that benchmark by 16 points. At the end of 2013, Morningstar gave the fund a one-star rating for its performance over the prior three years. Client David Peterseim, a 55-year-old retired surgeon in Charleston, S.C., said he was relieved the financial adviser got out. He was disappointed “Morningstar didn’t have some semblance to reality,” Dr. Peterseim said. Michael Cuggino, president of the family of Permanent funds, said Permanent Portfolio’s performance suffered as gold and silver prices fell. Morningstar said Permanent Portfolio was an “outlier” that “was designed as an inflation hedge; when precious metals are in favor, it will score well, and when they’re not, this fund won’t do well.” Major rallies in gold and silver ended in 2011, shortly before Mr. DeMuth invested. firm’s marketing cautions that “a high rating alone is not a sufficient basis for investment decisions.” Morgan Stanley declined to comment. Fund firms often cite Morningstar ratings in their advertising—at times even out-ofdate ones. AllianceBernstein ran an ad for nine of its funds in a spring edition of Private Wealth magazine, citing star ratings from September 2016. Two of the funds’ ratings had fallen by the time the ad ran. A spokesman for AllianceBernstein said it made a “human error” in two instances out of “hundreds of digital and print ads...that quarter.” Dallas-based Hodges Small Cap Fund’s retail share class beat 95% of similar funds in 2010 but had less than $100 million in assets. Late in 2011 Morningstar gave it a fifth star, and everything changed, said Craig Hodges, who manages Hodges Capital Management. Charles Schwab put the fund on its “Schwab Select List.” Mr. Hodges and his brother Clark advertised their star rating on a billboard in Dallas/Fort Worth airport. Hodges Capital paid over $10,000 to Morningstar for the right, to advertise the stars, Craig Hodges said. By 2014 year-end, assets in the fund hit about $1.6 billion, according to Morningstar data. Michael Rawson, who was a Morningstar fund analyst for six years until spring 2016, said asset managers who pay to advertise their stars are misrepresenting their funds because the ratings are solely backward-looking. “We know people misuse it. If we know people misuse it, why don’t we do something about it?” Mr. Rawson said. Morningstar said it publishes the ratings because it believes they have investment merit, not for financial gain. It said its intellectual-property licensing packages, which include the stars, contributed just 4% of revenue in 2016. Mr. Mansueto said employees are encouraged to debate issues related to its products, but the efficacy of its star ratings no longer comes up internally. “This is not a hot topic or even a cold topic at Morningstar today,” he said. As for Hodges Small Cap, its performance has since turned down. Its rating has fallen to two stars from five, and assets that had soared after the top rating have dropped by more than half. Morningstar in 2011 launched a second rating system, currently covering 26% of fund share classes, in which the firm’s analysts do a more qualitative assessment. Unlike the stars, analysts’ ratings often refer to likely future performance. The firm said ana- 2010 $100 million $500 million 40 ’15 0 50 -500 0 -1,000 -50 2005 ’10 ’15 2010 *Share class I lysts’ ratings reflect its level of conviction that a fund will “outperform its peer group and/or relevant benchmark.” The analysts give funds one of three medals—gold, silver or bronze—or a ”neutral” or “negative” rating. The Journal examined how these funds performed in future years, as measured in their star ratings. It found that five years after having a goldmedal rating from Morningstar’s analysts, funds had an average rating of 3.4 stars for Some funds do well but draw little cash until they gain a fifth star, then see a burst of new investment. that five-year period. Silver-medal funds were rated 3.3 stars for their performance over the following five years. Bronze-medal funds had an average rating of 3 stars. In other words, while funds rated highly by the Morningstar analysts did better, the differences among the funds weren’t large. A Morningstar spokeswoman said there was a mismatch in how the Journal evaluated the performance of analyst-rated funds because it relied on star ratings. She said unlike analysts, the star ratings take into account a “load”—a sales fee—that some funds have. The Journal analysis also found Morningstar analysts’ ratings of funds were overwhelmingly positive. From November 2011 through August 2017, the firm gave analyst ratings to about 9,200 fund share classes. Just 421, or 5%, received negative reviews. At the end of August, only 1% did. Mr. Mansueto said analysts tend to choose better funds to examine, since they can’t review them all. “Investors want to know what funds they should be investing in,” Mr. Mansueto said. “They don’t care so much about what the terrible funds are.” Morningstar recently started a third “quantitative ratings” system that it says applies analyst screening to a broader universe of funds. This one is likely to include more negative ratings, executives said. J.P. Morgan Chase & Co. is among asset managers that regularly send portfolio managers to talk to Morningstar analysts about the merits of their funds. BlackRock Inc. has a team that works to persuade Morningstar analysts of the merits of various funds, ac- cording to people familiar with the matter. They added that BlackRock CEO Laurence Fink met with Morningstar analysts early this year to discuss the firm’s ratings. In May, Morningstar upgraded to positive BlackRock’s “parent pillar” rating, an evaluation in which analysts are looking for factors including an alignment of interests between fund shareholders and those who manage the funds. A BlackRock spokesman said its team that works with research providers “is focused on providing transparency, education and information about our products to facilitate informed decisions.” Morningstar said BlackRock had changed how portfolio managers were paid in a way that led to their having more of their own money invested in BlackRock funds. “We followed the same process in evaluating Blackrock’s standing as a parent that we do with any other firm,” said a Morningstar spokeswoman. Funds of its own JEFF LAUTENBERGER FOR THE WALL STREET JOURNAL, MELISSA LYTTLE FOR THE WALL STREET JOURNAL Used as a crutch? Current and former Morningstar employees said some advisers use the ratings as a crutch. “It’s a cover-your-ass type of service,” says Samuel Lee, a former strategist at Morningstar. “An adviser can say, ‘I’m going to put you in this fund, it’s a 5-star fund,’ …and if something goes wrong the adviser can shunt blame to Morningstar.” Scott Jennings, a former Morgan Stanley financial adviser, recalled struggling last year to explain to a company’s employees which funds they should choose in their retirement plans. He decided to keep it simple and told them, “You only have two funds rated by Morningstar—one’s a two-star and one’s a four-star. Go with the four-star.” He could see a look of understanding flash across their faces. At Morgan Stanley, “Advisers get in trouble when they go against the grain,” Mr. Jennings said. “You isolate yourself more if you sell something else rather than just go with what research recommends.” Morningstar said if advisers use the ratings this way, “this is a fault with the users of the ratings, not the ratings.... If an advisor wants to do proper due diligence, we provide a robust set of information.” The ’15 Source: WSJ analysis of Morningstar data ‘With rare exception, we would want a fund to have five stars.’ ‘Advisers get in trouble when they go against the grain.’ Financial adviser Donald DeMuth Former Morgan Stanley financial adviser Scott Jennings Mr. Kapoor, the Morningstar CEO, said analysts operate independently from fund companies and without influence from management despite frequent angry calls executives must field. “We prize our independence,” he said. Morningstar’s application to the Securities and Exchange Commission for permission to launch nine mutual funds of its own has led some critics to cry conflict of interest. The Morningstar spokeswoman said the firm is in a quiet period related to the filing, restricting what it can say, but she said the firm’s analysts sit “in a separate entity” from Morningstar Investment Management, which would oversee the company’s funds. The Journal spoke with more than three dozen executives at asset-management firms large and small about Morningstar. Few would go on the record. Several years ago, some were unhappy when Morningstar changed the way it calculates its “stewardship grade,” which is supposed to measure the corporate culture of each fund company. Executives from fund companies viewed the change as the latest example of Morningstar acting unilaterally and without explaining itself. The money managers drafted a two-page letter to Morningstar that accused the company of “bullying” fund companies and running a monopoly, according to people familiar with the letter. “The nature of what we do is going to end up alienating some portion of the industry,” said Jeffrey Ptak, Morningstar’s global director of manager research. “That’s not something we relish but it’s part of our job.” When the time came for the money-management firms to put their names to the letter, they balked. The letter was never sent. 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 A10 | Thursday, October 26, 2017 NY THE WALL STREET JOURNAL. T H E FA S T E S T- S E L L I N G S H O W I N N AT I O N A L T H E A T R E H I S T O R Y C O M E S T O B R O A D W A Y. TICKETS ON SALE MONDAY, OCTOBER 30 18 W E E K S O N LY • P R E V I E W S B E G I N F E B R U A RY 2 3 NEIL SIMON THEATRE, 250 WEST 52ND STREET • ANGELSBROADWAY.COM Visit Ticketmaster.com or call 877-250-2929. Ofﬁcial Card of Angels in America 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. Thursday, October 26, 2017 | A10A NY * * * * GREATER NEW YORK Thomas Spota accused of trying to cover up beating of a suspect by an ex-police chief BY JOSEPH DE AVILA A federal grand jury in New York indicted Suffolk County District Attorney Thomas Spota on Wednesday on obstruction of justice charges connected to a 2012 assault by the county’s former police chief. Christopher McPartland, the chief of investigations and head of the government-corruption bureau of the Suffolk County District Attorney’s Office on Long Island, also was charged in the four-count indictment that includes conspiracy to tamper with witnesses and obstruct an official proceeding. Both men pleaded not guilty Wednesday in federal court in Central Islip, N.Y. They face a maximum of 20 years in prison if convicted. “Tom categorically denies the government’s charges,” said Alan Vinegrad, an attorney for Mr. Spota, who was released on bond and left court without telling reporters whether he would resign. Larry Krantz, a lawyer who represents Mr. McPartland said his client “vehemently denies the charges.” Federal prosecutors allege that Mr. Spota, 76 years old, and Mr. McPartland, 51, attempted to cover up the assault of a handcuffed suspect by former county Police Chief James Burke in 2012. Mr. Burke beat Christopher Loeb, who was accused of stealing sex toys, pornography and other items from Mr. Burke’s police-issued sportutility vehicle. Mr. Burke pleaded guilty in 2016 and is serving 46 months in prison. “Prosecutors swear oaths to pursue justice and enforce the SETH WENIG/ASSOCIATED PRESS Suffolk County District Attorney Indicted District Attorney Thomas Spota, right, pleaded not guilty when he appeared Wednesday in federal court in Central Islip, N.Y. law,” said Bridget Rohde, acting U.S. Attorney for the Eastern District of New York. “Instead of upholding their oaths, these defendants allegedly abused the power of the Suffolk County District Attorney’s Office.” Following the assault of Mr. Loeb, the defendants, along with Mr. Burke and others, tried to conceal Mr. Burke’s role in the incident and attempted to impede the probe, the indictment said. The indictment was a stunning turn for Mr. Spota, who de- veloped a reputation for taking on corruption, including the successful prosecution of former town of Islip Supervisor Peter McGowan, who pleaded guilty to corruption charges in 2006. In 2001, Mr. Spota, a Democrat, was elected as Suffolk County’s district attorney and has served four terms. He said earlier this year he wouldn’t run for a fifth term, citing his age and a desire to spend more time with family. Suffolk County Police Commissioner Tim Sini, a Democrat who is running for district attorney in the county, said Mr. Spota should step down. “He’s unfit to serve under federal indictment,” he said. Suffolk County Executive Steve Bellone also called on fellow Democrat Spota to resign. Republican Suffolk County District Attorney candidate Ray Perini said: “I don’t see how you can continue. This kind of cloud—who is go- ing to trust his judgment?” Mr. Spota’s relationship with Mr. Burke dates to the 1970s. At the time Mr. Spota was prosecuting a high-profile murder case and Mr. Burke was a witness. After Mr. Burke entered the law-enforcement field, Mr. Spota later hired him to work for the Suffolk County District Attorney’s Office. Earlier this month, Mr. Spota came under criticism from Mr. Bellone for using funds from the county budget to make “unauthorized bonus payments” to his staff. Mr. Spota said he didn’t need approval because the payments were reimbursed from a fund of assets and money seized during criminal investigations. Among those to receive bonuses: Mr. McPartland, who got $5,000 in 2014 and $17,500 this year, according to budget documents. —Zolan Kanno-Youngs contributed to this article. Pact Resurrects Pier 55 Project BESS ADLER FOR THE WALL STREET JOURNAL BY THOMAS MACMILLAN A Rikers Island inmate competed against a chess grandmaster this week in the first tournament held at the New York City jail. Chess Is King in Helping Prisoners BY ZOLAN KANNO-YOUNGS On a rainy afternoon at the Rikers Island Jail Complex in New York City this week, five men and one woman wearing tan uniforms sat in front of chess boards surrounded by an audience of correction officers and fellow inmates. Maurice Ashley, a 2003 U.S. Chess Federation grandmaster of the year, walked from one board to the next, simultaneously playing six games. One by one, he eliminated the inmates—except for Camilo Arcelay, 37 years old, who used his king to take Mr. Ashley’s last pawn. That left Mr. Arcelay and Mr. Ashley with a king as their last piece. The result was a draw— enough for Mr. Ashley, who also judged the event, to name Mr. Arcelay the winner of the first Rikers chess tournament. “To be in a situation that I’m in right now in jail, it leaves me speechless,” Mr. Arcelay said, referring to his chess victory. The final round of the twomonth tournament is part of a series of programming designed to educate and reduce idleness funded by a $38.9 million New York City initiative. “It teaches them how to think, how to strategize, in an environment that is conducive to those things,” said James Walsh, the Department of Correction’s deputy commissioner of adult programming & community partnerships. While this was the first official tournament at Rikers, chess has long been popular behind bars. Carl Portman, 53, author of “Chess Behind Bars,” and the manager of prisons chess for the English Chess Federation, said the game’s history in prisons dates to World War II. “The more they’re playing chess, the less they have time to attack officers or attack each other, or concentrate on negative things,” Mr. Portman said. The five men and one woman who faced off this week against Mr. Ashley were finalists from the tournament. The inmate who played the most competitive game against Mr. Ashley would be named the winner. During the games, inmates stood on bleachers cheering, critiquing and moving their arms on imaginary boards as if they, too, were participating. “Society wastes so much when we don’t channel the energy and capabilities of those who have been incarcerated,” Mr. Ashley said. The spectators applauded when Mr. Arcelay won the tournament, earning him a $150 commissary voucher. “Just when I thought I had him, he came back,” Mr. Ashley said. “It just goes to show the tremendous potential of these young men and women.” Mr. Arcelay, who is awaiting trial on charges of impersonating a police officer and robbery, said he compares the chess pieces to his family: His wife is the queen, and the bishops, knights and rooks are relatives who have sacrificed for him. He said he marshaled patience while playing Mr. Ashley. “Always step back to analyze situations,” Mr. Arcelay said. “And opportunities that are going to be a positive to you.” After it was abruptly abandoned in September, a $250 million plan to build an island park called Pier 55 in the Hudson River has been revived, due to a deal brokered by New York Gov. Andrew Cuomo. The governor, media mogul Barry Diller, real-estate developer Douglas Durst and the City Club of New York on Wednesday announced that an agreement had been reached to once again attempt to make the ambitious park a reality. Mr. Diller, whose family foundation is the main financial source for the project, had pulled out of the effort in September, citing escalating costs and years of litigation. The move effectively scuttled plans to erect the grassy 2.4-acre man-made park, which was to be mounted on scores of undulating concrete pilings driven in the riverbed near West 13th Street in Manhattan. The park had long been blocked by litigation brought by the City Club and funded by Mr. Durst. The club argued that the project wasn’t subject to sufficient environmental review and complained that it would block the view of the river. After Mr. Diller withdrew, Mr. Cuomo intervened to bring the parties back to the negotiating table, said a spokeswoman in the governor’s office. Mr. Cuomo, she said, has agreed to support the completion of the Hudson River Park, the 550-acre stretch of riverside property between 59th Street and Battery Place in Manhattan, as part of the deal. “I have spoken to the parties involved in the lawsuit against Pier 55 and expressed my belief that cooperative efforts to complete the overall park are more constructive than litigation and stalemate,” Mr. Cuomo said in a statement. A lawyer for the City Club said it won’t pursue further litigation. “In exchange for holding our nose and letting this project go through,” the state finally will complete the Hudson River Park, said Richard Emery, lawyer for the City Club. “The stars aligned to get the park out of its malaise.” Mr. Emery said completion of the Hudson River Park, which officially was created in 1998 but has never been fully built, will cost at least $200 million. The governor’s office declined to comment on cost. Mr. Diller, in a statement, said many people had asked him not to give up on the Pier 55 project, which had a profound impact on him and his family. “So, I’m going to make one last attempt to revive the plans to build the park, so that the intended beneficiaries of our endeavor can fall in love with Pier 55 in the way all of us have,” Mr. Diller said. Diana Taylor, chairwoman of the Hudson River Park Trust, which had planned the project with Mr. Diller’s support, said: “We will work with all stakeholders to figure out a way forward and bring this incredible project to fruition.” Michael Gruen, president of the City Club, said his members are satisfied that the estuary will be protected and are willing to support the project even if they still don’t like the way it looks. “If we manage to get this park completed and get the funding the park needs, I think that is fabulous,” he said. Asbury Park Broadens Appeal With Arts Center Deal BY CHARLES PASSY ASBURY PARK, N.J.—The city that put Bruce Springsteen on the map is looking to expand beyond rock ’n’ roll. Madison Marquette, the real-estate company behind the redevelopment of Asbury Park’s boardwalk, is working with the Newark-based New Jersey Performing Arts Center, or NJPAC, to bring a broader range of cultural events to the seaside destination. As part of the plan, NJPAC will present several artists and shows at two historic boardwalk venues now owned by Madison Marquette—the 3,600-capacity Convention Hall and the 1,600-seat Paramount Theatre. Already announced are programs with astrophysicist Neil deGrasse Tyson (Dec. 15 at Convention Hall) and comedian Paula Poundstone (March 24 at Paramount Theatre). In the 1960s and ’70s, Asbury Park emerged as a destination for budding rock musicians. Mr. Springsteen got his start in local clubs—most notably, the Stone Pony. He named his debut album “Greet- ings from Asbury Park, N.J.” In recent years, the city has reclaimed some of its former glory—not only in terms of its music scene, but also as a funin-the-sun locale. New condos have gone up, with prices topping $750,000 for some units. A new 110-room hotel, called the Asbury, opened last year. The partnership with NJPAC is aimed at building upon that recent success, said Madison Marquette project director George H. Ladyman Jr. The idea is to not only show that Asbury Park can be about more than rock ’n’ roll, but to also grow the city’s events calendar well beyond the summer. “We’re a 12-month destination,” said Mr. Ladyman. Madison Marquette will share in the costs and profits cellini moonphase rolex and cellini are ® trademarks. for shows with NJPAC, said Mr. Ladyman. He declined to provide specific dollar figures or percentages, saying the partnership is on a show-byshow basis. Mr. Ladyman also indicated that the revenue from the shows wasn’t necessarily as important as boosting the boardwalk’s overall business and image. 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 A10B | Thursday, October 26, 2017 NY * * THE WALL STREET JOURNAL. GREATER NEW YORK Trust Jersey City Condo Joins Space Race Land To Offer The 79-story tower would rank among the nation’s tallest residential buildings Affordable Housing BY LAURA KUSISTO A sleek limestone and glass tower soon will soar nearly 900 feet into the skyline with broad views of New York Harbor and the Statue of Liberty. This latest venture isn’t in Manhattan—it is in downtown Jersey City, PROPERTY where its developers hope to create a fresh brand and set a new standard for luxury and amenities. The tower, known as 99 Hudson, is part of a push by Chinese developers to enter the local condominium market in a big way, setting the stage for expansion into other major markets. The building, a block from the waterfront, would be the tallest in New Jersey. The 781 condo apartments went on the market in the past few weeks. Now a 16-story frame of concrete and steel, it is due to open in 2019. The total sellout of condos at the 79-story tower will total slightly more than $1 billion, said Martin Brady, executive vice president of the Marketing Directors, which is listing the apartments in the U.S. Prices start at $889,000 for one-bedroom units and $1.5 million for two bedrooms. At 887 feet tall, 99 Hudson would be the sixth-tallest residential building in the U.S. if it were open today. There are 11 taller towers under construction, mostly in New York City, but also in Chicago and San Francisco, according to data from the Council on Tall Buildings and Urban Habitat. Condo development has lagged in Jersey City since the 2008 financial crisis, even as a forest of tall rental buildings came on the market, and Jersey City developed a reputation as a center for arts, culture and business. Asking prices at 99 Hudson average about $1,400 a square foot, about 64% of the average price a square foot in Manhattan, brokers said. But 99 Hudson, about a four-minute ride on the PATH train to the World Trade Center, has one unbeatable advantage over most Manhattan towers: a vast open view of the Manhattan skyline. It sits directly across from the World Trade Center and views extend from Midtown to the Statue of Liberty and Liberty State Park in New Jersey. Cindy Xu, president of China Overseas America Inc., said the building’s residents “will have unparalleled views of the Manhattan skyline, while enjoying the luxury lifestyle and amenities of a pre- New York City has long struggled with how to help lower-income families buy homes as real-estate prices climb further out of reach. A coalition of housing groups has unveiled plans for a new community land trust that they say could offer a new model for how the city addresses low-income homeownership. One key feature: The land trust will retain ownership of the land under the homes and control how much the homes are resold for, preserving affordability for generations to come. Community land trusts are still in their infancy in major cities, and it remains to be seen how effectively a nonprofit can compete to buy land, especially in a place like New York City where many land deals are closed quickly and in cash. The creators of the New York land trust said it could generate 250 units over the next couple of years, which would make it one of the largest in the U.S., according to Melora Hiller, chief executive of Grounded Solutions Network, which works with community land trusts across the country. In the wake of the foreclosure crisis, many places shifted focus away from promoting low-income homeownership after that became a path to financial ruin for many during the era of easy mortgages. Roughly two-thirds of New Yorkers rent. But as real-estate prices have climbed, housing groups said they began to search for alternatives that would give people more control over their living situation. “Coming out of the foreclosure crisis, we spent a lot of time and still do spend a lot of time figuring out how to keep homeowners in their homes. We started seeing that there was very little daylight between recovery and gentrification,” said Christie Peale, executive director of the Center for NYC Neighborhoods, one of the organizations behind the creation of the trust, dubbed CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL; CHINA OVERSEAS AMERICA INC. (RENDERING) BY JOSH BARBANEL The 99 Hudson residential tower, under construction above and seen in a rendering below, would be the tallest building in New Jersey. Chinese Companies Expand Their Reach Large-scale condominium development is returning to Jersey City, in large part through the efforts of two separate subsidiaries of the same Chinese-government-owned enterprise. Both subsidiaries were looking to hone their reputations and develop their skills as they move into more highly competitive condo markets in places such as New York City. In July, Strategic Capital put a condo project known as Park and Shore in the Newport section of Jersey City on the market. The development includes two separate buildings, 75 Park Lane and Shore House, that will share amenities. Strategic Capital is an investment and development company owned by China Con- struction America, which in turn is owned by China State Construction Engineering Corp. Ltd., a Chinese government-owned conglomerate. Nearly 20% of the 180 sales at Park and Shore so far have been to Chinese buyers, said Jacqueline Urgo, president of the Marketing Directors, which is overseeing U.S. sales. It is competing against another subsidiary of China State Construction, China Overseas America, which is building 99 Hudson. The building’s prices are pegged to be the highest in Jersey City. Sales were simultaneously launched this month in Jersey City and China. Both China State Construction subsidiaries are looking to expand further, though in August China announced curbs to limit the outflow of corporate investment in property, among other sectors. Cindy Xu, president of China Overseas America, declined to discuss limitations on capital outflow. She confirmed that 99 Hudson is being built without a conventional mortgage. “Whether to pay cash or arrange for loans is affected by various factors, such as the finance-modeling methods, the strategic concerns and the overall environment,” she said. Nine years ago, large-scale condo development fell out of favor in Jersey City, as the financial crisis of 2008 left a large overhang of unsold units. That is now turning around, with at least four new developments on the market since last year. The two projects by the Chinese-owned companies are the largest. Both 99 Hudson and Park and Shore are being built by Plaza Construction, a Manhattan-based construction management, consulting and contracting firm that was purchased by a China State Construction subsidiary in 2013. mier residential property.” The building will soar above the massive 42-story Goldman Sachs Tower about a block away, which at 781 feet currently is the tallest building in New Jersey. The angled tower is rising at the eastern, Manhattan-facing edge of a block-square site that formerly was a parking lot between Hudson and Greene streets, a short walk from the Exchange Place PATH station. It has several angled glass walls on each side to give more units Manhattan views. China Overseas America purchased the site from Hartz Mountain Industries for $68 million in 2013. Hartz had bought it two years earlier for $35 million. The building is clad in floorto-ceiling glass and vertical columns of limestone that soar up the face. The tower stands on a seven-story base that covers an entire square block. It has ground-floor retail, parking spaces that are being sold with condos and wall of studios on Greene Street, facing away from Manhattan. The roof of this base is a playground with an irregularly shaped 80by-50-foot outdoor pool, a lawn, fire pits, barbecues and cabanas. Inside, there will be a spa with hot tub, steam room, sauna, fitness area, poker rooms, a business center and golf simulators. China Overseas America is a U.S. subsidiary of China Overseas Holdings Ltd., which in turn is a subsidiary of the China State Construction Engineering Corp. Ltd., a Chinese government-owned enterprise. Ms. Xu said sales at 99 Hudson were launched on-site si- multaneously by a team from the Marketing Directors, a New York-based marketing company, and a China State Construction unit in China. She noted that many potential Chinese buyers have children working or studying in the U.S. “We have built up a large and solid base of loyal customers who follow us to anywhere in the world,” Ms. Xu said. She said her subsidiary is looking to expand beyond Jersey City because overseas markets remain part of her company’s “sustainable development strategy.” GREATER NEW YORK WATCH NEW YORK CITY Two city building inspectors and an asbestos investigator were among 14 people charged Wednesday in three construction schemes involving bribery and corruption, authorities said. Officials said the two-year probe by the city Department of Investigation and the Brooklyn district attorney’s office revealed construction corruption thought to be widespread in the city. Other defendants included property owners and developers. There were no injuries reported from the alleged schemes. —Zolan Kanno-Youngs TRANSIT MTA Votes to Ban Subway Alcohol Ads ROBERTO COIN BOUTIQUE Westﬁeld World Trade Center Oculus | Main Level C2 New York, NY | 212.287.1299 POIS MOI COLLECTION | robertocoin.com Bye-bye, beer and booze ads on the subway. The board of the Metropolitan Transportation Authority approved a measure Wednesday that bans beer, wine and spirits advertising on any MTA property. The measure prohibits any new contracts for alcohol ads immediately, but allows for existing contracts to continue until the end of the calendar year. Some 30 major cities have already banned alcohol ads on transportation systems, and New York City banned tobacco ads from its system decades ago. —Melanie Grayce West SETH WENIG/ASSOCIATED PRESS Inspectors Charged In Construction Probe Investigators converged on a marshy area in a Freeport, N.Y., park following the discovery of suspected human remains. OPIOID CRISIS LONG ISLAND App Lets Public Send Park Search Yields Tips on Drug Crimes Apparent Remains A New Jersey prosecutor is turning to an app to fight his county’s opioid epidemic. Residents of Somerset County can use their smartphones to anonymously text tips on opioid-related crimes to the office of the prosecutor, Michael H. Robertson. Mr. Robertson said he hopes the STOPit app will encourage tech-savvy people who are less likely to call a police hotline and those uncomfortable speaking to law enforcement to come forward with information about dealers and overdoses. “Our intention with this is basically to use it almost like a neighborhood watch on steroids,” he said. —Zolan Kanno-Youngs The FBI says its gang task force has found apparent human remains in a Long Island park nearly a week after the body of a 16-year-old boy was found in a neighboring community. An FBI spokeswoman said the suspected remains were found Wednesday in Cow Meadow Park & Preserve in Freeport. On Oct. 19, investigators discovered the body of 16year-old Angel Soler in woodlands in Roosevelt. Authorities haven’t commented on whether either case is linked to the MS-13 street gang, which is blamed for 22 killings on Long Island since January 2016. —Associated Press ‘We feel that we have to act now and acquire land at a cheap price.’ the Interboro Community Land Trust. There is a growing body of evidence that homeowners fare better financially than renters over time. The median net worth of homeowners increased by 15% between 2013 and 2016, while the incomes of renters or other non-homeowners fell 5% during the same period, according to a September report by the Federal Reserve. “Whatever savings they could have put together for a deposit on a home or an apartment is being exhausted by rising rental costs,” said Bob Annibale, global director of Citi Community Development and Inclusive Finance, which has contributed $1.2 million toward the Interboro Community Land Trust. As the owner of the land, the trust then has the ability to restrict the price at which owners can resell their units, keeping them below market rate in perpetuity. This differs from many of the current models for affordable homeownership, where regulatory agreements that keep homes or apartments affordable often expire after a couple of decades, freeing the owners up to sell their homes at market rates and potentially turn a substantial profit. Ms. Peale said the trust is likely to focus on areas like southeast Queens, the Bronx and southeast Brooklyn and to include a significant component of single-family homes, as well as co-op apartment buildings. Many of the homes will be affordable to those making 80% of New York’s median income, or just over $76,000 for a family of four. “We feel that we have to act now and acquire land at a cheap price,” Ms. Peale said. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. LIFE&ARTS Thursday, October 26, 2017 | A11 Staying Connected At 10,000 Feet Airlines are at various stages of upgrading in-flight Wi-Fi. Some have as many as four different kinds of service. Here’s a look at who offers what for large-plane mainline flights (excluding regional flights): American: Wide-body international fleet has satellite connections in 129 of 150 aircraft. Domestic fleet mostly ground-based service. First narrowbody satellite-equipped plane starts flying Nov. 29. Upgrades won’t be completed until end of 2019. Delta: International planes have satellite connections. Domestic narrow-body conversion to satellite up to 238 of 700 planes. A319s and 737-800s have it. Working on A320s now. FROM TOP: GETTY IMAGES/ISTOCKPHOTO; GOGO United: Entire fleet has satellitebased service except for 15 Boeing 757s. Some 737s have coverage limited to continental U.S. Southwest: Entire fleet has satellite service. In the process of upgrade that delivers speeds three to four times faster than original. THE MIDDLE SEAT | By Scott McCartney Cut Through the Confusion Of In-Flight Wi-Fi TRAVELERS USED TO struggle to figure out if their flight was going to have Wi-Fi. Now the question is whether they’ll have Wi-Fi that works. Wi-Fi has grown from a milehigh luxury to an essential amenity for many travelers. Internet connections are more important than food in airline surveys. Alaska Airlines says Wi-Fi reliability is the No. 1 topic of conversation among its most loyal customers. “There are certain things people view they need while in a metal tube, and Wi-Fi is one of them,’’ Alaska spokeswoman Bobbie Egan says. But with more passengers trying to log in and each using more data, systems that connect to ground antennas get overwhelmed on many flights. Frequent travelers sometimes call Gogo, the leading air-to-ground service, Slowgo or Nogo. “Sometimes the service is spotty or I get kicked off. You get frustrated and sometimes just bag it,” says Hemant Pathak, an attorney based in Washington, D.C., who travels frequently to Seattle and other West Coast cities. Airlines are rushing to upgrade to satellite-based Wi-Fi systems that can route much larger amounts of data much faster. With satellite-based Wi-Fi, you can log in from gate to gate instead of waiting until the plane climbs above 10,000 feet, and you can stream live TV and movies. Workers install a Gogo 2Ku satellite antenna on an aircraft. Airlines are upgrading to satellite-based internet connections. Not all carriers have it. Some airlines have it on some of their planes, but not others. Some satellite systems have been upgraded to deliver speeds three to four times faster than early satellite systems. Others await an upgrade. And airlines make it difficult to sort the slow from the speedy— there’s rarely much information about what Wi-Fi you’ll get until you step onboard. Gogo has four flavors of Wi-Fi onboard airliners right now—two versions of ground-based systems, plus an original satellite system and a version with a new modem that handles far more data each second, known as 2Ku. The differ- ent versions range in speed from receiving 3 megabits per second for the entire plane to 100 Mbps per second. That’s a huge difference if you have 30 or 40 passengers all on at the same time. When the small-capacity systems get overwhelmed, problems can worsen when flight crews intervene. “Sometimes people mistake degraded service for not working and flight attendants reboot the system,” kicking all users off, says Anand Chari, Gogo’s chief technical officer. One side benefit to upgrading so many planes: Congestion on the ground-based antenna network will decrease, says John Wade, Gogo’s chief operating officer. “Technology has caught up with passenger expectations,” Mr. Wade says. Delta flies all four Gogo varieties and is quickly upgrading, sometimes installing satellite equipment on two planes a night at its Detroit hub. All of Delta’s long-haul wide-body fleet has satellite service, and 238 of about 700 mainline narrow-body jets have been upgraded to Gogo’s satellite service as of Oct. 20. Delta is upgrading each aircraft type together so savvy customers will know which flights have better Wi-Fi. By the middle of 2018, Delta says it will have satellite WiFi service on all its domestic flights longer than 1,500 miles. Like all U.S. airlines, regional partners will stick with ground-based systems. With fewer passengers onboard, airlines say ground-based works better on smaller planes, and satellite antennas that get installed on top of planes don’t fit on narrow regional jets. “The reality is not every product will ever be the same when you operate as large a fleet as we do,” says Andrew Wingrove, Delta’s managing director of product strategy and customer experience. Delta is sending an email before travel to passengers who will get satellite service. Satellite-equipped planes have different signs at airplane doors and flight attendants announce the upgraded service. Delta is working on distinguishing Alaska: Ground-based Wi-Fi service. Upgrade to satellite service starts next year, with completion in 2020. Virgin America has 53 air-to-ground planes and 12 satellite-equipped planes. JetBlue: Entire fleet has satellitebased service, offered free. Coverage only over the contiguous U.S. between upgraded Wi-Fi and ground-based when customers book flights, Mr. Wingrove says. Like reliability, pricing can vary significantly with in-flight Wi-Fi. Several airlines have recently begun to offer free text messaging in-flight. JetBlue offers free full satellite Wi-Fi with live television. Southwest charges $8 a day for satellite-based internet access, but live TV is free. Other airlines typically charge $12 to $28 a day for internet access. Some offer monthly passes at around $50, or discounts if you pre-purchase WiFi when you book. “You can pay a bunch and get very little,” says Ed Pizzarello, a Reston, Va.-based venture capitalist who blogs about frequent-flier programs and travel. United was slow to offer Wi-Fi years back because it decided from the start to install satellite service. Now the airline crows that it made the right decision. Besides the increased speed and capacity, satellite service allows connections over most areas on long international flights. Yet United ended up with a mix, too. United has 15 Boeing 757s used on transcontinental flights that have ground-based service. So does all of its two-cabin regionaljet fleet. And one of United’s satellite-service providers offers connections only over the continental U.S. So a 737 flying to Central America or other destinations outside the lower 48 states would lose service for much of the trip. “It’s something we are eager to improve,” says Tarek Abdel-Halim, United’s managing director of onboard products. MUSIC BY NEIL SHAH SOME OF THE MUSIC industry’s biggest players are betting that a new sound is ready to catch on. It’s called classic rock. The genre is being reinvented by young musicians, some of whom are barely out of high school, who are channeling bands their mothers and fathers grew up with. Greta Van Fleet is a rarity in today’s music business: An old-fashioned rock band that could, some music executives say, break into the pop world. The Frankenmuth, Mich., group is made up of 21-year-old twins Jake Kiszka, the band’s guitarist, and Josh Kiszka, its singer; their brother and bassist Sam Kiszka, 18; and drummer Danny Wagner, 18. Greta Van Fleet’s debut EP, “Black Smoke Rising,” which features Josh’s Robert Plant-like howl and Jake’s guitar hooks, opened at No. 1 on Apple’s iTunes rock chart. “Highway Tune,” their single, recently topped Billboard’s mainstream rock radio chart for five weeks. Despite having just four songs, Greta Van Fleet is selling out clubs like New York City’s Bowery Ballroom. Championing them are two of the industry’s most powerful names: Marc Geiger, head of music at talent agency WME, which represents Adele, Foo Fighters and Kendrick Lamar, and Lava Records executive Jason Flom, who helped launch Lorde, Katy Perry and Kid Rock. The band is releasing a “doubleEP” on Nov. 10 that will include “Black Smoke Rising” and four new tracks—two originals and two covers. “Black Smoke Rising” showed the band’s knack for catchy, tightly-crafted songs but was also criticized by some fans as derivative of Led Zeppelin. The new songs, including a cover of soul singer Sam Cooke’s “A Change Is Gonna Come,” aim to prove the band isn’t a Zeppelin clone by showing its other musical influences, Sam Kiszka says. The band’s ascent is reviving a question pondered by industry executives ever since hip-hop took over America’s youth culture: For younger music fans who see Led Zeppelin, Guns N’ Roses, and Nirvana as the distant past, can “classic rock” be new again? “There’s a theory that rock needs one new band showing up and getting people to talk about rock again,” says Eddie Trunk, a longtime rock personality who hosts a daily radio show on SiriusXM’s “Volume” channel. “Could this be that band?” “We grew up listening to blues and soul,” not classic rock, says Josh Kiszka. The Kiszka brothers’ father is a blues musician with an Please see ROCK page A12 MATT ROTH FOR THE WALL STREET JOURNAL THIS IS NOT YOUR FATHER’S ROCK BAND Greta Van Fleet, a group of teenagers who recently finished high school, are winning listeners and attention with their modern take on rock ‘n’ roll. THE WALL STREET JOURNAL. A12 | Thursday, October 26, 2017 LIFE & ARTS CLOCKWISE FROM TOP LEFT: NETFLIX; JACKSON LEE DAVIS/NETFLIX (3) Vintage cameras, above, and arcade games, below, for ‘Stranger Things 2,’ by directors Ross Duffer (left, inset) and Matt Duffer (right, inset). In the series, from left, Noah Schnapp, FInn Wolfhard, Gaten Matarazzo and Caleb McLaughlln play suburban middle-school students who encounter monsters. STREAMING SERIES The ’80s of ‘Stranger Things’ How the hit Netflix series recreates an ‘awesome’ era without going over the top BY JOHN JURGENSEN IN “STRANGER THINGS 2,” the second season of Netflix’s sci-fi horror hit set in the 1980s, certain props catch the eye like cameos by stars of that decade: a ReaganBush ’84 campaign sign, a bulky camcorder, an E.T. figurine and a fat Madrid brand skateboard. For the show’s production designer, Chris Trujillo, it wasn’t hard to find vintage action figures, boxy cars and other emblems of the era. The challenge was to avoid distracting viewers with an overdose of retro accessories. “It was a constant censoring,” says Mr. Trujillo, who received an Emmy nomination for the production design in season 1. Often his team resisted the urge to load sets with lamps or wallpaper that were too “awesome and bizarrely ‘80s” for fear they’d steal the scene. “It’s a lot harder to have that self-control than you’d think,” he says. “Stranger Things” is about a group of middle-school students who confront monsters spilling into their suburban world from another dimension. When it premiered last year, the series trans- ported viewers to 1983 with period references such as Steven Spielberg movies, the synthesizer music of horror master John Carpenter and even the title font of “Choose Your Own Adventure” books. Twin brothers Matt and Ross Duffer, the show’s 33-year-old writers and directors, created a story about four boys who team up with a girl with telekinetic powers who escapes from a secret research facility. The plot mirrors the Cold War paranoia and Dungeons & Dragons games that the characters are immersed in. “When the real world starts to reflect the kids’ fantasy pop-culture world, it all feels oddly kind of seamless,” says Mr. Trujillo, who met the Duffers before Netflix picked up “Stranger Things.” “All the things that influenced us to make the show are very present in the world of the show.” As a flashback to a time when unsupervised kids roamed on BMX bikes, the show gave a cross-generational audience a respite from today’s hyper-connectivity. With scant pre-release promotion and press coverage, the show’s popularity spread gradually by word of mouth, another seeming throwback. Hype surrounding “Stranger Things” and its sequel season have since gone into overdrive, and cheeky Netflix marketing has reveled in ‘80s touchstones. A Super Bowl ad announcing season 2 incorporated a vintage Eggo waffle commercial. Posters paid homage to old movies like “Firestarter.” A “Stranger Things” app borrowed the look of vintage Nintendo games. Mr. Trujillo acknowledges the risk of the show becoming a victim of its own nostalgic style, but he says season 2 has the substance to back it up. In early reviews, many TV critics seem to agree, though some note that it takes awhile for the show to get back up to speed. Many sets from season 1 re- main, but other facets got an update for 1984, such as the Ghostbusters gear the boys sport for Halloween. The ‘80s props and costumes offered by Hollywood rental houses tend to be a little too “on the nose,” Mr. Trujillo says. So the production designer and his team, including art director Sean Brennan, prop master Lynda Reiss and set decorator Jess Royal, made many acquisitions in the Atlanta area where the series was shot. Mr. Trujillo, who was born in 1981 and raised in Tampa, Fla., describes “estate sale-ing” in Atlanta suburbs lined with mid-century duplex and colonial homes identical to the ones inhabited by “Stranger Things” characters. They sought out houses that hadn’t been renovated. In some of these time capsules, everything was for sale, down to the contents of the kitchen junk drawer. The popularity of “Stranger Things” sometimes helped the production team gain early access to estate sales. For every famous “Star Wars” toy that appears in “Stranger Things,” there are many more obscure tchotchkes, such as the wooden napkin holder on one family’s kitchen table. Those, along with holdover decor from the ‘60s and ‘70s, helped give sets a more authentic “life layer,” Mr. Trujillo says. In some cases, however, the designers and the Duffer Brothers gave themselves permission to go full tilt. The first episode involves scenes set in the ultimate symbol of 1984: a video-game arcade. Rather than replicate it inside a studio, they built one in a former laundromat in an Atlanta-area strip mall that had gone to seed. They loaded it with neon lights, a disco ball and games such as Dragon’s Lair and Dig Dug. Reincarnating the arcade was an opportunity “to go over the top while still staying true to that world,” Mr. Trujillo says, “because they were just ridiculously overdesigned spaces.” Continued from page A11 extensive record collection, their grandfather, an accordion-player on the polka scene. Jake Kiszka first got into classic acts like Jimi Hendrix and Eric Clapton and the band followed. The group took its name from an 86-year-old Frankenmuth musician, Gretna Van Fleet, who plays the dulcimer. “It’s a little piece of home that we can travel with,” Josh Kiszka says. It isn’t just Greta Van Fleet giving classic, guitar-driven rock a modern twist. Tyler Bryant & the Shakedown are playing to bigger crowds, recently opening shows for AC/ DC and Guns N’ Roses. The band’s new album, due Nov. 3, features tighter, punchier songs—a decision it made after playing a 25,000-capacity venue with AC/DC and realiz- L-R: MATT ROTH FOR THE WALL STREET JOURNAL; PAUL MORIGI/GETTY IMAGES ROCK Greta Van Fleet: from left, band manager Aaron Frank, singer Josh Kiszka, guitarist Jake Kiszka and drummer Danny Wagner. Above right, Luke Spiller of the Struts. ing they needed biggersounding material. The Struts, whose singer Luke Spiller channels Queen’s Freddie Mercury, delivers ‘70s-style rock with singa- ADVERTISEMENT Leisure Travel To advertise: 800-366-3975 or WSJ.com/classiﬁeds FRANCE ! "!# # $ % #& ' $& ! ( #) long choruses; they’re touring with Foo Fighters. “From Day One, our ambition has always been to compete with the biggest pop or hip-hop acts,” Mr. Spiller says. No one thinks it will be easy for 20-somethings playing classic rock music to achieve a level of stardom on par with Drake or Taylor Swift. Today, streaming services mint stars, not radio stations. But rock fans don’t stream nearly as much as hip-hop fans do: Greta Van Fleet’s “Highway Tune,” for example, has under 7 million streams on Spotify compared with female rapper Cardi B’s recent hit “Bodak Yellow (Money Moves)” with 146 million. Talented, upstart musicians who in previous eras might have tried to be rock stars have embraced rap, says David Jacobs, a music-industry lawyer. Meanwhile, the few recent bands to explode, like Imag- ine Dragons and Twenty One Pilots, are considered pop as much as rock. Many of rock’s most critically acclaimed new names are indie-oriented or female acts such as The War on Drugs and Courtney Barnett. What separates Greta Van Fleet, Mr. Trunk says, is the considerable promotional machinery behind them. With their retro sound, youthful energy and good looks, Greta Van Fleet could appeal to three key demographics, Mr. Flom says: Older “classic-rock Dads” who tune into rock radio shows and attend classicrock concerts; younger male fans curious about 1960s and 1970s rock, soul and funk; and young women who, in the past, have helped mainstream rock bands become pop stars. Greta Van Fleet’s rise to stardom started when tour manager Mike Barbee discovered them at a cookout in Frankenmuth in Septem- ber 2012. He courted the Kiszka boys’ parents for months. As his charges gained local notoriety, he reluctantly agreed to hand them to a more experienced manager—Aaron Frank, whose family runs a major U.S. concert promotion company—a move that led to WME’s Mr. Geiger and eventually, Mr. Flom. For Mr. Flom, who signed ‘80s rock bands like Zebra, Twisted Sister and Skid Row, Greta Van Fleet represents a return to his rock roots. Mr. Flom took Greta Van Fleet’s song “Highway Tune” to David Dorn, senior director of Apple Music, who helped it onto the streaming services’ playlists, where the song immediately gained traction. In April, Apple Music named Greta Van Fleet a “new artist of the week.” Greta Van Fleet’s backers are having them play smaller venues to hone their chops even if they can get booked in bigger ones. “You need to give people the, ‘I saw them at the Troubadour,’ ” Mr. Geiger says. Minutes before a packed show earlier this month at Baltimore’s Ottobar club, the band drank beers and hung out with Mr. Flom in a small green room as Mr. Flom made jokes about infamous “tour riders” from pop-music history. Josh took sips of whiskey from a plastic cup. They performed an hour-long set full of songs the crowd—a mix of 30- and 40-somethings and younger fans— had never heard before. During soundcheck hours before, guitarist Jake Kiszka briefly played “Mary Jane’s Last Dance,” by Tom Petty, who had died the day before. With so many of rock’s pioneers dying, Greta Van Fleet’s music provides a reassuring continuity, music executives say. “What’s going to happen when all of that [classic rock] is gone?” Jake Kiszka says. “What is going to fill that void?” 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. Thursday, October 26, 2017 | A13 LIFE & ARTS AN APPRECIATION | By Jim Fusilli Ambassador for the Big Easy Fats Domino, who died Tuesday, showed his love for New Orleans in his music, bringing the city’s vibrancy into listeners’ homes performed now and then, particularly at the New Orleans Jazz and Heritage Festival, Mr. Domino faded into the backdrop, though his singles retained their power to spark joy. When Hurricane Katrina struck New Orleans in 2005, Mr. Domino was determined to ride out the storm, but when the levees broke, his home was flooded. Mr. Domino; his wife, Rosemary; and other family members retreated to an upper floor and were rescued by Harbor Police. Someone who hadn’t heard he had been spared spray-painted “R.I.P. Fats You Will Be Missed” on the front of his white-brick house. Mr. Domino’s survival was greeted with relief and a measure of joy amid the shock and sorrow following the storm. The National Medal of Arts he was awarded by President Bill Clinton was lost in the flood, but President George W. Bush traveled to New Orleans to greet Mr. Domino and replace the medallion. Musicians honored him, notably at a 2007 tribute concert at the New Orleans House of Blues that featured local luminaries Art Neville, Dr. John, Irma Thomas, Allen Toussaint and members of Mr. Domino’s band, and with “Goin’ Home: A Tribute to Fats Domino,” an album featuring versions of his hits by, among others, Elton John, Norah Jones, B.B. King, Willie Nelson, Randy Newman, Robert Plant and various artists from New Orleans. Mr. Domino performed sporadically, and in 2012 made a cameo appearance in the HBO series “Treme,” singing a muted but touching version of “Blueberry Hill.” Thus, some five decades after his last smash hit, Mr. Domino’s re-emergence confirmed that he still had a hold on the affection and admiration of music fans. EVERETT COLLECTION FATS DOMINO BROUGHT the sound of New Orleans into the homes of millions of American teenagers during the 1950s with his brand of rollicking R&B and boogie-woogie-tinted piano playing; his sweet growl of a voice, often conveyed with an accent that reflected his Lower Ninth Ward roots; and his ample charm and charisma. When he sang “Yes, it’s me and I’m in love again” to open his 1956 hit “I’m in Love Again,” the line came across like a cheery pronouncement from an old friend. Antoine “Fats” Domino died Tuesday night at his home in Harvey, La. He was 89. Most of Mr. Domino’s familiar crossover hits in the late 1950s were written and arranged with Dave Bartholomew, who produced “Ain’t That a Shame,” “I’m in Love Again,” “Blue Monday,” “I’m Walkin’,” “Whole Lotta Lovin’” and “I Want to Walk You Home” as well as “Blueberry Hill,” a bigband-era number that the two men whipped into an international rock ’n’ roll favorite. Each of those singles was in the top 10 on Billboard magazine’s hit-singles chart that measured overall sales and radio play. Mr. Domino did even better among African-American music consumers: With the exception of “Whole Lotta Lovin’,” which peaked at No. 2, every one of those hits reached the top of Billboard’s R&B singles chart. The son of a French Creole violinist, Mr. Domino was born in New Orleans. His brother-in-law, Harrison Verrett, taught him to play piano; a banjoist, Verrett worked with New Orleans legends Kid Ory and Papa Celestin. In 1947, the 19-year-old Mr. Domino joined the Solid Senders, a local combo led by Billy Diamond. It’s said that Diamond dubbed the portly Domino “Fats” because he reminded him of great pianists Fats Waller and Fats Pichon. Thus it was fitting that Mr. Domino’s first brush with national recognition came in 1949 with “The Fat Man,” which is Fats Domino (1928-2017) in ‘Jamboree’ (1957). His hits included ‘Blue Monday,’ ‘Whole Lotta Lovin’ ’ and ‘Blueberry Hill.’ said to be the first rock ’n’ roll single to sell in excess of a million copies. Six years later, he had his first top 10 crossover hit with “Ain’t That a Shame.” His version might have done even better if Pat Boone, a white pop singer, hadn’t released a tepid version aimed at the mainstream. In 1963, Mr. Domino’s relationship with Imperial Records, for whom he recorded his many hits, ended when the label was sold. In what now seems a wrong-headed plan, his new label instructed Mr. Domino to record in Nashville without Mr. Bartholomew. He continued to work, but his peak pe- riod had ended. By 1980, he decided to stop touring and remain in his beloved New Orleans. An influence on Elvis Presley and the Beatles, in 1986 he was among the 10 inaugural inductees to the Rock ’n’ Roll Hall of Fame and a year later received a Grammy Lifetime Achievement Award. Though he Mr. Fusilli is the Journal’s rock and pop music critic. Email him at firstname.lastname@example.org and follow him on Twitter @wsjrock. WSJ TALK / E XPE RIE NCE / OFFER / GE TAWAY Atlantic Theater Company Production, photograph by Ahron R. Foster WSJ Masterpiece: ‘The Band’s Visit’ Join us as we welcome back our Masterpiece event series, with mezzanine and orchestra level seats to Broadway’s hit musical “The Band’s Visit.” After the play, WSJ Drama Critic Terry Teachout will take you behind the scenes for a private discussion with the show’s award-winning director, David Cromer, and cast members. WHERE: NEW YORK WHEN: DECEMBER 13, 2017 E XCLUSIVE TO WSJ MEMBER S BOOK NOW AT WS JPLUS .COM / THEBANDSVISIT © 2017 Dow Jones & Co., Inc. All rights reserved. 6DJ6059 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 | Thursday, October 26, 2017 SPORTS WORLD SERIES How Jose Altuve Makes His Size Work The 5-foot-6 Astros star has become one of the best hitters in baseball by punishing the pitchers that throw the hardest BY BRIAN COSTA RONALD MARTINEZ/GETTY IMAGES THERE IS ARGUABLY no harder task in sports than hitting a majorleague fastball. That’s especially true for the fastest of fastballs, many of which now exceed 100 mph. Yet the player who excels at this more than any other isn’t some towering slugger. At first glance, he looks more like a Little Leaguer. Jose Altuve, the 5-foot-6 star second baseman for the Houston Astros, has become one of the best hitters in baseball by punishing the pitchers that throw the hardest. He is batting .433 on pitches clocked at 94 mph and above this season, including the playoffs, the highest mark among qualified hitters. For years, his diminutive height—which puts him among the shortest MLB players on record— has been talked about as a disadvantage that he has somehow managed to overcome. But amid Houston’s run to the World Series, this aspect of Altuve’s brilliance raises another possibility: His pintsized frame may actually work to his benefit. With such a short-lever swing, he can get the barrel onto the ball much faster than the average hitter, a critical advantage when milliseconds are at a premium. “He’s not real tall, so his arms are a little shorter and he’s able to get to a lot of pitches,” Astros hitting coach Dave Hudgens said. “It’s not a disadvantage for him.” Altuve’s bat is like his physique: short and stocky. He uses a 33-inch Victus-made bat, about an inch shorter than the typical length, with a thinner handle and thicker barrel than many other bats. Jared Smith, a Victus cofounder, said most players attempting to use such a bat would shatter it too often, because the thinner handle is more vulnerable to breaking. But Altuve’s quickness to the ball with the barrel allows him to use the added thump the thickness gives him without the downside. “He’s so short to contact,” Smith said. “If you watch where his hands start and the swing path to contact, it’s amazing.” The effect is a punchy swing that is almost as much of an outlier as the 27-year-old Altuve himself. At a time when hitters are more tolerant than ever of whiffing as they take big swings for the fences, Altuve strikes out only about 13% of the time, less often than all but a dozen players. His .346 batting average was the highest in the majors during the regular season. The combination makes him Astros star Jose Altuve is batting .433 on pitches clocked at 94 mph and above this season, including the playoffs, the highest mark among qualified hitters. kryptonite for the modern pitcher, who relies heavily on power in pursuit of strikeouts. Consider Altuve’s first at-bat of the postseason, in which Boston Red Sox ace Chris Sale needed only one more strike to strike him out. Sale challenged him with a 97-mph fastball. Altuve hit it for a home run, his first of three in that game. “He’s able to put the barrel to the ball better than anybody else I’ve ever seen,” Astros pitcher Collin McHugh said. None of this was even remotely conceivable to the scouts who first happened upon Altuve as a teenager in Venezuela. At the time, Altuve said he was 5-foot-5 and 145 pounds, 20 pounds lighter than his current listed weight. Many majorleague teams then had academies in Venezuela, which had become a significant source of talent. Only the Astros offered him a contract, and it was hardly a show of confidence. He signed in 2006 for a relatively paltry $15,000. “It was really hard to believe that a guy like that was going to make it to the big leagues,” Altuve said. Even after he signed, he said he faced skepticism within the organization because of his size. “They didn’t think I was going to make it,” he said. There may be something to the idea that the hitters best suited to counter pure strength are the ones who appear the least physically imposing. Hitters listed at 5-foot-9 or shorter are batting .280 on 94mph-plus pitches this year, 28 points higher than the rest of the league. That category of pitches represents the upper tier of velocity, with the average MLB fastball clocking in at just under 94 mph. By contrast, New York Yankees slugger Aaron Judge, a hulking figure at 6-foot-7 and Altuve’s primary competitor for the AL MVP award, hit just .259 on such pitches. Of course, a shorter path to the ball is not enough by itself. For Altuve, who went 1 for 4 in Hous- Weather Edmonton d 50s 40s Seattle Por P tl d Portland Pierre 30s Salt Lake LLaake City C City 70s Denver Los A Angeles Angel 80s San Diego Colorado C Colorad Springs p g Las Vegas V Vega 100s Santaa Fe F Ph Phoenix 90s 50s Anchorage A h g 40s 50s 20s Albany Ab h ill Memphis phi Nashville kl h City Oklahoma City Ft. Worth D ll Dallas Little L e Rockk Birmingham 80s A ti Austin Jackson Jack Mobile bil Atl t Atlanta 40s 23 t Boston 50s 70s t Houston New ew Orleans San an Antonio Orlando l d U.S. Forecasts International Hi 61 67 95 91 64 56 62 79 97 56 56 Today Lo W 51 c 55 s 67 pc 77 s 46 pc 49 c 52 pc 54 s 76 s 41 pc 37 pc Tomorrow Hi Lo W 58 49 c 72 59 s 93 67 s 90 75 pc 70 49 s 53 46 c 58 45 pc 68 48 r 96 78 s 54 46 s 53 45 s 10 31 11 12 13 28 29 47 48 19 22 25 27 32 33 35 34 36 38 37 39 40 42 43 44 45 50 46 51 Cold T-storms 52 53 Stationary Snow 57 58 59 Showers Flurries 60 61 62 City Frankfurt Geneva Havana Hong Kong Istanbul Jakarta Jerusalem Johannesburg London Madrid Manila Melbourne Mexico City Milan Moscow Mumbai Paris Rio de Janeiro Riyadh Rome San Juan Seoul Shanghai Singapore Sydney Taipei Tokyo Toronto Vancouver Warsaw Zurich Today Hi Lo W 63 50 pc 70 45 s 80 63 s 83 73 s 62 51 r 90 78 pc 76 56 s 81 59 c 65 50 c 79 49 s 87 77 pc 66 49 c 74 50 pc 70 48 s 32 28 i 95 78 s 66 50 pc 85 71 pc 95 62 s 72 48 s 89 75 pc 64 52 c 69 56 pc 89 76 t 79 63 t 77 68 pc 67 54 s 54 36 c 55 43 s 54 46 c 68 45 pc Tomorrow Hi Lo W 56 42 r 66 43 pc 84 71 pc 83 71 s 64 54 s 90 76 sh 78 57 s 81 47 pc 59 43 s 84 48 s 88 76 pc 78 59 pc 75 48 s 72 48 pc 33 27 sf 94 78 s 62 42 pc 89 75 c 94 61 s 70 53 s 87 77 sh 71 48 s 70 58 s 88 78 c 71 61 sh 78 69 c 69 58 s 56 51 c 57 42 s 53 40 sh 59 38 r 54 55 56 TURNING IN | By Heidi Moretta Across 1 Memory problem 4 Novak Djokovic’s homeland 10 Miles away 14 Co. that founded NBC 15 Does the Bing thing 16 Sail stretcher 17 Fluids drawn in an alien’s prenatal test? 19 Bean on the moon 20 Home of the Swift and Voltaire craters 21 Fremantle fellow 23 Slips of the pen? 25 Tomb raider’s worry 26 Kin of percussion caps? 30 Tussle 33 Soda jerk’s creations 34 Ring count 35 Its nuclear program is the subject of the Joint Comprehensive Plan of Action 36 Victors in the Battle of Dun Nechtain 37 Shooting match? 38 On behalf of 39 Real cross 40 Fresh 41 Accommodations for statues of the Apostles? 44 Fillers of slips 45 Browbeats 49 City between Milan and Venice 51 2013 film that won the Best Animated Feature Oscar 52 First-rate 53 Royal in a mauve sari? 57 Leaves home? 58 Vivacious quality 59 Combine 60 Cheer production 61 Dostoyevsky novel 62 Dumbstruck reaction Solve this puzzle online and discuss it at WSJ.com/Puzzles. s City Amsterdam Athens Baghdad Bangkok Beijing Berlin Brussels Buenos Aires Dubai Dublin Edinburgh 9 16 24 Rain Ice City Omaha Orlando Philadelphia Phoenix Pittsburgh Portland, Maine Portland, Ore. Sacramento St. Louis Salt Lake City San Francisco Santa Fe Seattle Sioux Falls Wash., D.C. 8 Tampa Miami Tomorrow Hi Lo W 42 29 pc 79 61 pc 65 49 s 90 64 s 67 48 s 60 40 s 68 47 s 85 50 s 49 37 pc 60 40 s 77 53 s 50 27 s 65 44 s 41 22 sn 66 50 s 30 7 21 41 Warm 70s Today Hi Lo W 63 32 pc 73 54 s 60 44 pc 93 63 s 52 35 s 62 45 r 67 48 pc 86 51 s 73 43 s 63 37 pc 83 56 s 70 33 s 61 45 pc 56 29 c 60 43 s 6 90s 100+ Jacksonville Honolulu l l s...sunny; pc... partly cloudy; c...cloudy; sh...showers; t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice Today Tomorrow City Hi Lo W Hi Lo W Anchorage 47 40 r 48 36 r Atlanta 69 50 s 74 55 s Austin 84 53 s 65 36 c Baltimore 59 37 s 65 44 s Boise 64 40 s 63 40 s Boston 61 46 sh 62 46 s Burlington 54 44 r 58 42 pc Charlotte 64 42 s 72 48 s Chicago 56 46 pc 49 38 c Cleveland 54 40 s 67 52 pc Dallas 86 52 s 60 38 pc Denver 49 20 pc 42 24 pc Detroit 54 43 s 61 41 pc Honolulu 84 69 pc 84 70 pc Houston 83 63 s 72 41 t Indianapolis 59 48 s 54 34 r Kansas City 70 35 pc 44 31 pc Las Vegas 86 61 s 83 60 s Little Rock 80 52 s 56 33 r Los Angeles 89 65 s 87 65 s Miami 78 66 s 83 74 pc Milwaukee 56 47 pc 50 38 c Minneapolis 57 35 c 39 30 sn Nashville 71 51 s 71 39 pc New Orleans 79 61 s 79 51 t New York City 60 46 pc 63 51 s Oklahoma City 78 40 s 52 31 pc 80s 5 18 60s New Yorkk e Y 4 15 26 49 70s 3 17 Augusta A t d Hartford Ch l tt Charlotte Columbia C b 2 20 g Philadelphia Ph d lph Phi hi es Moines di p li Pittsburgh Des Moines Indianapolis hington hi gton D.C. D.C DC Charleston Washington Springfield p i gfi ld 60s Topeka Top k Richmond h d Lou ill Louisville Kansas St.. Louis LLou Wichita h City l igh h 60s Raleigh Tucson T cson 80s 40s k Milwaukee Detroit t l Buffalo Cl l d Cleve Cleveland Ch g Chic Chicago 70s Albuquerque Toronto T t 1 14 30s h Omaha El P Paso 10s 20s 30s p ss./St. / Pa Mpls./St. Paul Sioux oux FFalls ll Cheyenne Ch y n Francisco San 90s 10s 60s Montreal Ottawa 40s i Boise Sacramento Reno 50s Bismarckk Billings 50s 60s 90s 0s Winnipeg ip l Helena Eugene g <0 40s 30s Calgary C l y Calgar like you’re going to come into the game and throw 91 because he hits fastballs well,” said Dodgers reliever Luis Avilan. “You go to your strength, and maybe he’s going to make a mistake.” That, however, has been a losing proposition for many pitchers, this year more than ever. Through the ALCS, Altuve was batting .400 in the playoffs with a .500 on-base percentage and five home runs. He is the engine that powers one of the best offenses ever assembled. He is also a physical rarity, which might help facilitate his greatness, might make it merely more remarkable and certainly obscures it. “Everyone always talks about his size,” McCullers said, “and that’s the first headline: ‘Jose Altuve is small and great.’ I think it should just be ‘Jose Altuve is great.’ We’re watching a Hall of Fame player in front of us, and all we talk about is how small he is.” —Ben Cohen contributed to this article. The WSJ Daily Crossword | Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. Vancouver Vancouver ton’s Game 1 loss, it is how that works in tandem with his explosiveness and hand-eye coordination. Astros pitcher Lance McCullers, who works out with Altuve in the offseason, said, “He’s extremely fit and can do things that—I’m not going to say ‘that normal-sized athletes can do,’ but that’s kind of the reality of it.” Altuve’s ability to hit the fastest pitches begs the question: Why don’t pitchers simply avoid throwing him those pitches? To some extent, they have tried in the postseason, only to watch him adapt and beat them anyway. Altuve’s home runs in the last two games of the ALCS came on a 90-mph changeup and an 86-mph slider. The Dodgers aren’t overly reliant on fastballs to begin with. They threw them less frequently than all but six other teams this year. But some pitchers still try to overpower Altuve because they want to. “If you throw 98 (mph), it’s not Down 1 Letter from the teacher 2 High points 3 Crash cause 4 Acquire eagerly before others can 5 Leaves empty 6 Flyer described by Marco Polo 7 Outkast rapper Big ___ 8 Sen. Angus King, e.g. 9 They may come with batteries 10 Djokovic’s coach 11 1992 Broadway show that won Tonys for its book and score 12 Second half of a court game 13 1950s French president Coty 18 1955 Bo Diddley song 22 Catering containers 24 Monkeys 25 Linus Pauling’s alma mater 27 Arizona license plate features 28 Flying Clouds and Royales 29 Single 30 Go through thoroughly 31 Raucous avian 32 Singular sort 36 Not live 37 Flock leader 39 Middle of the brothers Karamazov 40 Espionage objective 42 Lets fly 43 Stanwyck’s “The Strange Love of Martha Ivers” co-star 46 Levine’s predecessor at the Boston Symphony Orchestra 47 Modernize 48 Nastily disparaging 49 Brewmaster’s collection 50 Neutral color 54 Play for a chump 55 Tach fig. 56 Backing side Previous Puzzle’s Solution D A T E S A R E S T D A R C Y A M A P C O L A T A L L O R E O T A I L S P I N S A B S O R B T E L E C A S T E B O O K S A V A N N A S N I D G U H E T S E AM V I A N E R S E R C A S S O R T N E T S O O N P T E AM C L AM B A L L A E S C O F C O R I D A L I T O R M S T Y X H A S T E N E D D A N D L E A F T E R N O O N L A I R E R R S E N O S T Y R A R O Y A L S I L V A E L L E N 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. Thursday, October 26, 2017 | A15 OPINION The Republicans’ Donner Party Advice for the tender: Do not let yourself be blown over by Donald Trump’s tweets. again, and the nation’s president was counter-tweeted that Mr. Corker “couldn’t get elected dogcatcher,” an insult not only to Mr. Corker but to dogcatchers, who I’d guess are part of Mr. Trump’s base. That morning spat under his belt, Mr. Trump traveled later to Capitol Hill for lunch with Senate Republicans. Thirty minutes later, Arizona GOP Sen. Jeff Flake stood on the Senate floor and delivered his cri de coeur about not wanting to be “complicit” in a long bill of particulars having to do with the “degradation of our politics.” Welcome to the club, Mr. Flake, and further congratulations for rediscovering the wheel. It’s no news that Mr. Trump’s goal in life is to be the whip-snapping lion tamer of his own circus, that the Beltway press is happy to perform their roles, or that CNN will give Mr. Corker a perch to snarl at the man with the whip. And one more thing: Hard as it is for some to absorb, it’s no longer news that in 2016 more than 60 million Americans voluntarily voted the lion tamer into the U.S. presidency after watching him perform his act in public for more than 16 months. His opponent was Hillary Clinton, whose campaign, along with the Democratic National Committee, was revealed this week to have paid for the opposition research of Fusion GPS, which produced the salacious dossier filled with kompromat—compromising info—about Mr. Trump, such as allegedly hiring Russian hookers in Moscow to defile a bed. Somehow, the dossier leaked. No less than the revered FBI was “complicit” in this fantastic dossier gambit by continuing its own relationship with Christopher Steele, the former spy who produced the document. So who could disagree with Sen. Flake? Politics still ain’t beanbag. The press is now writing that Republicans face a “dilemma”—whether to join the Corker-Flake ring or remain “silent” in the interests of “job security.” Mitch McConnell has become Washington’s own Solo- leagues on eliminating the egregious state and local tax deduction, or that the bill will add a fourth marginal tax bracket to punish “the wealthy.” Then word leaked of a possible limit on annual 401(k) contributions, and responding to these vapors, the president tweeted “There will be NO change in your 401(k).” Those who remain confused about how Washington works in reality should pay attention to what Ways and Means Chairman Kevin Brady, the House’s tax-writing chief, did Wednesday. He said, matter-of-factly, that adjustments to the treatment of 401(k)s are still on the table. “We are continuing discussions with the president,” Mr. Brady said. Translation for sensitive political types: Do not let yourself be blown over by Mr. Trump’s tweets. Do not make a mountain out of every Trumpian tweetful. Opinions vary on whether Mr. Trump’s attacks on fellow Republicans are impolitic or unappreciated genius. It isn’t genius. Lyndon Johnson and Bill Clinton raged volcanically inside the White House at opponents while embracing the honorable gentlemen in public. They knew that subjecting a senator to public insults will produce payback later on a policy or bill the president dearly wants. Let us end on optimism, if not sweet reason. Permanently cutting the public’s taxes heals all wounds. Donald Trump and Bob Corker will discover that truth the day they make possible the president’s signature on the Tax Reform Act of 2018. Write email@example.com. ALAMY STOCK PHOTO We are in the foothills of the same tax mountains that Congress crossed on the way to tax reWONDER form in the LAND 1960s and By Daniel 1980s, and the Henninger Republicans are starting to sound like members of the Donner Party in 1846. Overwhelmed by snowstorms in the Sierra Nevadas, some in the feuding Donner Party’s wagon train ate the dead to survive. History regards them with ambivalence. As of this hour, the distinguished senator from Tennessee, Bob Corker, was last seen on television saying he would never vote for Donald Trump Pioneers in the Sierra Nevadas. mon, routinely expected to decide which half of the baby to sacrifice and which to save. On Tuesday he said: “We’re going to concentrate on what our agenda is and not any of these other distractions that you all may be interested in,” describing that as “a lot of noise.” Mr. McConnell could write a book about maintaining policy focus under political pressure. Here’s an analogy: When the Spanish explorers were hacking their way across 16th-century America, they encountered swamps, arrows, biting bugs and poisonous snakes. That’s Trump’s Washington, and those who can’t handle swamp life really should turn back and write their memoirs. Though the Trumpian gulfs may wash us down, as a poet once wrote, the rest of us unable to quit or carp have to press forward. And so it is with the real business of the moment—the tax-reform bill. The press meticulously reports instances of Republican pants-wetting as they take on the tax rewrite. Rumors abound—that the GOP has already caved to blue-state col- The Democrats’ Impeachment Mania By Karl Rove I t is easy to dismiss the impeachment efforts of Democratic Reps. Brad Sherman, Al Green and Maxine Waters as the actions of inconsequential backbenchers. Mr. Sherman argued in his July impeachment resolution that President Trump committed obstruction of justice by exercising his constitutional authority as head of the executive branch. The California lawmaker said it “seems likely that the president had something to hide” regarding Russia. Here’s an idea: How about waiting for the FBI investigation to conclude? Then there is Mr. Green, another long-serving House member without any significant accomplishments. He unveiled his competing impeachment resolution earlier this month. Among his list of Mr. Trump’s impeachable acts was disrespecting National Football League players. Overturning a national election because of crude comments about athletes who don’t stand during the anthem certainly is novel. Then there is Ms. Waters. She said last week that the New York gala she was attending was so exciting that “with this kind of inspiration, I will go and take Trump out tonight.” Few took this provocation literally, but even her defense sounded unhinged: “He creates controversy, he cannot get along with our members of Congress, and I’m going to continue my efforts to impeach him.” Apparently the standard for impeaching a president has shifted again: Now he can be removed from office for creating controversy and fighting with Congress. It might be tempting to roll your eyes at these manifestations of Trump Derangement Syndrome. But it will be harder for responsible Democrats to ignore or excuse the party’s grandstanders now It’s harder to ignore now that megadonor Tom Steyer has pledged $10 million. that hedge-fund billionaire Tom Steyer has pledged $10 million to the cause of impeaching the president. In an open letter last week, Mr. Steyer called on grassroots Democrats “to urge your federal representatives to remove him from office at once.” On Mr. Steyer’s list of impeachable offenses were Mr. Trump’s decisions to end President Obama’s Deferred Action for Childhood Arrivals program, to block Obama-era regulatory initiatives, to withdraw from the Paris climate accord and to seek ObamaCare’s repeal and replacement. By asserting a president should be removed from office over policy differences, Mr. Steyer has done more than trivialize impeachment. He helps move America closer to the tyranny Mr. Trump is accused of having brought about. Still, his pressure for Democrats to join his banana republic-style coup will hurt many of that party’s candidates in close contests, regardless of their answer. I’m reluctant to give advice to Democrats, but their growing impeachment chorus will damage their party’s standing in next year’s midterms. Many independent voters who supported Mr. Trump in 2016 have been turned off by his behavior in office but applaud his policies. Democrats who promise they would use a congressional majority to impeach the president will only repulse these independents. Democrats cheer when their national party chairman calls Mr. Trump an “existential threat” to America and history’s “most dangerous president.” Yet these overwrought comments could turn off swing voters, especially if they have Republican choices on the ballot who come across as focused on making the nation more prosperous, united and secure. The Democrats’ criminalization of policy differences and offensive speech has a companion sentiment also potentially hurtful to Democrats and America’s political culture. It’s the sense of insufferable moral superiority encouraged by President Obama, who reemerged on the political stage this week. While stumping for the Democratic gubernatorial can- didate in Virginia, Mr. Obama charged that the proposal of Republican standard-bearer Ed Gillespie to target the violent MS-13 gang was “damaging and corrosive to our democracy.” Mr. Gillespie describes this criminal syndicate as a growing public-safety threat, especially after its members committed multiple murders in Northern Virginia. In one, gang members wielding a knife and a large wooden stake killed a 15-year girl in a remote park and filmed her execution. By calling to target MS-13 and opposing sanctuary city policies supported by his Democratic opponent, Mr. Gillespie raised perfectly legitimate issues. But Mr. Obama attacked this as “cynical” and warned “our democracy is at stake” if Mr. Gillespie is elected. It is tiresome when Mr. Obama depicts those he disagrees with as not only wrong on the merits but morally irresponsible. Democrats have a tremendous challenge in reforming their party, which is at its weakest point in a century, largely thanks to Mr. Obama and Hillary Clinton. Yet many of them can’t help but obsess on impeachment and mimic Mr. Obama’s moral hectoring. Both are good ways to lose elections and stay out of power. T he U.S. Senate voted Tuesday to repeal the Consumer Financial Protection Bureau’s rule prohibiting arbitration clauses in financial contracts. The Treasury Department and the Office of the Comptroller of the Currency had both weighed in with warnings about the rule’s effects—criticisms that prompted a surprising admission from CFPB Director Richard Cordray. The Treasury projected that the rule would have generated an additional 3,000 federal class-action lawsuits over five years, costing businesses $500 million to defend plus $330 million in payments to plaintiffs’ lawyers. The CFPB had denied those costs would be passed on to consumers in higher interest rates. But the comptroller’s analysis of the CFPB’s data found an 88% chance that the total cost of credit would increase and estimated the likely increase at almost 3.5 percent- Many banks haven’t been requiring arbitration clauses. age points. “That means a consumer, living week to week, could see credit card rates jump from an average 12.5 percent to nearly 16 percent,” acting Comptroller Keith Noreika wrote in an op-ed for the Hill. Mr. Noreika urged the Senate to “vacate” the rule, as the House had already done. Here’s where things got in- teresting. In response to the comptroller’s analysis, Mr. Cordray fired off a letter to Sen. Sherrod Brown of Ohio, the Senate Banking Committee’s ranking Democrat, insisting the criticism is “mistaken and unfounded.” Perhaps inadvertently, however, Mr. Cordray let slip a broader truth—that contrary to the argument of the rule’s supporters all along, consumers are not being forced to sign contracts with mandatory arbitration clauses to access financial services. “We know,” Mr. Cordray wrote, “that roughly half of the credit card market does not have arbitration clauses in their agreements. If the OCC review were correct, it would mean that these banks are operating at a substantial competitive disadvantage.” He Shangri-La In the Woods Inside Camp David By Michael Giorgione (Little, Brown, 307 pages, $28) J udging from Rear Adm. Michael Giorgione’s new history of Camp David, it’s not hard to see why the current occupant of the White House has steered clear of the place. Mr. Giorgione, who was the 17th commanding officer of Camp David, describes the presidential retreat in rural Maryland in starkly rustic terms. As he relates in “Inside Camp David,” the 200-acre mountain escape was never meant to be luxurious. Mr. Giorgione, who served Presidents Bill Clinton and George W. Bush, points out that Camp David is a private sanctuary—not a vacation home. Every president “vacations” somewhere else. Camp David, instead, serves as perhaps the one place on earth where the commander-in-chief can pretend he’s still an ordinary person, albeit one protected by Marines, served by Navy stewards and followed around by an aide carrying the nuclear codes. The camp—officially known as Naval Support Facility Thurmont—is kept pristine by a crew of Seabee engineers and maintenance staff. As Mr. Giorgione explains, it’s home to more than 20 cabins—including Aspen, the president’s lodge—all made of roughhewn oak and painted a moss green. It also has a gym and a conference facility, as well as a health clinic, its own fire department, a mess hall and a hangar for Marine One, the presidential helicopter. It even has a chapel, which gets its own dedicated chapter in “Inside Camp David,” whose broad survey also includes Dwight Eisenhower’s three-tee golf green; the cabin where Egyptian president Anwar Sadat stayed during Jimmy Carter’s marathon 1978 Middle East peace negotiations; even the roads where Barack Obama taught Malia to drive. The camp’s modern origins date to World War II, when security needs and fuel rations necessitated a new presidential retreat close to D.C. Franklin Roosevelt settled on a mothballed Works Progress Administration site, known as Camp #3, in the Catoctin Mountains. When it became FDR’s camp—he christened it “Shangri-La,” after the promised land in James Hilton’s novel “Lost Horizon”—only the presidential cabin had indoor plumbing. The rest of the staff relied on latrines. Mr. Giorgione relates how interest has waxed and waned with each successive president. Harry Truman, a man of the open plains, hated Shangri-La—complaining of how the trees closed in around him. (He went to Key West instead.) Eisenhower first visited with the intention of closing it down, only to fall hard for the Catoctin Mountains. He renamed it after his grandson, David. When John F. Kennedy became president, he decided to keep the name, partly in gratitude for Ike’s counsel following the Bay of Pigs fiasco in 1961. It’s stuck ever since. Working at the camp, as Mr. Giorgione did, affords one an up-close look at the First Family, an intimacy in which the commanding officer can sometimes develop friendships with presidents and observe them at their most human. Occasionally there are fires to put out—real and metaphorical. Mr. Giorgione describes one wintery day when he was called to President Eisenhower had planned to close Camp David when he first visited, but he soon grew attached. He even had a golf green built. added that the CFPB had surveyed a “random sample” of 141 community banks, and found only 7% of them use arbitration agreements. To sum up, the head of the CFPB now admits that roughly half of big banks that issue credit cards, and nearly all smaller banks that provide checking accounts, do not require their customers to sign contracts with mandatory arbitration clauses. So how in the world did the CFPB ever conclude it needed to impose itself on a sound and functioning market—a market in which consumers have plenty of choices and banks that don’t require arbitration are free to advertise themselves as such? Aspen to meet with a military aide during a Clinton visit. Standing inside the main living space as the fireplace roared, the president opened a door to the patio as another visitor entered through the front, and a rush of air stoked the fire. “Time stood still,” Mr. Giorgione says, as the room filled with smoke and his eyes locked with Mr. Clinton’s. Luckily, Mr. Giorgione and his staff were able to quickly dissipate the smoke before anything caught ablaze. Still, life tends to slow down at Camp David, where the chief mode of transportation is the golf cart—the presidential cart, of course, being Golf Cart One. As Mr. Giorgione explains, the banality of daily life often surprises those who work there. “Marines walk the patrol in February at two a.m. and it’s freezing cold, shockingly quiet, and very lonely,” he writes. “The crew replants flowers because the deer got into them. After a while, a natural frustration sets in.” Yet it has also served as a venue for a number of pivotal moments in American history. It’s where FDR and Winston Churchill plotted D-Day and where the younger Bush convened his war council the weekend after September 11 to chart a path forward after the terror attacks. While the White House and even Air Force One have spawned multiple books, Camp David—isolated and private— has drawn only scant historical attention in recent years, including a slim 1995 volume by reporter W. Dale Nelson, with a foreword by the camp’s namesake, David Eisenhower. Yet even as other recent books—like Kate Andersen Brower’s rollicking romp through the private quarters of the White House “The Residence”—have exposed the dirty laundry of First Families past, the secrets in Mr. Giorgione’s book are of the decidedly PG variety, as when Russian president Vladimir Putin forgot to bring his slippers to a 2003 visit with Mr. Bush, and one of the crew was dispatched to Wal-Mart to purchase a new pair. Instead of a tell-all, “Inside Camp David” is a biography written by a protective family member. Mr. Giorgione carefully avoids giving away security or operational details. He never mentions the underground bomb shelter, for example—not even to chuckle over the controversy of when Richard Nixon decreed that a swimming pool was to be built right atop the emergency site. In that way, the book seems just the presidential memoir America needs right now. As Mr. Giorgione says, “One of the great gifts of Camp David is the complete absence of politics.” At a time of great teeth-gnashing and division, he makes it possible to read a 70-year history of American presidents without once considering their political foibles. Yet in the end, Mr. Giorgione’s examination of the “spirit” of Camp David leaves the reader a bit frustrated. The book makes clear that, to outsiders, there’s a certain almost unknowable quality to the place. Even when the retreat is laid bare by one who has worked there, Camp David still remains private and intimate, with its secrets held close. Mr. McKinney is director of communications for the American Tort Reform Association. Mr. Graff is the author, most recently, of “Raven Rock: The Story of the U.S. Government’s Secret Plan to Save Itself— While the Rest of Us Die.” Mr. Rove helped organize the political-action committee American Crossroads and is the author of “The Triumph of William McKinley” (Simon & Schuster, 2015). Richard Cordray’s Surprising Admission By Darren McKinney BOOKSHELF | By Garrett M. Graff For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. A16 | Thursday, October 26, 2017 OPINION I REVIEW & OUTLOOK LETTERS TO THE EDITOR Democrats, Russians and the FBI Immigrants and Cornell’s Black Student Union t turns out that Russia has sown distrust and according to media reports it debated payin the U.S. political system—aided and ing Mr. Steele to continue his work in the runup abetted by the Democratic Party, and per- to the election. This occurred while former FBI haps the FBI. This is an aboutDirector James Comey was Did the bureau use face from the dominant media ramping up his probe into narrative of the last year, and supposed ties between the disinformation to it requires a full investigation. Trump campaign and RusThe Washington Post re- trigger its Trump probe? sians. vealed Tuesday that the HilTwo pertinent questions: lary Clinton campaign and Did the dossier trigger the FBI Democratic National Committee jointly paid probe of the Trump campaign, and did Mr. for that infamous “dossier” full of Russian dis- Comey or his agents use it as evidence to seek information against Donald Trump. They fil- wiretapping approval from the Foreign Intellitered the payments through a U.S. law firm gence Surveillance Court of Trump campaign (Perkins Coie), which hired the opposition-re- aides? search hit men at Fusion GPS. Fusion in turn Congressional investigators need to focus on tapped a former British spook, Christopher the FBI’s role, and House Speaker Paul Ryan Steele, to compile the allegations, which are was correct Wednesday to insist that the bubased largely on anonymous, Kremlin-con- reau comply with Congress’s document denected sources. mands “immediately.” Mr. Sessions has recused Strip out the middlemen, and it appears that himself from the Justice Department’s Russia Democrats paid for Russians to compile wild al- probe, but he and Deputy AG Rod Rosenstein legations about a U.S. presidential candidate. can still insist on transparency. Mr. Ryan should Did someone say “collusion”? also reinstall Intelligence Chair Devin Nunes as This news is all the more explosive because lead on the Russia investigation, since it apthe DNC and Clinton campaign hid their role, pears the Democratic accusations against him even amid the media furor after BuzzFeed pub- were aimed in part at throwing him off the Fulished the Steele dossier in January. Reporters sion trail. are now saying that Clinton campaign officials All of this also raises questions about Special lied to them about their role in the dossier. Cur- Counsel Robert Mueller’s investigation. The Furent DNC Chair Tom Perez and former Chair sion news means the FBI’s role in Russia’s elecDebbie Wasserman-Schultz deny knowing tion interference must now be investigated— about the dossier arrangement, but someone even as the FBI and Justice insist that Mr. must have known. Mueller’s probe prevents them from cooperatPerhaps this explains why Congressional ing with Congressional investigators. Democrats have been keen to protect Fusion Mr. Mueller is a former FBI director, and for from answering dossier questions—disrupting years he worked closely with Mr. Comey. It is hearings, protesting subpoenas and deriding no slur against Mr. Mueller’s integrity to say Republican investigators. Two of Fusion’s co- that he lacks the critical distance to conduct a founders invoked their Fifth Amendment rights credible probe of the bureau he ran for a dozen last week rather than answer House Intelli- years. He could best serve the country by regence Committee questions, and Fusion filed signing to prevent further political turmoil over a federal lawsuit on Friday to block committee that conflict of interest. subpoenas of its bank records. The American public deserves a full accountThe more troubling question is whether the ing of the scope and nature of Russian meddling FBI played a role, even if inadvertently, in as- in American democracy, and that means followsisting a Russian disinformation campaign. We ing the trail of the Steele dossier as much as it know the agency possessed the dossier in 2016, does the meetings of Trump campaign officials. A McConnell 1, Cordray 0 mid Republican disagreements over health and tax reform, 50 GOP Senators united Tuesday to overturn the Consumer Financial Protection Bureau’s arbitration rule. This is a victory for the economy and Mitch McConnell’s leadership. CFPB director Richard Cordray gambled that Republicans were too timid and divided to rescind his expansive rule that banned arbitration agreements with class-action waivers in financial service contracts. The rule would have set off a trial-lawyer race to the courthouse. A Treasury report Monday detailed how the rule violated Congress’s directive to the CFPB in Dodd-Frank to examine whether limiting or banning arbitration would protect consumers and benefit society. Mr. Cordray’s rule did neither. According to the CFPB’s own data, more than $330 million in wealth would have been transferred from businesses to trial lawyers. Businesses would have paid some $2.2 billion more on attorney fees and settlements. Most consumers would have been worse off T since arbitration provides an expeditious and inexpensive way to resolve disputes. The CFPB’s own study found that consumers on average received $32 from class-action payouts versus $5,389 from arbitration awards. The Comptroller of the Currency said the rule would have increased the cost of credit. Vice President Mike Pence cast the 51st vote for the Congressional Review Act resolution since Louisiana Senator John Kennedy and South Carolina’s Lindsey Graham sided with the tort bar. Mr. McConnell deserves credit for preventing other defections after Elizabeth Warren portrayed the resolution that passed the House in July as “a giant wet kiss to Wall Street.” Democrats like Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) ought to be held to account in next year’s midterms for supporting trial lawyers over consumers. Mr. Cordray has been mulling a bid for Ohio Governor, and the rebuke won’t be a winning platform. Maybe he should step down before he gets handed more defeats by Congress or the courts. Jeff Flake’s Public Service here is a familiar Washington irony in Trump’s unpresidential behavior. the praise that the press corps and Making a virtue of necessity is not uncomDemocrats are heaping on Jeff Flake for mon in politics, and it is easier to “not be comhis speech Tuesday announcplicit” when you aren’t runThe Arizona Senator ing that he won’t seek re-elecning for re-election. But Mr. tion to the Senate in 2018. The Flake is right that far too gives the GOP a same crowd criticized Mr. much of Mr. Trump’s rhetoric chance to save his seat. is crude, undignified and paFlake as a heartless libertarian until he opposed Donald tently false. Trump. But no matter, the AriAs we’ve pointed out many zonan has still done his party and maybe his times, the impulsive narcissism of Mr. Trump’s cause a public service. mean tweets aren’t bursts of PR genius. They The first service is making it possible for Re- are by and large politically destructive acts that publicans to retain the Arizona Senate seat. Mr. hurt his ability to persuade and accomplish his Flake struggled to win election in 2012 and he’s policy goals. Voters are already showing politinever built a strong state profile. His approval cal combat fatigue, as his 40% approval rating rating is so low that national Republicans feared suggests. he was unlikely to win a primary, much less hold The more important part of Mr. Flake’s the seat against a Democrat. Republicans believe speech was his description of the GOP’s divide they can hold the seat for the party but not for over ideas: “It is clear at this moment that a trahim, so he is taking one for the team. ditional conservative who believes in limited Mr. Flake’s departure means that other Re- government and free markets, who is devoted publicans have room to jump in against Kelli to free trade, and who is pro-immigration, has Ward, the Steve Bannon acolyte who lost to a narrower and narrower path to nomination John McCain in 2016. Ms. Ward, an osteopathic in the Republican Party—the party that for so physician, is famous for calling a public hearing long has defined itself by belief in those things.” to address constituent concerns that the The GOP, he added, has “given up on those core plumes behind jets are an attempt to poison the principles in favor of the more viscerally satispublic. Her first reaction to news about Mr. Mc- fying anger and resentment.” Cain’s cancer diagnosis was that he probably In this Mr. Flake is too pessimistic, but he is wasn’t long for the Senate. She is an odds-on identifying the battle lines in the GOP. The Banloser if she wins the GOP nomination. non wing wants to redefine the party around But Mr. Flake is mainly getting huzzahs be- hostility to immigration and trade, but its main cause in announcing his departure he de- animating principle is anger against whoever nounced Donald Trump. “Reckless, outrageous, happens to be in power. This isn’t a principle and undignified behavior has become excused that can govern even if it manages to win a few and countenanced as ‘telling it like it is,’ when elections. it is actually just reckless, outrageous, and unThe Bannon wing is also a long way from takdignified,” Mr. Flake thundered. ing over the GOP, and the next test will the 2018 “And when such behavior emanates from the midterms. Mr. Bannon has called for a “season top of our government, it is something else: It of war” against all GOP Senate incumbents is dangerous to a democracy. Such behavior other than Ted Cruz, and the best response for does not project strength—because our Republicans who want to hold Congress and adstrength comes from our values. It instead vance a free-market agenda is to win that seaprojects a corruption of the spirit, and weak- son. This will require candidates who can stitch ness.” He added that “I will not be complicit,” together the GOP’s populist and traditional though he is hardly the first to note Mr. wings—and then win in November. Regarding Naomi Schaefer Riley’s “Cornell’s Black Student Disunion” (oped, Oct. 19): I grew up in the Congo and have numerous friends in the U.S. from the Congo and other African countries who are here for an education or a better life. Every one of them is grateful for the opportunity to secure an excellent education. The U.S. offers the opportunity to pursue their dreams and a chance to raise their families in peace. Most come here from different cultures with minimal money and limited English language skills. Interestingly, I’ve never heard one complain about discrimination, obstacles or being a victim. Rather, they are grateful. Juxtapose this with Cornell’s Black Students United (BSU) whose members feel they should be treated better than every other color or race if they have ancestors who’ve been here for more than two generations. The counterintuitive posturing of American blacks denying other blacks from Africa or the Caribbean is appalling. First-generation African or Caribbean students have more obstacles to overcome to get into any university, much less a prestigious one like Cornell. Furthermore, the liberal American blacks who worship at the altar of “diversity” and “victimhood” should welcome real Africans or Caribbeans versus seeking preferences for those American blacks who truly have the superior advantage of having grown up in the U.S. If my Congolese friends are grateful for their opportunities here and have more challenges to overcome, why should American blacks get special treatment? Call this action what it is: racism. And it’s being pushed and protected under the guise of alleged victimization and preferential treatment at the expense of others of all colors and walks of life. So I challenge the BSU folks to start focusing on the concept of succeeding in life instead of always dwelling on the idea that the system is rigged against them. JEFF EALES Mission Viejo, Calif. Actually, Cornell’s Black Students United’s demands on behalf of affirmative-action admissions for American blacks, ahead of “black” and many other recent immigrants, is neither “radical” nor off-base. Desegregation of America’s public and private colleges and universities and affirmative action in admissions were established in an era of remedying the long-term exclusion of native-born black Ameri- cans and of societal-based discrimination which disadvantaged, marginalized and ghettoized generations of black and brown American citizens who were kept out of mainstream opportunities. It only made sense in the 1960s and ’70s, especially in the aftermath of urban rioting, for affirmativeaction programs that recruited and specially admitted the progeny of the former and direct victims of race prejudice, discrimination and Americangrown slavery. Recent immigrants do not share that heritage of exclusion or of overt domestic racial discrimination. Why should they be counted and placed ahead of American blacks and Hispanics for coveted seats in some of the nation’s best and elite colleges on the basis of their immigration status or because they share the skin color of the very Americans whose parents, grandparents and relatives were purposefully and pervasively placed behind the eight ball of American segregation for decades? Recent immigrants of whatever hue do not merit, much less warrant, access to our colleges and universities through affirmativeaction programs. MICHAEL MEYERS President New York Civil Rights Coalition New York Universities have been categorizing Africans, African-Americans and Caribbean blacks in the same group to inflate diversity statistics. Cornell’s BSU objected because this accounting fiction understated the number of African-Americans and was therefore deemed discriminatory. In 2004, the ever-quotable Henry Louis Gates Jr. estimated that two-thirds of Harvard University students classified as blacks were of West Indian and African descent or biracial rather than AfricanAmerican, i.e., “in which all four grandparents were born in America, descendants of slaves.” Universities, to exaggerate their African-American student population, include those who self-identify as blacks. Importantly, African-Americans like to include as many classifications of blacks and other nonwhite students to increase political leverage for additional funds and demands. Nevertheless, as seen in Cornell’s BSU attempt to limit non-African-American blacks, the BSU blundered into the reality of their putative special status. GENE DATTEL Lakeville, Conn. Chinese Steel Overcapacity: A World Problem John Ferriola is largely correct in his analysis of China’s prolific use of state subsidies to distort global steel trade, but not in his proposed remedy (“China: A Company Disguised as a Country,” Letters, Oct. 17). Rather than impose new trade restrictions under a seldom-used, Cold War-era law, an action that will certainly result in damaging retaliation by our trading partners, the better course is to heed the counsel of Harvard’s Graham Allison, who noted in “Behold the New Emperor of China” (op-ed, Oct. 17) that China’s influence on the world stage surged as America has retreated. There is no better way for America to constructively meet China’s steel challenge, and at the same time re- Imagine if the Founding Fathers Had Twitter Tweets When another of President Trump’s tweets led the morning’s news, it caused me to wonder what it would have been like if our Founding Fathers had Twitter? Reading Alan Taylor’s Oct. 21 review of Gordon S. Wood’s book “Friends Divided,” my imagination was fueled. “Jefferson sought to ingratiate, Adams to provoke,” Mr. Taylor writes. Twitter would have been the perfect means for each of them. “Adams warned them [Americans] to beware of their passions, greed and conceit. Jefferson told them what they longed to hear.” Twitter would have been exploding, especially later when Adams “seethed in retirement.” Perhaps Twitter would have accelerated their reconciliation. And wouldn’t Benjamin Franklin have been an avid and interesting tweeter? Just wondering. ROSS FELTZ Meadville, Pa. claim its international economic leadership, than by organizing and advancing a robust, sustained, multilateral effort under the Global Forum on Excess Steel Capacity, an entity the U.S. helped create, to achieve a workable, long-term solution to the steel overcapacity problem. There is no better time to start than now. RICHARD CHRISS President The American Institute for International Steel Alexandria, Va. It Would Make Sense to Add RINs to Exported Ethanol Regarding your editorial “Trump Caves on Ethanol” (Oct. 23): One of President Trump’s key policy objectives is to promote American “energy dominance.” But the EPA’s pronouncement that the current biofuels “point of obligation” won’t be changed runs counter to this goal. Last year the U.S. exported more than one billion gallons of ethanol, while imports declined. The proposal to attach renewable identification numbers (RINs) to exports would have been a boon to farmers and ethanol refiners while also providing more liquidity to the RINs market. What’s more, it would have extended our energy dominance into the growing global market for renewable fuels. BERNARD L. WEINSTEIN, PH.D. Southern Methodist University Dallas Pepper ... And Salt THE WALL STREET JOURNAL CORRECTION The 2017 NBA Finals drew 79 million unique viewers in the U.S. and 286 million world-wide. This was misstated in the Oct. 23 opinion article “The High-Tech Playing Field.” Letters intended for publication should be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, or emailed to firstname.lastname@example.org. Please include your city and state. All letters are subject to editing, and unpublished letters can be neither acknowledged nor returned. “So if you’ve all signed and turned in your waivers—let’s ride!” 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. Thursday, October 26, 2017 | A17 OPINION By Rupert Darwall A majority of scientists might say a scientific theory is true, but that doesn’t mean the consensus is reliable. The science underpinning environmental claims can be fundamentally wrong—as it was in one of the biggest environmental scares in recent decades. The parallels between the two environmental frenzies are many, but the stakes are much higher now. The acid-rain alarm of the 1970s and ’80s was a dry run for the current panic about climate change. Both began in Sweden as part of a war on coal meant to bolster support for nuclear power. In 1971 meteorologist Bert Bolin wrote the Swedish government’s report on acid rain to the United Nations. Seventeen years later he became the first chairman of the Intergovernmental Panel on Climate Change. There are many parallels between acid rain and global warming. Each phenomenon produced a U.N. convention—the 1979 Geneva Convention on Long-Range Transboundary Air Pollution in the case of acid rain, and the 1988 Framework Convention on Climate Change. And each convention led to a new protocol—the 1985 Helsinki Protocol and the 1997 Kyoto Protocol. Public alarm surrounding acid rain was far more intense, especially in Germany, where popular reaction to media stories about acid rain reached a pitch of hysteria not yet seen with global warming. A 1981 Der Speigel cover story featured an image of smokestacks looming over a copse of trees with the title “The Forest Is Dying.” The most striking parallels are the role of scientific consensus in underpinning environmental alarm and the way science is used to justify cuts in emissions. The emission of sulfur dioxide into the atmosphere “has proved to be a major environmental problem,” Bolin wrote in his 1971 report. National scientific academies across North America and Europe were in complete agreement. “We have a much more complete knowledge of the causes and STEPHEN ST. JOHN/GETTY IMAGES/NATIONAL GEOGRAPHIC RF Climate Alarmists Use the Acid-Rain Playbook Signs in front of the U.S. Capitol on Earth Day 2000. consequences of acid deposition than we have for other pollutants,” a report by the National Academy of Sciences’ National Research Council said in 1981. According to the NRC, the circumstantial evidence was “overwhelming.” Many thousands of lakes had been affected, rivers were losing salmon, fisheries in the Adirondacks were in a bad way, red spruce were dying, and pro- The Case for Keeping Janet Yellen By Alan S. Blinder P resident Trump will soon make a nomination that is hugely consequential, to him and to literally every American: his choice for the next chair of the Federal Reserve Board. Of the issues relevant to the decision, one stands out: Who is likeliest to continue our economy’s remarkable streak of growth and job creation even as the Fed “normalizes” its monetary policy? If he or she succeeds, the good times will continue to roll. If not, we could all be in trouble. The Fed can’t fix every economic ailment. But macroeconomically, the U.S. is terrific right now. Let’s hope it’s “she.” The term of the incumbent Federal Reserve chair, Janet Yellen, ends in February. The three main alternatives in President Trump’s mind appear to be, in alphabetical order, Jerome “Jay” Powell, a current Fed governor; John Taylor, a monetary economist from Stanford; and Kevin Warsh, a former Fed governor. I am privileged to count all four candidates among my friends. They are all serious, knowledgeable people who understand the Fed and have the nation’s best interest at heart. Two of them, Ms. Yellen and Mr. Taylor, are distinguished economists—highly germane to the Fed’s current challenge. Two of them, Mr. Taylor and Mr. Warsh, have been praised by this newspaper. But Janet Yellen stands head and shoulders above the rest, because she is least likely to err either by hitting the monetary brakes prematurely or by staying on the brakes too long. Either mistake could end the economic winning streak. Ms. Yellen’s extensive experience on the Federal Open Market Committee began when I was the Fed’s vice chairman in 1994 and she joined the board as a governor. The two of us became the house “doves” on a fairly hawkish committee dominated by Alan Greenspan. We weren’t doves because we wanted higher inflation—we didn’t. We wanted continued growth, more job creation and lower unemployment. It worked well then, though most of the credit goes to Mr. Greenspan, not us. A similarly dovish strategy is working again today, with Janet Yellen at the helm. Ms. Yellen returned to the Fed in 2004 as president of the Federal Reserve Bank of San Francisco, where she served with distinction for about six years. In that position, she not only displayed an abundance of good judgment but sounded early warnings (alas, not heeded) about the shenanigans that eventually led to the financial crisis. One of her main concerns was that a financial ruction could impede, if not destroy, growth. In December 2010, Ms. Yellen moved back to Washington as vice chair of the Fed Board of Governors. By then the Great Recession was over, but the economy was still in the doldrums. Chairman Ben Bernanke, shoulder to the wheel, was trying to boost growth, and Ms. Yellen instantly became a key ally. The name of the game then was the same as now: preventing the Federal Open Market Committee from turning hawkish prematurely. One of the board’s most prominent hawks at the time was Mr. Warsh. He had earned well-deserved kudos for helping Mr. Bernanke through the acute stage of the crisis. But by 2009—yes, 2009!—he was already worrying that the Fed’s extraordinary monetary policies would lead to high inflation. When Mr. Warsh left the Fed in 2011, CNBC’s Larry Kudlow lamented the loss of “hard-money hawks.” Meanwhile, Mr. Taylor was perhaps the leading academic critic of virtually everything the Bernanke Fed did to spur growth. Like Mr. Warsh, he feared the Fed was sowing the seeds of future inflation. He also objected to central-bank purchases of mortgage-backed securities as interfering with the market’s allocation of credit. No one knows what would have happened if the Fed had followed the hawkish policies recommended by Messrs. Taylor and Warsh, but it wouldn’t have been good. Fortunately, the Bernanke-Yellen philosophy prevailed and was phenomenally successful. The economy flourished, the unemployment rate has been 5% or lower for two years, and inflation has remained low. That particular hawk-dove debate reflected honest differences of opinion. But Ms. Yellen was right, and Messrs. Taylor and Warsh were wrong. By the time Janet Yellen became chair in February 2014, the central bank’s main job was extricating itself from the hyper-expansionary policies left over from the Great Recession. Monetary policy had to get back to normal. But how? Very gradually, because if the Fed switches from the accelerator to the brake too abruptly, it can damage growth. Ms. Yellen was the perfect person for the job, which she has managed superbly so far, despite continued hawkish objections. But the job isn’t over. The Fed cannot fix every economic ailment. But macroeconomically, things are pretty terrific right PUBLISHED SINCE 1889 BY DOW JONES & COMPANY Rupert Murdoch Executive Chairman, News Corp Robert Thomson Chief Executive Officer, News Corp Gerard Baker Editor in Chief William Lewis Chief Executive Officer and Publisher Matthew J. Murray Deputy Editor in Chief DEPUTY MANAGING EDITORS: Michael W. Miller, Senior Deputy; Thorold Barker, Europe; Paul Beckett, Washington; Andrew Dowell, Asia; Christine Glancey, Operations; Jennifer J. Hicks, Digital; Neal Lipschutz, Standards; Alex Martin, News; Shazna Nessa, Visuals; Ann Podd, Initiatives; Matthew Rose, Enterprise; Stephen Wisnefski, Professional News Paul A. Gigot, Editor of the Editorial Page; Daniel Henninger, Deputy Editor, Editorial Page WALL STREET JOURNAL MANAGEMENT: Suzi Watford, Marketing and Circulation; Joseph B. Vincent, Operations; Larry L. Hoffman, Production EDITORIAL AND CORPORATE HEADQUARTERS: 1211 Avenue of the Americas, New York, N.Y., 10036 Telephone 1-800-DOWJONES DOW JONES MANAGEMENT: Mark Musgrave, Chief People Officer; Edward Roussel, Innovation & Communications; Anna Sedgley, Chief Operating Officer & CFO; Katie Vanneck-Smith, President OPERATING EXECUTIVES: Ramin Beheshti, Product & Technology; Jason P. Conti, General Counsel; Frank Filippo, Print Products & Services; Steve Grycuk, Customer Service; Kristin Heitmann, Transformation; Nancy McNeill, Advertising & Corporate Sales; Jonathan Wright, International DJ Media Group: Almar Latour, Publisher; Kenneth Breen, Commercial Professional Information Business: Christopher Lloyd, Head; Ingrid Verschuren, Deputy Head now. Both unemployment and inflation are extremely low, the Dow broke through 23000 without blinking, and the expansion is in its 100th month. According to the National Bureau of Economic Research, only two expansions in U.S. history lasted longer. The fabled Kennedy-Johnson boom of the 1960s ran 106 months— a mark we seem likely to break. The amazing Clinton boom of the 1990s lasted 120 months. But even that historic record is within reach if we can keep things going past June 2019. If that happens, history will record the Obama-Trump boom as the longest ever. The person bestequipped to make that happen is Janet Yellen. Mr. Blinder is a professor of economics and public affairs at Princeton University and a visiting fellow at the Brookings Institution. He was formerly vice chairman of the Federal Reserve. duction from Canadian sugar maple trees had been affected. Acid rain was a scientific slam dunk. Politicians duly parroted what the scientists told them. “Acid rain has caused serious environmental damage in many parts of the world,” President Jimmy Carter wrote in his 1979 environmental message to Congress. He signed an agreement with Canada to establish five acid-rain working groups, and Congress set up a 10-year National Acid Precipitation Assessment Program, which went by the catchy acronym Napap. To Canadian anger, President Ronald Reagan was more skeptical than his predecessor. The head of Canada’s Federal Assessment and Review Office accused Mr. Reagan of “blatant efforts to manipulate” the science being done by the working groups. A formal note of protest from Ottawa pointed to the more than 3,000 scientific studies on acid rain yielding “sufficient scientific evidence” for policies to cut emissions. Vice President George Bush promised Canada that if elected president, he would act on the problem. But as acid-rain cap-and-trade legislation was making its way through Congress, the Environmental Protection Agency encountered a major problem. Napap’s draft report concluded that the science was wrong. Yes, power-station emissions make rain more acidic—rain is naturally acidic, and more so during thunderstorms— but changes to ecosystems, the report said, were mainly caused by changes in land use. The felling of trees and the burning of stumps in the Adirondacks had reduced the acidity of the forest floor. After conservationists put a stop to it, the soil gradually returned to its previous acidity. Rather than admit it had the science wrong, the EPA set about suppressing the inconvenient findings. The Napap report was delayed until after key provisions of cap-and-trade legislation had been agreed to in Congress. As outlined in a 1992 article in Reason, the EPA then waged a dirtytricks campaign to discredit Edward C. Krug, a soil expert and the leading dissident Napap scientist. It assembled a group of compliant scientists to conduct a sham peer review and conclude that Mr. Krug was a bad scientist. The episode ended with an assistant administrator of the EPA, William Rosenberg, apologizing to Mr. Krug to avoid a threatened libel action. To this day, the zombie science of acid rain lives on at the EPA’s website, which falsely states that acidification of soil, streams and lakes is caused by emissions from power stations. The EPA reckons the annual cost of antiacid-rain measures in the U.S. will reach $65 billion in 2020, but it no longer claims that the money will prevent ecosystem damage. Now it just claims to be improving public health. In its approach to the science of global warming, the EPA under current Administrator Scott Pruitt couldn't offer a greater contrast with the acid-rain coverup perpetrated by the EPA during the late ’80s and early ’90s. Instead of attacking dissident scientists, Mr. Pruitt’s proposal to hold red-team/blue-team appraisals would put dissenters on the same footing as consensus-supporting scientists. This will enable proper debate between both camps to reveal the strengths and weaknesses of the scientific consensus on global warming. Open debate is as crucial to science as it is to democracy. Capping sulfurdioxide emissions is an economic pinprick compared with the multitrilliondollar cost of cutting emissions of carbon dioxide. If people’s way of life is to be forcibly changed in an expensive attempt to decarbonize society, at the very least it should be done with their informed consent. Mr. Darwall is author of “Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex” (Encounter, 2017). 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 A18 | Thursday, October 26, 2017 THE WALL STREET JOURNAL. WORLD NEWS WORLD WATCH South Sudan Peril Puts U.S. in Bind Haley arrives to assess support as food crisis, civil war threaten to destabilize region NAIROBI, Kenya—When U.S. Ambassador to the United Nations Nikki Haley arrived in South Sudan on Wednesday to assess how U.S. aid is being spent, she walked into a humanitarian disaster that threatens U.S. security interests. Nearly a third of South Sudan’s population of 12 million has been displaced in the six years since U.S. policy makers, Washington think tanks and Hollywood stars like George Clooney fostered its creation. Now, this nascent nation is collapsing in real time, spawning a crisis that has drawn comparisons to the 1994 Rwanda genocide. The White House has signaled it could scale back its hefty annual financial assistance to increase pressure on President Salva Kiir’s government. The U.S. has spent some $10 billion to support South Sudan since independence and pays more than a quarter of all international aid to the country each year. “We are disappointed by what we are seeing,” Ms. Haley told local radio on Wednesday. “This is not what we thought we were investing in. What we thought we were investing in is a free and fair society where people could be safe, and South Sudan is the opposite of that.” Ms. Haley’s harsh words for South Sudan’s government came as she stressed the U.S. predicament: Withdrawing aid would most likely aggravate the humanitarian disaster. “We are not going to give up on the South Sudanese people,” she said on Wednesday. “We are here to fight for them, we are here to help, to do whatever we have to to make peace and security become a permanent part of ALBERT GONZALEZ FARRAN/AGENCE FRANCE-PRESSE/GETTY IMAGES BY MATINA STEVIS-GRIDNEFF Congressional Vote Spares Temer a Trial Lawmakers voted against putting President Michel Temer on trial on corruption charges, keeping him at the helm even as the chances of approving some of his promised economic reforms dwindle ahead of next year’s presidential election. Mr. Temer faced removal from office if the vote went against him. Mr. Temer needed 172 votes, including abstentions and absentees, in the 513-seat Chamber of Deputies to avoid trial in Brazil’s supreme court—a count he achieved even as voting continued on Wednesday. —Paulo Trevisani and Jeffrey T. Lewis BRAZIL Central Bank Cuts Main Interest Rate Emergency The central bank cut its benchmark interest rate to near its lowest level ever to boost a feeble economy that has begun to recover despite political paralysis in Latin America’s largest nation. The bank trimmed its Selic rate to 7.5% from 8.25%. A rapid slowdown in price increases has allowed the bank to cut the Selic from 14.25% over the past year. Annual inflation was 2.5% in September, well below the bank’s target of 4.5%. —Paulo Trevisani and Jeffrey T. Lewis SUDAN UNITED KINGDOM Nikki Haley spoke with a U.N. official in Juba on Wednesday, when the U.S. envoy said the South Sudanese people wouldn’t be abandoned. South Sudan.” Ms. Haley was caught up in a small manifestation of the country’s massive problems on Wednesday, when she had to be evacuated from a U.N. camp for displaced people she was visiting in Juba after a demonstration against Mr. Kiir became volatile, the Associated Press reported. The rhetoric by Ms. Haley marks a contrast with the situation in July 2011, when a U.S.-backed independence referendum promised peace and a new state after decades of civil war with Sudan’s Khartoum government. Recent years have seen the revival of civil war, sparking a famine that put 100,000 on the verge of dying of starvation. Echoing Ms. Haley, diplomats and experts have blamed the country’s leaders for the unfolding crisis. At independence, Mr. Kiir and Riek Machar, of the dominant Dinka and smaller Nuer BRAZIL tribe respectively, shared power, as president and vice president. The deal fell apart, and by 2013 the country collapsed into conflict. Mr. Machar took to the bush and became a rebel leader. A U.S.-backed power-sharing agreement between the two men, intended to ease tribal tensions through shared state institutions after a three-year civil war, took effect in April 2016, and Mr. Machar rejoined the government. The accord collapsed after three months. Ethnic cleansing, for which government troops are mostly blamed, has become so widespread that the U.N. has warned the country could soon descend into genocide. “The scope and expansion of the conflict has never been worse,” said Adama Dieng, the U.N. secretary-general’s special adviser for the prevention of genocide. “The country is fragmenting everywhere and its social fabric is disintegrating.” Hungry for Peace Severe food shortages, mostly caused by continued ﬁghting, are devastating half of South Sudan. Food security phase classiﬁcation June-July 2017 projection Stressed Crisis Growth Sped Up In Third Quarter ETHIOPIA SOUTH SUDAN CENTRAL AFRICAN REPUBLIC 100 miles 100 km D E M O C R AT I C REPUBLIC OF CONGO Source: World Food Program K E N YA UGANDA THE WALL STREET JOURNAL. The economy accelerated in the third quarter, according to a preliminary estimate Wednesday, strengthening expectations that the Bank of England may raise interest rates as soon as next month. The Office for National Statistics said U.K. gross domestic product expanded 0.4% in the third quarter compared with the previous three months, an annualized rate of 1.6%. —Jason Douglas and Wiktor Szary WHAT DO PEOPLE really INVEST IN? Hint: It’s not actually stocks or bonds. What people really invest in is what they hope to get out of life. To help them get there, you can’t just approach investing from one point of view. We prefer to cross-pollinate and aggregate many points of view, to form our best point of view. So our clients might just get what they want out of life. Or they could get even more. invesco.com/MoreOutOfLife NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE Invesco Distributors, Inc. 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: NINTENDO TO OFFER ‘ANIMAL CROSSING’ FOR PHONES B4 BUSINESS & FINANCE © 2017 Dow Jones & Company. All Rights Reserved. S&P 2557.15 g 0.47% S&P FIN g 0.49% * * * ** S&P IT g 0.34% Thursday, October 26, 2017 | B1 THE WALL STREET JOURNAL. DJ TRANS g 1.62% WSJ $ IDX g 0.18% LIBOR 3M 1.374 NIKKEI (Midday) 21742.98 À 0.16% See more at WSJMarkets.com Texas Power Producers Push Merger Talks BY DANA MATTIOLI $10 billion. Vistra had a market value of $8.4 billion. Dynegy shares surged 17% to close at $10.78 on Wednesday after The Wall Street Journal reported on the advanced talks, while Vistra jumped 3.8% to $20.32 The Journal reported in May that Vistra had made a takeover approach to Dynegy and the power companies were in preliminary talks. Dynegy is a wholesale power producer with 50 plants in 12 states around the country, producing enough energy for some 25 million homes. Customers include utilities and municipalities. The Houston-based com- Vistra Energy Corp. and Dynegy Inc., two big independent power producers, are in advanced talks to combine. The Texas power companies, which have been in onand-off talks since at least the spring, could announce a deal as soon as next week, people familiar with the matter said. As usual, such talks could fall apart before a deal is reached. Dynegy’s market value was $1.2 billion at the start of trading Wednesday. But including debt, the companies combined are worth more than $20 billion as both have enterprise values exceeding flirtation with Enron Corp. on the eve of the energy trader’s bankruptcy and its own subsequent chapter 11 case. Vistra also has a notable past. Investors including private-equity firms KKR & Co. and TPG bought a predecessor, TXU Corp., for $32 billion at the height of the leveragedbuyout boom that preceded the financial crisis. The deal was the largest LBO in history and a hallmark of buyout firms’ big-ticket purchases in those years. TXU filed for chapter 11 protection in 2014 with $42 billion in debt after a decline in power prices upended its business. The operations that pany also has a retail business that provides electricity to about 963,000 residential customers in Illinois, Ohio and Pennsylvania, according to its annual report. Dallas-based Vistra operates Luminant, which produces and sells power on the open market, and retail-electricity provider TXU Energy, which serves about 1.7 million residential and business customers in Texas. Tacking on Dynegy’s power stations would broaden Vistra’s footprint to the Midwest, Northeast and other parts of the country. Dynegy has a colorful history that includes a merger now form Vistra were spun out last October, a milestone in one of the largest corporate bankruptcies in history. The utility sector has been active despite a broader slowdown in deal making, as a slump in power prices has prompted some companies to bulk up through mergers. In August, private-equity firm Energy Capital Partners signed a deal to buy Calpine Corp. for $5.5 billion. In the same month, Sempra Energy reached a deal to buy Oncor, another TXU descendant, for $9.45 billion, snatching the power-transmission company away from Warren Buffett’s Berkshire Hathaway Inc. Energized Share performance on Wednesday, minute-by-minute 25% 20 15 10 5 Dynegy $10.78 s17% Vistra Energy $20.32 s3.8% 0 –5 10 a.m. noon 2 4 Source: FactSet THE WALL STREET JOURNAL. Bond Funds Sound Retreat From Puerto Rico Talks With Suitor Falter at Weinstein Sales surge following Hurricane Maria, as creditors that had held out cut their losses Franklin Resources Inc., one of Puerto Rico’s largest creditors, sold hundreds of millions of dollars of the island’s bonds in recent days, part of an exodus of investors hurt by accelerating losses in the wake of recent hurricanes. A swath of mutual funds and hedge funds that held on to a portion of Puerto Rico’s roughly $70 billion of bonds even after the island started bankruptcy proceedings last year are now throwing in the towel. That includes Franklin Mutual Advisers LLC, a Short Hills, New Jerseybased unit of Franklin Resources, which has sold its entire $294 million stake in Puerto Rico general obligation bonds, people familiar with the matter said. Bonds with a total face value of $8.24 billion have changed hands this month through Monday, more than in any full month since the beginning of 2015, according to Municipal Securities Rulemaking Board data. The only time trading approached that level was July 2015, after Puerto Rico’s then governor said the island’s debts were “not payable.” Puerto Rico bonds since 2014 have attracted a variety of distressed-debt investors, especially hedge funds, because of the bonds’ relatively cheap prices in otherwise red-hot debt markets. Some of those funds are now selling. Varde Funds and Merced Capital recently sold their holdings of $172 million in municipal bonds backed by Puerto Rico’s tax collections to other existing bondholders, according to bankruptcy-court documents and a person familiar with the matter. RICARDO ARDUENGO/AGENCE FRANCE-PRESSE/GETTY IMAGES (2) By Matt Wirz, Andrew Scurria and Heather Gillers BY BEN FRITZ AND DANA CIMILLUCA Hurricane Maria only worsened Puerto Rico’s dire financial situation. Workers repaired a storm-damaged road on the island last week. Franklin, widely known under its Franklin Templeton brand, has been the secondlargest mutual-fund holder of Puerto Rico bonds, after OppenheimerFunds Inc. The two mutual funds have been part of a group of large Puerto Rico creditors fighting to recover some portion of their investments through a court-supervised restructuring. Franklin Resource’s main municipal-bond-fund arm, based in San Mateo, Calif., also owned general obligation bonds and other types of Puerto Rico debt worth more than $1 billion at the end of the second quarter, according to data from Morningstar Inc. It is unclear whether any of those investments have changed. Most mutual-fund managers are averse to keeping defaulted bonds through lengthy restructurings, and many sold their Puerto Rico bonds to hedge Pay Is Less Of a Secret In Millennial Workforce INSIDE Managing a generation of young people inclined to share relationship statuses and meal photos on social media requires employers to adjust the way they approach compensation, experts say. “Pay and promotions are not secretive topics anymore,” says Mary Ann Sardone, who consults with large employers on compensation issues and leads the workforce-rewards practice at benefits consultant Mercer, a unit of Marsh & McLennan Cos. “Companies are spending more time ensuring their pay decisions are fair and highlighting career paths under the assumption that the information is going to be widely shared,” she said. Please see PAY page B6 BOEING IS BULLISH ON PRODUCTION BY KELSEY GEE AVIATION, B3 TRACK YOUR TURKEY FROM FARM TO STORE DIGITAL, B5 On the Hook Borrowing backed by Puerto Rico’s government funds, sales taxes, and various public agencies make up the bulk of the island’s debt. Puerto Rico Sales Tax Financing Corporation $15.2 billion Commonwealth of Puerto Rico 12.5 Puerto Rico Electric Power Authority Puerto Rico Highway and Transportation Authority 8.1 4.7 Puerto Rico Public Buildings Authority 4.1 Puerto Rico Aqueduct and Sewer Authority 4.0 Note: Graphic shows top government borrowers. Source: Center for a New Economy funds, such as Aurelius Capital Management LP, Autonomy Capital LP and Canyon Capital Advisors LLC, as the island’s financial woes accelerated. Franklin and Oppenheimer stood out because they kept THE WALL STREET JOURNAL. much of their investments. The firms have experience working through restructurings, and some analysts said they owned so many Puerto Rico bonds that it would have been difficult to quickly liquidate their holdings without swamping the market. The new buyers paid as little as 65 cents on the dollar in this first bout of selling, betting that they would recover much more once Puerto Rico recovered economically. When Puerto Rico began restructuring its debt last year in the U.S.’s largest-ever municipal bankruptcy, investors holding different types of Puerto Rico bonds split into factions, battling the island’s government and each other to get better treatment. Franklin and Oppenheimer had been seen as power brokers in the process because they owned big chunks of the island’s different types of bonds. The recent selling began this spring as the island’s government and federal oversight board took a tougher stance with creditors in its bankruptcy process. Hurricane Maria, and comments by President Donald Please see BONDS page B2 Weinstein Co.’s talks with suitor Colony Capital LLC have stumbled and the troubled studio may seek other bidders as soon as next week, people close to the discussions said. In the wake of co-Chairman Harvey Weinstein’s firing after dozens of allegations of sexual misconduct and assault, Weinstein Co.’s board last week agreed to enter exclusive talks for private-equity fund Colony to buy some or all of its assets. The exclusivity period ends the middle of next week, and it appears increasingly unlikely the sides will reach agreement, the people said. In that scenario, Weinstein Co.’s board and its investment bank, Moelis & Co., could talk to other parties, a number of which have expressed interest, the people said. Among issues between Weinstein Co.’s board and Colony has been price. While the board has conceded the studio’s value has fallen, it is still seeking more than Colony is willing to pay, a person close to the board said. Weinstein Co.’s board believes it is worth several hundred million dollars, a person close to the studio said. As part of the arrangement for exclusivity, Colony has said it would provide Weinstein Co. with financing to continue operations for the next few months. However, it hasn’t provided that money, a person close to the studio said. Fortress Investment Group is in talks to provide a $30 million to $50 million loan to Weinstein Co., according to the people familiar with the studio’s financial discussions. That money would be used for TV production and film marketing until a buyer can be found. HEARD ON THE STREET | By Nathaniel Taplin Prepare Yourself for an Imperial China For most of its history, China was an empire led by a single paramount leader, backed by a powerful and opaque bureaucracy. Over the past 20 years, bureaucracy was alive and well, but most big political and economic decisions were reached by consensus. No more, it seems. On Wednesday, President Xi Jinping, the most powerful Chinese leader in decades, unveiled a new leadership team with no clear successor. That doesn’t necessarily mean Mr. Xi will stick around as Communist Party head past 2022 when he should step down by previous convention, but it does mean he will likely be running the show for quite some time. In his keynote congress speech, Mr. Xi said China’s primary task is now to satisfy the people’s increasing demands for a “wonderful” life in the face of incomplete and unbalanced development. Mr. Xi also strongly reaffirmed the role of state enterprises atop the economy and said that China should become a rich, strong and modern socialist nation by midcentury. What does all this mean? First, it isn’t just about growth anymore—social concerns will be a higher priority now that China is already on the cusp of becoming a “moderately prosperous” society, according to Mr. Xi. Welfare spending will rise, meaning a higher fiscal deficit, and environmental enforcement will increase. And with state firms favored under Mr. Xi, the private sector may be called upon more to fund this, potentially through higher corporate taxes. Broad Range 15% Average return on assets at listed Chinese ﬁrms 10 5 0 Health care Industrials 2006 IT Energy 2010 Source: Wind Info THE WALL STREET JOURNAL. Unlike previous leaders, Mr. Xi has the clout to implement his will: forced closures of polluting, mostly privately owned factories caught analysts off-guard this year and have helped force steel and aluminum prices higher. Foreign investors may find opportunities in burgeoning services sectors such as health care—one of the few sectors in which returns on assets for listed Chinese firms haven’t sharply fallen in recent years. Mr. Xi specifically cited services as an area that should open up more to foreign investment. A rising fiscal deficit paired with stronger support for big state firms may mean an even narrower spread between highly rated Chinese corporate bonds and sovereign debt. Finally, China will continue becoming more assertive abroad, meaning higher military spending by wary Asian neighbors and the U.S. Mr. Xi seems destined to stick around for much of this. Deng Xiaoping, who oversaw China’s early economic reforms, had a famous maxim for a modernizing China: “Hide your strength, bide your time.” For both China and Mr. Xi, the time for hiding is over. 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 | Thursday, October 26, 2017 * *** INDEX TO BUSINESSES THE WALL STREET JOURNAL. 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. C Canadian National Railway ..................... B3 Canyon Capital Advisors .....................................B1 Cargill..........................B5 Carlyle Group............B11 Chipotle Mexican Grill ...................................B12 Cigna............................B2 Cisco Systems.............B5 Cobra Acquisitions......B2 Coca-Cola.....................B3 Colony Capital.............B1 D Deutsche Telekom......B7 Dongfeng Motor Group .....................................B7 DowDuPont.................B5 Dr Pepper Snapple Group.......................B12 Dynegy ........................ B1 E-F Emirates Airline.........A3 Express Scripts Holding ...................................B13 Facebook......................B4 Franklin Resources ..... B1 G General Motors...........B6 Gilead Sciences...........A2 GlaxoSmithKline.........B7 H-I Harris Associates.......A8 Hodges Capital Management ............ A9 Intel...........................B13 M Marsh & McLennan ....B1 Mastercard................B11 Moelis..........................B1 Monsanto....................B5 Morningstar................A1 N Nintendo......................B4 Novartis.................A2,B7 Nuveen........................A8 P Permanent Portfolio...A9 Peugeot-Citroen..........B7 Pfizer...........................B7 Private Wealth...........A9 Purdue Pharma...........B2 R Rite Aid.......................B7 Rockwell Collins..........B3 S Santa Barbara.............A8 Snap.............................B4 SoftBank Group........B11 Sprint .......................... B7 T T-Mobile US................B7 Toyota Motor..............B7 Twitter ........................ B4 U Uber Technologies ............................. B7,B11 United Continental Holdings....................A3 United Technologies...B3 USAA.........................B11 V-W Visa............................B11 Vistra Energy..............B1 Walgreens Boots Alliance.....................B7 Weinstein....................B1 Whitefish Energy Holdings....................B2 INDEX TO PEOPLE Storm damage in Utuado, Puerto Rico. Response to the disaster caused by Hurricane Maria has fallen under congressional scrutiny. A H P Abbasi, Yousef..........B12 Al-Rumayyan, Yasir Othman...................B11 Allsopp, Stuart ......... B12 Athey, James............B12 Avendaño, Ingrid ........ B7 Haber, John.................B2 Harrison, Hunter.........B3 Hausch, Don................B6 Hofmann, Ivan............B2 Hoshino, Takuya.........A6 Höttges, Tim...............A7 Parets, J.C.................B13 Pearson, Caroline........B2 Prabhu, Vasant ......... B11 B K Bajaj, Mohit..............B12 Barra, Mary.................B7 Bosomworth, Andrew ...................................B11 Bradshaw, Myles......B11 Kratsios, Michael........B7 L D-F Larsen, Peter .............. B2 Lebovitz, David...........B1 Lee, Kewsong............B11 Legere, John................B7 Leroy, Didier................B7 Lopez, Roxana del Toro .....................................B7 D'Aniello, Daniel.......B11 de Nysschen, Johan....B6 Diebel, Charlie...........B11 Foote, James...............B3 MacMillan, Bill............B6 Medina, Ana................B7 Mutkin, Laurence......B11 C Chatillon, Jean-Baptiste de...............................B7 M R-S Rubenstein, David .... B11 Sardone, Mary Ann .... B1 Son, Masayoshi .......... B7 Swedish, Joseph R.....B2 T Tavares, Carlos ........... B7 V Vamvakidis, Athanasios ...................................B11 Vogel, Jim.................B12 W Walmsley, Emma........B7 Weinstein, Harvey......B1 Wetherbee, Christian.B3 Z Zamot, Noel................B2 Amazon to Unlock Doors for Deliveries BY LAURA STEVENS time letting cleaning people into their house if they haven’t been properly vetted,” said Ivan Hofmann, a former FedEx Corp. executive and transportation-industry consultant. Still, he added, that is how innovation works: “You have to try things that no one else has tried and see what works.” In the beginning, the Amazon Key system will allow in-home deliveries only from Amazon Logistics, the company’s delivery network. When an Amazon delivery-service provider brings a package to the door, he or she scans the label with a phone before requesting entry to the home. The system unlocks the door automatically—without a code—and turns on the security camera as the delivery person opens the door and sets the package down inside. After leaving, the delivery person taps the phone again to relock the door. The package recipient gets notifications throughout, including a time-stamped log and the possibility to watch a live video of the delivery or a recording afterward. The recipient can also block the ability to enter the home throughout the process. “We knew that peace of mind was going to be critical here,” Mr. Larsen said. Customers also can use the app to generate codes for guests to enter, and the system will eventually add access for service providers like dog walkers and maids. The Amazon Key package includes the new Amazon Cloud Cam security camera and a smart lock made by partner companies. For now, it is only available to Prime members, something the company said helps add value to the $99 annual subscription fee. The service will initially be available in 37 cities, starting Nov. 8. PATRICK SEMANSKY/ASSOCIATED PRESS Amazon.com Inc. wants you to open the door to your delivery courier—even when you aren’t home. The company on Wednesday introduced a connected doorlock and security-camera system to let package carriers, guests and eventually dog walkers in and out of customers’ houses, all controlled via an app. Dubbed “Amazon Key,” the new $249.99 system allows consumers to control and monitor deliveries and other services remotely. “This is not an experiment for us,” said Peter Larsen, vice president of delivery technology at Amazon. “We think this is going to be a fundamental way that customers shop with us for years to come.” Amazon Key plays to the online retail giant’s packagedelivery ambitions, enabling indoor drop-offs to customers as the company handles more of its own shipments. Already the company has added lockers and apartmentbuilding package hubs. Inhome delivery is a natural next step. A consequence of the rise in e-commerce is that “theft is certainly a problem,” said John Haber, who works with retailers on supply-chain issues as chief executive of consultancy Spend Management Experts. Theft is particularly pronounced during the holiday season, when some thieves dubbed “porch pirates” go from door to door stealing gifts. But it remains to be seen whether consumers are ready to open their doors to strangers. Transportation industry experts said that most people are likely to balk at the idea, at least at first. “People have a difficult MARIO TAMA/GETTY IMAGES B Bank of America.......B11 Blackstone Group ..... B11 Boeing..................B3,B12 Bombardier..................B3 Buffalo Funds.............A8 Costco Wholesale.....B11 CSX..............................B3 In-home delivery comes as Amazon handles more of its own shipments. U.S. Steps In at Puerto Rico Utility BY ANDREW SCURRIA U.S. officials supervising Puerto Rico’s finances are installing an emergency manager at the island’s public electricity utility, in an attempt to course-correct a disaster response that has come under congressional scrutiny. Puerto Rico’s financial oversight board is appointing the emergency manager to take over the public electricity monopoly, known as Prepa, with an eye toward eventual privatization, according to people familiar with the matter. The maneuver would largely wrest control of the utility away from its board and Gov. Ricardo Rosselló. More than a month after Hurricane Maria knocked out BONDS Continued from the prior page Trump hinting at debt forgiveness, upended bondholders’ calculus. Prices of general obligation bonds sold by the Franklin Mutual Series have been cut in half since May and now trade around 30 cents on the dollar, according to data from the Mu- power to all of Prepa’s customers, service has been restored to roughly one-quarter. Prepa’s decisions in the wake of the storm, including its use of a tiny Montana-based firm to rebuild power lines, have raised concerns among members of Congress about how the utility was managing federal disaster-relief funds. The federal oversight board, which Congress created last year, responded by tapping Noel Zamot, its top official for economic revitalization, to assume control of Prepa’s reconstruction. But the governor is expected to resist ceding control of Prepa, saying in a Wednesday afternoon statement that managing public corporations such as Prepa “rests exclu- sively on democratically elected officials, appointed under the law of Puerto Rico.” The situation is the latest struggle between the governor and the oversight board over Puerto Rico’s financial rehabilitation. Before Maria hit, the two sides were tangling in court over whether the board could order furloughs of public employees and impose other austerity measures. The oversight board has argued that Prepa should be transitioned from a public monopoly to a regulated utility to spur investment in its plants and lower costs for rate payers. The utility is a flashpoint in the island’s fiscal crisis because power costs are a drag on economic growth. Lawmakers are scrutinizing spending decisions. Members of Congress from both parties are calling for investigations into a $300 million contract awarded to Whitefish Energy Holdings LLC, a two-year-old company that had two full-time employees when the storm hit last month. Oklahoma-based Cobra Acquisitions won a $200 million contract. Mr. Rosselló said Tuesday that after Hurricane Irma hit, the government had reached out to contractors and of those, Whitefish was the only one that didn’t require substantial cash upfront. He said he ordered the island’s Office of Management and Budget to review Prepa’s contracting of repair crews and to report its findings to the Puerto Rico comptroller. —Arian Campo-Flores contributed to this article. nicipal Securities Rulemaking Board. Then came Hurricane Maria in September and the humanitarian and economic devastation left in its wake. The precipitous drop in prices has piqued the interest of some investors who have avoided Puerto Rico. AllianceBernstein Holding LP sold the last of its Puerto Rico bonds in 2014 believing the island’s debt load was unsustain- able, making default inevitable, says Joe Rosenblum, the investment firm’s director of municipal research. “The prices are so low that it makes us ask the question whether we’re at the right levels to get back in.” But even at current valuations AllianceBernstein remains concerned about the risk that politics in Puerto Rico and in Washington will undermine bondholders. The Senate on Tuesday passed legislation that extends emergency credit to Puerto Rico, and Mr. Trump has criticized corruption in Puerto Rico and questioned how long the federal commitment to disaster relief should last. “You can run as many spreadsheets as you want but how do you interpret the politics around it,” Mr. Rosenblum says. Purdue Pharma Probed on Painkiller BY SARA RANDAZZO AND JEANNE WHALEN ALEX BRANDON/ASSOCIATED PRESS A Advanced Micro Devices ........................... B12,B13 Airbus..........................B3 AllianceBernstein.......A9 Alphabet ................ B4,B5 Amazon.com..........B2,B5 American Express.....B11 Amicus Therapeutics..A2 Anthem................B2,B13 AT&T..........................B12 Aurelius Capital Management.............B1 Autonomy Capital.......B1 Avalere Health............B2 The HealthCare.gov website, which details health-insurance options under the Affordable Care Act. ACA Premiums Set to Jump BY ANNA WILDE MATHEWS Some consumers who get health insurance through the Affordable Care Act exchanges next year will face sharp premium increases and have fewer insurer options, though federal premium subsidies mean that others will be able to get cheaper coverage. The federal HealthCare.gov website posted new details Wednesday about what plans will be available for 2018 under the health law. Open enrollment starts on Nov. 1. Avalere Health, a consulting firm, said premiums on middle-tier silver-level exchange plans are set to rise by an average of 34% in the 39 states that use HealthCare.gov, based on the new data. The average increase for bronze plans is 18%, and for richer, gold coverage, it is 16%. The rate increases were partly driven by the Trump administration’s decision to halt federal cost-sharing reduction payments that reimburse insurers for covering low-income enrollees’ heath costs, said Caroline Pearson, a senior vice Anthem’s ACA Enrollment to Sink Anthem Inc. expects its enrollment in Affordable Care Act plans to drop by about 70% next year, highlighting the extent of the insurer’s pullback from the business amid what it said was too much uncertainty about the health-law marketplaces’ future. The big insurer’s retreat from the ACA exchanges had been known, but the company added more detail to its projections during a call to discuss third-quarter earnings. Anthem will keep offering ACA coverpresident at Avalere. The rate increases will be felt most strongly among people who don’t get subsidies. According to HealthCare.gov, a 40-year-old man in Richmond, Va., who isn’t eligible for subsidies will be able to choose from two bronze plans, with an average monthly premium of $345, and can consider two age in just 56 of the 143 regions in states where it sells individual insurance, down from “virtually all” of them this year, and said it now expects the ACA plans to be profitable in 2018, albeit still short of its targeted 3%-to-5% margins. The business will be “relatively break-even” in 2017, said Chief Executive Joseph R. Swedish. Mr. Swedish highlighted questions around federal costsharing payments as an important factor in Anthem’s decision to exit exchanges. The Trump administration has now halted those payments, which reimburse insurers for reducing health costs of low-income enrollees. silver options, at an average premium of $460. There is only one exchange insurer, Cigna Corp., in Richmond. Last year, a similarly situated man had 14 bronze options, with an average premium of $276, and 15 silver plans, with the average premium at $322. There were four exchange insurers. Purdue Pharma LP said it is the subject of a probe by federal prosecutors related to its opioid painkiller OxyContin, adding to the mounting litigation the company already faces over its marketing of the addictive drug. Purdue said it has been cooperating with an investigation by the U.S. Attorney’s Office in Connecticut and “will continue to do so until the matter is resolved.” The drug company added that it “is committed to being part of the solution to our nation’s opioid crisis.” A spokesman for Connecticut U.S. Attorney Deirdre Daly declined to comment. Ms. Daly, nominated by former President Barack Obama, is ending her tenure as U.S. attorney on Friday. Bloomberg News reported the probe Wednesday. Purdue, a privately held company based in Stamford, Conn., has previously faced criminal scrutiny related to its opioid sales. In 2007, Purdue and three of its executives pleaded guilty in federal court to criminal charges of misleading the public about the addictive qualities of OxyContin between 1995 and 2001. Purdue and the executives agreed to pay $634.5 million in government penalties and costs to settle civil litigation. Around the same time, Purdue agreed to pay $19.5 million to settle similar allegations made by 26 states and the District of Columbia. Purdue has been at the center of recent litigation seeking to hold makers and distributors of opioids accountable for widespread drug addiction. 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. Thursday, October 26, 2017 | B3 * * BUSINESS NEWS BY JENNIFER MALONEY AND AUSTEN HUFFORD Coca-Cola Co.’s newest diet soda helped the company keep its soda volume flat in the latest quarter as it attempts to expand its portfolio of beverages and hold on to customers who are abandoning sugary drinks. Coca-Cola Zero Sugar, which the Atlanta company rolled out in the U.S. in August after introducing it last year in the U.K., replaced Coke Zero. Both are sweetened with aspartame and acesulfame K, though Zero Sugar is formulated to taste more like the original Coke. On Wednesday, the company said the new drink had performed well in its third quarter, increasing its volume in the high single digits. The company plans to roll out Zero Sugar to the rest of its key markets by early next year. In a call with analysts, Chief Executive James Quincey acknowledged that Zero Sugar has cannibalized some sales of Coke Light and original Coke, “but in the net, there is additional volume and additional consumers coming back into the franchise.” Coke’s overall beverage volumes in the quarter were flat world-wide as growth in developing markets essentially offset weakness in developed markets. The company saw 1% volume growth in its juice and dairy products as well as its tea and coffee drinks. Soda growth was flat, while volume for water and sports drinks fell 1%. In all, Coke reported earnings of $1.45 billion, or 33 cents a share, up from $1.05 billion, or 24 cents a share, a year earlier. On an adjusted basis, earnings grew to 50 cents a share from 49 cents. Revenue fell about 15% to $9.08 billion, largely as a result of the bottling divestitures. Adjusted revenue grew 4%. Boeing Presses to Meet Demand Plane maker had record deliveries in latest quarter, but orders keep piling up BY DOUG CAMERON Boeing Co. said Wednesday that demand for its singleaisle jets could merit a further rise in production beyond the 35% increase already envisaged by the end of the decade. Higher output of its 737 jets and the improved profitability of its 787 twin-aisle planes have helped Boeing’s share price almost double over the past year, as the company channeled most of the extra cash to shareholders in the form of buybacks and increased dividends. Boeing Chief Executive Dennis Muilenburg said the 737 was already sold out until the end of the decade, and there was pressure from customers to boost monthly output beyond the 57 jets envisioned in 2019. Boeing recently boosted output by five jets to 47 a month and plans to add another five to the rate next year. The bullish outlook came as Boeing reported forecast-beating quarterly earnings and gave a modest boost to its profit and cash-flow guidance for the year. However, its shares de- JASON REDMOND/REUTERS Coke Gains From New Diet Soda Boeing reported forecast-beating quarterly earnings. A production facility in Renton, Wash. clined as the company booked another charge on its militarytanker program and offered few details on how it plans to reach aggressive targets it has set for its services business. Boeing has orders for 5,700 commercial jets representing seven years of output at planned production rates. Rapid growth in passenger and freight traffic, especially in developing markets, has fueled optimism that the longstanding boom-and-bust cycles of the jet industry are smoothing. One market Boeing isn’t focusing on is for smaller jets seating 100 to 150 passengers, a segment targeted by a planned partnership between Airbus SE and Bombardier Inc. “Recent changes in the marketplace, discussions between Airbus and Bombardier, don’t change our plans,” Mr. Muilenburg said on a quarterly call. He continued to rail against consolidation elsewhere in the aerospace industry, notably the planned combination between United Technologies Corp. and Rockwell Collins Inc. announced last month. “Until proven otherwise, we remain skeptical,” he said of a deal that would unite two of Boeing’s largest suppliers, potentially reducing its own leverage to cut its costs and boost profit margins. Boeing in July created a separate services unit, projecting sales this year as high as $14.5 billion and margins of as much as 15.5%, well ahead of its core plane-making and defense units. The company aims to double its market share of selling spares and services and boost revenue from the business to $50 billion over the next several years. The company on Wednes- day said the unit had $3.6 billion in sales in the third quarter, little changed from a year earlier, but provided no further update on plans for the business. The push into services has irked many Boeing suppliers, who rely on the segment for their profits. United Technologies revealed Tuesday that it doesn’t make any money on new parts sold to Boeing, just on spares. Boeing said profit for the third quarter fell to $1.85 billion from $2.28 billion in the year-earlier period, which included a large tax gain. The latest quarter included $329 million in extra costs for the KC-46A Pegasus refueling tanker, adding to the roughly $1.5 billion in charges already booked for the program. Per-share earnings declined to $3.06 from $3.60 but were $2.72 after stripping out certain pension items, 6 cents ahead of consensus estimates. That marked the sixth quarter in a row Boeing outpaced expectations as it tallied a record 202 commercial-airliner deliveries in the period. Sales rose 2% to $24.3 billion. The company also added 10 cents a share to the midpoint of its full-year profit guidance and another $250 million in operating cash flow. On Wednesday, Boeing shares fell 2.9% to $258.42. CSX Hires New Operating Chief in Shake-Up BY PAUL ZIOBRO CSX Corp. is shaking up its management ranks, replacing several top executives and bringing in a new operating chief from one of Chief Executive Hunter Harrison’s past railroading stops. The changes come as the railroad, one of two major operators east of the Mississippi River, has been working to fix services issues after Mr. Harri- son took over the company earlier this year and revamped its operations. On Wednesday, CSX said James Foote is joining as chief operating officer and will take over all duties overseen by longtime CSX executives Cindy Sanborn, who currently serves as COO, and Fredrik Eliasson, currently chief sales and marketing officer. Both CSX executives will resign next month. Mr. Foote, 63 years old, served as head of sales and marketing at Canadian National Railway Co. during Mr. Harrison’s stint turning around the railroad from 2003 until 2009. More recently, he served as CEO of Bright Rail Energy, which is developing a product to help existing locomotives run on natural gas. Mr. Harrison said the new executive’s deep understanding of and experience with his so-called precision scheduled railroading philosophy was a key reason for adding Mr. Foote as his top lieutenant. Mr. Harrison’s network changes led to widespread delays and congestion for most of the summer months, leading to a hearing before federal railroad regulators earlier this month. The CEO blamed some of the problems on pushback from some employees as well as derailments. He has said the service issues have been mostly resolved. Mr. Foote’s appointment may clear up some, but not all, questions around who could one day succeed Mr. Harrison, who has an undisclosed health condition that limits his travel and requires him to frequently use an oxygen tank. While Mr. Foote is a clear No. 2, Citi analyst Christian Wetherbee said he may not be the long-term answer to succeed Mr. Harrison. 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 B4 | Thursday, October 26, 2017 THE WALL STREET JOURNAL. TECHNOLOGY WSJ.com/Tech Researchers Sidestep the Editing of DNA The targeting of ribonucleic acid may raise fewer scientific and ethical risks A student makes a measurement during a popular Crispr workshop at the Genspace lab in New York City earlier this year. carrying the DNA’s instructions to the cells for making the proteins that are essential for life. Scientists have long believed RNA to be a good therapeutic target, but initial work using the Crispr system has focused on another enzyme, Cas9, and User Count Clouds Social-Media Race BY GEORGIA WELLS Social-media companies Twitter Inc. and Snap Inc. are locked in a popularity contest—but it is hard to rank them because they differ on how reach with users is best measured. Facebook Inc., their bigger rival, reports the number of users who check in at least once a month, currently 2.01 billion, and those who use its platform at least once a day, 1.32 billion. But Twitter and Snap’s Snapchat, which battle to be considered the second-biggest network, each picks only one of the metrics—and it isn’t the same one. Twitter, which has been around longer than Snapchat, reports how many monthly users it has. When the company releases third-quarter earnings on Thursday, analysts surveyed by FactSet expect it to post 0.5% growth in monthly users to 329.6 million. Snap, which first released its user figures in February ahead of its initial public of- fering, discloses the number of daily users of its network. A Snap spokesman said daily usage is a better reflection of engagement. At last count, Snap had 173 million daily users. Twitter has hinted at its daily use. In late 2016, to provide metrics beyond stagnant monthly-user growth, Twitter told investors its daily users had grown 7%, without revealing the raw number. In the following three quarters, Twitter updated its daily-user growth, and flagged it again to investors. That prompted the Securities and Exchange Commission to query Twitter as to why it wasn’t providing the actual number. Twitter said in a letter to the SEC in June that releasing its daily users could cause “confusion when comparing the company with other companies,” such as Facebook, that calculate daily users differently. A spokeswoman for Twitter declined to comment on why the company hasn’t released its number of daily users. on making edits in DNA, which cause permanent changes to a person’s genome. Unlike with DNA, cells constantly produce more RNA. As a result, RNA editing carries potentially fewer scientific and ethical risks. For one thing, if “off-target” changes occur, a key area of concern in editing DNA, the RNA edits are potentially reversible. Understanding of the biology of many diseases is also rapidly changing, and RNA editing allows scientists to revise the therapy more easily as more research is done. “Crispr editing of RNA creates more opportunities for things we can do therapeutically,” said Elizabeth McNally, director of the Center for Genetic Medicine at Northwest- Nintendo Game Is Crossing to Phones BY TAKASHI MOCHIZUKI TOKYO—Nintendo Co. will introduce a smartphone version of its “Animal Crossing” game, a move that could expand profit from its mobile business. The free-to-play game, which will include an option to pay a small amount of money to speed up game play, will be available from late November, the Kyotobased company said on Wednesday. It is designed for Apple Inc.’s iPhones and smartphones running the Android operating system from Google parent Alphabet Inc. First introduced in 2001 for the Nintendo 64 console, the “Animal Crossing” franchise has attracted a wide range of consumers, especially women and children who might otherwise not play games on dedicated hardware. Rather than shooting enemies or trying to get to the next level, players enjoy slow living in a virtual village through an avatar by catching bugs, growing flowers or getting mortgages from a raccoon. Nintendo has released six RICHARD ATRERO DE GUZMAN/NURPHOTO/ZUMA PRESS Researchers said they created a new Crispr-based system to edit RNA instead of DNA in human cells, offering a way around some of the ethical and scientific challenges associated with editing the genome and helping advance a new avenue to potentially treat diseases. Scientists at the Broad Institute of MIT and Harvard repurposed the Cas13 enzyme in the Crispr system to target and correct disease-causing mutations in RNA in cells. The new RNA-editing system, which the scientists have dubbed Repair, allows the editing of individual RNA letters, correcting a common mutation known to play a role in a number of diseases. They described their research in a paper published in Science Wednesday. Crispr, which stands for clustered regularly interspaced short palindromic repeats, serves as the immune system of bacteria and is used to defend against viral attacks. RNA, or ribonucleic acid, is a molecule and is found in all cells. It serves as a messenger, CAITLIN OCHS FOR WALL STREET JOURNAL BY AMY DOCKSER MARCUS ern University’s Feinberg School of Medicine, who wasn’t involved in the study but is working on efforts to use the Crispr system to treat forms of muscular dystrophy and other conditions. Scientists have been looking for ways to modulate RNA to treat diseases. Last month, Alnylam Pharmaceuticals, which said it spent 15 years developing its therapy, reported positive results in a trial of a so-called RNA-interference drug, patisiran, which stops production of a diseasecausing protein to treat a rare nerve disorder, familial amyloid polyneuropathy. If approved by the Food and Drug Administration, patisiran would be the first commercial product based on RNA interference. Crispr offers another approach. In nature, there are many different Cas13 enzymes that bacteria use to target and cut RNA as part of its defense system. Omar Abudayyeh, one of the co-first authors of the Science paper, said the researchers spent more than 18 months studying different Cas13 enzymes to find the most effective to adapt for RNA editing in human cells. The scientists eventually chose a Cas13 enzyme from the Prevotella bacteria, then combined it with a protein called ADAR2. The company is looking to expand profit from its mobile business. titles from the franchise and sold more than 30 million copies as of March 31, 2017, the company said. In the smartphone version of the game, called “Animal Crossing: Pocket Camp,” players can build campgrounds. Since moving into smartphone games in 2016, Nintendo has released three apps: “Miitomo,” “Super Mario Run” and “Fire Emblem Heroes.” So far, they have made up a relatively small part of the company’s business. In the fiscal year ended March 2017, Nintendo earned less than ¥20 billion ($176 million) from the smartphone games out of ¥489 billion in total revenue, Chief Executive Tatsumi Kimishima said at an analyst briefing in April. Analysts said life-simulation games are well suited to smartphones and predicted “Animal Crossing” would boost Nintendo’s mobile revenue. “We expect the app would earn ¥18.8 billion by March next year and ¥48 billion between April 2018 and March 2019,” said Macquarie Capital Securities analyst David Gibson. DeNA Co. is Nintendo’s partner in the smartphone game business. Fans have been waiting for the “Animal Crossing” since Nintendo first mentioned it in April 2016. Ayumi Maehara, who sells gift catalogs in Tokyo, said “Animal Crossing” is the only game she has ever played— and that was when she was a child. The 26-year-old, who prefers to see movies or listen to music in her leisure time, said she was interested in the “Animal Crossing” smartphone game. “I begged my parents many times for a Nintendo GameCube console and an ‘Animal Crossing’ game for a Christmas present when I was 10 years old,” she said. “That was all the game experience I have had. I love what I can do in the game, like collecting cute furniture.” WE’RE BULLISH ON COMFORT The Un-Sneaker™ goes to work. With leather-lined interior, padded collar and custom soles — the world’s most comfortable shoe is now dressed for the office. Free shipping and returns. Order online or call 844.482.4800. 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. Thursday, October 26, 2017 | B5 * * TECHNOLOGY BY RACHAEL KING PATRICK T. FALLON/BLOOMBERG NEWS Google and Cisco Systems Inc. on Wednesday said they are combining their technology to help corporate customers more easily develop software for the cloud. The two companies need a boost in the corporate computing market amid increasing competition from cloud-computing pioneer Amazon.com Inc. and corporate-tech veteran Microsoft Corp. Much like how Google’s Android makes it possible to run mobile apps on a variety of smartphones and devices, the two companies’ software will make it possible for businesses to create apps that run in their own data centers and on Google’s servers, creating a hybrid cloud. Until recently, big cloud providers were like walled Cisco CEO Chuck Robbins. gardens and different tools were used to create code for private data centers. Google, a unit of Alphabet Inc., is contributing cloud-development expertise and tools that run on the Google Cloud Platform, a suite of services for the cloud including computing, storage, databases and analytics. Cisco is bringing networking, security and infrastructure technologies to the mix. Both companies are using open-source technologies to give customers more flexibility. “It really does help companies avoid lock-in,” Cisco Chief Executive Chuck Robbins said in an interview. Mr. Robbins is counting on new cloud services to help turn around Cisco by moving further away from its legacy hardware. Cisco’s customers are increasingly using cloud services instead of investing in hardware for their own data centers. Google Cloud Chief Executive Diane Greene is leading the company on an uphill battle in the market for corporate computing power and storage accessed online. While Google is an internet giant, it is a relatively small player in business computing, ranking fourth in cloud infrastructure services in 2016 with only 2.3% market share, according to a September report from research firm Gartner Inc. The two companies have been working together for much of the past year developing software and working with corporate customers on requirements, Ms. Greene said. They plan to offer early access for a few customers in the first half of 2018. The software will be more widely available in the second half of next year, she said. Google is trying to attract corporate customers using its cloud-development expertise and popular software that was initially developed to manage its own search engine. Cisco has relationships with large corporate customers forged over decades along with expertise in hyperconverged systems that combine computing, storage and networking. The partnership is similar to the way Cisco rival Dell Technologies Inc. works with customers to build cloud software. Dell’s unit, Pivotal, makes it easier for companies to get started developing software, acting like an operating system for the cloud. CARGILL Cloud Deal Pairs Google, Cisco Blockchain technology is being used to track turkeys from four Texas farms to Cargill processing lines and on to grocery stores. A Digital Trail for Turkeys BY JACOB BUNGE Agricultural conglomerate Cargill Inc. aims to harness the technology underlying bitcoin to let shoppers trace their turkeys from the store to the farm that raised them. Cargill is test-driving a digital tool called blockchain that structures data into a series of records that can’t be changed or removed. The cloud-based data can be shared across a network of computers, and securely added to by various participants. Some food-company executives say such records could be faster and simpler to use than the industry’s current framework, which relies on software systems as well as paper records. Besides Cargill, other companies are also exploring blockchain technology to track foods or ingredients. It is an example of the food world looking to adopt technologies honed in Silicon Valley and Wall Street, with the aim of making the U.S. food system more efficient. Agriculture companies such as Monsanto Co. and DowDuPont Inc. have spent hundreds of millions of dollars to acquire startups that crunch data sets to help farmers better manage crops and machinery. The digital currency bitcoin was the first application built on blockchain, but the financial industry is also exploring it as a way to potentially trim billions of dollars in transaction and processing costs. Blockchain is also being evaluated for use managing healthcare records and processing insurance claims. In the food industry, a blockchain-based approach could make recalls faster and better pinpoint where affected products wound up, though much depends on ingredient suppliers, food manufacturers, distributors, retailers and food-service companies adopting a common system and standardizing data. In a pilot program for its Honeysuckle White brand, Minnesota-based Cargill has used blockchain to build a series of Food companies look to adopt technologies honed in Silicon Valley and Wall Street. links that will help track individual turkeys from four Texas farms to Cargill’s processing lines and ultimately to grocery stores. Each turkey in the program will bear a tag with a code that consumers can punch into a website, which will take them to a website detailing the farm that raised it. “It’s bringing the digital supply chain to life,” said Debra Bauler, chief information officer for Cargill’s North American protein business. Cargill and other food companies see broader potential for the technology. In August, International Business Machines Corp. said it formed a consortium with food makers such as Dole Food Co. and Tyson Foods Inc. and retailers including Kroger Co. and Wal-Mart Stores Inc. to figure out where blockchain can improve food safety and reduce waste. Darrell Glaser, a farmer based in Rogers, Texas, who raises turkeys for Cargill and is participating in the program, said he hopes it will reconnect an increasingly urban U.S. population with the rural areas and farmers that produce the country’s food. New Echo: Still in First Place “Alexa, which Echo should I buy? Echo Dot, Echo Spot? Echo Look, Echo Show? Echo Plus? Or just plain, vanilla Echo—I mean, the new one?” Alexa doesn’t have these answers (“Sorry, I don’t know that”), but after testing the new $100 Echo— herein referred to as “the Echo”—I have some. 1. The Echo is the smartspeaker sweet spot. It’s the one to buy if you’re just trying out the idea of living with an always-on microphone. There is nothing quite like the simplicity that started it all. No screens or cameras—just bark your commands at Alexa, and “she” will talk back. 2. If you’re one of the millions of people who bought the original Echo, no need to upgrade. The new Echo is a lot like the old Echo, just prettier, with slightly better mics and sound. 3. Software, not hardware, is the source of speaker smarts. And since that software mostly lives in the cloud, not on the device, we can upgrade speakers less frequently than we upgrade our PCs. Three years since its debut, the Echo’s new hardware may not appear that different, but the world around it is. While some remain cautious about placing always-listening microphones in their homes, many millions of people are now comfortable talking to Amazon’s cylindrical computer. They ask it to do everything from warming up the car to planning scuba dives. This new cylinder, boosted by a lower price and Alexa’s evolving smarts, is enough to maintain Amazon’s lead. Best thing about the Echo’s hardware? You can change its clothes—yes, like a Barbie doll. You can choose from six different outfits (sorry, decorative “shells”) or order extra ones for $20 F. MARTIN RAMIN/THE WALL STREET JOURNAL BY JOANNA STERN Amazon Echo ‘shells’ come in fabric, wood and silver finishes. to $30. Is your Echo feeling relaxed? Sandstone. Sophisticated? Oak finish, for sure. Of course, Google’s Home had similar fashion sense at its debut last year. There are actual engineering improvements, too. The speaker is about half the size of the original (going from tennis-ball can to Jif jar), yet it’s just as loud—still adequate to fill a kitchen or bedroom. To really hear the difference between the old and new speakers, I had to listen to a few songs side by side. The new Dolby signal processor does deliver a crisper tone. Now with seven mics, Alexa’s ears have gotten better—but again, not drastically. The new Echo seemed quicker to light up to my voice in quiet environments. The real reason to buy an Echo has nothing to do with good looks or mics. It’s all about invisible Alexa. In the AI-assistant race against Google and Apple, Amazon has kept its early lead in some key areas: A deep ecosystem. With over 25,000 voice apps, or “skills,” and multiple hardware partners integrating Alexa, Amazon’s AI platform has become the most advanced voice operating system. Google has made some headway with third-party apps, but Alexa still has the edge with more news, ridehailing, to-do list and kitchen-friendly apps. Google’s Assistant, however, does excel at answering random questions better. Come on, Alexa, you should know wool doesn’t go in the dryer. A smarter smart home. Amazon still has Google beat in smart-home control. Case in point: Alexa devices work with more connected thermostat brands than Google Home does. If you are especially interested in smart home, check out the $150 Echo Plus. It has all of the new Echo’s refinements, plus built-in wireless technology for home control without the need for third-party hubs. A stream of new features. Earlier this month, Echos got the ability to recognize multiple voices; your voice becomes a password. When I want to reorder breath mints, Alexa knows me and doesn’t ask for a PIN. Back in May, Amazon turned Alexa into a telephone operator: You can call others with the Alexa app or with an Echo. In June, Alexa got the ability to name different kitchen timers (one for the Brussels sprouts, one for the chicken). Reminder: Google Home has a number of these features as well. And Siri still can’t set multiple timers. If you’re looking for a way to experience Alexa, or to bring other Echos into your house, the new Echo is arguably the best way—at least until December, when the Echo Spot shows up. ideas ideals impact For results that resonate, change the equation. Partner with Glenmede, an independent, privately-owned trust company offering investment and wealth management services. Founded in 1956 by the Pew family to manage their charitable assets, we provide customized solutions for families, endowments and foundations. To learn how our culture of innovation and experienced thinking can help you make your unique imprint on the future, contact Laura LaRosa at 215-419-6027 or email@example.com. CLEVELAND • MORRISTOWN • NEW YORK • PHILADELPHIA PRINCETON • WASHINGTON, DC • WILMINGTON Glenmede’s services are best suited to those with $5 million or more to invest. glenmede.com @glenmede /company/glenmede B6 | Thursday, October 26, 2017 * *** THE WALL STREET JOURNAL. MANAGEMENT The Quest to Make Cadillac Hum Again President Johan de Nysschen looks toward growth in China as he confronts the auto brand’s falling U.S. market share BY MIKE COLIAS volume, then so be it. How I Work Continued from page B1 Roughly one-third of U.S. workers ages 18 to 36 say they feel comfortable discussing pay with their co-workers, more than any other age group and about four times the rate among baby boomers, ages 53 to 71, according to a survey of 1,000 employees conducted by personal-finance firm Bankrate Inc.’s TheCashlorette.com. Nearly half of the millennials surveyed say they talk about compensation with their friends, compared with 36% of Americans overall. When Cameron Feenstra received a job offer this summer from Prattle Analytics, a St. Louis-based research firm, the first thing the 22-year-old did was call his sister. Although he was willing to take a below-market salary for the chance to work at a fastgrowing startup, Mr. Feenstra wanted to ensure that his offer of $42,000 was a fair annual salary for his role as a junior quantitative analyst. After talking about salaries But disentangling Cadillac’s operations from Detroit has proved frustrating at times. In 2015, Mr. de Nysschen jokingly described his first year running Cadillac as “the longest five years of my life.” There is a bright spot, though: Cadillac sales are booming in China. In an interview, Mr. de Nysschen said he is counting on growth in China to expand Cadillac beyond its home market for the first time. Edited excerpts: The Wall Street Journal: You had a great run at Audi and were just starting to make progress at Infiniti when you with friends and family, and consulting anonymous career and salary-sharing websites such as Glassdoor, Mr. Feenstra decided to negotiate for more money, even though it was his first real job in the field. “People who don’t ask around never learn how to negotiate, because they don’t know where everyone else is” in terms of salary as a refer- Nearly half of the millennials say they discuss compensation with friends. ence point, Mr. Feenstra said. He got a pay bump to $45,000 before accepting the offer. The attitude shift has put greater pressure on employers to explain why some workers are paid more than others and to formalize compensation and promotion practices, said Kristina Launey, a partner at law firm Seyfarth Shaw LLP, which specializes in labor and em- ADVERTISEMENT The Mart To advertise: 800-366-3975 or WSJ.com/classiﬁeds took the job to rebuild Cadillac. Why? Mr. de Nysschen: Cadillac is a truly iconic luxury brand, one with a 115-year pedigree. To have the opportunity to steer that back to greatness was an opportunity you couldn’t say no to. And General Motors has the resources, both in technical engineering and financial, to push the transformation. The one rule of social media every CEO should know? Think before you post. What’s your guilty pleasure? I enjoy motorcycling. about rapid growth—it’s about elevating awareness, it’s about expanding the dealer network—in a very forceful manner in a very short period of time. So we invested very heavily into a state-of-the-art manufacturing plant. We’re investing in building the brand profitably. It’s consuming a lot of resources. WSJ: How hard is it to change the perception of Cadillac? Mr. de Nysschen: People might still be thinking about Cadillac as they would have 15 or 20 years ago. The current vehicles are full of product substance equal to our peers. The challenge now is to build awareness of that excellence, and ensure it is complemented by the retail experience. But great brands are not built overnight. It will take time. WSJ: Given the long time horizon, how do you keep your people motivated? Mr. de Nysschen: It starts by making sure everybody understands the vision and the long-term aims for the brand and the tactical execution. That cascades down to individual goals and objectives that people are held accountable to. As long as we’re able to demonstrate that we’re making progress on those, it’s easy. WSJ: Three years in, Cadillac continues to lose U.S. market share. What’s holding you back? Mr. de Nysschen: An important part of the plan is globalization. For us, the top priority was China. In China, it’s ployment issues. A rash of new city and state ordinances in Philadelphia, New York City and Massachusetts bar hiring managers from asking job candidates about their salary history, pressuring companies to be more transparent about what they are willing to pay for many roles. Bill MacMillan, Prattle cofounder and chief technology officer, said he is accustomed to requests like Mr. Feenstra’s. But keeping the 19-person startup on good financial footing while offering competitive-enough salaries to retain talented workers is a delicate balance, he added. “I have great people, so I would love to pay them lots and lots of money,” said Mr. MacMillan. Instead, he said, the firm explains to job seekers that while their salary may start at a below-market level, their performance and pay will typically be reviewed at least twice a year—at which point he and other managers can be “aggressive” with raises for top performers. Since Mr. Feenstra began working at Prattle, he has discussed his pay with several of his colleagues. The chats have given him an idea of what to expect when discussing future raises, such as when his boss reviews his performance later this year. Cameron Feenstra says ‘People who don’t ask around [about compensation] never learn how to negotiate.’ WSJ: The New York move was meant to give Cadillac autonomy from GM. How’s that going? Mr. de Nysschen: We are semiautonomous. We don’t just do what we feel like. The issue was to ensure that, in those areas [including marketing ADVERTISEMENT Franchising To advertise: 800-366-3975 or WSJ.com/classiﬁeds FRANCHISE OPPORTUNITIES !"#$ #"% &#' ANNOUNCEMENTS BUSINESS OPPORTUNITIES BUSINESS OPPORTUNITIES BUSINESS OPPORTUNITY Short term business sales contracts for sale. Contracts pay 28% interest with 12 monthly payments !!! "# $$$%&% '( )) Attention High-Tax Payers: Cut Your Taxes Now by 30-50% -- this year. Earn more than $500,000? Legal, simple tools cut your taxes now. Strategies previously reserved for the megawealthy now at your fingertips. No obligation. No gimmicks. Don’t wait till it’s too late. To get your FREE guide simply text "TaxCut" to (323) 787-1040. ph-616-430-7987 firstname.lastname@example.org TRAVEL $1,000,000 Yearly-$5,000 Daily Save Up To 60% FDA approved medical device Very large passive income Financing and placement in a doctor’s office available Call Today! (877) 670-1134 MANAGEMENT WSJ .COM Watch the video and find more coverage at WSJ.com/ Management Wisconsin B-School Alters Course BY KELSEY GEE ! "# $ WSJ: When we get fully autonomous cars, will people care as much about luxury brands built on their reputation for performance? Mr. de Nysschen: We don’t envisage producing Cadillacs with no driving controls. A Cadillac will always be an exhilarating driving experience. But, when you’d like to have the car do the driving for you, our vehicle will offer that opportunity. True luxury means the ability to choose. WSJ: The U.S. is a different challenge? Mr. de Nysschen: In the U.S., the focus is not on growth. If you achieve sales results without looking at the quality of the business, it’s not sustainable. Three or four years ago, Cadillac incentive spending was significantly above the luxury average. We had to instill this discipline. If in the near term it means that we have to walk away from some AUCTION WSJ: Cadillac is touting Super Cruise as the industry’s first hands-free driving system. Should that help the brand image? Mr. de Nysschen: It begins to resuscitate Cadillac’s heritage of innovation. NICK SCHNELLE FOR THE WALL STREET JOURNAL PAY Favorite Cadillac model of all time? The 1955 Series 62 convertible. STEPHANIE AARONSON/THE WALL STREET JOURNAL Johan de Nysschen became an auto-industry rock star while helping transform Volkswagen AG’s Audi brand into a luxury powerhouse in the U.S. from late 2005 to mid-2012. He next moved to Nissan Motor Corp.’s Infiniti BOSS brand, before TALK General Motors Co. came calling in 2014 with another rebuilding project: Cadillac. Now president of Cadillac, Mr. de Nysschen viewed the challenge as “the pinnacle of my career.” One-third of the way through what he views as a decadelong project, the journey has been less than smooth as Cadillac’s U.S. market share has sagged and the company awaits new models to round out a threadbare product portfolio. Mr. de Nysschen, 57 years old, aims to mold Cadillac in the image of BMW and other luxury brands. That means creating a better dealership experience and ending big consumer incentives such as end-of-month discounts that often fueled sales. His strategy also included relocating Cadillac two years ago from Detroit to Manhattan’s Soho neighborhood, the better to give the brand an identity separate from GM. and retail strategy] that Cadillac needed 100% mindshare, those discussions took place among people who are invested in the brand. If you didn’t change the location, the meetings wouldn’t change, the faces wouldn’t change and probably the outcomes wouldn’t change. ! !" # First & Business INTERNATIONAL Major Airlines, Corporate Travel Never Fly Coach Again! www.cooktravel.net (800) 435-8776 $% & ' ! () )!*! !+ $! ! "!! * ,,)!-") ! ) ./0122233 45/01 6 7 8 99 The Wisconsin School of Business reversed course on a plan to suspend admissions to its full-time M.B.A. program while it reviews the school’s business strategy, officials said Wednesday. “We have heard from our community of students, alumni, and friends; therefore, we are going to stop further discussion of the one-year suspension of the full-time MBA. We moved too quickly without the broad consultation and discussion that our stakeholders can and should expect,” wrote dean Anne Massey in an update on the Madison school’s website. The decision comes one week after associate dean Don Hausch informed the school’s roughly 200 full-time M.B.A. students that administrators were evaluating whether to shutter the program. The proposal touched a nerve among the school’s more than 42,000 students and alumni, some of whom said they first learned of the administration’s plan from a Wall Street Journal story last Friday. 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. Thursday, October 26, 2017 | B6A NY OCTOBER 27-30, 2017 Over 90 Distinguished Dealers Will Exhibit a Lavish Array of Antique and Estate Jewelry, Vintage Time Pieces and Fabulous Modern Collections. METROPOLITAN PAVILION 125 WEST 18TH STREET • NEW YORK, NY 10011 Friday October 27 11:00am – 7:00pm Saturday October 28 11:00am – 7:00pm Sunday October 29 11:00am – 7:00pm Monday October 30 11:00am – 4:00pm GENERAL ADMISSION TICKET PURCHASED ONLINE $5.00 OFF A P A L M B E A C NYCJAWS.com PROMO CODE: WJ17 H S H O W G R O U P E V E N T 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 B6B | Thursday, October 26, 2017 NY The Body, the Brain, the Machines From computing in the multiverse to ecstatic trauma therapy, get an inside view of humanity’s future in this special-edition magazine from The Wall Street Journal. DON’T MISS YOUR FREE MAGAZINE. EXCLUSIVE TO SUBSCRIBERS. INCLUDED IN THIS FRIDAY’S PAPER. ©2017 Dow Jones & Co. Inc. All rights reserved. 6DJ6035 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 THE WALL STREET JOURNAL. Thursday, October 26, 2017 | B7 * * BUSINESS NEWS Sprint, T-Mobile Silent on Deal Talks BARTEK SADOWSKI/BLOOMBERG NEWS BY RYAN KNUTSON The management at Opel is being pushed to accelerate efforts toward returning to profitability as Europe’s booming car market starts to plateau. An Opel plant in Poland. Peugeot’s Mr. Fixit Turns to Opel Tavares presses for change at unprofitable German brand he acquired from GM BY WILLIAM BOSTON BERLIN—After fixing a French car manufacturer long derided by the industry as an eternal also-ran, Carlos Tavares is turning his attention to the business General Motors Co. could never fix. Mr. Tavares, who on Wednesday unveiled another quarter of solid growth at PSA Group, maker of Peugeot and Citroën cars, is turning up the pressure on Opel, the unprofitable German brand he acquired from GM this summer. Over the past three years, the 59-year-old native of Portugal has taken PSA from near death to Europe’s most profitable maker of mass-market cars. The acquisition in August of GM’s European businesses Opel and Vauxhall hoisted the French car maker into the No. 2 spot in Europe by sales behind Volkswagen AG. Mr. Tavares hasn’t wasted time in moving to improve returns. In response to sluggish sales of some Opel and Vauxhall models, Peugeot said it would cut nearly a quarter of the 1,800 employees at Vauxhall’s Ellesmere Port plant in the U.K. Peugeot said it would be in “a better position to consider future investments” in the Vauxhall business once the terms of any post-Brexit trade deal between the U.K, and the European Union become clear. Mr. Tavares has also been pressing the German management at Opel to accelerate efforts to return to profit as Europe’s booming car market is beginning to plateau. Since the acquisition closed in August, Peugeot and Opel managers have been working on a restructuring plan that German labor leaders warn could put thousands of Opel engineers out of a job. Peugeot’s path to profitability was painful. After Mr. Tavares took control in 2013, the company was bailed out by the French government and Chinese auto group Dongfeng Motor Group, now its two biggest shareholders. Peugeot, running big losses amid mounting labor costs and falling sales, slashed jobs and production to cut costs, skidding past a looming bankruptcy. But the efforts paid off. On Wednesday, Peugeot reported a 31% rise in third-quarter revenue Toyota Cuts Target For Mexican Factory Toyota Motor Corp. is scaling back its Mexico production plans. The company said Wednesday that it would halve its production target to 100,000 Tacoma pickup trucks at its new plant in Guanajuato, Mexico. Toyota will spend $700 million to complete the plant, which is under construction, instead of the originally planned $1 billion. The reduced production target to €15 billion ($17.64 billion), driven by strong growth in all regions except China and healthy demand for its new Peugeot 3008 and 5008 sport-utility vehicles. The revenue includes two months of business from the Opel Vauxhall division. Without Opel Vauxhall, Peugeot sales rose 7% to €12.2 billion in the quarter. Peugeot didn’t report thirdquarter profit. On a call with analysts, Jean-Baptiste de Chatillon, the company’s finance chief, said losses at Opel Vauxhall would weigh on Peugeot’s earnings in the second half of the year, saying, “The recovery plan will kick off beginning in 2018.” means Toyota can get Tacomas rolling off the line more quickly. The plant will produce its first trucks in 2019. Its initial target was for the first half of 2020. “We don’t have enough trucks,” said Didier Leroy, a Toyota executive vice president, of the reduced production target. Two other truck plants, in San Antonio and Baja California, Mexico, are at capacity, but Toyota is still leaving dealers hungry for more, he said. Toyota estimates it needs 100,000 more Tacomas to meet demand, he said. This is the second major change to Toyota’s plan for the plant. In August, Toyota said Corolla sedans that were slated for production in Guanajuato would instead be built at a U.S. plant in a joint venture with Mazda Motor Corp. Toyota is currently looking for a location for that operation. Separately, Toyota said it would expand a revamped manufacturing process that it uses for its core sedan models world-wide to light trucks, such as SUVs and pickups. —Sean McLain in Tokyo and Chester Dawson in Detroit Peugeot’s shares closed down 1.6% at €20.06 on the Paris Euronext exchange on Wednesday. The company’s share price has nearly quadrupled since Mr. Tavares was appointed chief executive in November 2013. With Peugeot’s core business profitable again, Mr. Tavares embarked on an expansion strategy earlier this year, acquiring GM’s German Opel unit and its British Vauxhall subsidiary for €2.2 billion. After years of losses at Opel, GM Chief Executive Mary Barra pulled the plug on the German business after running it for more than 80 years. On Tuesday, GM said it took a $2.3 billion charge related to the sale of Opel Vauxhall. Peugeot sells 35 new cars per employee, compared with 30.4 for an Opel or Vauxhall employee, according to a recent study by Ferdinand Dudenhöffer, head of the Center for Automotive Research at Duisburg-Essen University. He said that Opel would need nearly 5,000 fewer employees if its factories were as productive as Peugeot’s French plants. —Max Bernhard contributed to this article. BUSINESS WATCH UBER TECHNOLOGIES Still reeling from charges of sexism and sexual harassment by a former software engineer, Uber Technologies Inc. now faces a lawsuit from three engineers who allege the ride-hailing firm systematically underpaid women and minorities. The suit, filed in California Superior Court in San Francisco, adds to the legal and public relations woes facing Uber. In the suit, the engineers, Ana Medina, Roxana del Toro Lopez and Ingrid Avendaño, claim Uber’s so-called stack ranking of workers from lowest performing to highest set “arbitrary cutoffs” for similarly skilled workers and ultimately skews in favor of men and white and Asian employees. Ms. Lopez, Ms. Avendaño, who have left Uber, and Ms. Medina, who is still an employee, seek back pay for themselves and others in their situation, according to the suit. An Uber spokesman declined to comment. An attorney for Ms. Medina and the other engineers said they were not available for comment. —Greg Bensinger CHRISTOPHER LEE/BLOOMBERG NEWS Riding-Hailing Firm Faces Suit Over Pay Walgreens’ $30.15 billion in revenue beat a $29.93 billion forecast. GLAXOSMITHKLINE Drugmaker to Weigh Bid for Pfizer Unit GlaxoSmithKline PLC will consider a bid for Pfizer Inc.’s consumer-health business should the U.S. company put it up for sale, Chief Executive Emma Walmsley said Wednesday, leaving the door open to a potential deal that would further expand the U.K. company’s portfolio of pharmacy staples. Pfizer earlier this month said it was exploring a sale or spinoff of its consumer-health business, which analysts have said could fetch more than $10 billion. Glaxo’s consumer-health arm is one of the world’s largest, with revenue of £7.19 billion ($9.44 billion) last year. Glaxo two years ago expanded its consumer-health business by combining it with Novartis AG’s consumer-health unit in a joint venture controlled by the U.K.-based company. Glaxo said revenue rose 4% to £7.84 billion in the three months to Sept. 30, in line with analysts’ expectations. Adjusted operating profit, a measure which strips out one-time items, increased 7% to £2.47 billion, beating expectations of £2.42 billion. Net profit jumped 50% to £1.21 billion because of lower costs related to a $20 billion asset-swap deal with Novartis, which hurt the same period last year. —Denise Roland WALGREENS BOOTS ALLIANCE Results Top Consensus Walgreens Boots Alliance Inc. reported fourth-quarter profit and revenue beat expectations. Earnings for the latest quarter fell to $802 million, or 76 cents per share, from $1.03 billion, or 95 cents per share in the yearearlier period. Adjusted earningsper-share were $1.31, above the FactSet consensus of $1.21. Revenue rose to $30.15 billion from $28.64 billion, above the FactSet consensus of $29.93 billion. The results include costs related to the company’s Rite Aid Corp. deal, Walgreens said. Ownership of the Rite Aid stores is expected to transfer in phases, with a spring 2018 —Emma Court Sprint Corp. and T-Mobile US Inc. both took the unusual step of canceling their earnings calls this week to avoid questions about their potential merger, a move seen by many as a sign they are close to announcing an agreement. Yet despite months of talks, there is still no final deal in hand, according to people familiar with the matter. An agreement to combine the nation’s third- and fourthlargest cellular carriers by subscribers could be announced within the next few weeks, the people said, though it could also still fall apart. Broad outlines of the deal are largely settled, the people said: The transaction will be all-stock, and T-Mobile parent company Deutsche Telekom AG will have control over the combined company. T-Mobile Chief Executive John Legere will run the combined company. Sprint Chairman Masayoshi Son will be cochairman along with Deutsche Telekom CEO Tim Höttges. In a twist, the deal will have no cash breakup fee, the people said. Instead, if regulators block the deal, T-Mobile would have to give Sprint an attractive roaming deal so Sprint customers can connect to T-Mobile’s towers where Sprint doesn’t have coverage, the people said. The companies are now working on business- and network-integration plans and preparing arguments for what is certain to be intense antitrust scrutiny in Washington. “Haggling over an agreement is over,” said one person close to the deal. Shares of Sprint, which closed at $7.10, have fallen nearly 10% in the past month as it became clear the deal wouldn’t carry much, if any, of a premium for Sprint’s investors. The company has a market value of $28 billion. T-Mobile, whose shares are down 1.5% in the past month, has a market value of about $52 billion. —Drew FitzGerald and Dana Mattioli contributed to this article. U.S. Drone-Test Plan Sets Shared Oversight BY ANDY PASZTOR The White House has launched a pilot program expanding commercial drone operations by calling for test sites featuring shared oversight between federal agencies and state, local or tribal governments. The presidential directive issued Wednesday, while short on specifics, establishes a framework for trying out new regulatory initiatives and gradually opening up more airspace nationwide to such unmanned aircraft, likely including package-delivery services. Creating and learning lessons from such sites will help “enhance the safety of the American public, increase the efficiency and productivity of American industry and create tens of thousands of new American jobs,” according to the document signed by President Donald Trump. Within a year, the Federal Aviation Administration and the Transportation Department are supposed to work with operators and local officials to set up locations test- ing novel air-traffic management networks, along with proposed radio or cellular systems designed to track low-altitude drones. The move comes amid increasing industry frustration with what drone proponents consider regulatory gridlock stemming from safety and security concerns throughout federal agencies. Industry officials previously said they expected a handful to perhaps as many as 10 localized tests to be approved, but the White House didn’t provide any details. The Transportation Department said it was looking for a minimum of five partnerships. The initiative was rolled out as another example of Mr. Trump’s campaign to make U.S. companies more competitive versus foreign rivals by eliminating federal restrictions stifling innovation. “America’s skies are changing,” with the number of commercial drones projected to increase fivefold by 2021, Michael Kratsios, deputy chief of the White House science office, told reporters. Borrowing Benchmarks | WSJ.com/bonds Money Rates 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 Inflation Sept. index level Chg From (%) Aug. '17 Sept. '16 U.S. consumer price index 246.819 252.941 All items Core 0.53 0.19 2.2 1.7 International rates Latest Week ago 52-Week High Low Prime rates U.S. Canada Japan Week Latest ago October 25, 2017 4.25 4.25 4.25 3.50 3.20 3.20 3.20 2.70 1.475 1.475 1.475 1.475 —52-WEEK— High Low Policy Rates Euro zone Switzerland Britain Australia 0.00 0.50 0.25 1.50 0.00 0.50 0.25 1.50 0.00 0.50 0.25 1.50 0.00 0.50 0.25 1.50 1.38 0.15 Overnight repurchase 1.14 U.S. 1.20 Week Latest ago High Low Bid Offer 1.75 1.3125 1.1600 1.1700 1.1900 1.005 0.995 1.300 0.240 1.105 1.090 1.180 0.340 1.245 1.240 1.245 0.475 4 weeks 13 weeks 26 weeks 1.00 Federal funds Effective rate 1.1700 1.1700 1.2000 0.3500 Fannie Mae 30-year mortgage yields 30 days 60 days Week Latest ago 0.5625 0.2400 0.3000 0.3200 Secondary market Discount 1.75 1.3125 1.0500 1.1600 1.1700 Treasury bill auction U.S. government rates 1.75 1.3125 1.0000 1.1600 1.1700 —52-WEEK— High Low 3.540 3.441 3.865 2.987 3.573 3.463 3.899 3.021 —52-WEEK— High Low Other short-term rates Latest Week ago 52-Week high low Call money 3.00 3.00 3.00 2.25 Commercial paper (AA financial) 90 days 1.27 1.24 1.30 0.62 1.23999 1.37446 1.56444 1.84456 0.53044 0.87567 1.24267 1.55622 Libor One month Three month Six month One year 1.23999 1.37446 1.56219 1.84456 1.23888 1.36261 1.55055 1.83456 —52-WEEK— High Low Euro Libor One month Three month Six month One year -0.405 -0.381 -0.321 -0.232 -0.405 -0.375 -0.317 -0.230 -0.376 -0.319 -0.212 -0.071 -0.405 -0.381 -0.321 -0.232 Euro interbank offered rate (Euribor) One month Three month Six month One year -0.373 -0.331 -0.274 -0.183 -0.373 -0.329 -0.274 -0.183 -0.366 -0.311 -0.210 -0.069 -0.375 -0.332 -0.275 -0.183 Latest Value Traded 52-Week High Low DTCC GCF Repo Index Treasury MBS 1.150 27.270 1.366 0.244 1.159 104.770 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 4427 1.150 98.860 unch. 6378 1.140 98.710 -0.005 1988 1.290 Notes on data: U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks, and is effective June 15, 2017. Other prime rates aren’t directly comparable; lending practices vary widely by location; Discount rate is effective June 15, 2017. DTCC GCF Repo Index is Depository Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET. Futures on the DTCC GCF Repo Index are traded on NYSE Liffe US. Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; General Electric Capital Corp.; Tullett Prebon Information, Ltd. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. B8 | Thursday, October 26, 2017 MARKETS DIGEST EQUITIES Dow Jones Industrial Average S&P 500 Index Last Year ago 23329.46 t 112.30, or 0.48% High, low, open and close for each trading day of the past three months. Trailing P/E ratio 21.18 19.79 P/E estimate * 19.58 17.26 Dividend yield 2.20 2.58 All-time high 23441.76, 10/24/17 Nasdaq Composite Index Last 2557.15 t 11.98, or 0.47% 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 6563.89 t 34.54, or 0.52% 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 6300 Session high t DOWN Session open t Close UP Close Open Session low 65-day moving average 65-day moving average 21500 2440 6200 2410 6100 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 52-Week Low High % chg % chg 3-yr. ann. YTD Dow Jones Industrial Average Transportation Avg Utility Average Total Stock Market Barron's 400 -0.48 23451.51 23251.11 23329.46 -112.30 9958.51 9767.69 748.16 737.47 9790.09 -161.42 -1.62 -3.03 -0.40 26605.03 26351.05 26493.79 -130.03 689.31 680.53 685.44 -4.52 -0.49 Nasdaq Stock Market Nasdaq Composite 6600.64 Nasdaq 100 6087.58 746.34 6517.93 6011.24 -0.65 -0.52 6563.89 -34.54 6055.04 -25.18 23441.76 17888.28 28.2 18.0 10038.13 7967.02 22.9 8.3 4.5 754.80 625.44 12.5 13.1 8.5 26697.94 21514.15 691.35 521.59 19.9 27.8 13.8 13.9 9.1 9.9 6629.05 6122.61 -0.41 5046.37 4660.46 25.0 24.6 11.6 21.9 24.5 Late Trading 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. Volume, Advancers, Decliners NYSE NYSE Amer. Most-active issues in late trading Company SPDR S&P 500 13.5 14.4 Volume (000) Symbol SPY Last Net chg 18,577.8 255.65 After Hours % chg High 0.36 Low 0.14 256.50 255.21 Principal US Mega-Cap USMC 4,200.0 25.01 -0.04 -0.17 25.01 25.01 General Electric GE 4,042.5 21.55 0.05 0.23 21.79 21.42 Ford Motor F 3,828.2 12.04 … unch. 12.09 12.02 VanEck Vectors Gold Miner GDX 3,622.1 22.78 -0.05 -0.22 22.87 22.71 Vipshop Holdings ADR VIPS iShares MSCI Japan ETF EWJ 3,573.4 8.01 0.04 0.50 8.01 7.97 3,457.5 57.67 … unch. 57.69 57.65 Bank of America 3,235.6 27.66 0.03 0.11 27.69 27.61 595.3 121.00 19.85 Standard & Poor's 500 Index 2567.40 2544.00 2557.15 -11.98 -0.47 2575.21 2085.18 19.5 14.2 9.2 MidCap 400 SmallCap 600 1829.80 911.19 1808.09 899.77 1820.54 -10.65 906.82 -4.33 -0.58 -0.48 1834.29 918.72 1476.68 703.64 20.2 24.7 9.6 8.2 9.7 12.0 Other Indexes Russell 2000 1500.42 1482.53 1493.48 -6.94 -0.46 1512.09 1156.89 24.0 10.0 10.1 Westport Fuel Systems WPRT 29.0 3.58 0.23 6.87 3.58 Quotient Ltd. QTNT 11.0 5.50 0.31 5.97 5.99 5.19 Teradyne Inc TER 150.6 41.25 2.13 5.44 41.45 39.00 Agnico-Eagle Mines AEM 39.7 45.80 1.85 4.21 46.25 43.95 NYSE Composite Value Line NYSE Arca Biotech -0.55 12406.20 12280.31 12336.58 -68.42 543.82 536.97 4177.41 4095.05 540.32 12430.52 10289.35 -0.64 -3.50 4117.78 -44.93 -1.08 17.2 11.6 5.2 545.98 455.65 14.9 6.7 4.2 4304.77 2834.14 37.3 33.9 8.3 NYSE Arca Pharma 550.73 545.64 547.50 -4.32 -0.78 560.52 463.78 12.7 13.7 1.6 102.04 100.36 -0.49 -0.48 101.60 73.36 35.3 10.2 PHLX§ Gold/Silver 101.11 13.4 83.65 82.30 -0.90 96.72 73.03 -3.3 4.8 PHLX§ Oil Service 82.61 2.8 130.44 128.20 129.84 -0.42 192.66 117.79 -18.4 1242.21 13.20 1216.99 10.99 802.88 48.6 9.19 -21.1 -1.07 -0.32 1229.27 -16.11 -1.29 0.07 11.23 0.63 Philadelphia Stock Exchange Region/Country Index Close –9.20 –1.23 –0.40 Latest % chg YTD % chg –0.31 –0.32 –0.16 16.8 17.1 20.4 DJ Americas 615.53 –0.52 –3.20 0.42 Sao Paulo Bovespa 76671.13 320.94 S&P/TSX Comp 15854.77 –0.32 –50.37 S&P/BMV IPC 48876.46 –1280.76 –2.55 Santiago IPSA 4170.83 –31.27 –0.74 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 100 387.13 389.54 4048.50 5374.89 12953.41 1437.58 22446.39 541.27 1118.13 10153.30 587.82 9084.04 7447.21 –2.20 –1.99 –31.54 –19.91 –59.78 –4.15 –183.18 –2.40 –8.90 –52.40 –0.56 –110.80 –79.33 Asia-Pacific Australia China Hong Kong India Japan Singapore South Korea Taiwan S&P/ASX 200 5905.60 Shanghai Composite 3396.90 Hang Seng 28302.89 S&P BSE Sensex 33042.50 Nikkei Stock Avg 21707.62 Straits Times 3343.88 Kospi 2492.50 Weighted 10750.57 8.00 8.65 147.92 435.16 –97.55 9.21 2.01 6.79 NTRI 56.1 51.60 -6.70 -11.49 58.30 48.50 Ultra Clean Holdings UCTT 157.6 29.15 -3.54 -10.83 32.69 27.00 -29.4 -19.1 Brighthouse Financial BHF 25.7 56.00 -6.06 -9.76 62.16 56.00 35.6 26.2 -20.0 -11.3 CA Inc CA 125.7 31.70 -2.43 -7.12 34.13 31.70 Varian Medical Sys VAR 54.5 100.77 -7.13 -6.61 107.90 99.23 7.1 11.2 12.3 10.5 12.8 –2.3 16.7 12.0 –3.0 8.6 10.0 10.5 4.3 –0.57 –0.51 –0.77 –0.37 –0.46 –0.29 –0.81 –0.44 –0.79 –0.51 –0.10 –1.21 –1.05 0.14 0.26 0.53 1.33 –0.45 13.9 27.3 3.7 7.1 29.4 0.28 0.08 0.06 4.2 9.4 28.6 24.1 13.6 16.1 23.0 16.2 Company Symbol Ablynx ADR DryShips Macrogenics Dynegy VolitionRX ABLX Lightpath Techs A SenesTech Energy Focus OFG Bancorp Hornbeck Offshore LPTH LINE ADR Kraton Neurotrope Quotient Ltd. Cidara Therapeutics LN DRYS MGNX DYN VNRX ... -99.9 -22.5 0.6 -50.1 Acadia Healthcare Aytu BioScience trivago ADR ZAGG Inc Innoviva ACHC 3.41 2.98 2.45 9.25 3.76 0.44 0.38 0.30 1.10 0.44 14.81 14.62 13.69 13.50 13.25 3.48 10.69 5.32 14.48 9.07 120.0 ... -39.2 -11.6 -19.8 Chipotle Mexican Grill RISE Education Cayman ADR Speedway Motorsports iRobot Advanced Micro Devices CMG 41.45 47.00 4.59 5.19 8.75 4.66 5.02 0.49 0.55 0.90 12.67 11.96 11.95 11.85 11.46 44.15 30.90 -3.3 47.33 24.95 49.3 29.00 0.18 1107.9 7.74 3.22 -13.9 11.85 5.60 -11.0 BioLife Solutions Digital Ally Alaska Air Group Anixter Intl ZK International Group BLFS HOS CDTX 1.21 1.50 1.51 8.10 1.51 Most Active Stocks Company Symbol Advanced Micro Devices General Electric AT&T SPDR S&P 500 ProSharesUltVIXST AMD iPath S&P 500 VIX ST Fut Bank of America Finl Select Sector SPDR Bon-Ton Stores iShares MSCI Emg Markets VXX Volume % chg from Latest Session (000) 65-day avg Close % chg 52-Week High Low Selected rates A consumer rate against its benchmark over the past year Five-year ARM, Rate 2.00 t 0.00 Citizens Equity First Credit Union 3.00% Peoria, IL 309-633-3603 Hanscom Federal Credit Union 3.00% Hanscom AFB, MA 800-656-4328 1 3 6 month(s) Interest rate Federal-funds rate target 1.00-1.25 1.00-1.25 Prime rate* 4.25 4.25 Libor, 3-month 1.36 1.37 Money market, annual yield 0.32 0.32 Five-year CD, annual yield 1.46 1.47 30-year mortgage, fixed† 3.89 3.95 15-year mortgage, fixed† 3.19 3.25 Jumbo mortgages, $424,100-plus† 4.33 4.40 Five-year adj mortgage (ARM)† 3.50 3.53 New-car loan, 48-month 3.06 3.02 HELOC, $30,000 5.21 5.19 3-yr chg 52-Week Range (%) Low 0 2 4 6 8 High (pct pts) 0.25 l l 3.50 0.88 l 0.26 l 1.19 l l 3.57 l 2.85 l 4.23 l 3.13 l 2.85 l 4.57 1.25 4.25 1.37 0.36 1.47 4.33 3.50 4.88 4.03 3.36 5.30 1.00 1.00 1.14 -0.10 -0.04 -0.07 0.08 0.05 -0.04 -0.20 0.75 Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest banks.† Excludes closing costs. Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com EEM 10% 0 1.50 –5 0.75 –10 0.00 –15 30 Close Symbol WSJ Dollar index s Euro s Yen Country/currency WSJ .COM Volume % chg from Latest Session (000) 65-day avg Close % chg US$vs, YTDchg Wed in US$ per US$ (%) Americas Argentina peso .0572 17.4858 Brazil real .3093 3.2332 Canada dollar .7813 1.2799 Chile peso .001588 629.60 Colombia peso .0003339 2994.84 Ecuador US dollar 1 1 Mexico peso .0525 19.0403 Peru new sol .3093 3.234 Uruguay peso .03370 29.6700 Venezuela b. fuerte .099419 10.0585 10.2 –0.7 –4.8 –6.0 –0.2 unch –8.2 –3.6 1.1 0.6 Asia-Pacific 2016 2017 Yield (%) Last Week ago 52-Week High Low Total Return (%) 52-wk 3-yr 1450.336 2.181 2.105 2.237 1.482 –2.024 1.677 2.444 3.079 2.640 5.130 2.900 1.953 2.339 3.028 2.590 5.124 2.840 1.881 2.609 3.390 2.790 6.448 3.120 2.516 1.783 2.721 2.090 4.948 2.230 1.677 0.930 2.178 0.159 7.380 0.089 1.864 802.413 5.496 5.401 6.290 5.279 4.689 5.721 1.429 3.712 2.192 4.184 1.966 2.593 Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch Australian dollar .7703 1.2982 China yuan .1506 6.6399 Hong Kong dollar .1281 7.8036 India rupee .01543 64.815 Indonesia rupiah .0000737 13572 Japan yen .008792 113.74 Kazakhstan tenge .002999 333.40 Macau pataca .1244 8.0411 Malaysia ringgit .2361 4.2355 New Zealand dollar .6889 1.4516 Pakistan rupee .00949 105.405 Philippines peso .0193 51.805 Singapore dollar .7350 1.3606 South Korea won .0008867 1127.81 Sri Lanka rupee .0065003 153.84 Taiwan dollar .03304 30.262 5811 4006 3015 2553 2085 52-Week High Low 10.80 -0.14 -5.07 -0.16 -0.13 13.50 30.68 14.65 51.56 20.57 2.30 25.45 12.21 50.07 14.90 1819 32.68 -25.93 1644 19.00 17.36 1462 147.84 -0.30 1446 30.80 -0.06 1376 19.80 3.07 54.34 31.85 150.75 31.04 20.00 30.91 14.36 111.40 23.68 9.23 8.82 29.34 13.85 51.20 15.02 Track the Markets Compare the performance of selected global stock indexes, bond ETFs, currencies and commodities at WSJ.com/TrackTheMarkets –6.5 –4.4 0.6 –4.6 0.3 –2.8 –0.1 1.6 –5.6 0.5 1.0 4.4 –6.0 –6.6 3.6 –6.8 US$vs, YTDchg Wed in US$ per US$ (%) Country/currency .03013 33.190 –7.3 .00004400 22725 –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 .04615 21.671 –15.6 .1587 6.3005 –10.9 1.1813 .8466 –10.9 .003810 262.44 –10.8 .009499 105.27 –6.8 .1247 8.0170 –7.3 .2787 3.5878 –14.3 .01731 57.759 –5.7 .1217 8.2183 –9.8 1.0104 .9897 –2.9 .2655 3.7668 6.9 .0373 26.7750 –1.1 1.3262 .7540 –6.9 Middle East/Africa Bahrain dinar Egypt pound Israel shekel Kuwait dinar Oman sul rial Qatar rial Saudi Arabia riyal South Africa rand 2.6517 .3771 –0.02 .0567 17.6520 –2.6 .2850 3.5086 –8.8 3.3088 .3022 –1.1 2.5987 .3848 –0.04 .2747 3.641 0.01 .2666 3.7505 –0.01 .0712 14.0487 2.6 Close Net Chg % Chg YTD%Chg WSJ Dollar Index 87.16 –0.15–0.18 –6.22 Sources: Tullett Prebon, WSJ Market Data Group Commodities COMMODITIES Wednesday 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 256.0 -68.0 -3.1 1.8 ... U.S.-dollar foreign-exchange rates in late New York trading Yen, euro vs. dollar; dollar vs. major U.S. trading partners 2.25 7.53 1.43 6.25 1.95 101.43 68.10 88.60 63.40 10.50 6.72 Currencies Forex Race 5 -24.7 ... 6.8 33.1 69.1 * Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least 5,000 shares =Has traded fewer than 65 days 10-yr Treasury, Ryan ALM 1718.820 DJ Corporate 378.244 Aggregate, Barclays Capital 1931.600 High Yield 100, Merrill Lynch 2867.653 Fixed-Rate MBS, Barclays 1978.930 Muni Master, Merrill 521.502 EMBI Global, J.P. Morgan Company -13.3 131.2 ... 119.7 20.2 Ranked by change from 65-day average* 19,802 3,612 393 318 355 33.54 16.28 19.40 0.31 33.94 Corporate Borrowing Rates and Yields Treasury, Ryan ALM ZKIN ACHC Acadia Healthcare MGNX Macrogenics IHF iSh US Healthcare Prov WisdomTree Europe Hgd SC EUSC FSBK First South Bancorp One year ago Bond total return index AXE 153.48 27.92 26.92 1.98 46.82 Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group Yield/Rate (%) Last (l)Week ago ALK 52-Week Low % chg 273.78 11.10 16.80 47.10 6.22 499.00 17.86 23.47 109.78 15.65 5.98 -0.92 -13.33 1.95 -0.30 -13.33 68.92 -10.47 -13.19 66.05 -9.30 -12.34 6.81 -0.95 -12.24 3.03 -0.18 -0.60 37.26 -0.22 BONT 1 2 3 5 710 years maturity DGLY 36.35 27.63 26.65 0.84 45.79 3.75% t 1.00 AMD 190.3 19.4 31.6 12311.2 17.9 3.00 Somerset Savings Bank, SLA 2.88% Bound Brook, NJ 732-560-1700 IRBT 80,701 77,988 68,100 62,585 57,004 * Volumes of 100,000 shares or more are rounded to the nearest thousand Wednesday TRK 277.01 -47.29 -14.58 12.21 -2.06 -14.44 19.76 -3.22 -14.01 65.11 -10.15 -13.49 12.33 -1.92 -13.47 1,702 2,480 4,113 827 322 3.50% 2.88% 800-644-8261 REDU Cellect Biotechnology ADR APOP SPDR Bloomberg EM Loc Bd EBND PennantPark Floatg Rt Cap PFLT Xtrackers USD HY Corp Bd HYLB QAT iSh MSCI Qatar Capped ThirdFederalSavingsandLoanAssociationofCleveland 2.59% Cleveland, OH 866-627-1785 Florence Savings Bank Florence, MA INVA 15.65 6.22 32.38 21.30 43.03 33.33 257.51 208.38 416.80 15.02 t 5-year adjustablerate mortgage 4.00% t (ARM) 3.00 ZAGG 54.34 30.91 6.82 0.17 24.27 8.12 18.20 5.15 14.87 8.67 -13.47 -1.78 -3.93 -0.50 6.58 notes and bonds Bankrate.com avg†: TRVG 32.68 -11.44 -25.93 3.47 -1.14 -24.77 8.34 -2.42 -22.49 14.50 -2.95 -16.91 11.73 -2.16 -15.55 12.33 21.50 33.49 255.29 17.65 XLF * 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. High 185.5 119.1 252.2 35.5 220.6 BAC NYSE Arca Latest Session Close Net chg % chg 165,668 106,447 T 94,215 SPY 85,033 UVXY 83,983 GE s U.S. consumer rates AYTU Volume Movers Benchmark Yields Treasury yield curve andtoRates Yield maturity of current bills, Consumer Rates and Returns to Investor Symbol ... ... 28.63 23.15 799680.00 0.98 31.85 14.36 17.36 11.33 5.84 17.05 5.45 2.08 15.71 OFG QTNT Company 5.01 0.94 2.81 1.57 0.33 EFOI NTRP High 52-Week Low % chg 22.51 5.00 19.00 10.78 2.43 SNES KRA Nasdaq Total volume*2,168,873,816 284,352,573 Adv. volume* 588,395,444 79,217,864 Decl. volume*1,551,348,519 204,511,038 Issues traded 3,040 1,293 Advances 937 223 Declines 1,946 1,052 Unchanged 157 18 New highs 87 43 New lows 70 29 Closing tick 35 5 Closing Arms† 1.27 0.58 Block trades* 9,047 1,465 Percentage Losers Latest Session Close Net chg % chg CREDIT MARKETS & CURRENCIES N D J FMAM J J A S O 2016 2017 3.35 Nutrisystem Sources: SIX Financial Information; WSJ Market Data Group 5-year Treasury note yield 19.62 125.55 101.00 ...And losers Percentage Gainers... Net chg 2956.05 381.75 257.52 The Global Dow DJ Global Index DJ Global ex U.S. Americas Brazil Canada Mexico Chile 1245.38 22.51 BWLD Sources: SIX Financial Information; WSJ Market Data Group International Stock Indexes World Percentage gainers… Buffalo Wild Wings KBW Bank PHLX§ Semiconductor CBOE Volatility BAC Total volume* 908,404,885 12,564,729 Adv. volume* 229,185,172 2,457,720 Decl. volume* 669,133,274 9,984,045 Issues traded 3,071 327 Advances 764 89 Declines 2,215 220 Unchanged 92 18 New highs 123 … New lows 111 12 Closing tick 5 9 Closing Arms† 1.06 1.22 Block trades* 6,917 103 TR/CC CRB Index Crude oil, $ per barrel Natural gas, $/MMBtu Gold, $ per troy oz. 598.60 -0.94 185.40 52.18 2.919 1275.40 -0.42 -0.29 -0.055 0.40 -0.16 600.13 527.06 -0.23 195.14 54.45 -0.55 3.93 -1.85 0.03 1346.00 166.50 42.53 2.56 1127.80 % Chg 10.86 YTD % chg 5.53 -1.76 -3.69 6.10 -2.87 6.88 -21.62 0.84 10.90 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. Thursday, October 26, 2017 | B9 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. Wednesday, October 25, 2017 Stock Net Sym Close Chg NYSE ABB ABB 25.03 -0.08 AES AES 10.90 -0.09 Aflac AFL 84.07 -0.49 AGCO AGCO 70.43 -1.07 t AT&T T 33.49 -1.37 AbbottLabs ABT 55.49 0.11 AbbVie ABBV 91.77 0.08 s Accenture ACN 141.16 2.25 AcuityBrands AYI 156.39 -2.61 Adient ADNT 83.64 -2.29 t AdvanceAuto AAP 83.31 -0.94 AdvSemiEngg ASX 6.28 0.02 Aegon AEG 5.95 0.01 AerCap AER 52.06 -0.84 Aetna AET 160.12 0.04 AffiliatedMgrs AMG 189.19 -6.40 s AgilentTechs A 67.39 0.07 AgnicoEagle AEM 43.95 -0.29 Agrium AGU 110.12 -0.37 s AirProducts APD 154.59 0.74 t AlaskaAir ALK 68.92-10.47 Albemarle ALB 138.53 -0.19 Alcoa AA 49.52 -0.56 AlexandriaRealEst ARE 122.02 -0.05 Alibaba BABA 170.22 -3.48 Alleghany Y 565.67 2.35 Allegion ALLE 86.49 -1.99 t Allergan AGN 180.34 -2.58 AllianceData ADS 235.82 -3.98 AllianceBernstein AB 25.75 0.15 AlliantEnergy LNT 43.25 -0.23 s AllisonTransm ALSN 40.55 0.19 Allstate ALL 93.28 -0.36 s AllyFinancial ALLY 25.67 1.04 AlticeUSA ATUS 25.40 0.29 Altria MO 63.79 -0.34 AlumofChina ACH 21.51 0.35 Ambev ABEV 6.48 -0.05 Ameren AEE 61.10 -0.63 AmericaMovil AMX 17.81 -1.18 AmericaMovil A AMOV 17.66 -1.11 AmCampus ACC 42.31 0.09 AEP AEP 73.58 -0.39 s AmericanExpress AXP 93.53 -0.33 AmericanFin AFG 104.73 -0.93 AIG AIG 65.10 -0.03 AmerTowerREIT AMT 137.33 -0.70 AmerWaterWorks AWK 86.93 0.11 Amerigas APU 44.27 -0.61 s Ameriprise AMP 157.06 3.09 AmerisourceBrgn ABC 82.22 0.37 Ametek AME 68.51 -0.22 s Amphenol APH 87.25 0.60 AnadarkoPetrol APC 47.68 -0.37 Andeavor ANDV 104.90 -1.85 AB InBev BUD 121.56 -2.44 AnnalyCap NLY 11.84 -0.20 AnteroResources AR 18.51 -0.45 s Anthem ANTM 205.71 10.46 Aon AON 151.65 -0.73 Apache APA 39.51 -0.63 ApartmtInv AIV 43.70 -0.05 ApolloGlobalMgmt APO 32.28 -0.57 AquaAmerica WTR 35.35 0.14 Aramark ARMK 42.97 0.21 ArcelorMittal MT 30.06 -0.37 ArcherDaniels ADM 43.44 -0.29 Arconic ARNC 24.85 0.52 AristaNetworks ANET 189.61 -3.49 ArrowElec ARW 83.39 0.06 AstraZeneca AZN 34.12 -0.09 Athene ATH 53.15 -1.17 AtmosEnergy ATO 86.04 -0.27 Autohome ATHM 57.27 -1.41 Autoliv ALV 122.39 -1.53 AutoZone AZO 587.40 1.57 Avalonbay AVB 180.48 0.97 s Avangrid AGR 49.84 0.34 s AveryDennison AVY 104.05 5.14 Stock Net Sym Close Chg AxaltaCoating AXTA 29.06 0.01 BB&T BBT 47.78 0.20 BCE BCE 46.34 -0.27 BHPBilliton BHP 40.75 -0.78 BHPBilliton BBL 35.92 -0.71 BP BP 38.79 -0.21 BRF BRFS 13.75 0.11 t BT Group BT 17.83 -0.32 BWX Tech BWXT 60.58 -1.23 t BakerHughes BHGE 30.07 -0.62 Ball BLL 42.45 -0.47 BancoBilbaoViz BBVA 8.57 0.03 BancodeChile BCH 91.26 0.55 BancoMacro BMA 134.09 -0.01 BcoSantChile BSAC 30.58 0.10 BancoSantander SAN 6.63 0.04 BanColombia CIB 42.48 -0.19 s BankofAmerica BAC 27.63 -0.05 BankofMontreal BMO 77.72 -0.59 BankNY Mellon BK 51.75 -1.13 BkNovaScotia BNS 64.25 -0.40 Barclays BCS 10.44 0.07 Bard CR BCR 328.03 -0.09 BarrickGold ABX 15.75 -0.10 s BaxterIntl BAX 64.38 0.03 BectonDickinson BDX 210.39 -0.58 Berkley WRB 70.29 0.17 BerkHathwy A BRK.A 283035-1535.00 BerkHathwy B BRK.B 188.71 -1.07 s BerryGlobal BERY 59.96 0.20 BestBuy BBY 55.17 -1.48 Bio-RadLab A BIO 222.22 0.25 BlackKnight BKI 44.95 0.25 BlackBerry BB 10.75 -0.27 BlackRock BLK 469.15 -4.57 BlackstoneGroup BX 34.17 -0.42 t BoardwalkPipe BWP 14.27 -0.47 Boeing BA 258.42 -7.58 BorgWarner BWA 51.66 -1.09 BostonProperties BXP 121.49 0.07 BostonScientific BSX 29.61 -0.19 Braskem BAK 29.33 0.14 Bristol-Myers BMY 64.00 0.35 BritishAmTob BTI 64.53 1.27 BroadridgeFinl BR 84.26 -0.12 BrookfieldMgt BAM 41.61 -0.82 BrookfieldInfr BIP 42.59 -0.60 Brown&Brown BRO 49.21 -0.24 Brown-Forman A BF.A 56.09 -0.47 Brown-Forman B BF.B 55.66 -0.25 t BuckeyePtrs BPL 50.89 -1.19 Bunge BG 70.02 -0.71 BurlingtonStores BURL 88.98 -0.14 CBD Pao CBD 24.59 ... CBRE Group CBG 39.00 -0.52 CBS A CBS.A 58.18 0.46 CBS B CBS 57.23 0.29 s CF Industries CF 37.68 0.07 CGI Group GIB 53.09 -0.17 CIT Group CIT 46.50 -1.01 CMS Energy CMS 47.97 -0.45 CNA Fin CNA 50.34 -0.20 CNOOC CEO 128.80 1.65 CPFLEnergia CPL 16.94 0.09 CRH CRH 37.07 -0.10 CVS Health CVS 75.53 -0.48 CabotOil COG 24.42 -0.50 CamdenProperty CPT 91.23 -0.08 CampbellSoup CPB 46.21 0.08 CIBC CM 88.79 -1.10 CanNtlRlwy CNI 81.44 -1.70 CanNaturalRes CNQ 32.48 -0.07 CanPacRlwy CP 174.23 -2.93 Canon CAJ 36.38 -0.47 CapitalOne COF 90.82 1.30 CardinalHealth CAH 67.05 0.61 Carlisle CSL 110.74 5.12 CarMax KMX 74.17 -0.61 Carnival CCL 65.84 -0.58 Carnival CUK 66.18 -0.13 Caterpillar CAT 136.84 -1.40 Celanese A CE 104.46 -1.29 Cemex CX 8.10 -0.12 Stock Net Sym Close Chg CenovusEnergy CVE 9.40 -0.07 Centene CNC 90.76 -2.26 CenterPointEner CNP 29.38 -0.21 CentraisElBras EBR 7.22 0.28 CenturyLink CTL 18.53 -0.21 Chemours CC 56.82 -0.13 Chevron CVX 118.44 -0.79 ChinaEastrnAir CEA 25.24 0.10 ChinaLifeIns LFC 16.11 -0.07 t ChinaMobile CHL 50.23 -0.31 ChinaPetrol SNP 72.72 -0.37 ChinaSoAirlines ZNH 35.10 0.44 ChinaTelecom CHA 51.43 0.34 ChinaUnicom CHU 14.36 -0.14 t Chipotle CMG 277.01-47.29 Chubb CB 154.16 -0.24 ChunghwaTelecom CHT 33.74 0.01 Church&Dwight CHD 45.76 0.04 s Cigna CI 195.70 1.81 CimarexEnergy XEC 113.04 -0.31 Citigroup C 73.62 -0.62 CitizensFin CFG 38.03 -0.34 Clorox CLX 127.09 -0.12 Coach COH 40.26 ... Coca-Cola KO 46.05 -0.13 Coca-Cola Euro CCE 41.17 -0.52 Coca-Cola Femsa KOF 69.24 -0.73 Colgate-Palmolive CL 71.42 -0.42 ColonyNorthStar CLNS 12.54 -0.04 s Comerica CMA 78.88 -0.68 SABESP SBS 9.36 -0.08 ConagraBrands CAG 33.93 -0.24 ConchoRscs CXO 130.53 -0.13 ConocoPhillips COP 49.96 -1.03 ConEd ED 85.33 -0.43 ConstBrands A STZ 212.48 -0.17 s ConstBrands B STZ.B212.79 0.25 ContinentalRscs CLR 37.74 0.12 Cooper COO 237.90 -1.65 Corning GLW 31.54 -0.40 t Coty COTY 15.25 -0.10 Credicorp BAP 206.41 -1.78 CreditSuisse CS 16.12 -0.05 CrestwoodEquity CEQP 23.85 -0.05 CrownCastle CCI 104.12 0.06 CrownHoldings CCK 59.48 -0.43 s Cullen/Frost CFR 99.52 0.62 Cummins CMI 176.92 -1.48 DTE Energy DTE 110.77 -1.93 DXC Tech DXC 90.63 -0.78 Danaher DHR 90.65 -0.30 Darden DRI 81.81 -0.83 DaVita DVA 62.60 0.10 Deere DE 130.56 -0.46 s DellTechnologies DVMT 82.60 -0.65 DelphiAutomotive DLPH 97.40 -0.87 DeltaAir DAL 52.24 -0.94 DeutscheBank DB 17.12 -0.06 DevonEnergy DVN 34.35 -0.49 Diageo DEO 135.08 0.29 DigitalRealty DLR 122.98 1.79 DiscoverFinSvcs DFS 65.15 -2.24 Disney DIS 97.80 -0.49 s DolbyLab DLB 59.98 -0.79 DollarGeneral DG 83.97 -0.13 DominionEner D 79.68 -0.67 Domino's DPZ 185.75 1.91 Donaldson DCI 47.68 -0.09 DouglasEmmett DEI 39.47 -0.07 Dover DOV 95.00 -0.89 DowDuPont DWDP 71.09 -0.77 DrPepperSnap DPS 85.52 -4.19 DrReddy'sLab RDY 35.74 -0.24 DukeEnergy DUK 87.75 -0.24 DukeRealty DRE 28.79 0.15 ENI E 32.67 -0.14 EOG Rscs EOG 96.15 -0.33 EQT EQT 60.86 -3.19 EQT Midstream EQM 69.85 -1.41 EastmanChem EMN 90.63 0.16 Eaton ETN 78.98 -0.60 EatonVance EV 50.74 -0.97 Ecolab ECL 132.49 0.19 New Highs and Lows | WSJ.com/newhighs Wednesday, October 25, 2017 Stock 52-Wk % Sym Hi/Lo Chg Stock NYSE highs - 123 Accenture ACN AgilentTechs A AirProducts APD AllisonTransm ALSN AllyFinancial ALLY AmericanExpress AXP Ameriprise AMP Amphenol APH Anthem ANTM AppliedIndlTechs AIT AshlandGlobal ASH Avangrid AGR AveryDennison AVY BBX CapitalA BBX BancCA PfdE BANCpE BankofAmWtA BAC.WS.A BankofAmerica BAC BankofButterfield NTB BaxterIntl BAX BeazerHomes BZH BerryGlobal BERY CACI Intl CACI CF Industries CF CNO Financial CNO CalAtlantic CAA Cigna CI Comerica CMA CommunityHlthcr CHCT ConstBrands B STZ.B Cubic CUB Cullen/Frost CFR CurtissWright CW DaqoNewEnergy DQ DellTechnologies DVMT DolbyLab DLB EmpresaDisCom EDN Entergy ETR Exelon EXC FB Financial FBK FactSet FDS FirstAmerFin FAF Flagstar FBC Fortive FTV GTT Comm GTT GoDaddy GDDY GraceWR GRA Graco GGG GreenDot GDOT GrubHub GRUB Haemonetic HAE Heico A HEI.A HomeDepot HD HoraceMannEdu HMN DR Horton DHI HoulihanLokey HLI ING Groep ING IRSA IRS IDEX IEX IndepRealty IRT iStarPfdD STARpD 141.24 68.52 154.82 40.96 25.85 94.24 159.57 88.19 209.74 70.05 68.00 50.07 104.50 8.20 27.67 15.79 27.92 37.57 65.00 20.42 60.27 147.31 38.01 25.07 39.93 195.84 80.25 27.99 212.79 57.05 100.20 114.94 37.74 83.35 61.45 44.51 86.49 40.18 40.43 188.68 51.38 37.38 73.37 34.75 46.09 75.26 129.74 56.47 57.93 46.95 78.35 166.95 45.45 43.82 44.15 19.01 29.50 127.18 10.63 25.58 1.6 0.1 0.5 0.5 4.2 -0.4 2.0 0.7 5.4 -1.4 ... 0.7 5.2 1.5 2.0 -0.2 -0.2 2.0 ... -1.5 0.3 0.9 0.2 0.5 0.6 0.9 -0.9 ... 0.1 1.3 0.6 0.5 -2.6 -0.8 -1.3 -0.8 0.4 0.3 1.6 0.5 0.2 1.6 -1.1 2.5 0.1 6.3 -1.0 1.9 11.2 0.6 1.6 ... 6.3 -0.1 3.5 0.1 -1.7 0.1 -0.3 0.2 52-Wk % Sym Hi/Lo Chg Stock JPMorganWt JPM.WS JPMorganChase JPM KB Home KBH KKR KKR Kemper KMPR KeysightTechs KEYS Kraton KRA Leidos LDOS Lennar B LEN.B Lennar A LEN LincolnNational LNC MI Homes MHO ManchesterUnited MANU MarriottVacations VAC Maximus MMS MeritageHomes MTH MettlerToledo MTD MicroFocus MFGP MorganStanley MS NatlRetailPropPfE NNNpE NortelInversora NTL NorthropGrumman NOC NuvDow30Dyn DIAX PNC Fin PNC PaycomSoftware PAYC PerkinElmer PKI Petrobras PZE PolyOne POL PrefApartment APTS PulteGroup PHM QTS Realty QTS RobertHalf RHI RoyalDutchB RDS.B Salesforce.com CRM SeaspanPfdG SSWpG SeaspanPfdD SSWpD Statoil STO STMicroelec STM Stoneridge SRI TE Connectivity TEL Telus TU TRI Pointe TPH TelecomArgentina TEO TeledyneTech TDY ThermoFisherSci TMO TidewaterWtSeriesB TDW.WS.B Timken TKR Toll Bros TOL Torchmark TMK TotalSystem TSS UnitedHealth UNH UnumGroup UNM UsanaHealth USNA Visa V VenatorMaterials VNTR Vishay VSH VistraEnergy VST VMware VMW WarriorMetCoal HCC Waters WAT Watsco WSO WestAllianceBcp WAL ZionsBancorpNts ZBK 60.05 101.45 27.77 20.77 61.15 43.24 47.33 63.68 49.70 58.96 77.34 30.89 18.50 130.84 66.65 50.10 672.69 33.61 51.52 26.35 42.46 306.61 17.74 139.23 80.77 72.27 13.91 44.60 20.51 29.80 58.79 53.49 63.89 99.63 25.20 25.19 20.77 21.37 22.81 89.27 36.95 16.94 34.01 168.34 200.99 2.65 53.10 45.37 86.50 71.63 209.14 52.93 71.00 110.61 25.24 21.80 20.44 119.76 27.95 191.05 165.96 56.67 31.12 0.4 0.1 -2.4 -1.1 1.0 0.2 12.0 2.4 -0.4 -0.1 -1.0 4.0 -0.3 0.9 -0.9 -1.4 -0.6 2.0 -1.1 ... 1.9 3.6 -0.9 -0.3 -0.4 -0.3 -1.7 5.7 0.3 1.9 4.7 1.4 -0.4 0.9 -0.1 0.3 -0.3 -1.0 0.6 -0.2 2.2 6.2 -0.1 ... 2.7 0.8 -4.8 0.3 0.8 3.3 -0.3 -1.2 10.9 1.0 1.4 -0.7 3.8 -0.6 -1.2 1.4 1.2 0.5 -2.4 52-Wk % Sym Hi/Lo Chg NYSE lows - 111 AT&T T AdvanceAuto AAP AdvantageOil AAV AlaskaAir ALK AllerganPfdA AGNpA Allergan AGN AllianzGIConv24 CBH AquaVenture WAAS ArlingtonAsset AI BT Group BT BakerHughes BHGE BlueApron APRN BoardwalkPipe BWP BrookdaleSrLiving BKD BuckeyePtrs BPL CONE Midstream CNNX CapsteadMtg CMO CenterCoastMLP CEN ChesapeakeEner CHK ChinaMobile CHL Chipotle CMG ClearBridgeAmEn CBA ClearBridgeEnMLPFd CEM ClearbridgeEngyMLP EMO ClearbridgeEnMLPTR CTR Cloudera CLDR Corts JCPen JBR JBR Coty COTY CushingTotRetFd SRV DDR DDR DeanFoods DF DeutscheMuniIncmTr KTF Duff&PhelpsSelEn DSE EP Energy EPE EastmanKodak KODK EastmanKodakWt KODK.WS.A EdgewellPersonal EPC EducationRealty EDR EldoradoGold EGO EnergyTransfer ETP FedRealtyInvPfdC FRTpC FidcryClymrOppFd FMO FT MLP&Energy FEI FootLocker FL GGP GGP GabelliMultPfdE GGTpE GeneralElec GE GenesisEnergy GEL GS MLPEnergyRen GER GS MLP IncmOpp GMZ GranitePointMtg GPMT HCP HCP HormelFoods HRL Intrexon XON JuniperNetworks JNPR KKRIncomeOppsRt KIOr KayneAnderson KED KayneAnMLPInv KYN Kellogg K KeyEnergySvcs KEG Ecopetrol EC 9.97 0.06 EdisonInt EIX 79.01 -0.86 EdwardsLife EW 103.33-10.92 EmersonElectric EMR 66.50 -0.24 EnbridgeEnPtrs EEP 14.37 -0.28 Enbridge ENB 38.01 -0.85 Encana ECA 10.60 -0.19 EnelAmericas ENIA 10.61 0.04 EnelChile ENIC 5.94 0.03 EnelGenChile EOCC 27.04 0.28 EnergyTrfrEquity ETE 16.10 -0.72 t EnergyTransfer ETP 16.39 -0.55 s Entergy ETR 86.34 0.36 EnterpriseProd EPD 24.36 -0.80 Equifax EFX 107.54 -1.26 EquityLife ELS 87.38 -0.44 EquityResdntl EQR 66.88 1.09 EssexProp ESS 257.63 0.09 EsteeLauder EL 111.12 0.88 EverestRe RE 232.94 -1.34 EversourceEner ES 62.33 -0.09 s Exelon EXC 40.07 0.11 ExtraSpaceSt EXR 80.65 0.24 ExxonMobil XOM 83.17 -0.30 FMC FMC 93.21 -0.96 s FactSet FDS 188.20 0.93 FederalRealty FRT 123.27 -1.63 FedEx FDX 225.50 -0.34 Ferrari RACE 114.72 0.13 FiatChrysler FCAU 17.09 -0.36 FibriaCelulose FBR 16.19 -0.27 FidelityNatlFin FNF 35.35 -0.05 FNFV Group FNFV 17.60 0.05 FidelityNtlInfo FIS 95.53 0.26 58.com WUBA 63.03 -1.28 FirstData FDC 18.78 -0.12 FirstRepBank FRC 99.57 0.09 FirstEnergy FE 31.85 -0.16 FleetCorTech FLT 164.40 0.57 Flowserve FLS 44.43 -0.41 Fluor FLR 42.50 -0.22 FomentoEconMex FMX 89.19 0.19 FordMotor F 12.04 -0.15 ForestCIty A FCE.A 24.72 -0.11 Fortis FTS 36.57 -0.19 s Fortive FTV 72.47 -0.84 FortBrandsHome FBHS 66.88 -1.24 Franco-Nevada FNV 78.96 -1.30 FranklinRscs BEN 44.15 -0.65 Freeport-McMoRan FCX 14.70 -0.53 FreseniusMed FMS 48.59 -0.35 t GGP GGP 20.60 -0.28 Gallagher AJG 62.54 -0.29 Gap GPS 27.11 -0.07 Gartner IT 124.07 1.05 Gazit-Globe GZT 9.68 -0.07 GeneralDynamics GD 207.25 -4.83 t GeneralElec GE 21.50 -0.39 GeneralMills GIS 51.53 -0.26 GeneralMotors GM 45.12 -1.36 Genpact G 29.71 0.17 GenuineParts GPC 88.46 -0.45 Gerdau GGB 3.69 0.04 Gildan GIL 31.19 -0.30 GlaxoSmithKline GSK 38.19 -2.29 GlobalPayments GPN 99.52 1.78 s GoDaddy GDDY 45.44 0.04 Goldcorp GG 12.88 -0.06 GoldmanSachs GS 241.71 -3.13 s Graco GGG 127.92 -1.28 Grainger GWW197.13 -1.22 GreatPlainsEner GXP 32.15 0.14 GpoAvalAcciones AVAL 8.79 -0.03 GpFinSantandMex BSMX 8.99 0.03 GrupoTelevisa TV 23.75 0.17 GuidewireSoftware GWRE 77.38 -0.81 HCA Healthcare HCA 79.20 -0.37 t HCP HCP 25.36 -0.27 HDFC Bank HDB 89.43 -5.29 HP HPQ 21.67 -0.28 HSBC HSBC 49.19 0.15 Halliburton HAL 41.46 0.09 Hanesbrands HBI 22.78 -0.33 HarleyDavidson HOG 48.89 -0.58 Harris HRS 136.56 -0.40 HartfordFinl HIG 54.84 -0.04 HealthcareAmer HTA 29.68 0.13 Heico HEI 92.24 0.51 s Heico A HEI.A 78.30 1.25 Helmerich&Payne HP 51.31 -1.14 Herbalife HLF 71.90 -0.76 Hershey HSY 108.60 -0.76 Hess HES 42.21 -1.85 HewlettPackard HPE 14.08 -0.23 Hilton HLT 71.32 0.18 HollyFrontier HFC 36.30 -0.10 s HomeDepot HD 166.07 0.04 HondaMotor HMC 30.46 -0.28 Honeywell HON 145.99 -0.13 t HormelFoods HRL 30.32 0.05 s DR Horton DHI 43.26 -0.06 HostHotels HST 19.35 -0.31 HuanengPower HNP 26.47 0.97 Hubbell HUBB 125.99 0.64 Humana HUM 248.36 1.87 HuntingtonIngalls HII 234.00 -1.93 Huntsman HUN 29.65 -0.07 HyattHotels H 61.73 -0.21 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. 33.33 -3.9 81.82 -1.1 5.26 -2.8 68.10 -13.2 647.06 -1.2 178.35 -1.4 9.61 -0.3 12.50 0.9 11.40 -6.6 17.77 -1.8 30.00 -2.0 4.83 -1.4 14.21 -3.2 9.68 -2.5 50.14 -2.3 15.25 -0.8 9.22 -1.6 9.28 -4.2 3.45 -2.7 50.00 -0.6 273.78 -14.6 7.58 -3.2 13.19 -3.5 10.72 -3.1 11.25 -2.4 14.91 -5.8 12.29 -1.1 15.16 -0.7 10.80 -3.6 7.87 -3.5 9.90 -1.6 12.08 -0.3 5.46 -4.5 2.38 -4.7 5.75 -8.0 0.02 -70.0 64.88 -0.4 35.46 -0.7 1.29 -12.2 16.10 -3.2 24.01 -0.5 11.59 -2.7 14.12 -3.3 29.89 0.5 20.20 -1.3 24.52 -0.7 21.30 -1.8 22.72 -2.5 5.77 -4.0 8.18 -3.2 18.06 -0.5 25.13 -1.1 29.75 0.2 16.28 -1.9 23.87 -6.1 0.34 -32.2 15.23 -3.5 15.32 -3.5 60.01 -1.2 9.11 8.2 AdvShDorseyADR AADR ColumbiaIndiaInfr INXX DirexFinlBull3 FAS DirexHmbldrBull3 NAIL ETFMG PrimeMob IPAY S&P2xDivAristoETN SDYL E-TRACS IndMtl UBM FidelityMSCIFinls FNCL FidelityMSCIMatls FMAT FidelityMomFactor FDMO FinSelSectorSPDR XLF GuggS&P500EWFin RYF GuggS&P500EWMat RTM GuggGlbTimber CUT GuggSolar TAN InspireGlblHope BLES iShCurrHdgNikk400 HJPX iShUSFinlServices IYG iShUS Finls IYF Fund Top 250 mutual-funds listings for Nasdaq-published share classes with net assets of at least $500 million each. NAV is net asset value. Percentage performance figures are total returns, assuming reinvestment of all distributions and after subtracting annual expenses. Figures don’t reflect sales charges (“loads”) or redemption fees. NET CHG is change in NAV from previous trading day. YTD%RET is year-to-date return. 3-YR%RET is trailing three-year return annualized. e-Ex-distribution. f-Previous day’s quotation. g-Footnotes x and s apply. j-Footnotes e and s apply. k-Recalculated by Lipper, using updated data. p-Distribution costs apply, 12b-1. rRedemption charge may apply. s-Stock split or dividend. t-Footnotes p and r apply. v-Footnotes x and e apply. x-Ex-dividend. z-Footnote x, e and s apply. NA-Not available due to incomplete price, performance or cost data. NE-Not released by Lipper; data under review. NN-Fund not tracked. NS-Fund didn’t exist at start of period. Fund American Century Inv 43.74 Ultra American Funds Cl A 31.39 AmcpA p 40.88 AMutlA p 27.18 BalA p 12.91 BondA p 62.58 CapIBA p 51.65 CapWGrA EupacA p 56.69 FdInvA p 62.49 50.29 GwthA p 10.49 HI TrA p 40.77 ICAA p 23.35 IncoA p 44.40 N PerA p 46.66 NEcoA p 65.70 NwWrldA 55.84 SmCpA p 13.01 TxExA p 45.04 WshA p Baird Funds NA AggBdInst CorBdInst 11.20 BlackRock Funds A GlblAlloc p 20.17 BlackRock Funds Inst EqtyDivd 22.99 20.29 GlblAlloc HiYldBd -0.21 25.4 StratIncOpptyIns -0.13 -0.23 -0.07 -0.01 -0.26 -0.17 -0.07 -0.22 -0.18 -0.02 -0.20 -0.10 -0.11 -0.14 -0.13 -0.20 -0.02 -0.16 17.0 12.6 11.2 3.0 11.3 19.7 28.3 16.9 19.6 6.8 13.8 10.1 25.7 29.8 27.7 21.4 4.7 14.2 ... -0.05 NA 3.9 -0.07 10.9 -0.07 12.6 -0.08 11.1 7.86 -0.01 9.99 ... Bridge Builder Trust CoreBond 10.16 -0.01 Dimensional Fds 5GlbFxdInc 11.01 ... 30.24 +0.04 EmgMktVa EmMktCorEq 22.29 -0.03 14.11 -0.04 IntlCoreEq 19.79 -0.07 IntlVal 21.32 -0.03 IntSmCo 23.31 -0.08 IntSmVa 21.84 -0.12 US CoreEq1 US CoreEq2 20.77 -0.12 36.31 -0.16 US Small US SmCpVal 38.95 -0.14 24.96 -0.15 US TgdVal USLgVa 38.77 -0.22 Dodge & Cox Balanced 108.92 -0.37 14.00 -0.03 GblStock Income 13.80 -0.01 46.84 -0.09 Intl Stk Stock 201.32 -0.95 DoubleLine Funds NA ... TotRetBdI Edgewood Growth Instituti EdgewoodGrInst 29.12 -0.13 Federated Instl 7.7 StraValDivIS 4.5 Fidelity 3.4 2.1 28.0 30.3 23.2 20.8 24.6 23.3 14.7 12.9 8.0 4.6 4.8 12.1 8.8 17.5 3.8 22.9 12.3 NA 31.1 500IdxInst 500IdxInstPrem 500IdxPrem ExtMktIdxPrem r IntlIdxPrem r SAIUSLgCpIndxFd TMktIdxF r TMktIdxPrem USBdIdxInstPrem 0.49 0.01 -0.57 0.16 -0.88 0.49 -4.29 -0.18 0.67 0.10 -2.38 0.15 -0.68 -0.31 0.13 -0.09 -0.01 0.18 0.10 -0.51 -0.14 -0.33 0.72 -0.76 -2.61 -1.60 -0.30 1.04 -0.23 -0.25 -1.91 -0.72 -0.14 0.08 -0.36 0.36 -0.24 -0.31 -0.10 -0.17 0.35 -0.02 -0.34 ... 0.16 -0.14 0.20 4.66 0.24 1.85 -0.10 -0.24 -0.36 -3.27 -0.65 1.50 -0.07 -0.19 -3.35 -0.30 -0.30 0.42 -0.32 -0.75 0.82 0.64 -0.72 0.05 -0.72 -0.26 -0.17 -1.19 0.05 -0.25 -0.59 -1.91 -0.60 -0.76 -0.16 -1.33 -0.58 -0.74 -0.23 -0.23 -0.55 4.24 -0.02 -4.36 -1.16 0.44 -0.29 -0.32 -0.30 1.63 0.54 -0.66 -0.20 -3.93 -0.07 0.66 0.06 0.04 0.02 -0.18 -3.36 -0.40 -1.31 -0.31 Net Sym Close Chg Moody's MCO 145.58 -1.42 s MorganStanley MS 50.53 -0.54 Mosaic MOS 21.54 -0.11 MotorolaSolutions MSI 90.05 -0.18 NRG Energy NRG 24.92 -0.19 NTTDoCoMo DCM 23.58 -0.21 NVR NVR 3159.14-46.77 NationalGrid NGG 60.92 -0.70 NatlOilwell NOV 33.63 -0.18 NatlRetailProp NNN 40.77 -0.40 NewOrientalEduc EDU 88.93 -3.19 NY CmntyBcp NYCB 12.50 -0.27 t NewellBrands NWL 40.28 -0.11 NewfieldExpln NFX 28.82 0.01 NewmontMining NEM 36.75 -0.38 NextEraEnergy NEE 153.86 -0.36 NielsenHoldings NLSN 38.56 -2.57 Nike NKE 54.94 1.52 NiSource NI 26.54 -0.13 NobleEnergy NBL 26.74 -0.39 Nokia NOK 6.05 0.06 NomuraHoldings NMR 5.74 -0.02 Nordstrom JWN 41.52 -0.09 NorfolkSouthern NSC 128.69 -3.62 s NorthropGrumman NOC 304.75 10.72 Novartis NVS 81.37 -1.76 NovoNordisk NVO 50.13 -0.19 Nucor NUE 58.99 -0.79 t NuSTAREnergy NS 32.80 -0.89 OGE Energy OGE 36.73 -0.27 ONEOK OKE 53.71 -2.23 OccidentalPetrol OXY 65.35 -0.47 Och-Ziff OZM 3.61 -0.04 Olin OLN 35.42 0.11 OmegaHealthcare OHI 31.51 -0.14 t Omnicom OMC 69.81 -1.11 Oracle ORCL 49.70 -0.28 Orange ORAN 16.01 -0.03 OrbitalATK OA 133.05 0.15 Orix IX 84.97 0.19 Oshkosh OSK 89.18 -0.50 OwensCorning OC 76.67 -4.16 PG&E PCG 56.68 -0.43 PLDT PHI 32.55 -0.86 s PNC Fin PNC 137.46 -0.37 POSCO PKX 74.00 -0.14 PPG Ind PPG 117.72 0.28 PPL PPL 37.69 -0.23 PVH PVH 130.00 0.38 PackagingCpAm PKG 118.16 -0.47 PaloAltoNtwks PANW 148.55 -0.69 ParkHotels PK 28.09 -0.21 ParkerHannifin PH 183.68 -0.78 ParsleyEnergy PE 23.87 -0.18 Pearson PSO 9.27 0.09 PembinaPipeline PBA 31.81 -0.64 Pentair PNR 70.94 0.36 PepsiCo PEP 110.07 -0.68 s PerkinElmer PKI 71.42 -0.19 Perrigo PRGO 85.00 -1.06 PetroChina PTR 63.37 -0.27 PetroleoBrasil PBR 10.51 0.13 PetroleoBrasilA PBR.A 10.29 0.15 Pfizer PFE 36.16 -0.11 PhilipMorris PM 107.00 -1.57 Phillips66 PSX 91.71 -0.12 PinnacleFoods PF 55.52 0.01 PinnacleWest PNW 88.25 -0.18 PioneerNatRscs PXD 142.16 -1.06 t PlainsAllAmPipe PAA 18.98 -0.56 t PlainsGP PAGP 19.56 -0.32 PolarisIndustries PII 123.17 -0.01 Potash POT 19.67 -0.07 Praxair PX 143.62 0.67 PrincipalFin PFG 67.68 -0.89 Procter&Gamble PG 86.86 -0.12 Progressive PGR 48.61 -0.42 Prologis PLD 64.03 -0.01 PrudentialFin PRU 111.25 -0.92 Prudential PUK 48.96 ... PublicServiceEnt PEG 49.16 0.08 PublicStorage PSA 210.00 -0.11 s PulteGroup PHM 29.23 0.55 QuantaServices PWR 37.37 -0.51 t Qudian QD 26.39 -2.06 QuestDiag DGX 94.21 -1.06 QuintilesIMS Q 101.50 -0.83 RELX RENX 21.89 0.03 RELX RELX 22.67 -0.02 RPM RPM 52.32 0.07 RalphLauren RL 91.85 1.18 RaymondJames RJF 85.73 -0.63 Raytheon RTN 189.19 0.09 RealtyIncome O 54.47 -0.49 RedHat RHT 120.22 -1.06 RegencyCtrs REG 62.93 -0.43 RegionsFin RF 15.57 0.13 ReinsuranceGrp RGA 143.60 -0.86 RepublicServices RSG 63.77 -0.14 ResMed RMD 78.40 -0.65 RestaurantBrands QSR 67.39 0.33 RiceEnergy RICE 26.77 -1.59 RioTinto RIO 47.10 -0.88 s RobertHalf RHI 51.59 0.73 Rockwell ROK 187.07 -1.61 RockwellCollins COL 134.92 -0.20 RogersComm B RCI 52.50 -0.67 Rollins ROL 44.10 -3.05 52-Wk % Sym Hi/Lo Chg Stock Net YTD NAV Chg % Ret 6.40 -0.05 11.2 -0.42 -0.42 -0.42 -0.37 -0.14 -0.06 -0.36 -0.37 -0.01 16.0 16.1 16.0 13.3 21.6 16.0 15.6 15.5 2.8 -0.13 23.1 -0.05 12.5 -0.05 13.3 -0.07 15.7 -0.04 NS -0.05 NS -0.06 NS -0.06 NS -0.05 NS -0.09 -0.66 -0.51 -0.51 -0.02 -0.09 13.2 28.7 26.9 27.0 10.4 23.0 61.23 69.10 33.65 79.63 17.85 39.40 34.36 30.22 26.92 42.54 108.55 31.19 23.17 27.72 29.60 124.30 115.45 -0.9 -1.6 0.1 -0.1 8.3 -0.4 -0.5 -0.5 -0.6 -0.8 -0.1 -0.2 0.1 -0.4 -0.1 -0.4 -0.4 Net Sym Close Chg Stock RoperTech ROP 255.16 RoyalBkCanada RY 78.34 RoyalBkScotland RBS 7.49 RoyalCaribbean RCL 121.28 RoyalDutchA RDS.A 61.05 s RoyalDutchB RDS.B 63.22 SAP SAP 112.76 S&P Global SPGI 160.92 SINOPECShanghai SHI 61.42 SK Telecom SKM 26.03 SLGreenRealty SLG 95.80 s Salesforce.com CRM 99.59 Sanofi SNY 47.67 Sasol SSL 28.68 t Scana SCG 47.57 Schlumberger SLB 63.44 SchwabC SCHW 44.65 ScottsMiracleGro SMG 99.49 SealedAir SEE 44.58 SemicondctrMfg SMI 6.82 SempraEnergy SRE 114.31 SensataTech ST 48.96 ServiceCorp SCI 33.29 ServiceMaster SERV 44.62 ServiceNow NOW124.62 ShawComm B SJR 21.26 SherwinWilliams SHW 392.54 ShinhanFin SHG 45.98 Shopify SHOP 102.99 SimonProperty SPG 163.68 SmithAO AOS 59.11 Smith&Nephew SNN 38.02 t Smucker SJM 103.93 Snap SNAP 14.16 SnapOn SNA 159.92 SOQUIMICH SQM 59.84 Sony SNE 37.16 Southern SO 52.21 SoCopper SCCO 43.65 SouthwestAirlines LUV 57.16 SpectraEnerPtrs SEP 41.48 SpectrumBrands SPB 106.61 SpiritAeroSys SPR 80.62 Sprint S 7.10 Square SQ 32.90 StanleyBlackDck SWK 163.53 StateStreet STT 94.05 s Statoil STO 20.46 Steris STE 91.07 s STMicroelec STM 20.90 Stryker SYK 150.18 SumitomoMits SMFG 7.96 SunCommunities SUI 89.62 SunLifeFinancial SLF 39.38 SuncorEnergy SU 32.94 SunTrustBanks STI 59.78 SynchronyFin SYF 32.38 Syngenta SYT 92.11 Sysco SYY 54.55 TAL Education TAL 32.37 s TE Connectivity TEL 88.90 s Telus TU 36.82 Ternium TX 32.52 TIM Part TSU 18.82 TJX TJX 71.44 TableauSoftware DATA 78.30 TaiwanSemi TSM 41.16 t TargaResources TRGP 40.35 Target TGT 61.92 TataMotors TTM 32.12 TechnipFMC FTI 25.16 TeckRscsB TECK 22.88 s TelecomArgentina TEO 33.51 TelecomItalia TI 9.01 TelecomItalia A TI.A 7.19 s TeledyneTech TDY 167.58 Teleflex TFX 242.43 TelefonicaBras VIV 15.59 Telefonica TEF 10.37 TelekmIndonesia TLK 30.01 t Tenaris TS 25.97 Teradyne TER 39.12 t TevaPharm TEVA 13.93 Textron TXT 53.71 s ThermoFisherSci TMO 199.67 ThomsonReuters TRI 47.25 ThorIndustries THO 131.56 3M MMM237.68 Tiffany TIF 93.48 TimeWarner TWX 98.72 s Toll Bros TOL 44.73 s Torchmark TMK 84.58 Toro TTC 62.89 TorontoDomBk TD 56.36 Total TOT 54.33 s TotalSystem TSS 70.42 ToyotaMotor TM 122.34 TransCanada TRP 46.64 TransDigm TDG 272.62 TransUnion TRU 50.86 Travelers TRV 131.78 TurkcellIletism TKC 9.22 TurquoiseHill TRQ 3.10 Twitter TWTR 17.14 TylerTech TYL 170.51 TysonFoods TSN 71.09 UBS Group UBS 17.28 UDR UDR 38.21 52-Wk % Sym Hi/Lo Chg Stock 3.05 iShMSCIAustriaCap EWO 24.12 0.2 TelInstrElec TIK iShMSCIFranceETF EWQ 31.27 0.1 32.15 -0.3 iShMSCIFrontier100 FM 25.35 ... iShMSCISingapore EWS ANSS 133.40 73.08 ... Ansys iShMSCISouthKorea EWY BANR 62.75 68.48 -0.3 Banner iShGloblFinancials IXG BYBK 11.95 67.60 -0.4 BayBancorp iShGlobalMaterials MXI TECH 125.88 KraneMSCIChinaEnv KGRN 25.95 ... Bio-Techne 60.58 CFFI OppenheimFclsSect RWW 66.69 -0.4 C&F Fin CSW Industrials CSWI 49.28 93.67 -0.9 PwrShDynMkt PWC 25.29 0.2 CarolinaFinancial CARO 38.70 PwrShIndia PIN PwrShS&P500EnhVal SPVU 33.79 -0.1 CathayGenBncp CATY 41.38 33.17 CLLS PwrShS&P500Mom SPMO 32.89 -0.7 Cellectis 33.67 ProShrUltraFnl UYG 119.91 -0.7 ChinaInternet CIFS 23.53 1.2 ChinaLodging HTHT 142.80 RenaissanceIntlIPO IPOS 54.78 -1.0 CiscoSystems CSCO 34.73 SPDRS&PCapitalMkts KCE 21.25 CoBizFin COBZ 41.57 -1.4 SPDR S&P Home XHB CGNX 124.46 UBSMLPShort MLPS 13.28 9.1 Cognex COHU 25.34 47.46 0.2 Cohu VanEckCSI300 PEK CONN 32.90 61.32 -0.4 Conn's VanEckIndiaSC SCIF BOOM 19.25 VanEckVietnam VNM 15.63 0.3 DMC Global DFNL 23.32 67.74 -0.4 DavisFinl VangdFinls VFH 34.50 DIOD WBITacticalSMG WBIA 25.03 -0.1 Diodes 17.59 WisdTrGlbxUSDiv DXUS 26.65 -0.1 ElectroScientific ESIO Entegris ENTG 30.95 29.22 FifthThirdBncp FITB FirstBancorpNC FBNC 36.45 AIPoweredEquity AIEQ 24.70 -1.1 FirstFoundation FFWM 19.34 AlerianMLPETF AMLP 10.24 -2.5 FirstSouthBancorp FSBK 20.00 FTAG 27.54 BarclaysETN+Select ATMP 19.65 -2.6 FT GlblAgri FUNC 17.66 CTrksETNsMillerHwd MLPC 14.65 -1.9 FirstUnited 74.49 FSV 19.83 -0.3 FirstService ColumbiaDivFixed DIAL 46.58 FLIR CSX2xAlerianMLPETN AMJL 17.36 -5.2 FlirSystems 13.26 0.9 DirexFinlBear3 FAZ DirexZacksMLPHiIn ZMLP 15.56 -1.8 ETRACS Alerian MLP AMU 16.30 -2.6 ETRACSMthPay2xLev DVHL 19.80 -1.8 ETRACS2xMLvAlerian MLPQ 32.50 -5.0 ETRACS2xMLevS&PMLP MLPZ 37.09 -5.6 GlbX MLP&Energy MLPX 12.68 -2.7 9.34 -2.4 GlbX MLP MLPA GlbXSuperIncPfd SPFF 12.38 -0.2 HartfordTRBd HTRB 39.94 -0.1 InfraCapMLPETF AMZA 7.87 -3.3 Company iPathS&PMLPETN IMLP 16.90 -2.6 25.89 -2.6 Increased JPM AlerianMLP AMJ KraneEMCnsTech KEMQ 24.30 -1.0 6.69 -1.1 Abaxis MSCushMLPHI MLPY NuShESGUSAggBd NUBD 24.95 -0.1 NuShEnhYd1-5Y NUSA 24.99 -0.1 American Elec Power 23.42 -1.4 Associated Banc PwrShDB G10 DBV 18.31 -3.3 ProShShtBasicMat SBM Schwab1000Index SCHK 24.95 -0.5 Charter Financial E-TRACS AlrInfr MLPI 22.45 -2.8 Cheniere Energy Ptnr 58.72 -1.1 VanEckHiIncmInfra YMLI 12.97 -2.4 15.59 0.1 VelocityShVIXTail BSWN 18.12 -0.7 EQT GP Holdings 17.84 -1.7 37.50 -1.4 1.98 -0.5 6.04 -6.5 4.18 0.7 22.45 -0.1 5.65 -0.3 39.90 -0.3 32.64 -2.6 16.01 -4.4 10.45 -3.7 9.91 -0.2 15.57 -2.6 69.42 -1.6 16.16 -1.2 18.77 -2.9 18.98 -1.6 2.26 -2.5 26.00 -7.2 23.23 -7.8 11.39 -4.9 0.16 -17.0 3.31 -2.0 10.28 -2.5 3.68 -1.8 46.40 -1.5 13.62 -9.9 23.90 -1.3 6.10 -3.1 102.31 -0.5 1.63 -4.1 11.67 -1.6 24.88 -0.6 7.75 0.4 26.18 -0.5 40.22 -4.7 47.72 -1.1 24.65 -0.8 25.95 -2.1 13.52 -2.5 25.19 -3.1 16.06 -2.6 17.33 -2.4 16.16 -2.9 15.75 -1.8 14.29 -1.2 4.80 ... 36.80 -1.2 37.44 -1.7 45.59 -1.9 13.55 -0.2 0.33 -1.42 0.03 -1.12 -0.34 -0.27 0.46 -0.98 -0.15 0.11 -0.40 0.93 -1.34 0.03 -0.72 1.00 -0.54 0.11 0.02 0.02 -0.65 -0.46 -0.49 -0.83 -1.27 -0.24 3.63 1.32 -3.42 -0.19 -2.82 0.45 -0.49 -0.43 -2.40 -1.15 -0.54 -0.16 -0.72 -1.64 -0.83 -2.39 -0.25 0.10 0.19 -2.21 -2.38 -0.06 -0.16 -0.21 0.49 0.04 -0.29 -0.37 -0.19 -0.40 -0.27 -0.02 -0.19 -1.60 -0.19 0.79 0.04 0.13 -0.30 -0.56 -0.16 -1.99 -1.01 -0.07 -0.20 -0.50 -0.02 -0.01 -0.07 -0.04 1.17 -0.09 0.07 -0.81 -0.57 -0.08 -0.35 -0.71 5.29 -0.24 -0.37 3.03 -0.47 -1.78 0.12 0.70 -0.15 -0.35 -0.28 2.24 -1.54 -1.41 4.80 -0.05 -1.41 -0.29 -0.03 -0.11 -6.69 -0.07 -0.13 0.18 NYSE Arca lows - 29 Net Sym Close Chg Stock UGI UGI 47.67 US Foods USFD 27.20 UltraparPart UGP 24.41 t UnderArmour A UAA 16.01 t UnderArmour C UA 14.65 Unilever UN 55.89 Unilever UL 54.28 UnionPacific UNP 110.27 UnitedContinental UAL 59.92 UnitedMicro UMC 2.54 UPS B UPS 118.55 UnitedRentals URI 138.91 US Bancorp USB 54.14 US Steel X 28.11 UnitedTech UTX 118.99 s UnitedHealth UNH 207.56 UniversalHealthB UHS 110.75 s UnumGroup UNM 52.21 VEREIT VER 7.80 VF VFC 71.25 s Visa V 109.49 VailResorts MTN 225.67 Vale VALE 10.33 ValeroEnergy VLO 77.68 Vantiv VNTV 71.16 VarianMed VAR 107.90 Vedanta VEDL 20.60 VeevaSystems VEEV 59.30 Ventas VTR 61.50 Verizon VZ 48.64 s VistraEnergy VST 20.32 s VMware VMW 118.90 VornadoRealty VNO 72.81 VoyaFinancial VOYA 40.14 VulcanMaterials VMC 122.33 WABCO WBC 152.09 WEC Energy WEC 66.77 W.P.Carey WPC 68.54 Wabtec WAB 77.65 Wal-Mart WMT 88.48 WasteConnections WCN 69.88 WasteMgt WM 77.51 s Waters WAT 190.35 s Watsco WSO165.14 Wayfair W 64.52 WellCareHealth WCG 179.48 WellsFargo WFC 55.25 Welltower HCN 66.20 WestPharmSvcs WST 91.65 WestarEnergy WR 52.74 s WestAllianceBcp WAL 56.16 t WesternGasEquity WGP 38.31 t WesternGasPtrs WES 46.62 WesternUnion WU 20.03 WestlakeChem WLK 84.51 WestpacBanking WBK 25.67 WestRock WRK 60.97 Weyerhaeuser WY 34.68 WheatonPrecMetals WPM 20.60 Whirlpool WHR160.94 Williams WMB 28.34 WilliamsPartners WPZ 36.82 Wipro WIT 5.26 WooriBank WF 46.61 Wyndham WYN104.32 XPO Logistics XPO 68.16 XcelEnergy XEL 49.38 Xerox XRX 33.10 Xylem XYL 64.53 YPF YPF 24.73 YumBrands YUM 74.67 YumChina YUMC 40.12 ZTO Express ZTO 15.63 ZayoGroup ZAYO 36.08 ZimmerBiomet ZBH 121.46 Zoetis ZTS 64.38 -4.7 ForresterResearch FORR 44.45 -1.6 Garmin GRMN 56.69 0.2 19.51 -0.3 23.67 -0.8 0.6 GoldenEnt GDEN 26.70 2.2 -0.3 HailiangEduc 22.78 10.6 HLG 1.1 Hardinge HDNG 16.48 -0.1 0.4 HeritageFin HFWA 31.25 0.3 -0.3 Hurco HURC 46.75 -0.4 0.5 II-VI 44.45 0.5 IIVI 3.0 IPG Photonics IPGP 211.73 -1.2 ... IRSA Prop 64.68 0.3 IRCP 1.8 Intel 41.06 -0.4 INTC 2.8 InterParfums 46.80 8.2 IPAR -3.5 InteractiveBrkrs IBKR 51.57 0.6 -0.8 InternetInitiat IIJI 10.15 1.0 1.4 Intuit INTU 149.74 0.6 ... Jewett-Cameron JCTCF 14.90 -0.3 -1.1 KingoldJewelry KGJI 2.50 6.2 4.0 LGI Homes 57.92 -1.1 LGIH 5.8 LightpathTech LPTH 3.48 14.8 -0.2 MKS Instrum MKSI 106.70 -0.1 1.2 MainSourceFncl MSFG 38.85 0.3 2.4 ManTechIntl MANT 46.90 0.2 -0.8 MercerIntl MERC 14.60 -0.7 -0.1 MercurySystems MRCY 54.49 -5.4 3.3 MonarchCasino MCRI 45.00 4.6 3.4 NN NNBR 32.00 1.4 3.1 NortechSystems NSYS 6.24 7.9 ... Novanta NOVT 46.33 -0.1 2.1 OldDomFreight ODFL 113.36 -1.1 -1.1 ON Semi 20.50 -0.7 ON 6.0 OrrstownFinSvcs ORRF 26.75 3.7 -0.24 -0.21 0.10 -0.29 -0.18 0.15 0.17 -2.63 0.01 -0.05 -1.15 -5.03 -0.07 -0.58 -0.75 -0.59 -0.75 -0.61 -0.15 0.02 1.08 -1.10 -0.05 -0.01 1.03 0.54 -0.07 -1.46 -0.32 -0.30 0.74 -0.73 -0.83 -0.75 -1.43 2.68 -0.05 -0.44 -3.09 0.50 -0.39 -0.44 2.72 2.00 -1.93 1.89 -0.17 -0.65 -0.76 -0.19 0.27 -0.66 -0.88 -0.07 -1.09 -0.39 -0.10 -0.19 ... -2.32 -0.43 -0.76 -0.05 0.36 -4.20 -0.28 -0.08 -0.35 -0.30 0.70 -0.67 -0.82 0.06 0.28 0.25 -0.60 NASDAQ AGNC Invt AGNC 21.44 s Ansys ANSS 132.85 ASML ASML 177.36 Abiomed ABMD171.37 ActivisionBliz ATVI 61.81 AdobeSystems ADBE 171.83 AkamaiTech AKAM 54.00 AlexionPharm ALXN 132.01 AlignTech ALGN 201.75 Alkermes ALKS 49.49 AlnylamPharm ALNY 117.40 Alphabet A GOOGL 991.46 Alphabet C GOOG 973.33 Altaba AABA 65.40 Amazon.com AMZN 972.91 Amdocs DOX 65.74 Amerco UHAL388.25 AmericanAirlines AAL 51.02 Amgen AMGN 177.50 AnalogDevices ADI 89.86 Apple AAPL 156.41 AppliedMaterials AMAT 55.30 ArchCapital ACGL 102.11 Atlassian TEAM 48.26 Autodesk ADSK 119.94 ADP ADP 116.34 BOK Fin BOKF 87.15 Baidu BIDU 263.04 BankofOzarks OZRK 46.33 Biogen BIIB 314.64 52-Wk % Sym Hi/Lo Chg Stock SNSR Nasdaq highs - 87 GlbXInternetThings GlbX Robotics&AI BOTZ -0.18 0.74 -1.07 -5.34 -0.92 0.25 2.09 -4.65 -1.97 -0.89 0.33 2.97 2.79 -1.21 -2.99 -0.11 0.85 -0.93 -2.87 -0.43 -0.69 -1.08 0.18 -1.02 0.65 -0.12 -3.43 -0.96 -0.34 -1.09 Net Sym Close Chg Stock BioMarinPharm BMRN 84.79 Bioverativ BIVV 58.73 bluebirdbio BLUE 139.45 BrighthouseFin BHF 62.06 Broadcom AVGO 245.82 CA CA 34.13 CDK Global CDK 66.49 CDW CDW 69.16 CH Robinson CHRW 78.60 CME Group CME 133.85 CSX CSX 52.92 CadenceDesign CDNS 42.22 Carlyle CG 22.95 CboeGlobalMkts CBOE 109.73 Celgene CELG 119.56 Cerner CERN 71.80 CharterComms CHTR 344.91 CheckPointSftw CHKP 115.56 s ChinaLodging HTHT 135.59 CincinnatiFin CINF 75.75 Cintas CTAS 150.16 s CiscoSystems CSCO 34.30 CitrixSystems CTXS 82.43 s Cognex CGNX 122.77 CognizantTech CTSH 74.25 Coherent COHR 263.56 Comcast A CMCSA 36.83 CommerceBcshrs CBSH 57.88 CommScope COMM 31.86 Copart CPRT 35.75 CoStarGroup CSGP 278.41 Costco COST 162.18 Ctrip.com CTRP 47.35 DISH Network DISH 49.00 DentsplySirona XRAY 61.00 DiamondbackEner FANG 100.89 DiscoveryComm A DISCA 19.26 DiscoveryComm C DISCK 18.18 DollarTree DLTR 91.61 E*TRADE ETFC 43.42 EastWestBancorp EWBC 60.19 eBay EBAY 36.68 ElbitSystems ESLT 150.60 ElectronicArts EA 114.56 Equinix EQIX 457.93 Ericsson ERIC 6.58 Exelixis EXEL 25.89 Expedia EXPE 147.90 ExpeditorsIntl EXPD 58.84 ExpressScripts ESRX 61.16 F5Networks FFIV 119.31 Facebook FB 170.60 Fastenal FAST 46.64 s FifthThirdBncp FITB 28.58 Fiserv FISV 128.21 Flex FLEX 17.63 s FlirSystems FLIR 46.52 Fortinet FTNT 39.70 Gaming&Leisure GLPI 35.81 s Garmin GRMN 56.55 GileadSciences GILD 79.89 Goodyear GT 33.95 Grifols GRFS 21.32 HD Supply HDS 35.17 Hasbro HAS 94.40 HenrySchein HSIC 82.90 Hologic HOLX 37.03 JBHunt JBHT 106.23 HuntingtonBcshs HBAN 13.88 IAC/InterActive IAC 123.87 IdexxLab IDXX 162.04 IHSMarkit INFO 42.95 INC Research INCR 55.50 s IPG Photonics IPGP 206.96 s IRSA Prop IRCP 64.65 IcahnEnterprises IEP 55.88 Icon ICLR 112.91 Illumina ILMN204.85 Incyte INCY 114.55 s Intel INTC 40.78 s InteractiveBrkrs IBKR 51.46 s Intuit INTU 149.46 IntuitiveSurgical ISRG 372.42 IonisPharma IONS 54.02 JD.com JD 37.40 JackHenry JKHY 106.92 JazzPharma JAZZ 140.27 JetBlue JBLU 19.72 KLA Tencor KLAC 106.71 KraftHeinz KHC 77.33 LKQ LKQ 36.54 LamResearch LRCX 203.07 LamarAdvertising LAMR 67.95 LibertyBroadbandA LBRDA 89.69 LibertyBroadbandC LBRDK 91.41 LibertyGlobal A LBTYA 31.19 LibertyGlobal C LBTYK 30.17 LibertyLiLAC A LILA 21.73 LibertyLiLAC C LILAK 21.74 LibertyQVC A QVCA 22.95 LibertyVenturesA LVNTA 56.47 LibertyFormOne A FWONA 37.18 LibertyFormOne C FWONK 39.00 LibertyBraves A BATRA 24.59 LibertyBraves C BATRK 24.64 LibertySirius A LSXMA 41.80 LibertySirius C LSXMK 41.80 LincolnElectric LECO 97.26 52-Wk % Sym Hi/Lo Chg Stock Overstock OSTK PAM Transport PTSI PinnacleEnt PNK PluristemTherap PSTI PwrShDynBscMatl PYZ PwrShKBW Banks KBWB PreferredBankLA PFBC ProgressSoftware PRGS QAD B QADB QAD A QADA Rambus RMBS RealPage RP SchmittIndustries SMIT SierraOncology SRRA Silicom SILC SiliconLab SLAB Stamps.com STMP Synopsys SNPS TD Ameritrade AMTD TesscoTech TESS TowerSemi TSEM Trimble TRMB 2U TWOU UFP Tech UFPT Xunlei XNET 43.15 29.15 25.34 2.12 68.13 52.70 65.19 42.83 30.75 37.70 14.50 43.85 2.32 2.20 73.68 92.70 231.40 86.81 50.96 16.39 32.60 41.49 63.15 31.20 7.60 7.1 0.4 -0.7 -1.0 ... -0.5 9.2 0.1 1.0 ... -1.5 -0.1 4.7 12.6 ... 3.6 0.1 1.1 -0.2 3.8 -0.8 0.2 -0.9 2.0 5.3 Nasdaq lows - 70 AMAG Pharm AMAG 15.10 0.6 AcadiaHealthcare ACHC 30.91 -25.9 AccelerateDiag AXDX 17.80 1.3 8.20 -1.2 AduroBiotech ADRO 9.93 0.7 AlcentraCapital ABDC -1.50 -0.55 -1.80 -0.48 -1.86 -0.16 -0.50 -0.80 -0.23 -0.22 -1.41 -0.09 -0.80 -0.52 -0.78 -0.58 4.65 -1.71 -4.88 -0.51 -0.69 -0.28 -0.76 -0.01 -0.44 0.96 0.33 -0.48 -0.54 -0.41 -2.33 -0.11 -0.70 ... -0.09 1.22 -0.20 -0.27 -0.17 -0.20 -0.59 -0.06 -0.62 1.17 -5.04 0.06 -0.55 -2.83 -0.38 2.31 0.16 -1.20 -0.20 -0.02 0.82 -0.15 2.62 -0.30 -0.71 0.14 -0.21 -0.11 0.06 -0.20 1.44 -0.07 -0.01 -0.08 -0.33 0.23 -0.66 -0.59 0.25 -2.50 0.18 -1.09 0.08 -5.97 0.51 -0.17 0.33 0.84 0.93 -0.99 -1.12 0.88 -1.73 -0.90 -0.98 0.11 -0.56 -2.77 0.27 0.89 0.92 0.01 -0.09 0.22 0.08 -0.21 0.22 -0.10 ... 0.12 0.12 -1.42 -1.41 -1.13 Net Sym Close Chg Stock LogitechIntl LOGI 34.10 -0.47 LogMeIn LOGM 121.40 -0.55 lululemon LULU 62.07 0.20 MarketAxess MKTX 179.68-10.40 Marriott MAR 116.33 -0.48 MarvellTech MRVL 18.39 -0.19 MatchGroup MTCH 25.20 -0.28 MaximIntProducts MXIM 51.45 -0.89 MelcoResorts MLCO 23.04 -0.54 MercadoLibre MELI 221.51 -3.91 MicrochipTech MCHP 92.32 -0.99 MicronTech MU 41.06 -0.54 Microsemi MSCC 52.66 0.16 Microsoft MSFT 78.63 -0.23 Middleby MIDD 115.76 -1.26 Momo MOMO 29.56 -1.68 Mondelez MDLZ 41.08 -0.01 MonsterBeverage MNST 56.50 -0.33 Mylan MYL 39.02 0.10 NXP Semi NXPI 116.49 -0.30 Nasdaq NDAQ 72.44 -1.01 NatlInstruments NATI 44.25 0.25 NetApp NTAP 43.71 -1.11 Netease NTES 275.21 -5.33 Netflix NFLX 193.77 -2.25 NewsCorp A NWSA 13.66 0.03 NewsCorp B NWS 14.00 0.05 Nordson NDSN 125.54 -0.11 NorthernTrust NTRS 94.76 -1.69 NorwegianCruise NCLH 54.79 0.13 NVIDIA NVDA 193.66 -5.02 OReillyAuto ORLY 202.72 -0.61 s OldDomFreight ODFL 111.03 -1.28 s ON Semi ON 20.22 -0.15 OpenText OTEX 33.96 -0.13 PTC PTC 60.09 -1.00 Paccar PCAR 70.23 -0.15 PacWestBancorp PACW 47.89 -0.79 Paychex PAYX 64.08 0.20 PayPal PYPL 71.02 0.81 People'sUtdFin PBCT 18.68 -0.16 PilgrimPride PPC 30.87 0.18 Priceline PCLN 1928.81 -3.48 Qiagen QGEN 33.54 0.02 Qorvo QRVO 71.78 0.34 Qualcomm QCOM 53.84 -0.41 RandgoldRscs GOLD 97.19 -0.23 RegenPharm REGN 421.93 -4.58 RossStores ROST 63.84 -0.50 Ryanair RYAAY103.46 -0.55 SBA Comm SBAC 146.48 -1.75 SEI Investments SEIC 62.80 -0.70 Sina SINA 107.78 -2.84 SS&C Tech SSNC 42.07 0.03 SVB Fin SIVB 188.58 -0.41 ScrippsNetworks SNI 83.51 -0.18 Seagate STX 38.15 -0.69 SeattleGenetics SGEN 62.00 -0.36 Shire SHPG 143.69 -0.81 SignatureBank SBNY 133.91 -1.97 SiriusXM SIRI 5.56 -0.16 Skyworks SWKS 104.57 -0.64 Splunk SPLK 65.14 -0.27 Starbucks SBUX 54.16 -0.12 SteelDynamics STLD 38.73 -0.82 Stericycle SRCL 71.40 -0.68 Symantec SYMC 32.18 -0.18 s Synopsys SNPS 85.69 0.92 s TD Ameritrade AMTD 49.88 -0.12 TESARO TSRO 110.03 -2.36 T-MobileUS TMUS 61.93 -0.35 TRowePrice TROW 95.15 -1.33 TakeTwoSoftware TTWO 104.87 -0.35 Tesla TSLA 325.84-11.50 TexasInstruments TXN 95.82 -0.62 TractorSupply TSCO 57.92 -0.38 s Trimble TRMB 41.20 0.08 21stCenturyFoxA FOXA 26.13 -0.10 21stCenturyFoxB FOX 25.43 -0.13 UltaBeauty ULTA 201.29 -2.02 UltimateSoftware ULTI 195.54 1.85 UniversalDisplay OLED 132.60 -2.60 VEON VEON 3.85 -0.06 VeriSign VRSN 107.75 -1.14 VeriskAnalytics VRSK 84.20 -0.68 VertxPharm VRTX 146.80 -4.31 Viacom A VIA 32.00 -0.35 Viacom B VIAB 25.48 -0.17 Vodafone VOD 28.75 -0.03 WPP WPPGY 87.61 0.54 t WalgreensBoots WBA 69.36 2.07 Weibo WB 90.35 -5.48 WesternDigital WDC 87.29 -0.60 WillisTwrsWatson WLTW 163.24 -0.04 Workday WDAY 105.80 -1.38 WynnResorts WYNN 143.51 -1.40 Xilinx XLNX 70.72 -0.89 Yandex YNDX 32.01 -0.81 ZebraTech ZBRA 110.80 -0.98 Zillow A ZG 40.35 -0.64 Zillow C Z 40.60 -0.50 ZionsBancorp ZION 45.99 -0.36 NYSE AMER CheniereEnergy LNG CheniereEnerPtrs CQP CheniereEnHldgs CQH ImperialOil IMO 52-Wk % Sym Hi/Lo Chg Stock AmbacFinWt AMBCW AquaMetals AQMS Astrotech ASTC AtlanticAmerican AAME AvenueTherap ATXI AxovantSciences AXON BedBath BBBY BoulevardAcqnIi BLVD CapitalaFinance CPTA CardiomePharma CRME Cempra CEMP Cenveo CVO DHX Media VV DHXM Digirad DRAD DigitalAlly DGLY ENDRA LifeSci NDRA ElbitImaging EMITF EndoIntl ENDP EnergyXXIGulfCoast EXXI FTD FTD FT LowDurOpp LMBS FiveStarSrLiving FVE GTY Tech GTYH GeniusBrands GNUS GenMarkDiagn GNMK Giga-Tronics GIGA GolarLNG GLNG HabitRestaurants HABT HawaiianHoldings HA ImmuneDesign IMDZ LexiconPharm LXRX MeetGroup MEET 6.00 -3.8 3.80 -0.5 3.06 -5.5 3.04 -8.8 3.92 -5.0 5.30 -2.0 20.77 -2.2 9.54 -0.7 8.40 -2.5 1.29 -5.0 2.40 -7.7 1.10 -12.6 3.05 -6.0 2.10 -4.4 1.95 -13.3 2.50 -7.9 2.51 -0.4 7.07 -3.8 8.00 -2.0 11.07 1.9 51.76 ... 1.43 -3.3 9.76 -0.1 2.74 -3.8 7.65 0.1 0.55 -5.0 19.58 -2.5 11.78 -0.8 35.90 -3.0 3.78 -3.4 10.13 -2.6 3.40 1.2 44.40 27.52 24.79 30.92 -0.77 -0.20 -0.48 -0.08 52-Wk % Sym Hi/Lo Chg MicronetEnertec MICT MustangBio MBIO NabrivaTherap NBRV NanoStringTech NSTG NationalAmerUniv NAUH NewYorkMtgPfdD NYMTN NovelionTherap NVLN NuCana NCNA OrionEnergySys OESX PapaJohn's PZZA ProspectCapital PSEC RISE Education REDU Radisys RSYS RexEnergy REXX RhythmPharm RYTM SearsHometown SHOS Synaptics SYNA Tocagen TOCA Travelzoo TZOO Trevena TRVN TrinityBiotech TRIB trivago TRVG USAutoPartsNtwk PRTS US Gold USAU UltragenyxPharm RARE VeecoInstr VECO Vivus VVUS WMIH WMIH WalgreensBoots WBA WestwaterResources WWR YogaWorks YOGA Ziopharm ZIOP ZK Intl ZKIN 0.65 -2.6 8.22 -0.7 5.53 -2.9 9.05 -0.3 1.00 -12.2 24.58 -0.2 5.28 -5.4 12.71 -6.7 0.80 -4.5 65.95 -0.1 6.00 -1.1 11.10 -14.4 1.23 ... 1.73 -3.7 22.11 -7.1 1.65 ... 34.25 -0.9 9.50 -3.2 7.50 -1.9 1.45 -4.5 4.44 -5.9 8.12 -22.5 2.27 -1.2 1.12 -6.3 47.55 -4.1 17.50 -6.0 0.71 -6.6 0.61 2.1 66.05 3.1 0.96 -3.9 2.49 -5.3 4.63 -2.0 6.72 -12.2 Dividend Changes Dividend announcements from October 25. NYSE American highs - 0 NYSE American lows - 12 2.45 -2.0 AsteriasBiotherap AST 2.34 -4.9 Biotime BTX 3.57 2.6 ContangoO&G MCF 0.67 -2.1 EMX Royalty EMX 22.29 -3.4 FT EnerIncome FEN 1.41 -2.0 GoldStandrdVntr GSV GoldenMinerals AUMN 0.39 -4.2 Myomo 2.55 1.9 MYO 0.92 ... NanoViricides NNVC 0.64 -4.4 NorthernOil&Gas NOG SamsonOil&Gas SSN 0.27 -0.6 Net YTD NAV Chg % Ret Fund 177.54 GroCo 177.49 GrowCoK 7.91 InvGB 11.25 InvGrBd 52.53 LowP r LowPriStkK r 52.49 104.13 MagIn 104.90 OTC 22.88 Puritn SrsEmrgMkt 21.15 SrsGroCoRetail 17.44 16.02 SrsIntlGrw 10.79 SrsIntlVal 10.64 TotalBond -1.40 -1.40 ... -0.01 -0.14 -0.14 -0.42 -0.90 -0.07 -0.01 -0.13 -0.08 -0.04 -0.02 Fidelity Selects 220.54 -2.09 First Eagle Funds 60.09 -0.19 GlbA FPA Funds NA ... FPACres FrankTemp/Frank Adv 2.36 -0.01 IncomeAdv FrankTemp/Franklin A 7.44 -0.02 CA TF A p 11.98 -0.02 Fed TF A p IncomeA p 2.38 -0.01 RisDv A p 60.24 -0.08 FrankTemp/Franklin C 2.41 -0.01 Income C t FrankTemp/Temp A GlBond A p 12.18 +0.01 Growth A p 26.90 -0.09 FrankTemp/Temp Adv GlBondAdv p 12.13 +0.01 Harbor Funds CapApInst 73.52 -0.33 IntlInst r 69.61 -0.25 Harding Loevner IntlEq NA ... Invesco Funds A EqIncA 11.25 -0.05 John Hancock Class 1 LSBalncd 15.86 -0.05 16.99 -0.07 LSGwth John Hancock Instl 23.91 -0.18 DispValMCI JPMorgan Funds 39.86 -0.20 MdCpVal L Biotech r 89.49 89.49 89.49 62.18 42.93 13.72 74.25 74.23 11.57 Fidelity Advisor I NwInsghtI 32.87 Fidelity Freedom 16.59 FF2020 FF2025 14.35 17.96 FF2030 Freedom2020 K 16.60 Freedom2025 K 14.35 Freedom2030 K 17.97 Freedom2035 K 15.06 Freedom2040 K 10.58 Fidelity Invest 23.48 Balanc 84.91 BluCh Contra 124.16 124.15 ContraK 10.28 CpInc r DivIntl 40.97 ICICI Bank IBN 9.11 s ING Groep ING 18.82 Invesco IVZ 36.84 s IDEX IEX 127.04 IllinoisToolWks ITW 157.54 Infosys INFY 15.01 Ingersoll-Rand IR 91.32 Ingredion INGR 124.67 ICE ICE 65.91 InterContinentl IHG 53.89 IBM IBM 153.50 IntlFlavors IFF 149.20 IntlPaper IP 57.99 Interpublic IPG 19.50 InvitationHomes INVH 22.81 IronMountain IRM 39.81 IsraelChemicals ICL 4.21 ItauUnibanco ITUB 13.66 s JPMorganChase JPM 101.02 JacobsEngineering JEC 58.08 JamesHardie JHX 14.72 JanusHenderson JHG 34.92 J&J JNJ 142.36 JohnsonControls JCI 41.20 JonesLangLaSalle JLL 125.88 t JuniperNetworks JNPR 24.56 KAR Auction KAR 46.87 KB Fin KB 52.51 s KKR KKR 20.52 KT KT 14.07 KSCitySouthern KSU 102.20 t Kellogg K 60.48 KeyCorp KEY 18.32 s KeysightTechs KEYS 43.07 KilroyRealty KRC 71.14 KimberlyClark KMB 112.40 KimcoRealty KIM 18.49 t KinderMorgan KMI 17.96 Knight-Swift KNX 40.25 Kohl's KSS 43.79 KoninklijkePhil PHG 40.51 KoreaElcPwr KEP 17.81 Kroger KR 21.13 Kyocera KYO 65.89 LATAMAirlines LTM 13.91 L Brands LB 44.29 LG Display LPL 13.17 LINE LN 41.45 L3 Tech LLL 188.45 LabCpAm LH 152.71 LambWeston LW 50.62 LasVegasSands LVS 62.91 Lazard LAZ 45.27 Lear LEA 171.52 Leggett&Platt LEG 47.90 s Leidos LDOS 62.74 s Lennar A LEN 57.94 s Lennar B LEN.B 49.03 LennoxIntl LII 193.22 LeucadiaNatl LUK 25.44 Level3Comms LVLT 52.90 LibertyProperty LPT 42.80 EliLilly LLY 84.85 s LincolnNational LNC 76.46 LionsGate A LGF.A 30.32 LionsGate B LGF.B 28.81 LiveNationEnt LYV 42.25 LloydsBanking LYG 3.66 LockheedMartin LMT 312.43 Loews L 48.25 Lowe's LOW 80.99 LyondellBasell LYB 99.75 M&T Bank MTB 165.80 MGM Resorts MGM 30.97 MPLX MPLX 32.46 MSCI MSCI 118.54 Macerich MAC 56.10 MacquarieInfr MIC 69.33 Macy's M 21.24 MagellanMid MMP 66.17 MagnaIntl MGA 54.96 Manpower MAN 123.24 ManulifeFin MFC 20.28 MarathonOil MRO 13.48 MarathonPetrol MPC 56.44 Markel MKL 1067.81 Marsh&McLennan MMC 84.47 MartinMarietta MLM 212.23 Masco MAS 39.67 Mastercard MA 146.24 McCormick MKC 98.87 McCormickVtg MKC.V 98.65 McDonalds MCD 163.58 McKesson MCK 151.38 Medtronic MDT 79.20 Merck MRK 62.45 MetLife MET 53.94 s MettlerToledo MTD 665.43 MichaelKors KORS 49.73 s MicroFocus MFGP 33.57 MidAmApt MAA 104.22 MitsubishiUFJ MTU 6.67 MizuhoFin MFG 3.63 MobileTeleSys MBT 10.56 MohawkIndustries MHK 263.15 MolsonCoors A TAP.A 84.40 MolsonCoors B TAP 82.26 Monsanto MON 121.55 Stock Symbol NYSE Arca highs - 43 Data provided by Wednesday, October 25, 2017 Net YTD Net YTD NAV Chg % Ret Fund NAV Chg % Ret Fund Net Sym Close Chg Stock 52-Wk % Sym Hi/Lo Chg Stock KinderMorgan KMI KinderMorganPfdA KMIpA LightInTheBox LITB MBIA MBI MFS Intermd MIN Mack-Cali CLI NaborsIndustries NBR NewellBrands NWL NuSTAREnergy NS NuSTAR GP NSH NuvEnerMLPTR JMF NuvHiIncmDec18 JHA OasisMidstream OMP Omnicom OMC PQ Group PQG PlainsAllAmPipe PAA PlainsGP PAGP PrecisionDrilling PDS Qudian QD RYBEducation RYB RangerEnergySvcs RNGR RivernorthOppsRt RIVr RubiconProject RUBI SalientMidstream SMM SanchezEnergy SN Scana SCG Sea SE SeaspanNts2027 SSWA Smart&FinalStores SFS Smucker SJM SocialCapHedWt IPOA.WS SouthwestEnerPfB SWNC StifelFinNts47 SFB SuperiorEnergy SPN SynovusFinlPfdC SNVpC TargaResources TRGP TaubmanCtrs TCO TeekayLNG PfdB TGPpB Tenaris TS TevaPharm TEVA TortoiseEnerInf TYG TortoiseMLPFund NTG TortoisePipe&En TTP TwoHarborsWi TWOw UnderArmour A UAA UnderArmour C UA VitaminShoppe VSI WeisMarkets WMK WesternGasEquity WGP WesternGasPtrs WES WideOpenWest WOW Mutual Funds | WSJ.com/fundresearch Explanatory Notes Net Sym Close Chg 29.8 29.9 3.2 3.6 14.6 14.7 20.7 31.7 14.7 34.7 30.5 25.2 17.8 3.5 26.7 10.7 NA 7.7 4.8 3.0 7.5 15.4 7.4 3.8 14.2 4.0 29.8 19.2 NA 7.7 12.3 15.6 11.4 9.5 EQT Midstream Partners Getty Realty Independent Bank Michigan Iron Mountain Legacy Texas Finl Macerich MSC Industrial Direct SB Financial Group Payable / Record Company Net YTD NAV Chg % Ret Fund HelSci AEP ASB CHFN CQP EQGP EQM GTY IBCP IRM LTXB MAC MSM SBFG 1.3 3.4 2.2 1.6 6.4 3.4 5.6 4.4 2.2 5.9 1.6 5.3 2.5 1.7 .16 /.14 .62 /.59 .14 /.12 .075 /.07 .44 /.425 .228 /.21 .98 /.935 .32 /.28 .12 /.10 .5875 /.55 .16 /.15 .74 /.71 .48 /.45 .075 /.07 Q Q Q Q Q Q Q Q Q Q Q Q Q Q 22.9 6.7 2.1 2.4 2.4 2.7 2.7 14.4 24.5 8.4 11.3 15.9 27.8 14.8 31.0 23.6 11.9 NA 4.6 NA NA NA NA 30.4 12.6 12.0 15.8 28.7 Net YTD NAV Chg % Ret Fund 73.81 -0.41 38.54 -0.17 19.08 -0.05 IntlStk 15.28 -0.07 IntlValEq 91.36 -0.49 MCapGro 30.91 -0.19 MCapVal 54.82 -0.41 N Horiz 9.47 -0.01 N Inc 11.28 -0.04 OverS SF r 23.06 -0.07 R2020 17.77 -0.06 R2025 26.17 -0.09 R2030 19.12 -0.07 R2035 27.47 -0.10 R2040 38.55 -0.17 Value PRIMECAP Odyssey Fds 35.24 -0.36 Growth r Principal Investors 13.82 -0.04 DivIntlInst Prudential Cl Z & I TRBdZ 14.47 -0.03 Schwab Funds 39.94 -0.19 S&P Sel TIAA/CREF Funds EqIdxInst 19.17 -0.09 IntlEqIdxInst 20.14 -0.08 Tweedy Browne Fds GblValue 28.14 -0.21 VANGUARD ADMIRAL 500Adml 236.29 -1.11 BalAdml 33.83 -0.12 CAITAdml 11.82 -0.02 CapOpAdml r 153.75 -1.53 36.92 -0.03 EMAdmr EqIncAdml 76.04 -0.41 ExtndAdml 81.69 -0.48 GNMAAdml 10.48 -0.02 69.16 -0.23 GrwthAdml HlthCareAdml r 90.10 -0.44 HYCorAdml r 5.98 -0.01 25.61 -0.01 InfProAd 93.46 -0.53 IntlGrAdml ITBondAdml 11.39 -0.01 ITIGradeAdml 9.79 -0.01 LTGradeAdml 10.51 -0.04 MidCpAdml 183.99 -1.56 11.38 -0.02 MuHYAdml 14.18 -0.03 MuIntAdml 3.2 InstlCapG Amount Yld % New/Old Frq Symbol Payable / Record Reduced ABAX Waddell & Reed Financial Dec15 /Dec01 Dec08 /Nov10 Dec15 /Dec01 Nov21 /Nov10 Nov14 /Nov03 Nov22 /Nov03 Nov14 /Nov03 Jan04 /Dec21 Nov15 /Nov06 Jan02 /Dec15 Nov20 /Nov06 Dec01 /Nov10 Nov28 /Nov14 Nov24 /Nov10 Sotherly Htls 7.875 Pfd C 25.6 5.2 16.0 15.6 21.7 5.0 .25 /.46 Q Feb01 /Jan11 SOHOO 6.8 .43203 Q Jan16 /Dec29 Funds and investment companies Horizons NASDAQ-100 Cvd JPMorgan Disciplined HY JPMorgan Gl Bd Opps JPMorgan Ultra Short Incm QYLD JPHY JPGB JPST 7.4 4.6 2.5 1.7 .14901 .1999 .10623 .07094 M M M M Oct31 /Oct26 Oct30 /Oct26 Oct30 /Oct26 Oct30 /Oct26 CNI DLNGpA ETN HSPX 1.6 8.4 1.9 0.9 .33041 .5625 .60 .03746 Q Q Q M Dec29 /Dec08 Nov13 /Nov05 Nov17 /Nov03 Oct31 /Oct26 NEN ROL 1.7 1.0 .94 .10 Foreign Canadian Natl Railway Dynagas LNG 9% Pfd. A Eaton Corp. PLC Horizons S&P 500 Cov Call Special New England Realty un Rollins Inc Net YTD NAV Chg % Ret Fund 11.66 MuLTAdml MuLtdAdml 10.98 MuShtAdml 15.79 PrmcpAdml r 133.92 REITAdml r 117.01 SmCapAdml 68.10 STBondAdml 10.43 STIGradeAdml 10.68 10.74 TotBdAdml TotIntBdIdxAdm 21.82 TotIntlAdmIdx r 29.71 TotStAdml 63.95 14.05 TxMIn r ValAdml 39.71 68.80 WdsrllAdml WellsIAdml 64.94 23.0 WelltnAdml 73.49 78.92 WndsrAdml 24.9 31.8 24.8 19.3 21.2 6.4 26.6 3.3 24.4 13.0 14.6 16.2 17.4 18.4 14.6 WDR Initial KEY: A: annual; M: monthly; Q: quarterly; r: revised; SA: semiannual; S2:1: stock split and ratio; SO: spin-off. JPMorgan R Class 11.62 -0.01 Lazard Instl 19.52 +0.02 EmgMktEq Loomis Sayles Fds LSBondI 14.19 -0.02 Lord Abbett A ... ShtDurIncmA p 4.27 Lord Abbett F 4.27 ... ShtDurIncm Metropolitan West 10.63 -0.02 TotRetBd 10.63 -0.02 TotRetBdI 10.00 -0.02 TRBdPlan MFS Funds Class I ValueI 40.99 -0.13 MFS Funds Instl IntlEq 25.23 -0.05 Mutual Series 32.62 -0.19 GlbDiscA Oakmark Funds Invest 33.87 -0.16 EqtyInc r Oakmark 84.03 -0.32 29.01 +0.01 OakmrkInt Old Westbury Fds 14.73 -0.07 LrgCpStr Oppenheimer Y DevMktY 41.87 -0.07 42.87 +0.01 IntGrowY Parnassus Fds ParnEqFd 43.59 -0.12 PIMCO Fds Instl AllAsset NA ... 10.26 -0.01 TotRt PIMCO Funds A IncomeFd NA ... PIMCO Funds D IncomeFd NA ... PIMCO Funds Instl NA ... IncomeFd PIMCO Funds P NA ... IncomeP Price Funds 94.67 -0.46 BlChip CapApp 29.50 -0.08 34.77 -0.18 EqInc 68.72 -0.32 EqIndex Growth 68.55 -0.26 CoreBond Amount Yld % New/Old Frq Net YTD NAV Chg % Ret Fund INSTTRF2045 23.32 -0.09 IntlVal 38.99 -0.14 32.88 -0.12 LifeGro LifeMod 26.74 -0.08 26.69 -0.21 PrmcpCor 32.75 -0.27 SelValu r 26.96 -0.11 STAR 10.68 ... STIGrade 15.83 -0.03 TgtRe2015 31.39 -0.09 TgtRe2020 18.39 -0.06 TgtRe2025 TgtRe2030 33.22 -0.11 20.40 -0.07 TgtRe2035 TgtRe2040 35.11 -0.14 22.05 -0.09 TgtRe2045 TgtRe2050 35.48 -0.14 13.50 -0.03 TgtRetInc TotIntBdIxInv 10.91 -0.01 VANGUARD FDS 26.81 -0.07 WellsI 26.33 ... 14.1 Welltn 42.55 -0.11 DivdGro 213.58 -1.02 18.8 WndsrII 38.76 -0.19 HlthCare r INSTTRF2020 22.38 -0.06 11.1 VANGUARD INDEX FDS 236.27 -1.11 INSTTRF2025 22.63 -0.07 12.5 500 201.58 -1.19 INSTTRF2030 22.81 -0.08 13.8 ExtndIstPl 55.20 -0.26 INSTTRF2035 23.00 -0.09 15.0 SmValAdml 10.70 -0.01 INSTTRF2040 23.18 -0.09 16.2 TotBd2 -0.03 ... -0.01 -1.05 -0.37 -0.39 ... ... -0.01 -0.01 -0.11 -0.31 -0.06 -0.24 -0.34 -0.17 -0.18 -0.35 5.5 2.6 1.4 23.1 2.9 11.3 1.3 2.2 2.9 1.5 23.0 15.6 22.1 11.6 11.5 7.5 11.0 14.9 16.8 22.8 15.1 11.8 20.3 13.8 14.6 2.1 9.1 11.1 12.5 13.8 15.0 16.2 16.7 16.7 6.6 1.4 7.5 11.0 11.4 15.9 13.3 7.5 2.8 Dec30 /Dec15 Dec11 /Nov10 Net YTD NAV Chg % Ret TotIntl TotSt 17.76 -0.07 63.93 -0.31 VANGUARD INSTL FDS BalInst 33.84 -0.11 DevMktsIndInst 14.07 -0.06 DevMktsInxInst 21.99 -0.09 81.68 -0.49 ExtndInst 69.16 -0.23 GrwthInst InPrSeIn 10.43 -0.01 233.13 -1.09 InstIdx InstPlus 233.15 -1.09 57.37 -0.28 InstTStPlus 40.64 -0.35 MidCpInst MidCpIstPl 200.45 -1.70 68.10 -0.39 SmCapInst ... STIGradeInst 10.68 10.74 -0.01 TotBdInst 10.70 -0.01 TotBdInst2 10.74 -0.01 TotBdInstPl TotIntBdIdxInst 32.74 -0.01 TotIntlInstIdx r 118.81 -0.43 TotItlInstPlId r 118.83 -0.43 63.96 -0.31 TotStInst 39.71 -0.24 ValueInst Western Asset CorePlusBdI NA ... 22.9 15.5 10.4 22.1 22.1 13.3 21.8 1.4 16.0 16.1 15.5 14.1 14.1 11.3 2.2 2.9 2.9 2.9 1.5 23.0 23.0 15.6 11.7 NA 12.4 16.0 10.4 4.8 23.7 26.4 13.4 13.3 1.6 21.8 18.9 7.2 1.4 38.8 3.5 3.9 8.1 14.1 6.6 4.5 IPO Scorecard Performance of IPOs, most-recent listed first Company SYMBOL IPO date/Offer price % Chg From Wed3s Offer 1st-day close ($) price close Ablynx ABLX Oct. 25/$17.50 FAT Brands FAT Oct. 23/$12.00 RISE Edu REDU Oct. 20/$14.50 22.51 28.6 ... 11.10 –7.5 –1.9 12.21 –15.8 –26.5 Sea Ltd. SE Oct. 20/$15.00 13.73 –8.5 –15.6 MongoDB MDB Oct. 19/$24.00 31.00 29.2 –3.3 Company SYMBOL IPO date/Offer price % Chg From Wed3s Offer 1st-day close ($) price close Mosaic Acquisition 10.13 MOSC.U Oct. 19/$10.00 Qudian 26.39 QD Oct. 18/$24.00 OptiNose 19.91 OPTN Oct. 13/$16.00 1.3 –0.2 10.0 –9.6 24.4 4.8 CarGurus CARG Oct. 12/$16.00 29.01 81.3 5.2 OrthoPediatrics KIDS Oct. 12/$13.00 17.86 37.4 –7.1 Sources: WSJ Market Data Group; FactSet Research Systems 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 | Thursday, October 26, 2017 COMMODITIES Futures Contracts Contract High hilo Low Open Metal & Petroleum Futures Contract Open High hi lo Low Settle Chg Copper-High (CMX)-25,000 lbs.; $ per lb. 3.1700 3.1760 3.1610 3.1715 –0.0150 Oct Dec 3.1985 3.2030 3.1440 3.1830 –0.0150 Gold (CMX)-100 troy oz.; $ per troy oz. Oct 1269.90 1275.20 1269.90 1275.40 0.40 Dec 1278.00 1281.30 1272.00 1279.00 0.70 Feb'18 1282.40 1285.20 1276.10 1283.20 0.70 April 1281.00 1288.00 1280.00 1287.00 0.70 June 1290.10 1291.90 1284.00 1291.00 0.80 Dec 1303.20 1304.60 1300.80 1303.40 1.00 Palladium (NYM) - 50 troy oz.; $ per troy oz. 985.00 985.00 s t 985.00 959.20 –3.10 Oct Dec 961.90 968.00 948.35 958.10 –3.10 March'18 947.20 958.55 940.25 949.40 –2.90 Platinum (NYM)-50 troy oz.; $ per troy oz. 921.20 921.20 921.20 924.00 1.20 Oct Jan'18 926.50 926.90 914.50 926.70 1.20 Silver (CMX)-5,000 troy oz.; $ per troy oz. 16.890 16.945 16.890 16.868 –0.039 Oct Dec 16.960 17.050 16.810 16.925 –0.041 Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl. 52.56 52.57 51.89 52.18 –0.29 Dec Jan'18 52.75 52.77 52.13 52.43 –0.24 Feb 52.85 52.85 52.29 52.59 –0.20 March 52.92 52.92 52.39 52.71 –0.16 June 52.78 52.80 52.38 52.72 –0.08 Dec 51.95 51.98 51.63 51.94 –0.05 NY Harbor ULSD (NYM)-42,000 gal.; $ per gal. 1.8291 1.8389 1.8031 1.8182 –.0039 Nov Dec 1.8292 1.8395 1.8035 1.8183 –.0043 Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal. 1.7334 1.7429 s 1.7004 1.7348 .0193 Nov Dec 1.6887 1.6959 s 1.6588 1.6861 .0127 Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu. 2.991 2.999 2.913 2.919 –.055 Nov Dec 3.153 3.156 3.076 3.082 –.053 Jan'18 3.273 3.275 3.199 3.203 –.054 Feb 3.276 3.278 3.201 3.205 –.055 March 3.230 3.231 3.162 3.165 –.051 April 2.990 2.994 2.962 2.967 –.022 Dec March'18 Open interest Settle 123.30 127.00 125.30 128.95 123.10 126.90 124.10 127.80 .90 121,369 .85 61,606 14.30 14.36 14.37 14.45 14.14 14.24 14.18 14.28 –.10 435,011 –.08 130,114 Sugar-World (ICE-US)-112,000 lbs.; cents per lb. March May 660 173,274 Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb. 27.03 March 27.06 27.03 27.04 Cotton (ICE-US)-50,000 lbs.; cents per lb. 234 392,827 74,670 16,065 12,306 10,788 Dec March'18 69.57 69.10 69.90 69.44 69.12 68.89 69.31 69.06 150.55 150.50 156.55 154.10 150.50 150.30 153.35 152.70 –.01 1.75 1.50 1,129 5,628 Interest Rate Futures 1 29,706 3,620 Treasury Bonds (CBT)-$100,000; pts 32nds of 100% 151-160 151-200 150-140 150-290 –25.0 739,886 Dec March'18 150-100 150-100 149-080 149-230 –25.0 255 Treasury Notes (CBT)-$100,000; pts 32nds of 100% 124-205 124-220 124-060 124-145 –9.0 3,156,130 Dec March'18 124-100 124-105 123-270 124-025 –10.0 15,143 5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100% 117-005 117-020 116-265 116-307 –4.2 3,021,320 Dec March'18 116-232 116-250 116-200 116-227 –4.7 6,453 2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100% 107-215 107-225 107-202 107-212 –1.0 1,697,991 Dec March'18 107-157 107-162 107-150 107-155 –1.5 5,751 30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg. 98.848 98.848 98.845 98.845 … 233,756 Oct Jan'18 98.630 98.635 t 98.625 98.635 … 347,651 10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100% 100.297 100.328 t 99.875 100.188 –.344 29,156 Dec 1 Month Libor (CME)-$3,000,000; pts of 100% 98.5650 98.5650 t 98.5650 98.5600 –.0075 2,264 Dec Jan'18 98.5400 98.5400 t 98.5400 98.5375 –.0075 21 Eurodollar (CME)-$1,000,000; pts of 100% 98.5875 98.5875 98.5800 98.5825 –.0025 99,834 Nov Dec 98.4900 98.4950 98.4800 98.4900 … 1,783,959 March'18 98.3500 98.3550 98.3350 98.3450 –.0100 1,295,790 Dec 98.0600 98.0600 98.0300 98.0450 –.0250 1,619,179 6 69,047 110 142,668 601,728 298,794 120,462 237,670 200,659 257,203 32,574 120,730 43,601 147,648 24,446 274,960 202,045 83,878 174,458 128,611 Currency Futures Nov Dec .8786 .8799 .8818 .8833 t Nov Dec .7888 .7890 .7900 .7918 t Nov Dec 1.3142 1.3152 1.3272 1.3291 1.3125 1.3130 1.3262 1.3274 Dec March'18 1.0123 1.0196 1.0166 1.0232 1.0094 1.0164 1.0143 –.0006 1.0212 –.0006 .7774 .7771 .7769 .7741 .7773 .7700 .7781 .7780 .7776 .7741 .7773 .7700 .8761 .8768 .8801 –.0012 2,583 .8814 –.0013 272,574 .7805 .7805 .7807 –.0085 1,014 .7809 –.0084 168,448 Canadian Dollar (CME)-CAD 100,000; $ per CAD 352.50 355.25 350.50 351.00 Dec March'18 366.50 369.25 364.50 365.25 Oats (CBT)-5,000 bu.; cents per bu. 279.25 282.75 275.50 276.25 Dec March'18 278.25 281.00 276.00 276.50 Soybeans (CBT)-5,000 bu.; cents per bu. 975.75 983.25 975.25 975.50 Nov Jan'18 986.00 993.75 985.75 986.25 Soybean Meal (CBT)-100 tons; $ per ton. 314.80 317.80 314.30 315.40 Dec Jan'18 317.00 319.80 316.50 317.50 Soybean Oil (CBT)-60,000 lbs.; cents per lb. 34.35 34.69 34.20 34.26 Dec Jan'18 34.48 34.83 34.36 34.43 Rough Rice (CBT)-2,000 cwt.; $ per cwt. 1163.50 1183.00 1160.00 1166.50 Nov Jan'18 1192.50 1214.00 1191.00 1197.00 Wheat (CBT)-5,000 bu.; cents per bu. 438.00 443.00 433.75 435.50 Dec March'18 455.75 460.75 452.00 453.75 Wheat (KC)-5,000 bu.; cents per bu. 434.00 438.75 430.75 433.50 Dec March'18 451.75 456.50 448.50 451.25 Wheat (MPLS)-5,000 bu.; cents per bu. 619.50 624.75 617.00 621.50 Dec March'18 632.00 636.50 629.50 633.25 Cattle-Feeder (CME)-50,000 lbs.; cents per lb. 155.150 155.500 154.700 154.850 Oct Jan'18 155.000 157.100 s 154.575 155.600 Cattle-Live (CME)-40,000 lbs.; cents per lb. 113.750 114.300 112.800 113.025 Oct Dec 119.375 120.475 118.825 119.075 Hogs-Lean (CME)-40,000 lbs.; cents per lb. 63.875 64.675 63.675 64.475 Dec Feb'18 68.575 69.775 s 68.425 69.600 Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft. 439.00 441.20 434.60 439.70 Nov Jan'18 430.10 434.20 428.30 432.60 Milk (CME)-200,000 lbs., cents per lb. 16.61 16.71 16.60 16.60 Oct Nov 16.03 16.23 15.98 16.13 Cocoa (ICE-US)-10 metric tons; $ per ton. 2,083 2,112 2,064 2,079 Dec March'18 2,088 2,114 2,071 2,085 Coffee (ICE-US)-37,500 lbs.; cents per lb. –1.75 773,983 –1.50 313,717 –.75 .25 British Pound (CME)-£62,500; $ per £ 5,044 1,824 Swiss Franc (CME)-CHF 125,000; $ per CHF … 189,070 .50 273,148 –.08 161,737 –.04 95,196 –.50 146,729 –.50 86,271 –.0094 1,098 –.0094 131,524 –.0094 558 –.0094 369 –.0093 704 –.0093 242 .05136 .05061 .05199 .00039 179,787 .05122 .00038 630 1.1766 1.1787 1.1818 1.1840 .0019 6,304 .0019 428,548 Mini DJ Industrial Average (CBT)-$5 x index 1.75 1.25 35,926 24,510 –.275 .600 2,422 24,019 Dec 23416 s 23404 s 23389 23379 23203 23194 23301 23289 2541.80 2558.50 S&P 500 Index (CME)-$250 x index 2566.30 2566.30 Mini S&P 500 (CME)-$50 x index –102 160,585 –99 1,477 –8.80 60,209 2564.75 2566.25 2541.50 2558.50 –8.75 3,110,298 Dec March'18 2564.75 2566.25 2542.00 2558.75 –8.75 49,682 Mini S&P Midcap 400 (CME)-$100 x index 1828.10 1829.30 1807.00 1819.70 –11.10 92,033 Dec Mini Nasdaq 100 (CME)-$20 x index 6073.5 6087.5 6011.0 6064.5 –15.0 278,150 Dec March'18 6085.3 6100.0 6024.0 6077.5 –14.8 1,207 Mini Russell 2000 (ICE-US)-$100 x index 1499.60 1500.50 1481.90 1498.00 –3.50 64,532 Dec Mini Russell 1000 (ICE-US)-$100 x index 1420.40 1420.70 1408.70 1418.70 –4.40 267 Dec U.S. Dollar Index (ICE-US)-$1,000 x index 93.83 93.89 93.48 93.58 –.08 48,460 Dec March'18 93.59 93.59 93.19 93.28 –.08 2,022 –.600 2,349 –.450 140,943 .450 114,731 .950 50,190 3,798 4,614 t t .7694 .7690 .7689 .7686 .7685 .7680 63,686 167 Index Futures Dec March'18 –.01 .18 .7690 .7685 .7685 .7683 .7680 .7690 .05148 .05215 Dec March'18 .05135 .05136 Euro (CME)-€125,000; $ per € 1.1774 1.1829 Nov Dec 1.1796 1.1852 –2.50 271,880 –2.25 111,671 2,598 3,695 t Mexican Peso (CME)-MXN 500,000; $ per MXN 3,278 6,318 –.90 –1.10 .0117 1,089 .0117 181,782 Australian Dollar (CME)-AUD 100,000; $ per AUD Nov Dec Jan'18 Feb March June 1.20 138,481 1.10 91,503 6.00 6.00 –5 94,958 –4 100,654 Source: SIX Financial Information Inventories, 000s barrels Crude oil and petroleum prod Crude oil excluding SPR Gasoline Finished gasoline Reformulated Conventional Blend. components 1,271,858 ... 4-week avg 1,286 5-year avg Expected Previous Current change week 1,198 9,819 ... -2,200 ... unch. ... ... ... 456 222 24 0 24 199 468 226 25 0 25 201 460 220 22 0 22 198 421 211 34 0 34 177 8,123 233 36 0 36 198 ... ... ... ... ... ... 3,595 ... 4 4 3 4 ... ... ... 40,770 129,241 11,356 117,884 32,143 296,840 ... -900 ... ... ... ... 42 134 12 123 35 294 44 152 14 138 38 282 42 133 11 122 35 296 40 129 19 111 38 257 326 133 7 126 119 771 ... ... ... ... ... ... 72 107 0 107 262 956 Net crude, petroleum products, incl. SPR 1,943,235 ... 1,956 2,027 1,958 1,893 2,156 ... Kerosene-type jet fuel Distillates Heating oil Diesel Residual fuel oil Other oils Total petroleum product 20,010 Expected Previous change week ... 19,142 Year ago 20,465 4-week avg 4-week avg 5-year avg 9,778 7,483 7,016 690 834 90 27 0 0 90 27 600 807 9,358 7,609 661 79 0 79 583 7,570 408 23 0 23 384 ... ... ... 90 74 19 55 157 776 191 99 18 82 163 929 55 107 36 71 219 874 2,870 4,468 2,908 5,564 5-year avg 19,646 19,512 ... 9,136 9,118 9,293 9,026 jet fuel Distillates Residual fuel oil Propane/propylene Other oils 1,859 4,101 604 1,177 2,955 ... ... ... ... ... 1,641 3,477 531 935 3,421 1,547 4,166 601 1,130 3,903 1,692 3,808 466 1,002 3,385 1,519 3,890 196 ... ... 4250 Natural gas, lower 48 states 3250 t 2250 1250 Five-year average for each week N D J F M A M J 2017 2016 250 J A S O Note: Expected changes are provided by Dow Jones Newswires' survey of analysts. Previous and average inventory data are in millions. Sources: SIX Financial Information via WSJ Market Data Group; U.S. Energy Information Administration; Dow Jones Newswires Exchange-Traded Portfolios | WSJ.com/ETFresearch Largest 100 exchange-traded funds, latest session ETF AlerianMLPETF CnsmrDiscSelSector CnsStapleSelSector DBGoldDoubleLgETN DBGoldDoubleShrt EnSelectSectorSPDR FinSelSectorSPDR GuggS&P500EW HealthCareSelSect IndSelSectorSPDR iShIntermCredBd iSh1-3YCreditBond iSh3-7YTreasuryBd iShCoreMSCIEAFEETF iShCoreMSCIEmgMk iShCoreMSCITotInt iShCoreS&P500ETF iShCoreS&PMdCp iShCoreS&PSmCpETF iShS&PTotlUSStkMkt iShCoreUSAggBd iShSelectDividend iShEdgeMSCIMinEAFE iShEdgeMSCIMinUSA iShGoldTr iShiBoxx$InvGrCpBd iShiBoxx$HYCpBd iShJPMUSDEmgBd iShMBSETF iShMSCIACWIETF iShMSCIBrazilCap AMLP XLY XLP DGP DZZ XLE XLF RSP XLV XLI CIU CSJ IEI IEFA IEMG IXUS IVV IJH IJR ITOT AGG DVY EFAV USMV IAU LQD HYG EMB MBB ACWI EWZ 10.32 90.61 53.52 24.20 5.57 67.08 26.65 96.53 82.99 72.19 109.75 105.17 122.89 64.70 55.24 61.63 257.04 181.57 74.43 58.50 109.12 94.88 71.18 51.31 12.29 120.56 88.34 115.59 106.54 69.77 41.88 –2.46 –18.1 –0.38 11.3 3.5 –0.28 –0.41 20.3 –0.20 –18.7 –0.70 –10.9 –0.60 14.6 –0.67 11.4 –0.14 20.4 –0.99 16.0 1.4 –0.09 0.2 –0.06 0.3 –0.06 –0.37 20.6 –0.22 30.1 –0.37 22.1 –0.47 14.2 9.8 –0.61 8.2 –0.52 –0.49 14.1 1.0 –0.06 7.1 –0.57 –0.45 16.3 –0.14 13.5 0.16 10.9 2.9 –0.26 2.1 –0.28 4.9 –0.17 0.2 –0.08 –0.36 17.9 0.92 25.6 ETF ETF Closing Chg YTD Symbol Price (%) (%) 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 LBMA Platinum Price PM *922.0 Platinum,Engelhard industrial 919.0 Platinum,Engelhard fabricated 1019.0 Palladium,Engelhard industrial 978.0 Palladium,Engelhard fabricated 1078.0 Aluminum, LME, $ per metric ton *2144.0 Copper,Comex spot 3.1715 Iron Ore, 62% Fe CFR China-s 61.1 Shredded Scrap, US Midwest-s,w 286 Steel, HRC USA, FOB Midwest Mill-s n.a. Metals 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 69.03 62.27 45.79 43.46 57.67 321.45 110.75 127.72 142.12 119.78 179.62 148.45 124.14 151.39 199.44 85.41 206.76 145.92 109.47 38.42 113.14 84.25 105.65 122.84 115.40 101.82 147.43 46.57 23.13 37.19 121.35 33.76 61.75 –0.39 –0.21 –0.22 –0.09 –0.81 –1.14 –0.24 –0.40 –0.51 –0.59 –0.52 –0.48 –0.42 –0.51 –0.74 –0.67 –0.55 –0.42 –0.56 –0.44 –0.11 –0.02 –0.16 –0.48 –0.86 ... –0.38 –0.41 –0.22 –0.32 0.02 –0.38 –0.55 19.6 24.9 30.8 25.6 18.0 21.1 2.4 21.8 14.2 6.9 16.7 10.1 4.4 13.8 11.5 6.2 13.5 19.8 8.0 3.3 –0.0 –0.2 0.8 3.1 18.5 0.5 24.4 12.0 –1.0 2.0 10.7 22.0 14.0 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 Fibers and Textiles Gold, per troy oz 1280.82 1376.88 1275.00 1415.25 *1278.30 *1276.45 1329.12 1341.90 1341.90 1548.88 1255.70 1341.90 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 Grains and Feeds n.a. 71 n.a. 80.4 470.2 233 88 223 3.0625 374.00 24.00 7.8300 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 Silver, troy oz. 16.9800 20.3760 16.9200 21.1500 £12.7500 Engelhard industrial Engelhard fabricated Handy & Harman base Handy & Harman fabricated LBMA spot price 0.6100 0.6881 *80.40 n.a. n.a. 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 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 Closing Chg YTD Symbol Price (%) (%) 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 60.99 233.16 331.07 255.29 93.14 60.65 54.70 22.83 157.30 128.47 97.16 43.76 44.43 58.17 53.32 134.38 153.99 82.57 84.21 87.66 117.29 148.60 106.64 82.59 234.50 79.62 79.96 142.16 81.55 54.64 55.41 131.40 71.67 101.83 64.78 57.18 176.85 167.84 0.8421 2.2700 170.25 171.25 74.50 2400 1.2268 1.4176 0.8850 15.40 0.79 66.53 n.a. 0.9430 n.a. 160.75 Fats and Oils Corn oil,crude wet/dry mill-u,w Grease,choice white,Chicago-h Lard,Chicago-u Soybean oil,crude;Centl IL-u Tallow,bleach;Chicago-h Tallow,edible,Chicago-u 34.5500 0.2300 n.a. 0.3289 0.2500 0.3100 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 10/24 Source: WSJ Market Data Group 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 2.8 YTD total return (%) Yield (%) Latest Low High Index Mortgage-Backed Bloomberg Barclays Broad Market Bloomberg Barclays 1931.60 Total return close 2.640 2.090 2.790 U.S. Aggregate U.S. Corporate Indexes Bloomberg Barclays 1978.93 1.9 Mortgage-Backed 1947.63 1.5 Ginnie Mae (GNMA) 2.850 2.120 3.090 2.900 2.230 3.120 3.200 2.920 3.520 1160.04 2.1 Fannie mae (FNMA) 2.920 2.270 3.120 2616.30 3.7 Intermediate 2.730 2.360 3.010 1786.75 2.2 Freddie Mac (FHLMC) 2.930 2.280 3.130 3804.27 8.3 Long term 4.220 4.110 4.710 521.50 564.48 3.7 Double-A-rated 2.670 2.290 2.870 364.91 3.480 3.280 3.870 5.1 2765.86 U.S. Corporate 5.8 714.26 Triple-B-rated High Yield Bonds Merrill Lynch 7.4 417.47 High Yield Constrained 5.446 5.373 6.858 4.5 Muni Master 1.953 1.677 2.516 5.1 7-12 year 1.976 1.674 2.618 408.76 5.9 12-22 year 2.397 2.114 3.047 393.61 6.1 22-plus year 2.911 2.577 3.622 Global Government J.P. Morgan† 0.6 10.330 9.584 13.189 540.41 5.130 4.948 6.448 751.67 -0.2 Canada 2.100 1.390 2.190 7.6 Global High Yield Constrained 4.982 4.934 6.450 368.74 -0.1 EMU§ 1.167 0.757 1.363 6.8 Europe High Yield Constrained 2.122 2.121 3.814 706.17 -0.1 France 0.910 0.500 1.210 Germany 0.520 0.150 0.620 Japan 0.430 0.170 0.460 8.7 Triple-C-rated 418.20 2867.65 6.9 High Yield 100 379.04 306.41 506.31 U.S Agency Bloomberg Barclays Global Government 1.490 1.050 1.560 -1.6 1635.17 1.9 U.S Agency 2.000 1.330 2.000 287.39 1464.81 1.3 10-20 years 1.830 1.140 1.830 558.15 -1.4 Netherlands 0.660 0.260 0.760 3317.07 6.2 20-plus years 3.040 2.670 3.460 908.37 -0.6 U.K. 1.690 1.340 1.790 2.840 2.470 3.090 802.41 4.4 Yankee -0.3 8.6 Emerging Markets ** 5.496 5.279 6.290 † In local currency § Euro-zone bonds Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan Global Government Bonds: Mapping Yields 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 1.500 2.250 1.581 2.417 1.427 2.220 0.852 1.760 1.895 t 2.770 t l 1.939 1.971 1.671 28.4 35.8 81.9 l 2.784 2.807 2.286 32.7 36.7 52.6 France 2 -0.529 t 10 0.756 s l -0.526 -0.513 -145.5 0.751 0.699 -0.603 -214.0 0.306 -168.7 -210.7 l -166.6 -145.3 Germany 2 -0.701 s 10 0.483 s l -0.701 -0.706 -228.2 -150.3 l 0.478 0.403 -0.651 -231.2 0.032 -196.0 -193.9 -172.8 Italy 2 -0.134 s 10 2.032 t l -0.148 -0.107 -0.083 -174.5 -172.9 -93.5 l 2.062 2.105 1.388 -41.1 -35.5 -37.2 Japan 2 -0.131 s 10 0.074 s l -0.136 -0.137 -0.249 -110.2 0.069 0.024 -174.2 -0.064 -236.9 -171.7 l -234.7 -182.4 Spain 2 -0.301 t 10 1.642 t l -0.289 -0.317 -0.230 -191.1 -187.0 -108.2 l 1.647 1.615 1.082 -80.1 -77.0 -67.8 0.493 s 1.408 s l 0.475 0.435 0.248 -111.8 -110.6 -60.4 l 1.358 1.336 0.987 -103.5 -105.9 -77.3 10 0.500 0.050 2.050 0.100 0.100 2.750 1.450 Spread Under/Over U.S. Treasurys, in basis points Latest Prev Year ago l Australia 2 0.000 Year ago l 2.750 2.750 Month ago U.S. 2 1.611 s 10 2.443 s 2.750 0.000 Yield (%) Latest(l) 0 20 40 60 80 100 120 Previous 1.750 U.K. 2 4.250 10 Source: Tullett Prebon Investment-grade spreads that tightened the most… t 9,314 Wednesday, October 25 ,2017 Closing Chg YTD Symbol Price (%) (%) Other metals 311.90 n.a. 7.6400 4.2350 3.6550 5.3500 in that same company’s share price. Billions of cubic feet; weekly totals Finished motor gasoline Kerosene-type 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 Corporate Debt Natural gas storage Weekly Demand, 000s barrels per day Current Year ago 9,716 9,068 457,341 216,869 22,083 41 22,042 194,786 Natural gas (bcf) 0.9675 1.0581 2.930 2.900 2.930 2.650 2.720 0.820 2.830 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 Wednesday 16.8900 12784 ** EMBI Global Index Imports, 000s barrels per day 1,284 1,332 Wednesday (U.S.$ equivalent) Coins,wholesale $1,000 face-a *Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds Inventories, imports and demand for the week ended October 20. Current figures are in thousands of barrels or thousands of gallons per day, except natural-gas figures, which are in billions of cubic feet. Natural-gas import and demand data are available monthly only. Year ago Wednesday Energy 2448.73 Macro & Market Economics Watching the Gauges: U.S. Supply and Demand Expected Previous Current change week Wednesday, October 25, 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. Japanese Yen (CME)-¥12,500,000; $ per 100¥ Agriculture Futures Corn (CBT)-5,000 bu.; cents per bu. Cash Prices 2,710 –.23 117,276 –.07 75,983 Orange Juice (ICE-US)-15,000 lbs.; cents per lb. Nov Jan'18 Open interest Chg WSJ.com/commodities –0.51 –0.48 –0.62 –0.50 –0.52 –0.54 –0.44 –0.52 –0.37 –0.54 –0.14 –0.41 –0.22 –0.07 –0.34 –0.34 –0.21 –0.61 –0.15 –0.18 –0.48 –0.83 –0.90 –0.29 –0.48 –0.05 –0.03 –0.58 –0.09 ... –0.36 –0.52 –0.40 –0.57 –0.37 –0.82 14.5 18.0 9.7 14.2 8.9 25.4 12.6 9.1 29.5 6.2 14.1 19.8 24.2 21.3 20.7 20.5 21.5 9.0 1.4 2.3 14.6 12.9 9.7 0.1 14.2 0.2 0.7 10.2 0.9 0.6 20.8 13.9 17.5 9.5 12.9 15.4 Issuer Symbol Coupon (%) JPMorgan Chase CA Goldman Sachs US Bank NA JPM CA GS USB 7.900 April 30, ’49 4.700 March 15, ’27 5.375 March 15, ’20 2.125 Oct. 28, ’19 Citigroup General Electric Duke Energy Morgan Stanley C GE DUK MS 6.300 3.150 3.950 3.125 Maturity May 15, ’49 Sept. 7, ’22 Aug. 15, ’47 July 27, ’26 Current Spread*, in basis points One-day change –143 142 42 18 –26 –25 –18 –12 Last week Stock Performance Close ($) % chg –107 n.a. 55 n.a. 101.02 34.13 241.71 … 0.10 –0.47 –1.28 … 176 31 108 95 73.62 21.50 87.75 50.53 –0.84 –1.78 –0.27 –1.06 101 32 309 n.a. 73.62 21.50 6.41 … –0.84 –1.78 –0.31 … 12 10 10 10 n.a. 96 n.a. n.a. ... 111.25 33.49 … ... –0.82 –3.93 … Bond Price as % of face value Current One-day change Last week 2.75 2.25 2.00 1.99 105.250 79.000 88.375 99.500 10.78 9.30 1.82 19.95 17.05 5.68 1.11 –1.53 n.a. 83.000 91.000 n.a. 3.36 ... 16.82 ... 1.51 ... 3.00 ... 94.250 75.000 89.625 103.000 ... 5.76 … ... ... –3.84 … ... n.a. 103.500 82.000 97.250 44.27 ... 3.36 325.84 –1.36 ... 1.51 –3.41 174 26 100 84 –11 –11 –9 –9 …And spreads that widened the most 5.875 March 27, ’49 5.000 Jan. 21, ’49 4.625 Sept. 15, ’21 2.950 Dec. 18, ’22 Citigroup General Electric Nabors Industries Teva Pharmaceutical Finance C GE NBR TEVA MZ Funding Prudential Financial AT&T United Airlines MZFUND 14.000 PRU 5.625 T 6.550 UAL 4.000 Jan. 20, ’20 June 15, ’43 Feb. 15, ’39 Oct. 11, ’27 95 65 312 195 20 1059 97 214 101 19 14 14 High-yield issues with the biggest price increases… Issuer Symbol Dynegy McClatchy Windstream Services Beazer Homes USA DYN MNI WIN BZH 7.625 Nov. 1, ’24 6.875 March 15, ’29 7.750 Oct. 15, ’20 5.875 Oct. 15, ’27 Weatherford International Talen Energy Supply Uniti Carlstar WFT TLN UNIT CTPTRA 6.800 6.500 7.125 8.250 Coupon (%) Maturity June 15, ’37 June 1, ’25 Dec. 15, ’24 Dec. 15, ’19 107.250 88.250 87.500 101.992 84.750 84.750 90.625 96.000 1.28 1.25 1.25 1.00 Stock Performance Close ($) % chg …And with the biggest price decreases Staples Sears Holdings Noble Holding International Bombardier SPLS SHLD NE BBDBCN 8.500 Sept. 15, ’25 8.000 Dec. 15, ’19 7.750 Jan. 15, ’24 6.125 Jan. 15, ’23 89.125 60.943 88.344 100.750 AmeriGas Partners Intelsat Jackson Holdings S.A. Weatherford International Tesla APU INTEL WFT TSLA 5.750 9.750 5.950 5.300 101.252 101.500 77.500 97.375 May 20, ’27 July 15, ’25 April 15, ’42 Aug. 15, ’25 –2.63 –2.06 –1.91 –1.88 –1.87 –1.75 –1.63 –1.55 *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. Thursday, October 26, 2017 | B11 * * BANKING & FINANCE Draghi’s Pledge In Europe, Rates Are Focus How Helped the Eurozone BY JON SINDREU How Central Banks Steer the Bond Market Investors are preparing for the European Central Bank to give them all the complex details of how it will end its bond-buying program. But there is one crucial piece of information they truly care about: When will interest rates start going up? ECB policy makers have repeatedly said they won’t start raising rates until “well past” the point when purchases have stopped, even if inflation were to suddenly jump. That means divining the date of the last purchase is a focus for money managers across the world. Many analysts now forecast that the ECB will say Thursday that the purchases will end next September, an extension of about nine months from the current target. The central bank is expected to cut its purchases in half to €30 billion ($35.3 billion) a month. Yet if ECB President Mario Draghi says the speed of the taper is either faster or slower than expected, investors will adjust their rate projections to match, reshaping the entire bond market. In the eurozone, rates have stayed pegged at minus-0.4% for a year and a half and if Mr. Draghi says the speed of the taper is faster than expected, bonds could fall and the global rally propelling stocks to records could be derailed. If rates aren’t so predictable anymore, analysts said, financial markets could leave behind years of historically subdued volatility. In a speech in June, Mr. Draghi’s hints about a fasterthan-expected reduction of bond buying gave markets a jolt. Yields on the 10-year German government bond shot up to 0.570%, their highest in 18 months, and the euro gained about 2% against the U.S. dollar. German yields have since come back down, closing at 0.479% on Wednesday. The reaction was down to new expectations of future in- Short-term interest rates are the main driver of long-term rates… Yields, monthly 20% 15 10 5 10-year Treasury 1-year Treasury 0 1962 ’70 ’80 ’90 ’00 ’10 …while the effects of buying bonds remain uncertain. Total assets $6 trillion European Central Bank* Federal Reserve 4 2 0 2003 ’05 ’10 ’15 *Converted to dollars using Oct. 24 exchange rate. Sources: Federal Reserve (yields, Fed assets); European Central Bank (eurosystem assets) THE WALL STREET JOURNAL. terest rates, market derivatives called overnight index swaps suggest. After his statement, those derivatives showed that investors brought forward their expectation of a rate rise to December 2018 or earlier. They now suggest rates might stay where they are until around March 2019. The central bank is expected to cut its purchases in half to €30 billion. Once the ECB’s taper calendar is clear, “I would expect the market to focus on the next step, which is the process towards rate normalization,” said Andrew Bosomworth, head of portfolio management for Pacific Investment Management Co. in Germany. This means Mr. Draghi’s carefully chosen words will carry most of the ECB’s policy might going forward, money managers said, potentially exposing bond markets to more volatility. In the U.S., the Federal Reserve has already been down this road. In 2013, talk by policy makers about reversing bond buying sent yields on the 10-year Treasury note above 3% from about 1.9%. By contrast, bond markets have remained mostly unruffled this month, as Fed officials started unwinding $10 billion of the $4.5 trillion asset portfolio they accumulated after the 2008 financial crisis—a policy known as quantitative easing, or QE—in a bid to stoke growth and inflation. Money managers were initially jittery about the effects of this untested experiment, but most say they are now unconcerned. “QE was much more impactful when it was implemented than when it will be undone,” said Myles Bradshaw, head of global aggregate fixed income at Amundi SA, Europe’s largest money manager by assets. “Because [the Fed’s moves] have been so clearly disconnected from actual interest-rate policy, it’s not as dramatic.” Bank of America Merrill Lynch strategist Athanasios Vamvakidis called the Fed’s balance-sheet reduction “a sideshow to the hiking cycle,” in a recent note to clients. Rates in the U.S. have been rising since 2015. This issue gets to the core of a long-running debate for economists: Did central bankers’ bid to stimulate the economy by buying bonds work, and how? If it was central banks’ demand for bonds that was successful in reducing borrowing costs, then surely reversing QE could suddenly push them up again. But if QE’s impact was just on market sentiment, as many investors now believe, the unwinding might have a much smaller effect. A raft of research from economists and central banks estimates that QE lowered 10year sovereign-bond yields by about 1 percentage point in the U.S. and U.K. and by half a percentage point in the eurozone. There is debate, though, on what exactly was pushing those yields lower. Was it the bond buying itself or just the fact that such all-out policies are a way to persuade investors that rates will stay low for very long? “It’s mostly about sentiment,” said Charlie Diebel, head of rates at Aviva Investors. The importance many investors are attaching to signals about the direction of interest rates, more than the size of a central bank’s balance sheets, could suggest the actual bond buying had a smaller effect than once anticipated. ECB’s extreme measures still send out ripples..................... B13 BY PAT MINCZESKI AND CHRISTOPHER WHITTALL The European Central Bank is likely to scale back its bond purchases Thursday. But all of that buying—the ECB has been doing it since March 2015— has already helped reshape eurozone bond markets and given a needed boost to the finances of southern European countries. Thanks to bond buying and record-low interest rates, governments have been able to borrow on exceptionally cheap terms. The bonanza began in earnest in July 2012, when ECB President Mario Draghi pledged to do “whatever it takes” to save the euro. That pushed down bond yields across the eurozone, and they have been falling more or less ever since. Countries have effectively refinanced their big debt piles at lower rates, and they have also borrowed for longer terms, locking in those good deals. “From a debt-service-cost point of view, Italy is in great shape now because during this low-interest-rate environment, they’ve been busy borrowing away,” said Laurence Mutkin, global head of G-10 rates strategy at BNP Paribas SA. What It Took Borrowing costs have declined across the eurozone… Weighted 5% average 4 interest rate on debt 3 outstanding 2 1 0 2012: ECB President Mario Draghi says the ECB will do 'whatever it takes' to save the euro. ’07 ’08 ’09 ’10 ’11 Portugal Italy Spain Euro area Germany France ’12 ’13 ’14 ’15 ’16 …and lower rates have, in turn, reduced countries’ debt-servicing costs as a share of economic output... Interest 6% payments as a percentage 4 of gross domestic product 2 Portugal Italy Spain Euro area France Germany 0 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 …encouraging eurozone governments to issue debt with longer maturities. Years left 8 years until bonds mature, average 7 Portugal Spain France Italy Germany 6 5 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Sources: BNP Paribas (rates, payments); national ministries of ﬁnance and treasury agencies (maturities) THE WALL STREET JOURNAL. Visa’s Earnings Rise 11% as Partnerships Aid Results Visa Inc. reported an 11% rise in profit for its fiscal fourth quarter, adding fuel to a robust rally this year for the card company’s stock. Earnings were $2.14 billion for the quarter, or 90 cents a share, beating analysts’ estimates of 85 cents a share. Net operating revenue rose 14% from a year earlier to $4.86 billion, boosted by a 10% rise in payments volume as consumer card-based spending in By AnnaMaria Andriotis and Allison Prang the U.S. and abroad continues to rise. The San Francisco-based company forecast robust growth for the fiscal year that began Oct 1. Finance chief Vasant Prabhu said that Visa’s 2018 fiscal-year outlook is for adjusted earnings-per-share growth at the high end of a midteens percentage range. Visa shares ended up 1% at $109.49 on the New York Stock Exchange Wednesday, pushing the stock’s rise this year to about 40%. The company’s stock price—which is up about 40% for the year—has helped fuel a rise in the Dow Jones Industrial Average, which crossed the 23000 threshold this month. Chief Executive Al Kelly said on the earnings call that several drivers of growth contributed to the company’s strong performance over the past year. Strong economies have resulted in increased consumer spending and the addition of Visa Europe to the company’s lineup, which Visa finished acquiring in June 2016, has also helped to boost transaction activity on the Visa network. Before the acquisition, Visa Europe was a separate entity that was owned by banks and other financial firms. Visa has also benefited from new partnerships that kicked in last year, most notably with Costco Wholesale Corp. The store’s credit card switched from running on the American Express Co. network to Visa in June 2016. USAA, one of the country’s largest issuers of debit and credit cards, switched to Visa from Master- Saudi Fund Sets a Lofty Asset-Growth Goal BY MARGHERITA STANCATI AND MAUREEN FARRELL Carlyle Taps Co-CEOs in Its Plan for Succession BY MIRIAM GOTTFRIED FAISAL AL NASSER/REUTERS RIYADH, Saudi Arabia—The kingdom’s sovereign-wealth fund, a key engine of its plan to diversify the economy, laid out new targets for growth, saying it aims to nearly double the value of assets it manages to around $400 billion by 2020. That sum includes the expected proceeds from the planned initial public offering of up to 5% of state-owned oil giant Saudi Arabian Oil Co., known as Aramco. The listing, slated for next year, could raise as much as $100 billion, Saudi officials have said. The Saudi fund, called the Public Investment Fund, held assets valued at roughly $224 billion as of September, it said in a document released on Wednesday. It had previously struggled to calculate the value of its holdings, estimating them to be between $200 billion and $300 billion. The fund has made a series of high-profile investments and announcements since Saudi Arabia unveiled its longterm plan for an economic overhaul last year. On Wednesday, it committed as much as $20 billion to a $40 billion Blackstone Group LP vehicle that will primarily invest in U.S. infrastructure. It has invested $3.5 billion in Uber Technologies Inc., and committed $45 billion to a technology fund led by SoftBank Group Corp. The Saudi government, un- card Inc. last year. Visa, while a card company at its core, has been investing in partnerships that expand its reach as a payments company—a strategy meant to ensure that the firm will remain a leader in consumer spending even if fintech firms or other payment types grab more market share. In July, it extended its partnership with PayPal Holdings Inc. in Europe. The Saudi wealth fund is investing in a futuristic urban-development project called Neom. Visitors at a 3-D presentation of the city. der the leadership of Crown Prince Mohammed bin Salman, wants the fund to create sources of income outside of oil by investing at home and abroad. In recent months, it announced it will participate in several big infrastructure projects in Saudi Arabia, including a $500 billion futuristic urban- development project presented this week. The fund said it would be a key investor in the planned city, dubbed Neom. The fund’s head, Yasir Othman al-Rumayyan, on Wednesday said that the fund eventually will seek a return in excess of 8% each year but in the shorter term by 2020, it will seek a return of 4% to 5%, up from an average of 3% over the past few years. The fund will focus on job creation and encouraging its partners to do more in Saudi Arabia, said Mr. Rumayyan, speaking during an investment conference it organized in Riyadh. In tune with the Saudi government’s goal of creating more jobs for Saudis in the private sector, the fund aims to create 20,000 new jobs by 2020 through investments in sectors including real estate, technology and entertainment. That would help increase the fund’s contribution to Saudi Arabia’s gross domestic product to 6.3% from 4.4% today. Carlyle Group LP is elevating two executives to top leadership roles at the private-equity firm, as co-founders David Rubenstein and William Conway step back from day-to-day operations. Kewsong Lee, 52 years old, and Glenn Youngkin, 50, will become co-chief executives and join Carlyle’s board, the Washington firm announced Wednesday. Mr. Lee will focus on Carlyle’s corporate private equity, global-credit and capital-markets businesses, in addition to corporate strategy. Mr. Youngkin will oversee the firm’s real estate, energy and infrastructure businesses. Together, the two will have “full responsibility, authority and accountability for the firm’s performance,” Carlyle said. The changes will take place in January. Messrs. Rubenstein and Conway, currently co-CEOs and 68, will become co-executive chairmen. Daniel D’Aniello, 71, Carlyle’s current chairman and another cofounder of the firm, will assume the role of chairman emeritus and continue to serve on the board. Carlyle is the latest big private-equity firm to promote younger leaders and make succession plans clearer as their founders age. 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 B12 | Thursday, October 26, 2017 * *** THE WALL STREET JOURNAL. MARKETS Market Calm Extends to China Stocks globally are placid, but traders also see intervention from Beijing as playing role Trade Winds Die Down Shanghai Composite's number of 1% daily moves each year 200 175 150 125 100 75 50 25 0 1993 ’95 2000 ’05 *Through Oct. 23 Source: FactSet ’10 ’15 ’17* THE WALL STREET JOURNAL. markets seems to conflict with efforts by China over many years to open its economy and markets to the rest of the world. Chinese President Xi Jinping said in his congressopening speech last week that markets would continue to play a “decisive” role in the allocation of resources. Beginning in late 2014, Chinese authorities made it easier for ordinary investors to bor- row money to buy stocks, while the Communist Party-backed People’s Daily contended the market’s rise was part of China’s “grand development strategy.” Months later, after the market suddenly slumped by over 40%, the securities regulator clamped down on such margin trading. It also imposed a six-month ban on share sales by major corporate shareholders and a temporary halt for initial public offerings. Some restrictions remain: Big shareholders are forbidden from making large block share sales. Although IPOs have resumed, long-discussed reforms to make them easier have been delayed. Market rules still prevent stocks moving up or down by over 10% each day. Since 2015, traders say Beijing has also used the “national team”—large statebacked companies—to help steady markets by buying shares when the market falls sharply and selling when it rises. This year’s subdued volatility doesn’t mean China’s markets have truly modernized, said Michael Pettis, a finance professor at Peking University. He said that the quality of financial information still needs to improve. “Real value investing requires corporate transparency, high quality of data and predictable government behavior,” said Mr. Pettis. “In China, none of these is easily available yet.” —Yifan Xie in Shanghai and Steven Russolillo in Hong Kong STEPHEN BRASHEAR/ASSOCIATED PRESS The placid trading that has swept global markets this year has reached an unlikely destination: China. Once synonymous with large daily swings, Chinese stock markets are having one of their calmest stretches ever. The Shanghai Composite Index, which tracks the fourthbiggest global stock market by market value, has moved more than 1% on 10 trading days this year. That is down from 65 times for all of 2016 and 141 times in 2015. The past 30 trading days, coinciding in part with the 19th National Congress of the Communist Party, have been the least volatile of any 30-day period since the Shanghai Stock Exchange reopened in the early 1990s, according to an analysis of FactSet data. A number of factors help to explain the muted trading, ranging from record-low stock volatility in the U.S. to a stable economic backdrop in China. Institutional investors, known for a longer-term focus, are taking on a greater share of trading in Chinese markets. Perhaps most important, many investors and traders say Beijing has taken on a more muscular role in markets, following a spectacular market boom and bust in 2015. Securities regulators have called many brokerages and funds over the past year, urging them to say publicly they were bullish about stocks and to refrain from selling shares, market participants say. Some traders cite the price-supporting effect of the “national team” of state investment funds, which they say steps in to buy shares when prices fall. The developments have left China’s armies of retail investors increasingly disillusioned. While lower volatility can serve the government’s goal of projecting an image of stability, it can sharply reduce the opportunities for quick profits that many traders depend on. The perception of increased state involvement in stock Shares of Chipotle Mexican Grill fell 15%—their worst day in five years—after the chain missed forecasts and said it would open fewer locations than expected. Blue Chips Drop Broadly on Weak Profits BY AMRITH RAMKUMAR AND RIVA GOLD A raft of downbeat earnings sparked broad declines in U.S. stocks Wednesday, sending the Dow industrials down 112 points in their worst day since early September. Results from American companies have generally been solid, investors and analysts said. But after several quarters of strong WEDNESDAY’S e a r n i n g s , MARKETS some cautioned that expectations are high, which could limit gains in stocks. “Big beats don’t surprise people anymore,” said Mohit Bajaj, director of ETF trading solutions at WallachBeth Capital. “The downward pressure is much stronger,” he said. The Dow Jones Industrial Average closed down 0.5% at 23329.46 after shedding 191 points earlier in the session. The S&P 500 declined 11.98 points, or 0.5%, to 2557.15, with all 11 of its major sectors post- Retreating Shares of Chipotle Mexican Grill posted their biggest one-day drop since 2012, weighing on the S&P 500 along with Advanced Micro Devices. 0% S&P 500 –5 –10 Advanced Micro Devices Chipotle –15 9:30 10 11 noon Source: FactSet ing losses. Both indexes had their worst session since Sept. 5. The Nasdaq Composite shed 34.54 points, or 0.5%, to 6563.89. Roughly 36% of the S&P 500 has reported earnings as of late Wednesday, and 74% of those 1 2 3 4 THE WALL STREET JOURNAL. firms have beat expectations compared with the five-year average of 69%, according to FactSet. Still, relatively weak earnings from some firms Wednesday led investors to take profits because of the market’s almost uninterrupted run this year, said Yousef Abbasi, global market strategist at JonesTrading Institutional Services. “It’s just a friendly reminder that the market can go down sometimes,” he said, noting that strong earnings from a few firms propelled the Dow industrials to another record close Tuesday. Chipotle Mexican Grill fell $47.29, or 15%, to $277.01—their worst day in five years—after the fast-casual chain missed forecasts for earnings and sales, and said it would open fewer locations than previously forecast. Advanced Micro Devices tumbled 1.92, or 13%, to 12.33, after the chip maker forecast margins to remain flat and revenue to decrease in the current quarter. AT&T, Boeing and Dr Pepper Snapple Group also traded lower after the firms released results. Government bond investors largely focused on the outlook from central banks. The yield on the 10-year Treasury note rose to 2.444% Wednesday—its highest close Energy Stocks Lag Behind Oil Prices BY GEORGI KANTCHEV AND SARAH KENT Oil prices are bouncing back from a three-year slump, but investors in energy companies seem to have missed the memo. International crude prices have risen in the last 52 weeks as production cuts by major suppliers helped shrink the market’s three-year-old glut. But energy stocks have barely gained over the same period— an unusual divergence for sectors that are normally highly correlated. Investors have also put less money in energy equity funds. On Wednesday, Brent crude, the international benchmark, settled at 58.44 a barrel, up 17% over the last 52 weeks. Shares of global energy companies are up just 3% over the past 12 months, according to the MSCI World Energy index. In the U.S., West Texas Intermediate crude settled at $52.18 a barrel Wednesday and has risen 6.1% over the past 12 months, but energy stocks in the S&P 500 index are down nearly 3%. Exxon Mobil Corp. shares have fallen more than 4% over the 52 weeks, while BP PLC’s stock was broadly flat. Royal Dutch Shell PLC shares are up 9% but still lag behind the overall oil price gain for Brent. Of the major oil companies, only Chevron Corp. is up more than the price of a barrel of Brent, rising more than 18% over the past 12 months. Behind the performance of stocks is a cocktail of factors, analysts say, including companies’ high debt levels and a dearth of new investment that is hitting the bottom lines of oil-services firms. However, a more fundamental reason appears to be investors’ broad disillusionment with a sector that has endured wild price swings and is adapting to a new, lower-price environment. “Energy equities are now unloved by investors,” said David Lebovitz, global market strategist at J.P. Morgan Asset Management. “So much pain was felt during the downturn that people are hesitant to move into these names.” Oil prices fell from over $100 a barrel in mid-2014 to below $30 a barrel in early 2016, as booming U.S. shale oil output fueled a global glut of crude. Energy stocks fell, too, with the MSCI World Energy index down around 50% from peak to trough. However, a production-cut deal between the Organization of the Petroleum Exporting Countries and other big suppliers like Russia late in 2016 helped stabilize the market, and international crude prices have been steadily rising. Such a divergence is unusual. Energy shares over the past decade have had a 75% correlation with oil prices, meaning that they go in lockstep three-quarters of the time, according to Stuart Allsopp, head of financial markets at BMI Research. since March—from 2.406% Tuesday amid speculation about who the next Federal Reserve chairman will be. Yields rise as prices fall. Treasurys extended losses after data was released showing demand for long-lasting U.S. factory goods remained robust last month. The European Central Bank is widely expected to announce plans to unwind its bond-purchase program at its meeting on Thursday, keeping some investors on edge. The program has made European government debt more scarce and helped drag down yields globally. The Stoxx Europe 600 fell 0.6%, with a flurry of corporate results driving swings in individual stocks. Japan’s Nikkei Stock Average fell 0.4% to end a 16-session winning streak. Hong Kong’s Hang Seng index rose 0.5% after China’s new lineup of leaders was named. Early Thursday, the Nikkei was up 0.1%, while the Hong Kong benchmark was down 0.2%. Saudis, Russians Seek to Extend Pact Top oil producers Saudi Arabia and Russia want to extend their agreement to limit petroleum production until the end of 2018 in their continuing effort to cut the global oil oversupply, people familiar with the matter said. The pact between Saudi Arabia and Russia—the world’s two largest crude producers and exporters—provides momentum for advocates of the Organization of the Petroleum Exporting Countries continuing to withhold oil supplies to boost crude prices. OPEC, led by Saudi Arabia, and a Russia-led group of nonOPEC producers are in the middle of an accord that cuts Strong Factory Data Lift Yields BY AKANE OTANI Treasury prices slipped Wednesday, sending the yield on the 10-year note to its highest level since March, after data showed the CREDIT country’s manuMARKETS facturers on a strong footing. The yield on the 10-year Treasury note settled at 2.444%—the highest closing level since March 20— compared with 2.406% Tuesday. Yields rise as bond prices fall. Data showed demand for long-lasting U.S. factory goods rose again in September, with new orders for durable goods rising a seasonally adjusted 2.2% in September from a month earlier, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had expected new orders to rise by 0.8%. The data signaled strength among manufacturers heading into the fourth quarter, analysts said, weakening demand for government bonds, whose prices tend to rise when investors are less certain about the economic environment. “We’ve had a continuation of decent growth data around the world,” said James Athey, senior investment manager at Aberdeen Standard Investments. That has helped keep Treasurys in a relatively narrow range for much of the year despite ebbs and flows in investors’ confidence around policy changes in Washington, he said. Meanwhile, speculation around a potential change in leadership at the Federal Reserve continued to swing the markets, some analysts said. Bond yields closed above 2.4% for the first time in more than five months Tuesday as some investors considered the possibility that President Donald Trump would tap a hawkish candidate for Fed chairman. Mr. Trump has narrowed the list of candidates to Fed governor Jerome Powell and Stanford University economics professor John Taylor, a person familiar with the matter told The Wall Street Journal. Some analysts and economists say a Fed led by Mr. Taylor, who has criticized the central bank’s easy-money policies put in place after the financial crisis, may take a more Speculation around a potential change at the Fed continued to swing markets. aggressive approach to raising interest rates—something that could send bond yields higher. The yield on the two-year Treasury note, which tends to be more sensitive to rate expectations, notched its sixth advance in eight sessions Wednesday, settling at 1.608%, compared with 1.575% Tuesday. “Markets are clearly set to deal badly with anyone other than [Fed Chairwoman Janet] Yellen if and when the president announces his candidate,” said Jim Vogel, interest-rates strategist at FTN Financial, in a note Wednesday. global oil output by almost 2% through March 2018. OPEC, Russia and other producers plan to meet Nov. 30 to decide on production, with a growing number of group members stating publicly they want to keep their limits in place through the end of 2018. The OPEC-Russia production cuts have helped drain oil inventories in the U.S. and elsewhere in the West, but crude prices remain stuck below the $60-a-barrel target that Saudi officials say they want. On Wednesday, Russian Energy Minister Alexander Novak said his country would increase production next year by about 100,000 barrels a day if the OPEC pact isn’t continued. —Summer Said For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Thursday, October 26, 2017 | B13 MARKETS ECB’s Extreme Measures Still Ripple Central banks first acted to protect own economies; now, they are rolling back efforts BY BRIAN BLACKSTONE The European Central Bank is expected to decide Thursday whether to scale back its nearly three-year-old assetpurchase program, a potential milestone for global central banking. Yet smaller central banks in Europe have been forced in recent years to take their own extreme measures to protect their economies. They printed hundreds of billions of dollars of their currencies and used them to buy stocks, bonds and cash around the world, supporting global asset markets in the process. They have already started scaling back some of these efforts. Switzerland The ECB’s decision in January 2015 to launch a program of bond purchases, known as quantitative easing, or QE, hit its neighbors hard, none more than Switzerland. Yet the rich Alpine country appears to be one of the earliest beneficiaries of the ECB’s expected tapering of those purchases, with a weaker franc boosting exports. Like other European countries outside the eurozone, Switzerland is heavily influenced by ECB policies affecting exchange rates, exports and inflation. Switzerland cut its deposit rate into negative territory in December 2014 and unexpectedly abandoned a longstanding floor on the euro’s value against the franc one week before the ECB decision. A further reduction in the deposit rate to minus 0.75% wasn’t enough to keep the euro from plunging as much as Email: email@example.com Switzerland cut its deposit rate into negative territory and abandoned a ﬂoor on the euro’s value against the franc one week before the ECB’s launch of QE in 2015. Yet the Swiss National Bank had to intervene in a big way in currency markets. Deposit rates for the ECB and Swiss National Bank 0% –0.20 1.30 Swiss franc 800 billion Swiss francs Euro 1.10 –0.40 ECB –0.60 200 ’15 ’16 0.80 ’17 2014 ’15 How many Czech korun one euro buys 15 27 10 Scale inverted to show rising koruna ’15 ’16 0.2% 0 –0.2 –0.4 ECB –0.6 DCB –0.8 ’15 ’16 ’17 assets by about 240 billion Swiss francs ($242 billion) since 2015 to about $750 billion. Economic growth weakened from nearly 2% on an annual basis in early 2015 to just 0.3% in the second quarter. But the franc has weakened against the euro since the middle of the year, with the euro on Wednesday climbing to its highest level, nearly 1.17 francs, since the franc ceiling was abandoned. Czech Republic The Czech National Bank took a page from Switzerland’s ’17 CNB 0.20 0.15 0.10 0.05 0 0 2015 ’16 ECB ’17 2014 ’15 ’16 ’17 Danish foreign-exchange reserves House prices, change from a year earlier 800 billion Danish kroner 8% 600 6 400 4 200 2 Denmark Euro area 0 2014 ’15 ’16 ’17 playbook when, faced with a strong currency amid concerns over the euro, it set a peg on the koruna’s value against the euro in November 2013. The ECB’s asset-purchase program put upward pressure on the Czech peg, which was set at about 27 korun to the euro. It rose after that decision, forcing the central bank to spend vast sums intervening in currency markets to weaken the koruna. The Czechs had a particular problem: trade with Germany, which the central bank calls crucial. A weaker euro made Czech products less price competitive in Germany, threaten- 2015 ’16 ’17 THE WALL STREET JOURNAL. ing the country’s trade with Europe’s biggest economy. In some ways, its currency action was riskier than Switzerland’s because the koruna doesn’t have the same haven status as the franc. That exposed the Czech central bank to significant currency losses if the peg failed. Yet the Czechs largely weathered the storm, and while the inflation rate sank after the ECB launched QE, it gradually increased to 2.7%, within the Czech central bank’s target of 2% with a 1-percentage-point band on each side. And they were able to exit their peg earlier this year HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY That customer is set to become a competitor. Anthem announced it will form its own pharmacy-benefit manager once the contract ends in two years. Generating growth will be a challenge, even after ignoring the Anthem loss. The company is targeting annual adjusted Ebitda growth of 2% to 4% a year in its core business through 2020. Total third-quarter claims were down 1% from a year ago. The competitive picture could darken further. Express Scripts Chief Executive Tim Wentworth addressed “recent speculation and rumors about potential disruption” in the industry on a conference call Wednesday. While he reiterated confidence in the business model, investors are worried Amazon.com will soon enter the pharmacy business. Amazon has made no announcement on the topic. Express Scripts is a pure stand-alone pharmacy-benefit manager. The company is now working to diversify itself—Express Scripts announced the acquisition of medical-benefit manager eviCore for $3.6 billion earlier this month. That deal is expected to be accretive to earnings next year after it closes, but it is unclear by how much. Meanwhile, employee turnover in key roles is an issue. Express Scripts announced that James Havel would become finance chief effective Wednesday. He is the fifth CFO since 2012. The company also faces a slew of government inquiries into topics such as drug pricing and the opioid crisis, including two new investigations from state attorneys general revealed in the company’s latest quarterly filing with the Securities and Exchange Commission. Winning investors back won’t be easy. And doing so will take more than a low earnings multiple. —Charley Grant OVERHEARD Bitcoin isn’t for the faint of heart. Neither is technical analysis. Still, one analyst believes marrying the two can help explain the cryptocurrency’s surge this year. J.C. Parets, founder of Eagle Bay Capital and author of the All Star Charts blog, reckons a pattern called the Fibonacci sequence is the key to bitcoin’s twists and turns. “The levels match up so perfectly that it’s hard for some to believe that this is simply normal behavior,” he wrote on his blog on Wednesday. Critics say such studies enable analysts to distort charts to tell whatever story they want. Bitcoin recently traded around $5,500 after topping $6,000 a few days ago. Should it fall further, Mr. Parets suggests buying. When it comes to bitcoin, he wrote in his blog, “the path of least resistance here is higher, in my opinion, regardless of what the underlying asset may be.” India’s Boost to State-Owned Banks Can’t Afford to Fail India has finally sent its flailing state-owned banks the big lifeboat they need. Investors should jump aboard cautiously. The country’s finance ministry said late Tuesday that it would inject 2.11 trillion rupees ($32.4 billion) to recapitalize heavily indebted public-sector banks over the next two years. Investors cheered the aid, which is equivalent to 1.5% of India’s gross domestic product. State Bank of India, the country’s largest bank, rose as much as 27% on Wednesday, with the sector as a whole jumping more than 30%. The move to shore up the Denmark 0.25% $1 = 21.67 korun; 6.30 kroner; 0.99 Swiss franc Sources: the central banks (rates, reserves, intervention amounts); Thomson Reuters (korun); Tullet Prebon (Swiss francs); Eurostat (house prices) 30% against the franc the day the floor was lifted, threatening the export-dependent economy where roughly half of exports go to the eurozone. Despite fears of recession and deflation, Switzerland largely weathered the hit from the stronger franc, which has slowly weakened since early 2015. But this has come at a high cost for the Swiss National Bank, which had to intervene in currency markets by selling francs to purchase foreign stocks and bonds in a bid to weaken the currency and keep Swiss exports competitive. That has boosted its already high level of foreign ’16 Repo rates for the ECB and the Czech National Bank 0 2014 2015 5 ’17 Deposit rates for the ECB and Danish Central Bank 0 ’17 €20 billion 26 2013 ’14 ’16 Currency intervention amounts, by month 25 Czech korun 29 Dollar SNB –0.80 600 400 1.00 0.90 28 Denmark’s policy makers reacted quickly in 2015, cutting their already negative deposit rate, suspending bond issuance and intervening in the foreign-exchange market in order to keep tthe euro's rate within 2.25% of 7.46 kroner. Swiss National Bank's foreign-currency reserves 1.20 2014 The Czech koruna’s value rose in the aftermath of the ECB’s decision, forcing the Czech National Bank to spend vast sums intervening in currency markets. How many Swiss francs one dollar and euro buy Express Scripts Only Looks Cheap Express Scripts Holding isn’t as cheap as it may appear. Granted, at about eight times forward earnings, the pharmacy-benefit manager trades at a significant discount to a pricey market. Express Scripts unveiled third-quarter results on Tuesday evening that gave shares a boost. Adjusted earnings of $1.90 a share met analyst expectations, while revenue of $24.7 billion missed. Express Scripts increased the low end of its full-year profit forecast to $6.97 a share from $6.95. The stock closed 4% higher Wednesday. But a closer look suggests the stock is cheap for reasons that are unlikely to soon change. The company’s stock won’t be as attractive when Express Scripts loses its largest customer, the health-insurance giant Anthem. Anthem was responsible for 31% of Express Scripts’ adjusted earnings before interest, taxes, depreciation and amortization in the third quarter. without causing the same disruptions as Switzerland. Czech policy makers telegraphed the move well in advance of formally dropping the peg in April and haven’t intervened since May. In August, the Czech central bank raised interest rates, a rarity in Europe and beyond in recent years. Economists at ING Bank call another rate increase next month a “done deal.” How Europe’s Small Central Banks Weathered ECB Bond Buys banks is commendable, especially its scale. India’s government hasn’t been this charitable to its banks since the mid-1990s, when it infused roughly 1.2% of India’s GDP in fresh capital through a similar program. The plan is for New Delhi to finance the program mostly by issuing recapitalization bonds. Other details remain sparse. India’s public-sector banks do need help. They own about 70% of the banking system’s assets and 88% of its bad assets. The core of their problem is their mounting pile of bad debts, with the nonperforming loan ratio now over 15%. The big Indian state Booster Shot Share-price performance Punjab National Bank Bank of Baroda State Bank of India 75% 60 45 30 15 0 –15 2017 Source: FactSet banks’ bad-loan burden has constrained their ability to lend more to thriving individuals and businesses. That has hampered credit growth across the economy, which has dropped to record lows. Still, cleaning out bad loans remains a big challenge. In recent years, India’s central bank has periodically pushed programs to review banks’ asset quality and deal with the growing number of delinquent companies. In May, the government gave the central bank more power to force banks to deal with souring loans. The challenge now is that banks are recognizing more bad-debt charges, but the growth in their nonperforming loans isn’t slowing. Nor are they decisively cutting off lending to zombie companies. The longer it takes for banks to seriously grapple with the bad-loan problem, the higher their eventual losses will likely be. Investor money has poured into Indian markets this year on the belief that Prime Minister Narendra Modi’s government is the real deal when it comes to reform. To date, though, Mr. Modi has been better at making blockbuster announcements. Sorting out India’s banks and their soured loans holds the key to so much that India’s government needs to achieve, from buoying growth to improving infrastructure and reducing poverty. Investors should watch closely whether this particular lifeboat sinks or floats. —Anjani Trivedi The Danish central bank faced a different dilemma from that of its Swiss, Czech and other counterparts because it doesn’t have an inflation mandate. Rather, its sole responsibility is to keep its currency, the krone, in a tight exchange-rate band against the euro. Policy makers there reacted quickly to the ECB’s launch of QE, slashing their already negative deposit rate to minus 0.2% days before the announcement and reducing it further in subsequent weeks to minus 0.75%. Last year, they nudged it to minus 0.65%. They also suspended bond issuance and intervened in the foreign-exchange market, all with the aim of keeping the euro’s rate within 2.25% of 7.46 kroner. Denmark’s economy has strengthened since early 2015. Its central bank expects economic growth of 2.3% this year, followed by 1.8% next year and 1.7% in 2019. “This implies that the Danish economy will be in a boom with larger pressure on production capacity and labor resources,” it said last month. But it isn’t out of the woods. Low interest rates prompted a boom in the housing market—particularly in its largest city, Copenhagen—as some home buyers’ mortgage rates turned negative, meaning they were paid to borrow. WSJ.com/Heard Good News At AMD Can Hurt Intel Intel is so big that rival Advanced Micro Devices can hardly dent its business, but good news at AMD can make investors question their optimistic outlook for the chip giant. That has been the situation since AMD launched a new server processor chip called Epyc over the summer. AMD doesn’t break out sales for this product line, but third-quarter sales in its enterprise, embedded and semicustom segment beat Wall Street’s estimates by 10%. AMD credited Epyc and predicted Tuesday that the server processor would increase to a “sizable portion” of revenue next year. That isn’t much compared with Intel, which will likely sell more than $18 billion of chips into its data center segment this year. The segment containing AMD’s Epyc business will likely generate a little more than $2 billion, and most of that still comes from the processors the company designs for videogame consoles. Epyc could have a sizable impact on AMD next year by generating $500 million in sales and still just represent about 2% of Intel’s competing business. The problem for Intel is that it can’t afford to give up much. Analysts are expecting the company’s data-center sales to accelerate next year following a slowdown this year. Third-quarter results slated for Thursday are expected to show data-center revenue rising about 6% year over year compared with a 9% gain in the second quarter. Intel’s dominant share means that any gains for AMD and other rival processors are losses for Intel. —Dan Gallagher 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 B14 | Thursday, October 26, 2017 THE WALL STREET JOURNAL.