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The Wall Street Journal March 7 2018

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WEDNESDAY, MARCH 7, 2018 ~ VOL. CCLXXI NO. 54
* * * * * *
DJIA 24884.12 À 9.36 0.04%
NASDAQ 7372.01 À 0.6%
STOXX 600 371.37 À 0.1%
10-YR. TREAS. À 1/32 , yield 2.877%
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GOLD $1,333.60 À $15.50
Top economic adviser
lost effort to stop
planned tariffs; exit
could rattle investors
Business & Finance
C
VS sold $40 billion of
bonds to help pay for its
Aetna acquisition months
before it needs the money,
as the company braced for
an expected rise in rates. A1
S&P Global is buying tech
startup Kensho for about
$550 million, in the latest
sign of Wall Street embracing artificial intelligence. B1
Big banks are set to benefit from a provision in a
Senate bill that makes it easier for them to buy munis. B1
Gary Cohn will resign from
the White House after 14
months serving as President
Donald Trump’s top economic
adviser, he said Tuesday, days
after Mr. Trump surprised his
senior staff by announcing
steel and aluminum tariffs Mr.
Cohn opposed.
During his time at the
White House, Mr. Cohn oversaw a major revamp of the U.S.
tax code and pushed a significant rewrite of financial rules.
But the former Goldman Sachs
Group Inc. executive stumbled
in an uphill and monthslong
fight to sway Mr. Trump
against the tariffs.
He was also on the losing
side of an effort to prevent the
U.S. withdrawal last year from
the Paris climate accord, and
will leave having made little
progress advancing a $1 trillion infrastructure program.
Financial markets have see-
By Nick Timiraos,
Peter Nicholas
and Liz Hoffman
sawed in recent weeks, first on
the prospect that higher federal budget deficits approved
by Mr. Trump might boost inflation and interest rates and
more recently because of his
desire to start a “trade war.”
Mr. Cohn’s departure could
further
rattle
investors.
Though not universally well
liked on Wall Street, Mr. Cohn
was widely respected for his
market savvy and his pro-trade
world view. The dollar
slumped, and futures in the
Dow Jones Industrial Average
were down about 300 points,
or 1.2%, late Tuesday.
Mr. Cohn said it had been
an honor to serve in the administration as director of the
National Economic Council and
thanked the president in a
statement. Mr. Trump praised
Mr. Cohn’s “superb job” as his
economics adviser and called
him a “rare talent.”
The White House has seen
numerous departures over the
U.K. Focuses on Russia in Suspected Poisoning of Former Spy
YEN 106.12
Target’s same-store sales
climbed 3.6% in the fourth
quarter, boosted by strong
holiday-season spending. B3
U.S. stocks rose as investors saw opposition to tariff
plans. The Dow edged up
9.36 points to 24884.12. B16
Aramco’s CEO and other
oil-company heads rejected
predictions that demand for
petroleum will erode. B15
Lego’s profit fell as it continued to struggle in North
America and Europe. B10
Smucker and Conagra
called off a deal for Wesson
oil after the FTC filed suit. B3
CHRIS J. RATCLIFFE/AGENCE FRANCE-PRESSE/GETTY IMAGES
BlackBerry sued Facebook and its WhatsApp and
Instagram units, claiming
patent infringement. B4
By Michael R. Gordon
and Michael C. Bender
in Washington
and Jonathan Cheng
in Seoul
UNDERCOVER: The U.K. is investigating whether Moscow was behind the suspected poisoning of a former Russian intelligence officer and his
daughter in Salisbury, England. Above, police stand guard Tuesday at the shopping center where the two were found critically ill Sunday. A13
McDonald’s
Beefs Up Menu
World-Wide
Cohn said he would quit
as Trump’s top economic
adviser, days after the president announced tariffs
that he had opposed. A1, A4
Trump said North Korea’s offer to discuss giving up its nuclear weapons
was sincere, but U.S. officials remained wary. A1
Challenged by ‘fast casual’
chains, McDonald’s will offer
burgers made with fresh beef. B1
McDonald's U.S. comparable
store sales, change from
previous year
4
2
0
The Justice Department is
suing California over its sanctuary laws, alleging the state
overstepped its authority. A6
Sri Lanka declared a
state of emergency after
violence erupted between
Buddhists and Muslims. A7
Tillerson heads to Africa this week for a trip focused on counterterrorism
and China’s influence. A7
Morsi’s family said the
former Egyptian president
is ailing in prison. A12
West Virginia approved
a pay raise for teachers, resolving a 9-day strike. A2
A U.S. aircraft carrier
sunk during World War II
was found off Australia. A7
Opinion.............. A19-21
Property Report... B6
Sports....................... A18
Technology............... B4
U.S. News............. A2-6
Weather................... A18
World News..... A7-13
>
Synthetic-identity fraud is growing fast and is hard to combat
BY PETER RUDEGEAIR AND ANNAMARIA ANDRIOTIS
Two GOP lawmakers
called for a second special
counsel to probe surveillance
of a former Trump aide. A6
Texas held the first primary elections as the 2018
fight for control of Congress formally began. A3
The New ID Theft: Credit
Applicants Who Don’t Exist
6%
China has increased its
spending on domestic security, reflecting concern
about internal threats. A7
The administration
wants any plan to shore up
the ACA to include conservative goals, a memo said. A6
Battle heats up to derail or
limit tariff plan......................... A4
White House aide faulted for
discussing candidate............. A4
President Donald Trump
called an offer by North Korea
to discuss giving up its nuclear weapons sincere, but top
administration officials Tuesday stopped short of a commitment to open talks with
Pyongyang.
An investing group called
off its tentative deal to buy
Weinstein Co.’s assets. B3
Beijing is considering
plans to let tech giants such
as Tencent and Alibaba issue shares in China. B4
past year. A study by the
Brookings Institution in January showed turnover surpassed
that of the previous five presidents’ first year in office.
Since the study was published, Communications Director Hope Hicks, Staff Secretary
Rob Porter and communications adviser Josh Raffel have
also resigned, among others.
Please see COHN page A4
U.S. Wary
Of Offer
For Talks
With Kim
McDonald’s is switching
to fresh beef for its quarter-pound burgers at its
14,000 U.S. restaurants. B1
s Copyright 2018 Dow Jones &
Company. All Rights Reserved
EURO $1.2404
Cohn Quits After Split With Trump
What’s
News
CONTENTS
Banking & Finance.... B14
Business News.. B3,5
Crossword.............. A18
Heard on Street. B16
Life & Arts....... A15-17
Markets............. B15-16
HHHH $4.00
WSJ.com
–2
–4
2014
’15
’16
’17
Source: the company
From a townhouse near a megachurch in
Atlanta, Kelvin Lyles recruited about 300 accomplices to embark on a crime spree. His
group scammed ATMs, internet retailers and
credit-card companies, grabbing around
$350,000, until late 2015, when federal agents
closed in.
Mr. Lyles was the only one convicted. None
of his accomplices existed.
In a twist on ID theft, criminals are deploying figments of their imaginations, in what is
often called synthetic-identity fraud. It’s one
of the fastest growing forms of identity
crimes, the Justice Department says, and
among the hardest to combat.
Because the person taking out cards or
loans isn’t real, there are no consumer victims
to alert lenders. When companies and law enforcement discover something amiss, they of-
CVS Bets Big With
$40 Billion Bond Sale
BY MATT WIRZ
Pharmacy chain CVS Health
Corp. sold $40 billion of bonds
Tuesday to help pay for its acquisition of health insurer
Aetna Inc. months before it
needs the money, seeking to
get ahead of an expected rise
in interest rates and a flood of
borrowing across the economy.
The sale, the largest in two
years, showed there is still eager demand from investors for
corporate bonds issued by financially strong borrowers.
But investors and companies
say they are bracing for a sea
change in the markets caused
by shifts in U.S. monetary and
fiscal policy that could penalize prospective debt issuers for
waiting.
Investors are anticipating a
deluge of bond issuance this
year. The U.S. Treasury announced it would be selling
$42 billion of additional bonds
in the period from February
through April, and many ana-
ten wind up chasing ghosts. Mr. Lyles secured
credit cards often using fictional names and
numbers the Social Security Administration
hadn’t yet assigned.
Synthetic-identity fraud exploits a vulnerability in America’s consumer-credit system.
Lenders often consider a loan applicant legitimate if the applicant has a credit report at
Equifax Inc., TransUnion or Experian PLC. But
a new “credit file”—essentially a precursor to
a credit report—often gets created when
someone simply applies, even if the loan
doesn’t come through.
Some lenders approve loans after reviewing credit files, which helps turn those files
into full credit reports. That’s how a fictitious
person, or 300 fictional people, can end up
with a credit card.
“When you see this type of scheme,” said
Samir Kaushal, the assistant U.S. attorney
Please see FRAUD page A14
lysts forecast that the government will announce additional
increases to bond sales in May.
Greater availability of bonds
could send their prices lower,
which results in higher rates.
Some analysts and investors expect the additional supply of
debt will push borrowing costs
throughout the economy higher.
Regulators aren’t expected
to pass judgment on the $69
billion Aetna purchase until
late this year, but CVS issued
the debt this week to avoid the
risk that interest rates continue to rise, people familiar
with the deal said. Another
jump in Treasury bond yields
could suppress investor appetite for new corporate debt.
Yields on corporate bonds
jumped in tandem with U.S. interest rates this year, triggering a fall in bond prices and a
decline in overall debt sales.
Please see SALE page A6
Treasurys gain amid huge
CVS debt offering................. B15
Bipartisan
Politics, From
Mom and Dad
i
i
Salesforce.
#1 CRM.
i
Parents hit the
campaign trail, for
the opposite party
The White House’s wariness
stems from three decades of
frustrated diplomacy and fears
that North Korea now may link
any denuclearization with unacceptable demands, such as
the withdrawal of American
troops from the Korean Peninsula, a senior administration
official said.
Still, Mr. Trump said American sanctions appear to have
forced Pyongyang to the table
and he is hopeful for “a very
positive result.”
“We have come certainly a
long way, at least rhetorically
with North Korea. It would be
a great thing for the world, it
would be a great thing for
North Korea, it would be a
great thing for the peninsula,”
Mr. Trump said at a press
conference at the White
House, speaking alongside
Sweden’s prime minister, Stefan Lofven.
North Korean leader Kim
Jong Un told a visiting South
Korean delegation that he was
willing to hold talks with the
U.S. about giving up nuclear
weapons and would halt weapons tests during any negotiations, officials in Seoul said
Tuesday.
Mr. Kim, who has conducted a nuclear test and a series of missile launches over
the past year, signaled a “clear
intent to pursue denuclearization” if the security of North
Korea and his regime were
guaranteed, said Chung Euiyong, South Korea’s nationalPlease see KOREA page A11
Ranked #1 for CRM Applications based on
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BY KRISTINA PETERSON
At last, the nation’s political
polarization may have met its
match.
Standing on the sidelines of
this year’s midterm campaigns
is a crowd of proud, if sometimes slightly perplexed parents
watching their children run for
Congress representing the political party they don’t support.
They have held fundraisers,
debated policy proposals, filmed
ads, and in the case of Democratic Rep. Beto O’Rourke’s
mother, driven the campaign
van. Collectively they have demonstrated more across-the-aisle
activity than most of the
sharply divided Congress has
Please see VOTE page A14
8.4%
6.1%
2013
2014
2015
2016
2017H1
Source: IDC Worldwide
Semiannual Software
Tracker, October 2017.
salesforce.com/number1CRM
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.
A2 | Wednesday, March 7, 2018
* *
THE WALL STREET JOURNAL.
U.S. NEWS
West Virginia Teachers’ Return Set Pearson Family Sues
University of Chicago
BY KRIS MAHER
BY DOUGLAS BELKIN
CRAIG HUDSON/CHARLESTON GAZETTE-MAIL/ASSOCIATED PRESS
Striking West Virginia teachers celebrated Tuesday after officials approved a 5% pay raise for this year.
said lawmakers in both houses
agreed on budget cuts to fund
the pay raise. “We have supported the highest raises possible for public employees, as
long as we could guarantee that
the revenue would be there,” he
said.
Other elements of a prior
agreement affecting benefits
appeared to remain in place, including the creation of a task
force to find ways to avoid benefit-cost increases at the statewide Public Employees Insurance Agency.
Large crowds of striking
teachers poured into the state
capitol in Charleston in recent
days.
On Tuesday, teachers celebrated news of the deal by
dancing and chanting “Put it in
writing.”
“What our educators showed
was that when you stand
united, your voice will be
heard,” said Dale Lee, president
of the West Virginia Education
Association.
Mr. Lee said teachers could
return to school as early as
Wednesday.
But he said superintendents
would have to ensure that
schools were prepared to reopen.
The teacher strike affected
roughly 270,000 students in all
55 of the state’s counties, according to the state Education
Department.
Many teachers stand to get a
raise of more than $2,000 a
year.
Starting teachers in West
Virginia earn $32,435 a year on
average, and the average
teacher salary is $44,701, according to the West Virginia
Education Association.
A family foundation that
gave the University of Chicago
$100 million in 2015 to fund
research aimed at reducing
conflict around the world is
suing the school for breach of
contract and accusing the university of incompetence and
deception.
The Pearson Family Members Foundation, led by
Thomas Pearson and his
brother Timothy, hopes to recoup the $22.9 million it has
already given the school to create the Pearson Institute.
The suit, filed in federal
court in Oklahoma on Feb. 20,
charges that the school
“failed to deliver on the most
fundamental of its obligations,” including appointing a
director, creating an academic
curriculum and filling faculty
positions.
“The Pearsons are profoundly disappointed, and regrettably have been left with
no other choice or course of
action,” said a spokesman for
the Pearson Family Foundation.
The University of Chicago
said the lawsuit is without
merit and emphasized that all
hiring decisions were up to
them.
“In the short time since its
formation, the Institute has
hosted dozens of events, enrolled more than 200 students
in courses related to the study
of global conflict, and fostered
an engaged community of
scholars,” the school said in a
statement. “All academic and
hiring decisions are the sole
purview of the University and
its faculty, guided by the principle of academic freedom.”
News of the lawsuit was
first reported by the Maroon,
the University of Chicago’s student newspaper.
The lawsuit is unusual but
not unheard of, philanthropy
experts say. Descendants of the
A&P grocery store chain sued
Princeton University in 2002
for mismanaging a decades old
gift. In 1995, Yale University returned a $20 million donation
made by Lee M. Bass four
years earlier.
Still, Amir Pasic, dean of the
Lilly Family School of Philanthropy at Indiana University,
said universities around the
country are looking at the situation in Chicago “and seeing
this as a cautionary tale.”
In Wisconsin, Contestants Move Some Cheese
CARRIE ANTLFINGER/ASSOCIATED PRESS
A teachers strike that shut
schools across West Virginia
for nine days was resolved
Tuesday after state officials
approved a pay increase
unions had sought for publicschool teachers.
The state’s roughly 20,000
teachers, as well as all other
state employees, will receive a
5% raise this year, state officials
said.
The announcement followed
days of wrangling over the percentage increase in the Republican-controlled Legislature.
“We have reached a deal. I
stood rock solid on the 5%
teacher pay raise and delivered,” Republican Gov. Jim Justice tweeted Tuesday in announcing the agreement.
A tentative agreement between the governor and unions
last week that also included a
5% raise for teachers fell
through after lawmakers questioned whether there would be
enough state revenue to pay for
it.
“All the focus should have always been on fairness and getting the kids back in school,”
Mr. Justice said.
On Tuesday, Republican Senate Majority Leader Ryan Ferns
PIECE PROCESS: A volunteer opened a round of Swiss cheese at the World Championship Cheese Contest on Tuesday in Madison.
CORRECTIONS AMPLIFICATIONS
Golfer Justin Thomas, who
lost in a playoff on Sunday at
the WGC-Mexico Championship, is 24 years old. A Sports
article Tuesday about Phil
Mickelson incorrectly said Mr.
Thomas is 23.
An unmarried taxpayer who
has reached age 65 can add
$1,600 to his or her standard
deduction when filing taxes for
2018 (making the overall standard deduction $13,600). An Investing in Funds & ETFs retirement-advice article on Monday
incorrectly used the figure
$1,250, understating the overall
standard deduction as $13,250.
The North American Vexillological Association ranked Milwaukee’s flag 147th out of 150
cities surveyed, and it ranked
Provo, Utah’s flag 143rd. A Page
One article on Monday about
city flags incorrectly said the
flags were 147th and 143rd
worst, respectively.
The 3.6-liter Jeep Rubicon
has a port-injection DOHC V6
engine. An Off Duty article on
Saturday about the vehicle incorrectly said its engine is direct-injection.
A U.S. News graphic on Friday showing the median distance that children were born
from their mother’s or father’s
birthplace had a baseline of 1 kilometer. The graphic’s baseline
was incorrectly labeled as zero.
Maldives former President
Mohamed Nasheed was given
medical leave while serving a
13-year prison sentence, and he
is living abroad. A World News
article on Feb. 7 about a political crisis in the Maldives incorrectly suggested that he was
still incarcerated.
Readers can alert The Wall Street Journal to any errors in news articles by
emailing wsjcontact@wsj.com or by calling 888-410-2667.
THE WALL STREET JOURNAL
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U.S. WATCH
RELIGION
Pope Still Popular, but
Some Concerns Arise
Pope Francis remains broadly
popular with Roman Catholics in
the U.S., according to a new
study from the Pew Research
Center, but a growing number of
Catholic Republicans are concerned about the direction of
the church under his leadership.
Overall, 84% of Catholics in the
U.S. hold a favorable opinion of
the pope, a figure that has
changed little since 2014, the first
full year of his papacy. The survey
says 9% view him unfavorably.
Still, signs suggest diminishing support for Pope Francis
among Americans. Thirty-four
percent now believe the pope is
“too liberal,” up from 19% in
2014; 58% say he is changing
the church for the better, down
from 68% four years ago.
For conservatives, the drop in
support is steeper. Among Catholics who identify as Republicans,
55% called Pope Francis too liberal in the 2018 survey, compared
with 23% in 2014.
—Ian Lovett
TENNESSEE
Nashville Mayor
Pleads Guilty, Resigns
Nashville Mayor Megan Barry
resigned Tuesday after pleading
guilty to a felony that stemmed
from an investigation into an affair she had with an officer on
her security detail.
“My time today as your
mayor concludes,” Ms. Barry, a
Democrat, said at a news conference after her court appearance. “God bless this wonderful
city. I love you, Nashville.”
The 54-year-old mayor
pleaded guilty in state court to
theft of property and agreed to
pay the city $11,000 in restitution and serve three years of
unsupervised probation.
Ms. Barry has been investigated by the Tennessee Bureau of
Investigation and other agencies
after she acknowledged publicly on
Jan. 31 that she had an extramarital affair with her bodyguard, a police sergeant. She has been investigated for possible misuse of funds
while the two traveled on official
business and other matters.
David Briley, vice mayor of the
Metropolitan Government of Nashville and Davidson County, is in line
to become the acting mayor.
—Cameron McWhirter
ENTERTAINMENT
Music-Event Creator
Acknowledges Fraud
The 26-year-old entrepreneur
who created Fyre Festival admitted in court Tuesday that he defrauded investors in his high-end
music festival in the Bahamas, a
much-hyped event that ended in
a public collapse.
William “Billy” McFarland
pleaded guilty in Manhattan federal
court to two counts of wire fraud.
Each count carries a maximum
sentence of 20 years in prison.
Fyre Festival had been scheduled to take place last spring,
with tickets costing as much as
$250,000 a person for one
weekend. Thousands were expected to attend. Instead, concertgoers arrived to a logistical
meltdown, resulting in the festival’s abrupt cancellation.
In raising money for Fyre Festival, Mr. McFarland caused at
least 80 investors to lose a total
of more than $24 million, the
government said.
—Nicole Hong
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A3
* * * * * *
U.S. NEWS
Texas Vote Tests Democratic Enthusiasm
Primary gives more
hints on whether a
blue wave is about to
buffet GOP states
BY JANET HOOK
ERIC GAY/ASSOCIATED PRESS
WASHINGTON—The 2018
fight for control of Congress
formally began Tuesday, as
Texas held the first primary
elections and tested whether a
national wave of Democratic
voter enthusiasm will buffet
even traditionally Republican
states.
Early returns in the Senate
Democratic primary race provided a positive indicator: With
just 4% of the precincts reporting, more votes had already
been counted than the entire
2014 primary total of 510,000.
But Democratic votes statewide still lagged far behind the
GOP count.
Democrats also have been
encouraged by the record number of their party’s candidates
running for Congress across
the state—and by a jump in
early voting for their party. For
the first time in a quarter century, they have fielded at least
one candidate in each of the
state’s congressional districts.
But that meant voters had to
sort through crowded primary
fields—and some testy intraparty fights—in the districts
that are Democrats’ top targets.
Key races weren’t settled Tuesday, because Texas requires a
winning candidate to garner at
least 50% of the vote. Failing
that, the top two candidates
will enter a May 22 runoff.
Texas students waited to vote in Austin on Tuesday. Democratic early voting in the state’s biggest counties doubled from 2014 totals.
In an affluent suburb of
Houston, where Democrats hope
to topple longtime GOP Rep.
John Culberson in the fall, a
heated seven-way Democratic
primary may show limits of the
clout of national party leaders
as they tried to ensure that their
preferred candidates advance.
One candidate that party leaders tried to undercut, former
journalist and political activist
Laura Moser, was holding on in
second place, which would send
her into a runoff with frontrunner Lizzie Parnell Fletcher, a
lawyer endorsed by Emily’s List.
In the closing days of the
campaign, the Democratic Con-
gressional Campaign Committee took the unusual and controversial step of attacking Ms.
Moser to try to block her path
to the runoff, because it believed she would be a weak general-election candidate. Those
efforts drew criticism from Moser supporters and others who
thought it was inappropriate,
top-down interference.
“The people of Texas should
be allowed to make their own
decisions on who to vote for
without the influence of Washington insiders,” said Jim
Hightower, a board member of
Our Revolution, the political
group allied with former presi-
dential candidate Sen. Bernie
Sanders (I., Vt.) that has endorsed Ms. Moser.
In another affluent suburb
in Dallas, Democrats were
choosing from an array of candidates from across the party’s
constituencies. The top candidate was shaping up to be former NFL player Colin Allred.
Brett Shipp, a well-known local
journalist, and Lillian Salerno,
who had been endorsed by Emily’s List, were vying for the
second slot for a runoff.
Among those trailing was the
best funded of the crowded
field, Ed Meier, a former aide
to Hillary Clinton.
In San Antonio, Democrats
are hoping to unseat GOP Rep.
Will Hurd. The front running
Democratic candidate was Air
Force veteran Gina Ortiz Jones.
In close contention for the second place were Judy Canales, a
former official of the Department of Agriculture; Rick
Trevino, a teacher backed by
Mr. Sanders’s political organization; and former federal
prosecutor Jay Hulings, the
candidate favored by many in
the party establishment.
Texans also voted in primaries for state races, including
governor and the state Legislature. Republican Sen. Ted Cruz
is also up for re-election and
won the GOP nomination with
no serious primary opposition.
Democratic Rep. Beto O’Rourke
won his party’s nomination to
run against Mr. Cruz in what is
shaping up as an unusually
competitive race.
Although Mr. O’Rourke victory was solid, early returns
showed his support was weak
in the rural areas where he has
done a great deal of campaigning in his effort to appear in
every one of the state’s 254
counties. While Mr. Cruz won
his party’s nomination by a resounding margin, Mr. O’Rourke
in early returns was losing
more than one-third of the
Democratic primary vote to
two little known, poorly funded
opponents.
Mr. Cruz’s campaign is moving to define his opponent as a
liberal out of touch with the
conservative state on issues
like immigration and guns, releasing a radio ad with a country song hitting that message.
Chris Wilson, a GOP pollster
for Mr. Cruz, believes Democrats’ hopes will fade. “Every
two years, the Democrats find
some factoid to fixate on and
convince themselves this is the
year they make Texas competitive, and every two years it
falls flat,” said Mr. Wilson.
The primary results put
Texas on track to elect its first
Latina House member. In El
Paso, Veronica Escobar won
her primary for Mr. O’Rourke’s
open House seat with more
than 50%, avoiding a runoff,
and putting her on a glide path
to general election victory in a
solid Democratic district.
‘Superbug’ Disguises Resistance to Potent Antibiotic
BY BETSY MCKAY
Surprise Finding
Led to Research
JACK KEARSE/EMORY UNIVERSITY
Some common “superbugs”
appear to harbor a littleknown type of resistance to a
last-resort antibiotic, a new
study shows, suggesting a
worrying new way in which
dangerous bacteria can evade
one of the few remaining
treatment options.
Bacterial populations are
normally viewed as totally impervious to an antibiotic, or
totally treatable. But researchers from Emory University
identified a different pattern
in a certain type of drug-resistant bacteria, in which some
cells in a bacterial colony are
resistant to a last-resort antibiotic called colistin. This
“heteroresistance” isn’t easily
detectable in standard lab
tests because most of the cells
are susceptible to the drug.
The results of their study
were published online Tuesday
in the journal mBio.
Antibiotic resistance is a
growing public health crisis.
The Emory study’s focus, Carbapenem-resistant Klebsiella
David Weiss, director of the Antibiotic Resistance Center at
Emory University, has been studying the last-resort drug colistin.
pneumoniae, is among the
most common of a group of
so-called superbug bacteria
that are resistant to most antibiotics and kill up to 50% of
the people they infect.
More than two million people in the U.S. are sickened every year with antibiotic-resistant infections, with at least
23,000 dying, according to the
Centers for Disease Control
and Prevention.
Colistin is an old antibiotic
that doctors administer to patients as a last resort, when
the bacteria infecting them are
resistant to all other antibiotics. It is often the only antibiotic that will work against
these drug-resistant bacteria.
But the Emory study suggests that colistin may not
work in some patients, even
though lab tests doctors rely
on to decide treatment show
David Weiss, director of
Emory’s Antibiotic Resistance
Center who led research published Tuesday on “heteroresistance,” has been studying the
phenomenon since an astute
microbiologist at an Emory University Hospital laboratory noticed a strange test result in
2013, and asked if he would
look into it.
“I thought we should ex-
plore it, and I don’t have a research lab,” said Eileen Burd,
the hospital’s director of clinical
microbiology.
Since then, studying heteroresistance, a type of drug resistance that isn’t easily detectable in standard lab tests, has
become the priority of Dr.
Weiss’s research laboratory.
The lab is testing hundreds
of bacteria samples collected in
surveillance programs around
the country to determine how
common heteroresistance to
colistin is, he said. Colistin is an
antibiotic often administered
as a last resort, when other
drugs fail.
Dr. Weiss also formed the
antibiotic resistance center, a
virtual network of clinicians
and basic scientists. Its research agenda is driven by
findings in patients, he said.
“If we’re following what’s
actually happening in patients,
we’re hoping that we will be
led to the most relevant topics
to study, “ Dr. Weiss said. “I
definitely never would have
chosen to work on heteroresistance if that didn’t come
through the clinic.”
that it should. Carbapenem-resistant Klebsiella pneumoniae
causes pneumonia, bloodstream and other infections in
people with weakened immune
systems usually hospitalized
with other conditions.
“These are really bad infections that are occurring in really sick patients,” said David
Weiss, director of Emory’s Antibiotic Resistance Center, who
led the research. “It’s all the
more critical that you figure
out what’s wrong and how to
treat it.”
This isn’t the first time scientists have identified bacterial heteroresistance to colistin. In 2016, Dr. Weiss and
other Emory scientists found
that a different, less common
type of drug-resistant bacteria,
Enterobacter, demonstrated
heteroresistance to colistin.
Colistin was developed
more than 60 years ago, but
can cause kidney damage, so
doctors stopped using it in the
1980s in favor of newer, safer
medications. They have been
forced to turn back to colistin
in recent years, though, as
bacteria have become increasingly resistant to newer drugs.
Dr. Weiss said this new type
of colistin resistance points to
a need for better diagnostic
tests in clinical labs.
.
A4 | Wednesday, March 7, 2018
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THE WALL STREET JOURNAL.
U.S. NEWS
ETHAN MILLER/GETTY IMAGES
Former adult-movie star
Stephanie Clifford filed a lawsuit against President Donald
Trump, saying his lawyer
forced her to sign a false statement provided to The Wall
Street Journal in response to
inquiries about an alleged sexual encounter with Mr. Trump.
The lawyer, Michael Cohen,
paid Ms. Clifford $130,000 in
October 2016 in return for her
signing a nondisclosure agreement, which prevented Ms. Clifford, known professionally as
Stormy Daniels, from discussing
the alleged sexual encounter.
After the Journal learned of
the agreement and contacted
Ms. Clifford in January, Mr.
Cohen used “intimidation and
coercive tactics” to force Ms.
Clifford to sign a statement
Stephanie Clifford
denying there was a 2006 sexual encounter, Ms. Clifford
said in the complaint, which
was filed Tuesday in Los Angeles County Superior Court.
Mr. Cohen and White House
representatives
repeatedly
have denied any sexual encounter between Mr. Trump
and Ms. Clifford.
Mr. Cohen didn’t immediately respond to a request for
comment, nor did a representative for the White House.
Along with Mr. Trump, Ms.
Clifford named as a defendant
in the suit Essential Consultants LLC, a Delaware company Mr. Cohen used to make
the settlement payment, but
not Mr. Cohen himself.
The lawsuit doesn’t refer to
a second statement provided
to media by Ms. Clifford’s
manager in late January. The
statement, which bore Ms.
Clifford’s stage name, said: “I
am denying this affair because
it never happened.”
The complaint alleges that
the nondisclosure agreement,
which it refers to as “the Hush
Agreement,” is “null and void”
because Mr. Trump never
signed it. The lawsuit also alleges that Mr. Cohen breached
the agreement when he publicly acknowledged the pact
with Ms. Clifford and the
$130,000 payment in a Feb. 13
statement provided to news
media.
Conway Accused of
Touting Candidate
BY JULIE BYKOWICZ
Senior White House adviser
Kellyanne Conway improperly
used her official role when she
discussed an Alabama Senate
race on TV last year, federal investigators said Tuesday, as
they referred the matter to President Donald Trump for “appropriate disciplinary action.”
Ms. Conway, according to a
report by the U.S. Office of Special Counsel, a permanent office
of investigators and prosecutors, “appeared in her official
capacity” to discuss an Alabama
special election in two television interviews leading up to
the December vote. The report
found she promoted the unsuccessful candidacy of Republican
Roy Moore and opposed Democrat Doug Jones, violating the
Hatch Act, which restricts political activity by federal employees in their official capacity.
“While the Hatch Act allows
federal employees to express
their views about candidates
and political issues as private
citizens, it restricts employees
from using their official govern-
ment positions for partisan political purposes, including by
trying to influence partisan
elections,” the report said.
The consequences for Hatch
Act violations can include a
civil penalty of as much as
$1,000, suspension or termination. The special counsel’s letter to the White House doesn’t
recommend a specific penalty.
“Kellyanne Conway did not
advocate for or against the
election of any particular candidate,” said Hogan Gidley, the
White House deputy press secretary. “She simply expressed
the president’s obvious position that he have people in the
House and Senate who support
his agenda.”
In a Nov. 20 interview on Fox
News, Ms. Conway said of Mr.
Jones: “He’ll be a vote against
tax cuts. He’s weak on crime,
weak on borders. He’s strong on
raising your taxes. He’s terrible
for property owners. And Doug
Jones is a doctrinaire liberal.”
The Office of Special Counsel said that the interview
amounted to advocating
against Mr. Jones.
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Senate Majority Leader Mitch McConnell, at lectern, was one of a number of Republicans voicing concerns about the Trump tariff plan.
Fight Heats Up Over Tariffs
GOP lawmakers air
objections to Chief of
Staff Kelly, Treasury
Secretary Mnuchin
The resignation of President Donald Trump’s top economic adviser Tuesday followed a ferocious lobbying
campaign to derail or limit the
By Peter Nicholas,
Nick Timiraos
and Siobhan Hughes
scope of the proposed steel
and aluminum tariffs, with
some of the president’s own
aides and congressional allies
urging him to reconsider.
Republican lawmakers met
privately with John Kelly, the
president’s chief of staff, and
aired objections to Mr. Trump’s
plan to set a 25% tariff on steel
imports and 10% on aluminum.
Later in the day, Senate Majority Leader Mitch McConnell
(R., Ky.) said: “There is a lot of
concern among Republican
senators that this could metastasize into a larger trade war,
and many of our members are
discussing with the administration just how broad and
how sweeping this might be.”
In a trip to Capitol Hill, Treasury Secretary Steven Mnuchin
faced a grilling from GOP lawmakers and at times appeared
ambivalent about the tariff
plan. The pushback extended to
some of the companies the tariffs are intended to help.
An association representing
114 aluminum companies released a letter to Mr. Trump
calling on him to scrap the idea
in favor of a remedy that targets China and exempts some
trading partners, such as Canada and the European Union.
“We fear the proposed tariff may do more harm than
good,” reads the letter from
Heidi Brock, CEO of the Aluminum Association.
The tariff fight crystallizes
a running feud between the
White House’s globalist and
nationalist wings that boiled
down to a showdown between
National Economic Council Director Gary Cohn and presidential adviser Peter Navarro,
a tariff advocate. Mr. Cohn resigned on Tuesday.
For months, Messrs. Cohn
and Navarro had been trying
to win over the GOP president,
making the case that either
open markets or protectionist
policies is the key to reviving
the U.S.’s working class.
With Mr. Cohn’s exit, Mr.
Navarro and Commerce Secretary Wilbur Ross, who also supports tariffs, will now hold the
greatest sway inside the West
Wing on trade matters. Both
are in sync with Mr. Trump’s
own policy preferences.
In a joint news conference
at the White House with Prime
Minister Sefan Lofven of Sweden, Mr. Trump defended his
call for broad-based tariffs.
“We’ve been mistreated as a
country for many years,” said
Mr. Trump, who played down
the prospect of a trade war being touched off by the planned
new tariffs.
The president said that
much of the U.S. trade imbalance was with countries that
were allies. He said he hoped
to “straighten out” the relationship in a “loving way.”
“They’ll like us much better
and they’ll respect us much
more” as a result, he said.
Standing beside the president, Sweden’s prime minister
took a dimmer view. “I’m convinced that increased tariffs
will hurt us all in the long
run,” Mr. Lofven said.
Mr. Trump’s public statement last week about imposing tariffs on steel and aluminum imports stunned some of
his own advisers who believed
the matter was still unsettled.
Aides said the president was
frustrated by months of internal debate and wanted to fulfill a promise from his 2016
presidential campaign.
At a meeting with steel and
aluminum executives last
week, Mr. Trump said he
would sign the order this
week. With a limited window
to influence the decision, advocates on both sides have
been trying to sway a president who has backtracked on
policy pronouncements before.
Asked on CNBC if Mr. Trump
might be convinced to change
course, Rep. Kevin Brady (R.,
Texas), chairman of the House
Ways and Means Committee,
said: “I think he may well.”
Mr. Trump said Tuesday he
might be open to certain exceptions if the U.S. can get
some concessions in return.
“If the European Union
takes off some of the horrible
barriers that make it impossible for our product to go into
there, then we can start talking,” Mr. Trump said.
Mr. Mnuchin faced some of
Congress’s ire during his Capitol Hill appearance as lawmakers pressed him for more details; he didn’t offer many. Mr.
Mnuchin said he had spoken
to foreign counterparts about
the tariffs and said officials
would “deal with this on a
case-by-case basis.”
Mahindra keeps watch on
tariffs.............................................. B5
COHN
Continued from Page One
Mr. Cohn was part of a
globalist wing of the White
House that lately has been in
retreat. Peter Navarro, another
adviser who helped craft the
president’s
protectionist
stance in the campaign, prevailed in a high-profile fight
over tariffs on aluminum and
steel imports. Mr. Cohn had
fought internally to stave off
the move and told aides last
week he might resign if the
president followed through
and imposed the tariffs.
“I don’t think he suddenly
lost an argument. He just
never won it,” said Joshua Bolten, who served as chief of
staff to President George W.
Bush from 2006 to 2009 and
now heads the Business
Roundtable, a trade group that
opposes broad tariffs.
As recently as early this
week, Mr. Cohn still seemed to
be fighting the decision, trying
to put together a meeting
among industry executives
whose companies could be
hurt by the tariffs. That meeting, which had been expected
to happen later this week, was
no longer being planned after
Mr. Cohn’s resignation, a
White House official said.
Another White House official said in an interview Tuesday that Mr. Cohn had always
intended to stay for about a
year. This person said that Mr.
Cohn wasn’t resigning because
of frustration or disappointment over Mr. Trump’s decision to impose tariffs.
Mr. Cohn wound up staying
two months longer than he
had anticipated because the
president asked him to help
with the State of the Union
speech and a trip to the global
economic conference in Davos,
Switzerland, the official said.
Mr. Cohn, though, was unhappy about the “process” by
ALEX BRANDON/ASSOCIATED PRESS
BY MICHAEL ROTHFELD
AND JOE PALAZZOLO
J. SCOTT APPLEWHITE/ASSOCIATED PRESS
Stormy Daniels
Sues President
Gary Cohn, President Trump’s top economic adviser, was part of a
globalist wing of the White House that has recently been in retreat.
which Mr. Trump last week announced that he would be imposing steel and aluminum tariffs, the official said.
This person said White
House proponents of the tariffs, on their own, slipped into
the president’s office “at 6
o’clock at night” last Wednesday, then called steel and aluminum CEOs two hours later
and invited them to a meeting
the next morning, telling them
the president would sign an
executive order imposing the
taxes even though no such order was ready.
“There is extreme frustration when the process breaks
down,” the official said. In this
instance, the official said, the
White House “nationalists hijacked the process.”
One Wall Street executive
who kept in contact with Mr.
Cohn said a rotating group of
colleagues and friends took
turns urging him to stay. Some
of these people said Mr. Cohn’s
departure hinted at the limits
of trying to hem in Mr.
Trump’s desire to take more
dramatic actions on trade.
On Tuesday, Treasury Secretary Steven Mnuchin told
lawmakers that the administration wasn’t looking to get
into a trade war. Later in the
afternoon, Mr. Trump said,
“trade wars aren’t so bad.”
The departure will put pressure on other advisers, especially Mr. Mnuchin, to make
the case for preserving the
post-World War II trade architecture the U.S. helped construct and for speaking credibly to financial markets.
“More than anyone else in
the White House, Cohn had
credibility with the markets,”
said Ian Katz, a financial policy
analyst at Capital Alpha Partners in Washington. “If we go
several days without news of a
replacement, investors could
get edgy.”
The National Economic
Council job post doesn’t require Senate confirmation. An
administration official said
those being considered to succeed Mr. Cohn include Andy
Puzder, a fast-food executive
who withdrew his labor secretary nomination after domestic-abuse allegations from an
ex-wife surfaced. Mr. Puzder
has denied the claims.
The official said others who
could be considered include
CNBC commentator and former Trump campaign adviser
Lawrence Kudlow; Council of
Economic Advisers Chairman
Kevin Hassett; and Mr. Navarro.
With Mr. Cohn’s departure,
several Goldman alumni who
joined the administration last
year will have departed.
“Gary Cohn deserves credit
for serving his country in a
first class way,” Goldman CEO
Lloyd Blankfein tweeted Tuesday afternoon. “I’m sure I join
many others who are disappointed to see him leave.” Mr.
Cohn had spent 26 years at
Goldman and was once seen as
the likely successor to Mr.
Blankfein.
Early on, Mr. Trump enjoyed introducing Mr. Cohn as
a former Goldman executive
who gave up a lucrative career
to work for him. In a Wall
Street Journal interview in
July, Mr. Trump mused about
installing Mr. Cohn as the next
chairman of the Federal Reserve.
But that nomination never
happened. Mr. Cohn criticized
Mr. Trump’s response to the
racially charged violence in
Charlottesville, Va., in August
and found himself isolated.
Mr. Cohn found his way
back into Mr. Trump’s good
graces last fall by helping pass
the president’s tax cut package
in Congress, delivering the
president his signature legislative accomplishment.
Mr. Cohn performed so favorably that the president discussed with friends as recently
as last month whether to install him as chief of staff, even
though Mr. Cohn is a registered Democrat.
—Rebecca Ballhaus
contributed to this article.
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A5
Congratulations to America’s
Farmers and Food Processors
Food exports were up in 2017 after recent years of decline
Fresh beef
Beer
Cheese
All beef
All dairy
All meat
Fish, seafood
Pork
Poultry
Beverages
6%
5%
Fruits, Nuts
Confectionary, sugars
12%
9%
9%
8%
8%
18%
16%
26%
24%
21%
Agriculture Secretary Sonny Perdue and the Trump Administration
continue to spur this growth, toward our goal of doubling
the size of the American food production industry to $1.7 trillion
in the next decade, by:
• Reducing red tape, such as the Waters of the U.S. rule
• Fair and reciprocal trade deals, like getting beef into
China for the first time in 14 years
• Investment-friendly tax changes, including the 100%
deductibility of capital expenditures in year one
EXPORT FOOD, NOT JOBS!
Sincerely,
Anthony Pratt
Executive Chairman, Pratt
Source: USA Trade Online, USA Census Bureau, www.usatrade.census.gov. US Import and Export Merchandise trade statistics (HS code), Measured in value ($US).
Pratt Industries is one of the largest corrugated box manufacturers in the United States.
Our boxes save money and save the environment.
www.prattindustries.com
.
A6 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
* ***
U.S. NEWS
U.S. Sues to Halt
Sanctuary Laws
ALEX BRANDON/ASSOCIATED PRESS
BY LAURA MECKLER
AND ALICIA A. CALDWELL
GOP Reps. Trey Gowdy, left, and Bob Goodlatte want a second special counsel to probe the inquiry into ex-Trump aide Carter Page.
Probe on Dossier Is Urged
BY BYRON TAU
WASHINGTON—Two Republican chairmen in the House
are asking the Justice Department to consider the appointment of a second special counsel to investigate matters
related to how and why material gathered from a former
British spy was used to spy on
an associate of Donald Trump.
House Judiciary Committee
Chairman Bob Goodlatte (R.,
Va.) and House Oversight Committee Chairman Trey Gowdy
(R., S.C.) sent a letter Tuesday
to Attorney General Jeff Sessions and Deputy Attorney
General Rod Rosenstein making
the request.
“Some have been reluctant
to call for the appointment of a
special counsel because such
an appointment should be reserved for those unusual cases
where existing investigative
and prosecutorial entities cannot adequately discharge those
duties,” the two Republicans
wrote. “We believe this is just
such a case.”
Special counsels are prosecutors appointed to investigate
potential criminal matters in
situations where a conflict of
interest could exist within the
Justice Department or a presidential administration. Robert
Mueller was appointed as special counsel in May 2017 to
probe foreign interference in
the 2016 campaign after questions were raised about the impartiality of leadership at the
Justice Department.
Mr. Sessions has said that
controversies over surveillance
are being investigated by the
Justice Department Inspector
General. The Justice Department didn’t respond to a request for comment.
It isn’t the first call for a
new special counsel by Republicans in the House. Mr. Goodlatte has twice written letters
calling for other special counsels to be appointed to investigate issues outside of Mr.
Mueller’s scope that occurred
during the administration of
Barack Obama. Mr. Gowdy
hasn’t previously called for the
appointment of a second special counsel until this week.
In requesting another special counsel, Messrs. Goodlatte
and Gowdy are questioning
whether improper and possibly
criminal behavior occurred in
surveillance decisions made by
law enforcement during and after the 2016 election and
whether any internal investigation would pose a conflict of
interest.
They also say that the Justice Department inspector general—an independent internal
watchdog—doesn’t have the
tools to conduct a proper investigation.
Mr. Gowdy said Congress—
which typically conducts investigations into allegations of
wrongdoing or malpractice
within the administration—
lacks the public confidence and
tools needed to conduct a
probe.
“We leak like the gossip
girls. We don’t have the ability
to impanel a grand jury. We
don’t have the ability to offer
immunity,” he told reporters.
Republicans in Congress last
month released a memo in
which they suggested partisan
bias in the handling of surveillance against former Trump
aide Carter Page, which was
first approved by a secret federal court in the fall of 2016.
Mr. Page has denied any
wrongdoing and hasn’t been
accused of any crime.
The Republican memo says
research compiled by Christopher Steele, a former British
intelligence official who was
conducting opposition research
on Mr. Trump that was then
being funded by Democraticlinked groups, was the driver
in the government’s surveillance applications on Mr. Page.
A Democratic rebuttal released later in February said
that in asking a court to approve surveillance of Mr. Page,
federal investigators relied on
more than the Steele research,
and that law-enforcement officials disclosed the partisan origin of some of the research to
the four federal judges who approved the warrants.
WASHINGTON—The Justice
Department said Tuesday it is
suing the state of California
over its sanctuary laws, teeing
up a legal showdown in which
both sides appear eager for
battle.
The suit, according to officials, will allege that California
overstepped its authority in
passing three statutes that,
among other things, limit the
cooperation of private employers and local jurisdictions with
federal immigration-enforcement agents.
The Trump administration
argues that these laws were
designed to obstruct federal
law enforcement and that they
violate the Constitution’s Supremacy Clause, which holds
that federal laws supersede
those passed by the states.
The case is the latest of several legal battles pitting the
Trump administration against
a Democratic state, though
others have involved the states
taking the federal government
to court. Immigration has
proved particularly contentious, with Democratic states
charging that Trump policies
are discriminatory and the
Trump administration saying
that states are protecting
criminals who should be deported.
California Attorney General
Xavier Becerra, a Democrat who
has sued the administration
multiple times, said Tuesday he
hadn’t seen the government’s
full complaint but that “California stands on firm legal footing
when it takes action. We believe
we are in full compliance with
the federal Constitution and
federal law.”
Gov. Jerry Brown, also a
Democrat, also criticized the effort, calling it “sad.”
Senior Justice Department
officials said their suit would be
filed late Tuesday in Sacramento, the state capital, and
that Attorney General Jeff Sessions would talk about it
Wednesday during a speech to
law-enforcement officials there.
“The Department of Justice
and the Trump administration
are going to fight these unjust,
unfair and unconstitutional policies that have been imposed on
you,” Mr. Sessions planned to
say, according to the agency.
Justice Department officials
said they are relying on a 2012
Supreme Court case in which
the federal government asserted its authority over immigration law and turned back
the bulk of an Arizona law.
Memo Seeks ACA Revamp
BY STEPHANIE ARMOUR
The Trump administration
wants any congressional plan to
shore up the Affordable Care
Act markets to include conservative goals, such as letting insurers charge higher premiums
to older people, according to a
memo reviewed by The Wall
Street Journal.
The memo encourages lawmakers to pass measures including allowing insurers to
charge older people five times
as much as younger people, expanding access to health savings accounts and increasing
the amount of money that people can contribute to them, as
well as supporting a permanent
congressional appropriation for
subsidies to insurance companies who decrease deductibles
and co-pays for lower-income
consumers in exchange for explicit exclusions on abortion
coverage by those insurers.
The Affordable Care Act currently restricts insurers to
charging older buyers three
times as much as younger ones,
which has checked premiums
for 50-somethings and 60somethings compared with
what they might have been otherwise, but which some insurers contend have increased premiums for healthier 20somethings and 30-somethings
to the point that they don’t
want to buy coverage.
White House Develops Plan for Countering Hostile Drones
STEPHEN LAM/REUTERS
BY ANDY PASZTOR
A drone released a net to capture a simulated hostile drone
during a product demonstration in Castro Valley, Calif., last year.
SALE
Continued from Page One
Issuance of investment-grade
corporate bonds totaled $217
billion in January and February compared with $256 billion
in the same period last year,
according to data from S&P
Global.
Investors and other prospective borrowers were carefully watching CVS’s deal to
see if the move in rates had affected the market’s capacity to
finance outsize takeovers.
“There was a lot riding on
this deal,” said Drew Conrad, a
bond trader for Denver Investments, which manages about
$4.5 billion of fixed income. “I
think if this deal had gone
poorly it would have made it
harder for some of these large
M&A deals to price debt where
they wanted.”
CVS paid a slightly higher
yield on the debt than is common for new bond sales, attracting hefty demand from investors who placed orders
worth about $120 billion, or
three times the amount of
bonds on offer, people familiar
with the deal said. The company will also use $4 billion of
cash, a $5 billion loan and
stock to pay for the buyout,
the people said.
“Having a successful offering for CVS was important for
paving the way for some other
large borrowers,” said Dan
Mead, a senior banker at Bank
of America Corp. who worked
on the deal. “The transaction
showed there is still depth for
large M&A financings in the investment-grade bond market.”
After a relatively slow 2017,
M&A activity is heating up,
with pending deals including
United Technologies Corp.’s
$23 billion planned purchase
of Rockwell Collins and Bayer
AG’s $57 billion expected acquisition of Monsanto Co.
Falling interest rates around
the world in recent years
pushed yield-starved investors
to shift from government
bonds to purchases of global
corporate investment-grade
bonds, fueling a record $3.32
trillion of issuance in 2017 as
companies rushed to take advantage of low rates, according
to data from Dealogic. Foreign
BALTIMORE—White House
officials are preparing legislation that for the first time
would allow federal law enforcement and homeland security to disrupt, take over or
even destroy suspected hostile
drones in U.S. airspace.
The goal is to break the logjam preventing substantial expansion of commercial uses of
unmanned aerial systems, because those agencies currently
lack authority to disrupt or
neutralize suspicious aircraft
piloted from the ground.
The Pentagon and the Energy Department, which operates nuclear-warhead manufacturing sites, already have
explicit powers to take out
suspect or unidentified drones
passing over their critical facilities. Michael Kratsios, the
White House’s deputy technology adviser, said on Tuesday
purchases of corporate bonds
slowed this year as the yield
on the benchmark 10-year
Treasury note rose by roughly
half a percentage point. A
Bloomberg Barclays index of
the debt has declined 2.86%
since Jan. 1.
Investors expect yields to
remain higher, as the Federal
Reserve raises interest rates
and U.S. tax cuts combined
with the recent budget agreement create more fiscal stimulus for an already-growing
economy.
CVS offered buyers of the
new debt a higher yield than
that on its current bonds to ensure strong participation. CVS
priced a new $5 billion bond
due in 2025 to yield about 1.45
percentage points more than
comparable U.S. Treasury
bonds, roughly 0.15 percentage
point more than its existing
bonds of similar maturity, according to data from MarketAxess.
The company split the $40
billion financing into seven
bonds with repayment dates
ranging from two years to 30
years. The 30-year portion,
which yields 1.95 percentage
that a bill is now being
drafted—and is expected to be
unveiled shortly—giving the
Federal Bureau of Investigation, the Department of Homeland Security and other civilian agencies similar rights to
detect and defeat such threats.
“We need to reduce
risks…to public safety” from
the errant or hostile use of
drones, Mr. Kratsios told a
government-industry conference here. The bill, among
other things, seeks to eliminate the outright ban against
any of the agencies interfering
with radio transmissions or
other communications affecting unmanned aerial vehicles.
Mr. Kratsios didn’t elaborate
on the language or legal principles that will form the backbone of the anticipated bill.
Without additional powers
to act quickly and unilaterally
against potential airborne
threats, Federal Aviation Ad-
ministration’s efforts to loosen
safety rules for drone operators appear indefinitely delayed, Bryan Wynne, president
of the industry’s largest trade
association, told the same conference. Previous FAA moves
to propose remote tracking
and identification of drones
failed, due partly to splits
among industry players and
because leaders of the FBI and
other federal law enforcement
agencies balked at signing on
to concepts that failed to include the green light for taking countermeasures.
The FAA is continuing to
look for ways to gradually
phase in drone operations at
night, over densely populated
areas and beyond the sight of
ground-based operators.
But acting FAA administrator Daniel Elwell warned that
faced with the potential threat
of “people who aren’t playing
by the rules,” a single “mali-
Big Deals
Largest U.S.-dollar corporate-bond deals
Verizon
Communications
Sept. 11, 2013
Anheuser-Busch
InBev Finance
Jan. 13, 2016
$49 billion
46
CVS
March 6, 2018
40
AT&T
July 27, 2017
Actavis
Funding SCS
March 3, 2015
Dell
May 17, 2016
Source: Dealogic
points more than underlying
Treasurys, will remain outstanding even if regulators reject the Aetna purchase, which
would force CVS to buy back
most of the debt, investors
said.
The company hired five investment banks to jointly arrange the sale: Bank of America Corp., Barclays PLC,
Goldman Sachs Group Inc., JPMorgan Chase & Co. and yt yt&
23
21
20
THE WALL STREET JOURNAL.
Co.—a larger group than normal to manage its size.
Larger investors willing to
hold the debt for an extended
time received most of the
bonds they ordered, but
smaller investors received as
little as one-quarter of the
bonds they asked for, a fund
manager and one of the people
familiar with the deal said.
CVS’s borrowing for the acquisition would increase its
cious act could put a hard stop
[to] all the good work we’ve
done.”
Another sign of escalating
interest in combating hostile
drones is the dramatic growth
of startups and other companies offering technologies for
such purposes.
Some industry estimates indicate there are now over 200
providers of various counterdrone systems, several times
the total just a few years ago.
A bevy of U.S. intelligence
reports and news stories highlighting terrorist groups weaponizing off-the-shelf drone
models also has added to
White House concerns.
Under the current legal
framework, if a drone suddenly appears over a crowd
and its intention isn’t clear,
“we have limited tools to use,”
according to Angela Stubblefield, a high-level FAA official
responsible for security issues.
debt load to around 4.7 times
earnings before interest, taxes,
depreciation and amortization,
or Ebitda, from 3.3 times in
June, according to Moody’s Investors Service Inc.
The company intends to reduce that ratio to around 3.6
within two years by increasing
earnings and using excess cash
to repay debt, Moody’s said.
CVS expects to close the
deal in the second half of 2018.
Federal authorities reviewing
the proposed merger last
month asked for more information, pushing back the deadline
to rule on the deal. CVS said it
anticipated the move and that
the process is “progressing as
planned.” Shareholders for
both companies are set to vote
on the deal March 20.
CVS shares fell sharply,
while Aetna’s stock jumped,
when The Wall Street Journal
first reported the companies
were in talks in October. CVS
shares are down about 15%
from a year ago; Aetna’s stock
price is up nearly 50% in that
time.
—Sharon Terlep
and Daniel Kruger
contributed to this article.
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A7
* * * * *
WORLD NEWS
China Spends More on Security at Home
Domestic outlays
grow as Xi Jinping
consolidates power;
periphery is blanketed
National security spending
Regional security spending
BY JOSH CHIN
1.40 trillion yuan
3,500 yuan per capita
1.20
3,000
China’s spending on domestic security outpaces military spending,
driven in part by an increase in Xinjiang.
NICOLAS ASFOURI/AGENCE FRANCE-PRESSE/GETTY IMAGES
BEIJING—China has substantially increased spending
on domestic security, official
figures show, reflecting mounting concern about threats inside its borders as President Xi
Jinping moves to acquire more
power and reassert the authority of the Communist Party.
Beijing’s budgets for internal
and external security have
grown faster than the economy
as a whole for several years,
but domestic security spending
has grown far faster—to where
it exceeds the national defense
budget by roughly 20%.
Across China, domestic security accounted for 6.1% of
government spending in 2017,
the Ministry of Finance said.
That translates into 1.24 trillion yuan ($196 billion) and
compares with 1.02 trillion
yuan in central-government
funding for the military.
The numbers, revealed in
an annual budget report released this week, help illustrate the scale of a recent intensification of security and
surveillance across China, particularly in Xinjiang and Tibet,
minority-heavy areas on the
country’s periphery.
The spending numbers are
“very consistent with the
heavy securitization that’s go-
Looking Inward
1.00
Domestic
Military*
2,500
0.80
2,000
0.60
1,500
0.40
1,000
0.20
500
0
Tibet*
Xinjiang
Beijing
All
provinces
0
2008
2010
2008 2010
Note: 1 yuan = $0.16 *2017 data are Adrian Zenz's estimates
Sources: China's National Bureau of Statistics (through 2016); Ministry of Finance (2017
national); regional finance departments (2017 regional); Adrian Zenz (estimates).
THE WALL STREET JOURNAL.
Regular and paramilitary police come under the domestic budget.
ing on,” said Adrian Zenz, a
lecturer at the European
School of Culture and Theology in Germany who discovered the numbers in Monday’s
report and whose research
into Chinese security spending
is due to be published soon by
the Jamestown Foundation.
In Xinjiang the government
has woven a web of surveillance, with checkpoints, highdefinition cameras, facial scanners and street patrols; the
region spent $9.1 billion on domestic security in 2017, a 92%
increase from 2016, according to
local government budget data.
Spending across the country on domestic security rose
12.4% last year; in 2016,
spending increased 17.6%, official data show.
The budget for domestic security covers regular and paramilitary police, courts, prosecutors and prisons. Chinese
authorities are experimenting
with cutting-edge tracking
tools, tapping into social-media
accounts to punish politically
incorrect speech and, in some
places, trying to get residents to
inform on each other using
smartphone apps.
The
Finance
Ministry
stopped including the domestic-security budget in its annual report in 2013, after media reports highlighted its
growth. This year, the number
appeared only as a percentage
of the total budget in a graph
and wasn’t mentioned in the
text. It isn’t clear why the
ministry decided to publish
the number again.
The budget report was released as China’s National People’s Congress convenes in
Beijing, where delegates are
set to approve changes to the
country’s constitution that
would permit Mr. Xi to remain
president indefinitely.
Premier Li Keqiang, addressing the legislature on
Monday in an annual government work report, highlighted
a crime crackdown called the
“Peaceful China initiative,”
vowing to stamp out terrorism, violent crime, pornogra-
phy, gambling and other ills.
“With these steps we will
safeguard national and public
security,” he said.
The security escalation is
particularly striking in Xinjiang, in China’s far west, where
the government has armed
tens of thousands of police
with the latest technology.
Cameras and checkpoints
blanket the region’s cities and
villages, and street patrols use
hand-held devices to scan ID
cards and smartphones.
Authorities have invested in
data platforms used to identify
“unsafe” members of the region’s Uighur population, and
in construction of a network
of detention centers.
Xinjiang’s police are also
engaged in a blood-collection
effort designed to further expand China’s DNA database,
already the world’s largest.
Per capita security spending in Xinjiang and the Tibetan Autonomous Region to
the south are comparable to
the national average in the
U.S., with adjustments for differences in costs for personnel
and equipment, said Mr. Zenz.
The U.S. spends around $520
per person on policing and
other forms of law enforcement, Mr. Zenz said.
Chinese officials say the increase in surveillance in Xinjiang and Tibet is necessary to
snuff out separatist movements among minority groups
they say are influenced by
hostile forces abroad. Humanrights groups say discriminatory policies in both regions
are partly to blame for ethnic
strife and that the heavy security exacerbates the tension.
China’s military is also investing to develop its capabilities.
“Growth in China’s defense
budget remains in the single
digits, and broadly in line with
economic conditions,” said
William Choong, an Asian security specialist at the International Institute for Strategic
Studies in London, a global-affairs think tank.
Neither the Ministry of Finance nor the Ministry of Public Security responded to requests for comment.
Beijing considers a boost for
markets ....................................... B4
Tillerson to Focus
On Terror in Africa
AGENCE FRANCE-PRESSE/GETTY IMAGES
Secretary of State Rex Tillerson heads to Africa this
week for a five-nation trip focusing on counterterrorism,
China’s influence and fencemending, a visit that comes as
By Matina StevisGridneff in Nairobi
and Felicia Schwartz
in Washington
Police armed with emergency-rule powers were deployed in the central district of Kandy after Buddhist mobs attacked Muslims.
Sri Lanka Declares State of Emergency
BY UDITHA JAYASINGHE
COLOMBO, Sri Lanka—The
government imposed a nationwide state of emergency
on Tuesday for the first time
since the end of the civil war,
after communal violence
erupted between Buddhists
and Muslims, leaving at least
one person dead and scores of
houses and shops destroyed.
The fighting began Monday
in the central district of
Kandy, when 27 Muslimowned shops and businesses
and several houses were set
on fire in the town of Digana.
The clashes spread to the
nearby towns of Theldeniya
and Pallakelle, where Buddhist houses were attacked.
At least one mosque was damaged.
Buddhist-Muslim tensions
have flared in recent years
with the growth of extremist
Buddhist organizations, which
accuse Muslims of forcing
people to convert to Islam
and destroying sacred Buddhist sites. Hate groups in Sri
Lanka have spread their message on social media platforms.
The government declared a
seven-day state of emergency
across the country following a
special cabinet meeting on
Tuesday, granting the police
the authority to arrest suspects without a warrant or legal representation. Curfews
were imposed in the affected
areas.
It was the first time the
country has been under emergency rule since 2011, after
the nation’s 27-year civil war
ended.
More than 1,000 police officers, soldiers and special
forces operatives were deployed to the area.
Police have been placed on
alert as Muslim communities
in the eastern part of the
country and capital city of Colombo protested the violence,
demanding action from the
government.
Police fired tear gas at protesters and arrested 24 people
Monday, and seized gasoline
bombs on Tuesday. A 24-yearold man was found dead after
his home was set ablaze by
mobs Monday, police said.
“We completely condemn
this violence and have already
initiated investigations into
the incidents,” Prime Minister
Ranil Wickremesinghe told
Parliament. He called for calm
and pledged to provide compensation to affected parties.
Muslim lawmakers protested in Parliament, insisting
repeated clashes had made
them lose faith in law enforcement.
Opposition Tamil politicians also condemned what
they saw as government inaction on escalating violence between majority Sinhalese Buddhists and minority Muslims.
Some Buddhist nationalists
are also protesting against the
arrival of Muslim Rohingya
asylum seekers from mostly
Myanmar, where Buddhist nationalism has been on the
rise.
Buddhists make up about
74% of Sri Lanka’s population,
with Tamils at 12% and Muslims at 10% being the two
largest minorities in the country’s 20 million population.
Sri Lanka emerged in 2009
from war between the government and separatist group
Liberation Tamil Tigers of Eelam. Since a change of government in 2015, Sri Lanka
has been making tentative
progress with reconciliation.
the Trump administration tries
to set out its priorities there.
The one-week tour by the
most senior Trump administration official to visit the continent comes two months after
President Donald Trump’s alleged coarse comments on immigration from Africa sparked
a diplomatic firestorm.
The Trump administration
has yet to nominate a chief U.S.
diplomat for Africa, while eight
embassies, including South Africa, the Democratic Republic
of Congo and Somalia, remain
without ambassadors.
The State Department has
said it is working with the White
House to put officials in place
and that career staffers are capable of the work in the interim.
Mr. Tillerson is set to meet
top officials in Chad, Djibouti,
Ethiopia, Kenya and Nigeria—
America’s top regional security
allies—several of which host
bases or are helping battle jihadist insurgencies affiliated with
al Qaeda and Islamic State.
Islamist insurgencies have
proliferated in Africa even as
Islamic State has suffered defeats in Iraq and Syria. Militants loyal to the group ambushed a Special Forces patrol
in Niger in October, killing
four U.S. Army soldiers.
State Department officials
said Mr. Tillerson’s agenda
would also focus on bolstering
trade ties and the growing
debt burden many countries
on the continent are amassing
through concessionary loans
from China.
Beijing is by far Africa’s
largest trading partner—a
source of billions in investments and loans for infrastructure, mining and retail.
The U.S. was listed as the continent’s fifth-biggest trade
partner in 2016, the World
Bank said.
Speaking at George Mason
University in Virginia on Tuesday, Mr. Tillerson said China’s
approach to development in
Africa “encourages dependency” that undermines its
sovereignty, as he prepared
for his first official trip to the
continent, the Associated
Press reported.
He said China’s projects on
the continent had involved
predatory loans, corruption
and vague contracts. He contrasted that to America’s approach.
U.S. diplomats sought to
manage expectations for the
trip, saying they aren’t expecting any significant agreements, pacts or concessions.
“There’s really no deliverables, and the reason why is
because for the Secretary of
State and for our trip now it’s
really to underscore the commitment of the United States
to Africa but also to explore
with the leadership in each of
the countries about what we
want to achieve together as
partners,” a senior State Department official said.
BY ROB TAYLOR
CANBERRA, Australia—The
wreck of an American aircraft
carrier sunk during World War
II and which President Donald
Trump praised last year has
been discovered in deep ocean
off the coast of Australia.
The USS Lexington, one of
the first American carriers and
nicknamed the “Lady Lex,” was
found 500 miles northeast of
Australia in the Coral Sea by
billionaire
Microsoft
cofounder and wreck-hunting enthusiast Paul Allen, lying in
water 1.8 miles deep.
The carrier was crippled in
May 1942 during the Battle of
the Coral Sea after being hit
with bombs and torpedoes,
with 216 crew killed. It was
sent to the bottom after 2,735
crew were evacuated by an-
other American warship, the
USS Phelps, to prevent its possible capture by Japan.
Underwater photographs
and video of the carrier taken
by an underwater drone show
parts of the carrier’s superstructure and guns, as well as
some of its 35 aircraft, including Douglas TBD Devastator
torpedo bombers, Douglas SBD
Dauntless bombers and a
Grumman F4F Wildcat fighter.
The aircraft were in remarkable condition, with their U.S.
markings still clearly visible.
U.S. Pacific Commander
Harry Harris, whose father
was rescued from the carrier,
paid tribute to the ship and
those killed during a visit to
Australia.
Adm. Harris is set to become the Trump administration’s envoy and the first four-
star officer to take up
residence in Australia since
wartime Gen. Douglas MacArthur.
Mr. Trump last year commemorated the 75th anniversary of the Battle of the Coral
Sea with veterans, speaking of
“heroes that never returned”
from the deck of the World
War II aircraft carrier USS Intrepid in New York Harbor.
Six hundred and fifty Americans were killed alongside
Australian allies in the fourday battle. The battle broke
the momentum of the Japanese Navy’s attacks on Australia, where it had killed 236 in
bombing raids on the northern
city of Darwin.
The discovery is the latest
of several historic wrecks recovered in recent years by Mr.
Allen and others thanks to
AGENCE FRANCE-PRESSE/GETTY IMAGES
Long-Sunk U.S. Carrier Is Found
Aircraft found with the sunken USS Lexington using an underwater drone were in remarkable condition.
rapidly advancing underwater
drone technology. His team
last year discovered the wreck
of the heavy cruiser USS Indianapolis—sunk by Japanese tor-
pedoes in July 1945—as well
as the destroyer USS Ward,
credited with firing America’s
opening shots of World War II.
The Lexington was located
by a remote submersible operating from the RV Petrel, a
former offshore construction
vessel purchased by Mr. Allen
in 2016.
.
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by
for more articles and content from the conference
By Xizhou Zhou
RAPID CHANGE UNDER
THE ACTION PLAN
The energy industry responded quickly. National oil
companies made major refinery upgrades and met aggressive new fuel standards. Power
companies completed retrofits
for over 800 gigawatts of coal
plants, meeting emissions limits more stringent than the latest U.S. EPA rules. And they
shut down the vast majority of
their old, inefficient coal plants,
whose capacity totaled more
than 100 gigawatts — enough
to power France. As a result,
China’s coal-fired power generation fleet is now among the
world’s most efficient. During
this period, China also emerged
as the largest market for wind
turbines and solar panels. Gasfired power generation capacity
grew rapidly as well, reaching
76 gigawatts by the end of 2017.
Yet for all this activity, northern China’s residents continued
to receive red and orange alerts
on their phones during the winter of 2016-17, notifying them
that heavy smog was on the way.
Schools had to shut, vehicle travel
was restricted, and work stopped
at many industrial and construction sites. There were doubts the
Action Plan’s targets would be
reached by the end of 2017.
THE COAL-TO-GAS
SWITCH FRENZY
In early 2017, the Ministry
of Environmental Protection
(MEP) recognized there were
only a few short months left to
meet the deadlines set out in
HOW CHINA’S
Illustration
by Alex Williamson
ANTI-SMOG CAMPAIGN TRIGGERED
A NATURAL GAS CRISIS AND
A SWITCH TO “CLEAN COAL”
the Action Plan. They had to
supply. But it wasn’t enough.
school children sitting in freezlook for emission reductions in
Finally, in mid-December
ing classrooms and surgical
new places.
of last year, 10 central governprocedures delayed because of
Officials zeroed in on the last
ment agencies jointly issued a
frigid temperatures in hospitals.
unregulated sector, known as
Clean Heating Plan for 2017-21.
What had not been under“dispersed coal” — tens of thouThis new plan ordered that “disstood was that China lacked
sands of coal boilers that propersed coal” burn must stop and
the underground gas storage to
vided industrial steam, process
the resulting heating gap should
manage seasonal demand flucheat, and residential heating
be filled not only by gas but also
tuations — certainly not at the
in northern China. These small
by other energy sources.
scale needed by the 2017 coalfacilities, spread across many
to-gas conversion campaign.
COAL-TO-COAL SWITCH
provinces, burned low-quality
China was experiencing a natuTo many people’s surprise,
coal and lacked basic pollution
ral gas crisis.
the
most important source
control equipment. But disGAS
SHORTAGES
AND
A
RESPONSE
identified
in the new plan
persed coal provided 70 percent
Coastal
liquefied
natural
was
“clean
coal burning.” This
of northern China’s heating.
gas (LNG)-receiving terminals
meant large, centralized coal
Starting in the spring of
were operating beyond capacfacilities equipped with state2017, officials issued orders
ity; gas pipelines were full; and
of-the-art pollution controls.
to shut down these facilities,
upstream
producers
ramped
The vast majority of China’s
and — when they did not trust
their
production
up
to
10
percoal-fired electric power plants
the operator to stay closed —
cent
above
2016
levels.
Central
fall into that category today.
even hired crews to dismantle
Asia
pipeline
gas
imports
were
With clear skies continuing
the equipment. Local cadres
also up 19 percent. The global
throughout the winter, residents
quickly fell in line and sent a
LNG market responded as well,
noticed steam again coming
firm message to facility owners:
with Chinese imports rising by
out of the giant cooling towers
switch to gas or stop operating.
45 percent, and Asian spot LNG
at one of the mothballed coal
This did the trick. As the heatprices heading toward $12 per
plants in southeastern Beijing.
ing season began in November
MMBtu — 30 percent higher
The Gaobeidian plant had pre2017, northern China’s residents
than
in
2016.
Officials
scramviously been shut down as part
experienced consecutive blue
bled to allocate and swap gas
of the government effort to
sky days, without even
eradicate coal burna yellow alert. Many
China’s Northern Region Winter
ing in the city proper.
first-time visitors to
Clean Heating Plan (2017-21)
25,000
But authorities dethe Chinese capital
focuses on removing
Other
“Dispersed Coal”
cided that given its
wondered where the
20,000
high efficiency and
infamous Beijing smog
Clean
modern
pollution
had gone.
Coal
15,000
control equipment,
There was, however,
Burn
the Gaobeidian plant
a problem: many comshould switch back
munities were literally
10,000
on. This allowed gas
left in the cold. Their
Gas
to be diverted to
boilers could no longer
5,000
Dispersed
places where cenburn coal, but there
Coal
tralized heating inwasn’t enough natu0
frastructure was not
ral gas. The situation
2016
2021
“Dispersed coal” refers to coal boilers that lack standard pollution controls;
in place and gas was
quickly escalated, and
“Other“ includes electricity, biomass, geothermal, solar, and waste heat.
Source: Government documents and IHS Markit interpretation
the only alternative.
reports circulated of
Total heating floor space
(billion square meters)
“Battle for the Blue Skies”
has become an imperative
for China, as it seeks to curb
the pollution that’s been a byproduct of its rapid economic growth. But this massive
undertaking led to unintended
consequences — a natural gas
crisis that dramatically impacted global gas markets and shifted the anti-pollution campaign
towards “clean coal.”
During the winter of 2012-13,
media outlets across the world
covered the “airpocalypse” that
blanketed Beijing and surrounding regions. Photos of people
walking dogs on leashes — but
who couldn’t quite see their
pets — surfaced on social media. The increasingly affluent
Chinese public demanded relief, and the central government
acted swiftly, issuing a sweeping “Action Plan on Prevention
and Control of Air Pollution.”
The aim was to achieve real results in five years.
In effect, the clean air campaign
was now relying on a shift from
“dispersed coal” to “clean coal,”
instead of the prior widely held
mantra of “coal to gas.”
Over the next four years, the
government will continue to allow more combined heat and
power coal plants to operate
in northern China. As a result,
floor space heated by “clean
coal burning” is projected to
more than triple by 2021 (see
chart). Substitution of this kind
will actually reduce overall coal
consumption, because large
plants are more efficient than
dispersed small boilers. It will
also lower the associated carbon emissions.
Gas remains part of the solution, but not as much as clean
coal. By 2021, gas is projected to
account for 16 percent of floor
space heated, compared with
44 percent for clean coal. The
plan also stipulates that other
heating sources should be considered when possible, including biomass, geothermal, and
electricity. The Clean Heating
Plan thus pursues an “all-ofthe-above” strategy that relies
on any source of energy with
zero or low emissions.
This means the sharp increase
in gas consumption China saw
in 2017 — up 15 percent from
2016 — and the associated 45
percent jump in LNG imports
are not likely to repeat. With
most dispersed coal being
switched to large coal plants,
gas demand growth will likely
be much more moderate in
2018 and beyond, and China’s
impact on winter spot LNG
prices will also be less pronounced. Overall, we expect
China’s gas market to return to
upper single-digit growth rates
over the next few years.
The 2017-18 natural gas crisis
resulted from China’s aggressive
efforts to curb air pollution and
an initial assumption it could
rely mostly on switching from
coal to gas. The infrastructure
required to make a wholesale
switch like this was not yet in
place, leading to a shift. China’s
new strategy is to rely mostly on
a switch from “dispersed coal”
to clean coal, bolstered by generous doses of natural gas and
all of the above — and more
natural gas storage.
Xizhou Zhou is a Managing Director
of IHS Markit and heads the Power,
Gas, Coal & Renewables group in
Asia Pacific. Jenny Yang, Zhouwei
Diao, and Dongjie Zhang contributed to this article.
To Readers
A set of complex dynamics — ongoing technological advances, shifting government policies (especially
concerning the environment), a return to robust growth in all parts of the global economy, and geopolitical
tensions in hot spots around the world — is creating both opportunities and challenges for the energy industry.
These developments raise a series of questions. How long will the decade-long resurgence of U.S. oil
production continue? Is the world poised for another energy transition from oil and natural gas to a new generation of technologies? Will new needed energy infrastructure be built in a timely way? Which country will win the
race for 21st-century technology leadership? And how will China, the world’s leading energy consumer, meet the
aggressive pollution and carbon emission reduction targets it has recently set?
These will be among the many questions and topics at CERAWEEK 2018 by IHS Markit. This special section,
Tipping Point: Strategies for a New Energy Future, addresses three issues at the heart of the current energy
picture:
· How China’s aggressive efforts to curb pollution triggered a temporary natural gas crisis.
· How a set of new technologies and business models may transform the place of cars in people’s lives.
· The role of national innovation ecosystems in determining which country
will become the leader in new energy
technology.
IHS Markit Vice Chairman and
These articles and others on additional topics
Chairman of CERAWEEK by IHS Markit
by IHS Markit researchers, as well as content
Author of The Quest and The Prize
from CERAWEEK, are available online at
@DanielYergin
www.ceraweek.com
Daniel Yergin
About IHS Markit
www.ihsmarkit.com
IHS Markit (Nasdaq: INFO) is a world leader in critical
information, analytics, and solutions for the major industries and markets that drive economies worldwide. The
company delivers next-generation information, analytics,
and solutions to customers in business, finance, and
government, improving their operational efficiency and
providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business
and government customers, including 80 percent of the
Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed
to sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. and/or its
affiliates. All other company and product names may be trademarks
of their respective owners.
© 2018 IHS Markit Ltd. All rights reserved.
This special section was prepared by IHS Markit’s
research staff and did not involve The Wall Street
Journal news organization.
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process engineers
simulating the future
to improve today.
Emerson introduces
digital twin software to
optimize plant operations.
Emerson.com/WeSeeDigitalTwin
The Emerson logo is a trademark and a service mark of Emerson Electric Co. © 2018 Emerson Electric Co.
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by
FROM ZERO TO A TRILLION:
THE MOBILITY REVOLUTION
By Jim Burkhard and Katherine Hardin
I
nnovative technologies and
business models could well
transform how people use
cars. Three key developments are
converging. The first is ride-hailing, provided through mobile
apps. The second is electric cars.
The third, and potentially most
transformative, is driverless vehicles. While separate innovations, their impacts will overlap.
Together, they will challenge the
century-old model of mobility,
based on individual car ownership. IHS Markit’s research on
the future of transportation (see
box) projects that app-based
mobility services — which effectively did not exist a decade
ago — will become a $1 trillion
market by 2040. These changes
portend potentially momentous
shifts for automakers and energy
companies, as well as big opportunities for new entrants.
Ride-hailing is the opening act.
One key impact is that more people will travel by car than previously expected. This will increase
access to mobility, especially in
emerging economies. Another
impact will be more intense use
of vehicles. A car driven by a mobility services company averages
50,000 miles per year, five times
more than a car purchased for
personal use. So overall utilization of the automotive fleet will
be higher. This could have big
implications for the global automobile industry, and some of the
major carmakers are investing in
mobility services.
There will likely be a lot of regional variation in how mobility
services evolve. Some cities may
rely on an open, lightly regulated
market, while others could incorporate car-based mobility services into their mass transit systems.
In densely populated areas, ridepooling — where multiple passengers share a car — may be
favored to reduce congestion.
App-based mobility services
have grown because consumers
What Will Be the New Mix for Cars?
Personally owned cars
vs. mobility services
Human-operated
vs. driverless cars
Gasoline/diesel
vs. electric powertrains
SOURCE: IHS MARKIT
IHS Markit’s Mobility and Energy Future Service
How do you make sense of recent developments in the mobility sector, and what will they mean for
the trillions invested in the automotive and energy industries? IHS Markit’s new Mobility and Energy
Future service is a guide and toolkit to help companies navigate the historic change in the automotive
system. IHS Markit’s Reinventing the Truck study analyzes the disruptive forces impacting the medium
and heavy truck sector in the U.S., Europe, China, and Japan. The study will develop two scenarios of
the future of trucking and project energy demand for each, based on IHS Markit’s integrated energy
scenarios. For more information, contact Chelsea Havill@IHSMarkit.com
value what they provide — they
did not come about due to government fiat. With electric vehicles
(EVs), however, government subsidies, incentives, and regulation
have been the key stimulant. If a
shift to EVs takes place at scale, the
implications will be large for both
the oil and electric power industries. But light vehicles today account for only about a third of total
oil demand, and the timing and
pace of change are far from clear.
More than 1 million electric
vehicles were sold worldwide in
2017, up 43 percent from the prior year. Recent sales have grown
rapidly, but fast growth is easier
when the starting point is near
zero. EVs still accounted for only
1.7 percent of light vehicle sales
in 2017 — a mere 0.2 percent of
the global car fleet.
If supportive government policies fade away, EV sales could be
hobbled, possibly severely. The
lack of recharging infrastructure
is another major challenge. Fast,
direct current (DC) charging
systems are a solution, and the
first “ultrafast” DC chargers —
which can provide 500 miles of
range in 15 minutes — are now
being installed. But questions
about their economics remain.
Even with continued policy
support and proliferation of
fast-charging infrastructure, the
shift to EVs will take time. In
IHS Markit’s planning scenario
“Rivalry,” global oil demand
continues to grow until around
2040 and then plateaus, with 12
percent of the global car fleet of
2 billion electric by 2040. In our
“Autonomy” scenario, which assumes a more rapid EV uptake,
the EV share of the total global
fleet in 2040 is 25 percent.
The most profound innovation
is driverless technology. Leading
tech companies and startups are
active, partnering with — and
sometimes competing with —
the big carmakers. Driverless
technology will provide opportunities to generate additional
revenues by providing entertainment, information, and communications to passengers, so
firms from other industries are
becoming active in the driverless
vehicle race as well.
One big impact of driverless
technology will be improved
road safety. Driverless cars can be
programmed for safe, defensive
driving and don’t get tired, distracted, or fall under the influence
of drugs or alcohol. More than 1
million people are killed each year
in car accidents around the world.
Driverless technology won’t eliminate road deaths, but it could significantly reduce them.
In addition to saving lives, driverless technology may reshape
how we live. Long commutes
could be more productive and
pleasant, so many may choose
to live farther from where they
work. Driverless trucks also have
the potential to reconfigure industrial logistics and warehousing practices.
A hundred years ago, as automobiles were first being adopted
widely, it would have been difficult to envision how the car
would reshape life in the 20th
century. In a similar way, it may
be hard to imagine today how
driverless vehicles may transform life in the 21st century. But
before they have a big impact,
driverless cars will have to be
embraced by consumers and integrated with vehicles with drivers — and demonstrate a safety
record better than that of the best
human drivers.
As the three big innovations
diffuse around the world, a growing array of new services can be
expected to emerge that incorporate elements of each. One
possible example: a personal
subscription providing access
to a set number of driverless EV
miles per month.
To see what may happen, keep
an eye on China. It is the now the
largest automotive market, with
sales of 27 million cars last year,
60 percent larger than the 17 million sold in the U.S., the second
largest market. China is also the
largest market for EVs.
By 2040, there will be a lot
of money to go around in the
trillion-dollar mobility services
market. Because so much is at
stake, a number of formidable
players — automakers, oil companies, electric utilities, and tech
firms — are engaged today, seeking to position themselves in
what could be the competition of
the 21st century.
Jim Burkhard is a Vice President and
heads IHS Markit’s Crude Oil and
Energy/Mobility research. Katherine
Hardin is Executive Director for
Energy at IHS Markit.
THE CLEAN ENERGY INNOVATION ECOSYSTEM:
What’s Needed for the U.S. to Win the Race
By Timothy Gardner
Traditionally, innovation in the energy
industry has led to lower costs for consumers or better products — that is, higher in quality or more convenient to use.
Today, however, the industry faces a more
complex landscape that involves moving
beyond its traditional commitments to
lower costs or better service. In the 21st
century, the energy sector faces two massive yet conflicting imperatives: rapidly
rising global energy demand, as billions
of people in emerging economies strive
to achieve the way of life long enjoyed by
citizens of the industrialized world; and
the climate challenge, which creates a
need for low-carbon energy at scale. The
only way these dual challenges can both
be met is through significant, rapidly adopted technological breakthroughs.
Achieving major breakthroughs in energy technology innovation could yield
great economic as well as environmental rewards. Global investment in electric power alone is expected to total $20
trillion over the next 15 years. Over that
same period, virtually every nation in the
world has committed to significant reductions in carbon intensity. The country that can create the next generation
of clean energy technology will find a
global market eager to adopt its innovations and emerge as a big winner. Today,
the contest for leadership in cleantech
is a race between the European Union,
China, and the United States.
The U.S. — as the world’s leader in
technology innovation overall and with
a market that accounts for nearly onequarter of global energy consumption —
could assume that leadership role. But
to do so, the U.S. needs to strengthen its
clean energy innovation ecosystem. That
ecosystem rests on three pillars.
THREE PILLARS
The first pillar is a strong supply of new
ideas. This is determined primarily by
the amount of basic scientific research
conducted, which generates insights that
become breakthrough innovations in future years. In 2016, the U.S. spent more
than $6 billion on clean energy research.
Over three-quarters was provided by the
federal government and the remainder
by corporate research budgets. Six billion dollars annually sounds like a lot,
but the current level of funding is only
one-third of the amount that some estimate is needed to support long-term carbon reduction goals. It is approximately
what the EU spends, and while the U.S.
spends more on clean energy research
than China in absolute terms, it lags well
behind China’s spending when measured as a percentage of GDP.
The second pillar of the clean energy
innovation ecosystem is market demand
for clean energy solutions. The benefits
of clean energy — which include reduced carbon emissions and less air pollution — exceed their market value.
Demand for clean energy today is created
to a considerable degree by public policy.
Examples in the U.S. include tax credits; state renewable portfolio standards,
which require utilities to adopt clean
power technologies like wind and solar;
efficiency standards for cars, appliances,
and buildings; and regional carbon capand-trade systems. These policies seek to
create incentives for entrepreneurs and
companies to invest in clean energy inno-
vation. In the case of wind and solar energy, these policies have drawn enough
production into the market to attain
economies of scale that in many locations
make the new technology competitive on
a stand-alone basis. But overall, the U.S.
has a patchwork of national, regional,
and state policies to encourage demand
for clean technologies.
The third pillar of the clean energy
innovation ecosystem is a process that
mobilizes private resources to convert
technical potential into actual products.
The translation of an idea in the lab into
mainstream deployment in the energy
industry is long and complex. It involves
turning clean energy technology into
a usable invention; developing that invention to the point that it can be demonstrated under real-world conditions;
gaining acceptance by early adopters;
and finally deploying at economic scale.
This process typically requires years of
effort and escalating funding. Traditional
venture capital is not well-matched to
the time spans required for energy technology adoption nor to its relatively
modest initial returns. Indeed, venture
capital funding for clean energy innovation has retreated steadily over the past
five years as the long cycles of clean energy innovation have become more apparent. The venture funding that remains
has focused on software rather than the
large-scale hardware necessary for significant carbon breakthroughs.
The extended gap between invention
and initial adoption — often referred
to by observers of the energy industry
as the “valley of death” — needs to be
narrowed. Involvement by adopters —
utilities, building owners, and manufacturers of equipment — at earlier stages
of the development cycle can help innovators target their inventions to practical
needs and give investors insight into an
invention’s prospects for ultimate success. An array of support institutions has
sprung up to assist in this process — research fellowships, incubators, testing facilities — but more are needed, and they
also need sustained financial backing.
All three pillars are essential to clean
energy innovation. On the one hand, users seeking solutions require a supply of
technological offerings that can meet their
needs. On the other hand, new technological offerings require market demand
in order to move from the lab to commercialization. And the long, complex process
of advancing from invention through initial demonstration to deployment at scale
requires coordination and support.
WHO WILL WIN?
The United States has proven that it
can innovate continually and has assumed a leadership position in sectors
like information technology and biotech.
Whether the U.S. innovation system
can achieve the purposeful end-to-end
alignment needed for a strong cleanenergy innovation ecosystem, however,
remains an open question. Without such
a framework, it seems likely that China
or Europe could move ahead to become
the dominant source of clean energy solutions in the 21st century.
Timothy Gardner is Vice President for Gas
and Power Business Development at IHS
Markit, where he leads research on clean
energy innovation.
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A11
* * * * *
KOREA
Continued from Page One
security adviser.
Mr. Kim also said he would
be willing to meet South Korean President Moon Jae-in in
late April, in what would be
the third-ever summit between leaders of the two Koreas, Mr. Chung said.
South Korean officials are
coming to Washington this
week to brief the White House
in detail about the conversations with Pyongyang.
“We’d like to hear more
about that,” a senior administration official said of North
Korea’s offer to open talks on
giving up its nuclear arsenal in
exchange for normalization of
relations and security guarantees.
The official added: “What
we are looking for is concrete
steps toward denuclearization,
not for a list of or a rehashing
of old positions that did not
lead to that outcome.”
The surprise development
appeared to represent an easing
of tensions on the heavily
armed Korean Peninsula, but
experts cautioned that formidable diplomatic obstacles remain.
Reinforcing the Trump administration’s position that it
will maintain its “maximum
pressure” campaign until it
sees credible steps toward denuclearization, the State Department announced new sanctions against Pyongyang late
Tuesday for the killing of Mr.
Kim’s half brother last year.
The administration said
that it officially determined
last month that North Korea
used a chemical-warfare agent
to assassinate Kim Jong Nam
in Malaysia, making Pyongyang liable for new sanctions
under the Chemical and Biological Weapons Control and
Warfare Elimination Act of
1991. The State Department
didn’t elaborate on what its
penalties are, but North Korea
is already comprehensively
sanctioned by Washington.
“This public display of contempt for universal norms
against chemical weapons use
further demonstrates the reckless nature of North Korea and
underscores that we cannot af-
ford to tolerate a North Korean
WMD program of any kind,”
State Department spokeswoman Heather Nauert said.
It
remained
unclear
whether Mr. Kim views denuclearization as a distant objective, if he would agree to the
intrusive verification the U.S.
is likely to demand, and what
specific steps Pyongyang
might demand in return.
Details of the Trump administration’s negotiating stance
are similarly uncertain, nor
has the White House said who
its chief negotiator might be.
“It is unlikely Kim Jong Un
has abandoned his determination to keep nuclear weapons
indefinitely,” said Robert J.
Einhorn, a former senior State
Department official who negotiated with North Korean officials during the Clinton administration.
“It may well be just a tactical shift,” he said. “But the
Trump administration has little choice but to test North
Korea’s seriousness by sitting
down at a negotiating table
and exploring what Kim Jong
Un has in mind.”
A spokesman for United Nations Secretary-General António
Guterres said the U.N. chief is
encouraged by the advances,
and stressed the need to safeguard diplomatic momentum.
Opening talks with North
Korea could provide some
near-term benefits for the U.S.
if Pyongyang holds to its
promise not to conduct weapons tests while negotiations
continue.
American officials repeatedly have said North Korea still
needs to carry out additional
flight tests before it can be confident that it has the capability
to strike the U.S. with a longrange, nuclear-armed missile.
“If we can prolong a test
moratorium, that buys time,”
said Gary Samore of the Belfer
Center for Science and International Affairs at Harvard University and a former government
official
on
nonproliferation
issues.
“Whether negotiations would
produce more significant results is questionable.”
North Korea hasn’t insisted
that the U.S. cancel two joint
military exercises with the
South Koreans that are sched-
SOUTH KOREAN PRESIDENTIAL BLUE HOUSE/GETTY IMAGES
WORLD NEWS
South Korean President Moon Jae-in, center, was briefed in Seoul Tuesday on talks with North Korea.
Seoul’s Top Spy
Has Played Key Role
In Outreach Efforts
SEOUL—At a dinner hosted
by North Korean leader Kim
Jong Un for a delegation from
the South this week, a bespectacled official leaned forward to
talk to a grinning Mr. Kim—a
scene captured in a photograph
displayed prominently in the
North’s largest newspaper.
That man, Suh Hoon, is
South Korea’s top spy, tasked
with running espionage operations targeting the North and
analyzing intelligence on potential threats. For years he has
also played a central role in behind-the-scenes diplomatic outreach to Pyongyang.
The 63-year-old career intelligence officer was instrumental
in back-channel contacts that led
to the two inter-Korean summits
in 2000 and 2007. In both those
cases, Mr. Suh met extensively
with Mr. Kim’s father, North Korea’s then-leader Kim Jong Il.
Mr. Suh has supported engagement with Pyongyang, while
at the same time expressing
deep doubts about the North’s
trustworthiness and intentions.
He is also a vocal supporter
of Seoul’s alliance with Washington, and told South Korean lawmakers last year the country
should reject any calls by North
Korea to remove U.S. troops
from the Korean Peninsula—even
if North Korea promises to dismantle its nuclear programs.
Mr. Suh has spent much of
his adult life focused on the rival regime to the North. In July
1997, he became the first
South Korean official to be sent
to live in the North, as part of
efforts to construct light-water
reactors in the North following
a 1994 deal between Pyongyang and Washington to freeze
North Korea’s nuclear program.
For the next two years, Mr.
Suh lived in Sinpo, a city on
North Korea’s east coast. Dealing with his North Korean interlocutors was difficult, he recalled in a 2008 book.
“Even small things like the
freedom to walk over to a local
restaurant, walking by the
beachfront near where I stayed
and taking care of minor traffic
incidents all needed to be negotiated with the North Koreans,”
he wrote.
In 2008, Mr. Suh wrote a
doctoral dissertation on the
aims of North Korea’s nuclearweapons programs, arguing
that they were directed ultimately at letting Pyongyang
strike some kind of security
deal with Washington.
“The North’s pursuit of nuclear weapons cannot persist as
an eternal strategy,” Mr. Suh
wrote in his dissertation, later
published as a book. “Eventually,
such a foreign policy will become an institutional constraint
limiting North Korea’s growth.”
uled to take place this spring,
officials in Seoul said.
One exercise consists of
combined joint naval, air,
ground and Special Operations
missions, and is set to start at
the end of March, two U.S. defense officials said. The sec-
ond is a command-and-control
exercise that is scheduled to
begin in mid-April and end the
first week of May.
Beyond doubts about what
Pyongyang will offer at the table, some U.S. officials also
worry that North Korea will
seek to use negotiations to
create divisions between Seoul
and Washington and blunt the
American-led efforts to maintain tough economic sanctions.
North Korea’s proposal followed a rapid series of diplomatic overtures. The first
came in early January, when
Mr. Kim suggested his country
might be willing to participate
in the Winter Olympics in
South Korea and Mr. Moon responded by proposing interKorean talks.
South Korea has been eager
to encourage direct talks between the North Korea representatives and the U.S.
Pyongyang previously has
suggested that its arsenal
wasn’t open for discussion,
but Mr. Chung’s remarks on
Tuesday signaled a possible
shift in Mr. Kim’s thinking.
North Korea’s government
didn’t issue any statements of
its own on Tuesday. On Monday, state media there reported that Mr. Kim had exchanged “in-depth views on
the issues for easing the acute
military tensions” on the Korean Peninsula.
The two Koreas agreed to
hold a summit between their
leaders at the truce village of
Panmunjom in the demilitarized zone that separates the
peninsula—rather than in
Pyongyang, the site of the two
previous inter-Korean summits
in 2000 and 2007.
“It would be the first inter-Korean summit at a neutral location, so Moon can
avoid the optics of appearing
to pay tribute to Kim in
Pyongyang,” said Leif-Eric
Easley, a Korea specialist at
Ewha Womans University in
Seoul, adding that meeting on
neutral turf “carries the symbolism of military confidence
building.”
Mr. Trump, who has previously had harsh words for
North Korea and Mr. Kim, was
more complimentary of Pyongyang in comments on Tuesday,
particularly regarding North Korea’s presence at the Olympics.
“I thought North Korea was
terrific.…They went into the
Olympics, they went in with
good spirit, they did well. Let’s
see if we can carry it over,” he
said.
Earlier Tuesday, Mr. Trump
said in a tweet that the U.S.
will “go hard in either direction,” apparently referring to
diplomacy or economic and
military pressure.
—Felicia Schwartz, Nancy A.
Youssef and Ian Talley
contributed to this article.
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A12 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
WORLD NEWS
At ECB, New Powers and Pressure Egypt’s Ex-Leader
Ailing in Prison,
His Family Says
BY TOM FAIRLESS
BY JARED MALSIN
BORIS ROESSLER/DPA/ZUMA PRESS
FRANKFURT—The European Central Bank is being
dragged into local controversies over issues ranging from
banking scandals to bribery,
underlining the mounting political pressures on the world’s
No. 2 central bank as it takes
on a vastly expanded role.
Three of the ECB’s 25 policy
makers, a group that includes
central-bank governors from
19 eurozone countries, are
currently entwined in domestic investigations—in Latvia,
Slovenia and Greece—and
other top officials have faced
pressure to resign.
ECB President Mario Draghi
is likely to be quizzed at a
news
conference
Thursday about alleged corruption
and money laundering in Latvia, issues far removed from
the bank’s primary task of setting interest rates.
Since 2014, the Frankfurtbased ECB has been the eurozone’s top banking supervisor,
with direct oversight of
around 120 of the region’s biggest lenders and indirect control over thousands of others.
It is also among the international monitors that oversaw
the bailouts of struggling eurozone countries, including
Greece, Portugal and Cyprus.
New powers to oversee the
region’s banks have become
something of a “poisoned chalice” for the ECB, creating frictions with national authorities
that retain key responsibilities
in their banking sectors, said
Daniel Gros, a director at the
Centre for European Policy
Studies, a Brussels think tank.
National governments face
high hurdles to firing their central-bank chiefs under EU rules
that granted a high degree of
independence to the ECB. But
the ECB can’t obstruct investigations under national law.
The threat of national investigations effectively weakens the 19 national centralbank governors who sit on the
ECB’s rate-setting committee,
relative to the six members of
the bank’s executive board,
said Mr. Gros. The latter could
Since 2014, the European Central Bank has been the eurozone’s top banking supervisor.
gain influence in internal debates because they “don’t have
the Sword of Damocles hanging over them,” he said.
The situations in Latvia,
Slovenia and Greece differ
from one another, but each of
them risk straining and distracting the ECB, which
emerged strengthened from
the region’s recent debt crisis
even as elected politicians
stumbled.
Latvia’s central-bank governor Ilmars Rimsevics was recently suspended by Latvian
authorities from attending
meetings of the ECB’s rate-setting committee in Frankfurt as
a result of a Latvian investigation into whether he extorted
bribes. Mr. Rimsevics denies
the allegations and says there
is a campaign against him orchestrated by local banks.
The probe is separate from
allegations of systemic money
laundering leveled by the U.S.
Treasury against ABLV Bank,
Latvia’s third-largest bank,
which is being liquidated. ABLV
has said it isn’t guilty of money
laundering and has invested
heavily in compliance systems.
Slovenia’s
central-bank
chief Bostjan Jazbec was trav-
eling to Frankfurt in mid-2016
when Slovenian police raided
his office in the capital, Ljubljana, as part of an investigation into a 2013 overhaul of
the country’s banks. Mr. Jazbec and the Bank of Slovenia
have denied wrongdoing.
The police seized documents and hardware, including
some marked with the confidential stamp of the ECB, on
The bank’s oversight
responsibilities have
created friction with
national authorities.
whose rate-setting committee
Mr. Jazbec sits.
That prompted a rebuke
from Mr. Draghi, who threatened legal action for violating
the ECB’s legal immunities and
asked the European Union’s
executive, the European Commission, to intervene. Slovenian authorities responded at
the time that the raid was legal, and that the central bank
in Slovenia had refused several
requests by prosecutors to
hand over documents.
Mr. Jazbec’s computer was
eventually returned to him, six
months later, he says. But he is
frustrated at what he describes as an erosion of his authority within the central bank
after his four fellow board
members failed to be reelected. He has been nominated for a new job in Brussels, with the EU’s bankresolution authority, which
would entail stepping down
before his term ends.
In Greece, where the ECB
has a high-profile role in monitoring the country’s bailouts,
central-bank head Yannis
Stournaras has had a running
feud with members of Greece’s
government, led by the leftwing Syriza party, who regard
him as a political enemy.
In February, the Greek parliament launched an investigation into whether Mr. Stournaras, along with senior
opposition politicians, took
bribes to fix drug prices. Mr.
Stournaras and all the officials
named in the investigation
have denied wrongdoing.
—Todd Buell
contributed to this article.
CAIRO—The family of Mohammed Morsi, Egypt’s former
elected president, says his
health is deteriorating in
prison, raising a potential political flashpoint weeks before
a sensitive presidential election later this month.
Mr. Morsi, a leader of the
Muslim Brotherhood, has been
denied outside medical treatment in prison, family members say, prompting them to
ask that a delegation of British
officials be granted access to
the former president.
A group of British lawmakers and lawyers petitioned
Egyptian authorities on Monday to see Mr. Morsi, a politically sensitive request as an
election approaches with President Abdel Fattah Al Sisi’s only
viable opponents in detention.
A spokesman for Egypt’s foreign ministry couldn’t immediately be reached for comment.
The request draws attention to Mr. Morsi’s yearslong
imprisonment at a moment of
heightened political tensions
in Egypt. Opposition leaders
have deemed the election a
farce and called for a boycott.
Mr. Morsi came to power in
2012 in a free election in the
wake of the 2011 popular uprising that ended three decades of rule by President
Hosni Mubarak. He was ousted
in a military coup led by Mr.
Sisi in 2013.
In the crackdown that followed, Mr. Morsi was jailed
and later sentenced to death
for allegedly orchestrating a
prison break during the 2011
revolution. A high court overturned the death sentence in
2016, but the deposed leader
is serving three other sentences for other convictions.
Egypt’s military-backed government banned the Muslim
Brotherhood and branded it a
terrorist organization in 2013.
Though the group is now illegal in Egypt and barred from
participating in elections, it
still has millions of followers.
Foreign powers, including
Britain and the U.S., have increasingly embraced Mr. Sisi as
the former military chief presents his government as a force
for stability in a region consumed by war and civil strife.
His government’s improved international acceptance has
come even as it intensifies a
crackdown on political opponents and journalists before
the March election.
According to Mr. Morsi’s
family and their attorneys, the
former president is being held
in solitary confinement in
Cairo’s Tora Prison. They claim
he hasn’t received adequate
medical care for a range of ailments, including insulin for
treatment of diabetes, resulting
in a “recurring diabetic coma.”
“This is about the detention
of one man, and for my judgment the reason it commands
attention is that he was the
elected president of Egypt
from 2012 to 2013,” said
Crispin Blunt, a Conservative
member of the British Parliament who heads the group
seeking access to Mr. Morsi.
“Should he die in the rumored conditions, that would
be bad for Egypt,” he said.
Mr. Blunt, joined by two
other lawmakers and lawyers,
sent a letter to Egypt’s ambassador in London on Monday
requesting permission to visit
the former president in prison
to evaluate his status. Mr.
Morsi hasn’t been seen in public since 2015. He has received
only two visits from his family
and defense team since then,
according to the attorneys.
A spokeswoman for the British Embassy in Cairo said the
lawmakers don’t represent the
views of the U.K. government.
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THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A13
NY
WORLD NEWS
Ex-Spy’s Illness Strains U.K. Ties to Moscow Russian
strolling through the area Sunday afternoon when she saw a
man sitting still on the bench
and a person on the ground
being tended to by a paramedic.
“He was just so completely
still,” she said. “I couldn’t tell
if he was asleep or not.”
Police said Tuesday that
counterterrorism officers have
taken over the investigation
because of their expertise,
though a terrorist incident
hasn’t been declared.
Relations between London
and Moscow have been
strained since the 2006 poisoning of Mr. Litvinenko, a
Kremlin critic who had become a British citizen. He suffered a slow, painful death after drinking tea laced with
polonium, a rare and deadly
radioactive isotope. A 2016
British investigation found the
murder of Mr. Litvinenko in a
London hotel bar was probably
approved by Russian President
Vladimir Putin.
Mr. Skripal was part of a
group of three former officers
and a nuclear scientist whom
Moscow accused of betrayal.
In 2010 they were exchanged
in Vienna for 10 Russian
agents arrested in the U.S. in
one of the largest spy swaps
since the Cold War.
Russia’s Federal Security
Service, the FSB, this week
said Mr. Skripal worked in the
interests of the U.K. after its
intelligence agents recruited
him during his military service
in the mid-1990s.
Kremlin spokesman Dmitry
Peskov said Moscow was open
to cooperating with any investigation but declined to comment on accusations that Russia was behind the incident.
—Thomas Grove in Moscow
contributed to this article.
cerns have led to rises in bond
yields and volatility across other
financial markets.
But the Paris-based research
body’s measures suggest that
pickup in inflation is still a possibility, rather than a fact. It said
consumer prices across the
Group of 20 largest economies,
which account for most of the
world’s economic activity, were
2.5% higher in January than a
year earlier. That annual rate of
inflation was the same as in November and December.
The OECD said that across its
35 members—which are mostly
rich countries—the annual rate of
inflation dipped slightly to 2.2%
in January from 2.3% December,
having also fallen in the earlier
month. That drop wasn’t solely
due to volatile items such as
food and energy, since the core
rate of inflation dipped to 1.8%
from was 1.9%.
The drop in inflation was
largely confined to the eurozone,
while inflation accelerated in
Japan, which has long suffered
from sluggish price increases.
The measure for the U.S. was
unchanged in January, although
it had risen significantly since
mid-2017.
However, inflation in both the
G-20 and the OECD was lower
in January of this year than the
same month of 2017.
—Paul Hannon
U.K. Foreign Secretary Boris
Johnson on Tuesday pledged
to consider fresh sanctions on
Russia if police conclude that
Moscow was responsible for
the suspected poisoning of a
former Russian intelligence officer here over the weekend.
Sergei Skripal, a 66-yearold former colonel in Russia’s
military intelligence, and his
33-year-old daughter, Yulia, remained in critical condition in
a hospital Tuesday after being
found unconscious on a bench
outside a shopping mall in this
city in southwestern England
on Sunday afternoon. Police
said the two had been exposed
to an unknown substance and
didn’t have visible injuries.
Addressing lawmakers in
Parliament, Mr. Johnson said
while he didn’t wish to prejudge the outcome of the police investigation, the government
would
respond
“appropriately and robustly” if
evidence emerges linking the
incident to Russia.
He said the suspected poisoning recalled the 2006 assassination of Kremlin opponent Alexander Litvinenko,
ANDREW PARSONS/I-IMAGES/ZUMA PRESS
By Wiktor Szary
in Salisbury, England,
and Jason Douglas
in London
Former Russian intelligence officer Sergei Skripal and his daughter were found unconscious in Salisbury.
adding the U.K. would be
forced “to look again” at sanctions on Moscow if suspicions
that Russia was involved
proved well-founded. Mr.
Johnson even raised the possibility that British officials
would stay away from this
year’s soccer World Cup in
Russia.
“I say to governments
around the world that no attempt to take innocent life on
U.K. soil will go unsanctioned
or unpunished,” Mr. Johnson
said.
Police cordons were in
place Tuesday in five locations
across Salisbury, including Mr.
Skripal’s house, the hospital
where he and his daughter are
being treated and the bench
where they were found.
Meg Edgar, a 68-year-old
retired teacher from this medieval city 9 miles south of the
iconic prehistoric stone circle
at Stonehenge, said she was
WORLD WATCH
BREXIT
U.K. Wants Financial
Services in Trade Pact
U.K. Treasury chief Philip
Hammond is planning to say
Wednesday that the British
government believes it is in
the interest of the European
Union to include financial services in a free-trade deal with
the U.K. after Brexit, a day after his French counterpart
ruled it out.
The disagreement underscores what is set to be a major sticking point between Britain and the EU when talks over
the U.K.’s withdrawal move on
to the terms of its future relationship with the bloc. The EU
is due to publish its draft
guidelines for that future economic partnership Wednesday.
Mr. Hammond is expected
to say in a speech in London—
extracts of which were published by his office Tuesday—
that the U.K. believes a
bespoke free-trade accord that
extends to financial services is
in the interest of the U.K. and
the EU, given the scale of
cross-border financial activity.
He is planning to dismiss
those who say financial services shouldn’t be included in a
free-trade deal with the EU.
—Jason Douglas
GLOBAL ECONOMY
Inflation Stalled in
Largest Economies
Inflation in the world’s largest
economies was unchanged for a
third straight month in January,
while it fell in rich countries, according to figures released Tuesday by the Organization for Economic Cooperation and
Development.
A 2017 pickup in global economic growth that seems set to
continue this year has led many
investors to expect that inflation
will also accelerate, and central
banks will tighten policy more
rapidly in response. Those con-
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Aircraft
Crashes
In Syria
BY THOMAS GROVE
MOSCOW—A Russian transport plane crashed while landing at the country’s air base in
Syria on Tuesday, killing all 32
people on board, Russia’s Defense Ministry said, in another
setback for the Kremlin’s military intervention.
The Antonov An-26 aircraft
was likely not a target of fire
from hostile groups that have
launched attacks on the base
before, the ministry said.
“According to preliminary
information, the reason for the
catastrophe could have been a
technical failure,” Russian
news agencies reported a
statement from the Defense
Ministry as saying. “There was
no weapons fire directed at
the plane.”
Recent losses by Russia’s
military in Syria have tarnished the Kremlin’s efforts to
showcase its military and
arms technology.
The plane is the second
An-26 Russia has lost since it
launched its military intervention in 2015 to support Syrian
President Bashar al-Assad.
More recently, Syrian rebels
shot down an Su-25 in Idlib
province last month.
Russian military contractors were among those killed
in a U.S. airstrike in Syria last
month, which was launched in
response to what the U.S.
called an unprovoked attack
by pro-Syrian-regime forces.
Russia’s Hmeimim base has
been subjected to rebel artillery fire, and was targeted by
munitions-carrying drones on
New Year’s Eve that killed two
pilots and destroyed several
planes, two people with information on the incident said.
The Defense Ministry has rejected the claim, saying there
was no damage to aircraft and
the New Year’s Eve attack was
caused by mortar fire.
.
THE WALL STREET JOURNAL.
A14 | Wednesday, March 7, 2018
IN DEPTH
VOTE
Continued from Page One
been able to muster of late.
Melissa O’Rourke, a former
Republican who now considers
herself an independent, took the
wheel in late February to drive
her son and his team between
campaign stops as he challenges
Texas Republican Sen. Ted Cruz.
“She did a good job until she
realized she wasn’t wearing her
glasses,” Mr. O’Rourke said.
“I’ve forgotten that at night I
need my glasses to see clearly,”
his mother explained. Two days
later, Mrs. O’Rourke briefly
drove the van the wrong way
through a drive-through, her
son noted, en route to a doughnut shop.
“These may be the last images you see of the O’Rourke
campaign!” he said at one point,
filming a Facebook live stream
while his mother drove.
Rep. Sean Duffy, a Republican
running for re-election in Wisconsin, ends up hearing from
his liberal Democratic mother,
Carol, about how he should be
voting, regardless of how the
Keith Speers of the U.S. Postal Inspection Service tracked down Kelvin Lyles, a synthetic fraudster whose 300 accomplices didn’t exist.
Numbers game
Mr. Lyles had been looking
to rehabilitate his credit when
he learned about what are often called credit-profile numbers, Mr. Matthews said at his
client’s sentencing hearing.
Also called simply CPNs,
these are essentially fake Social
Security numbers, nine digits
the agency hasn’t assigned or,
in some cases, numbers assigned to children that haven’t
ever made it into credit files.
People with tainted credit histories sometimes use them
rather than their legitimate
numbers so they won’t be
dogged by prior delinquencies.
Underground websites sell
them in batches.
Using CPNs on loan applications is illegal, says Stephen
Stigall, partner at law firm Ballard Spahr LLP, and can subject
their users to charges of making false statements to banks,
bank fraud or conspiracy to
commit bank fraud.
Lenders lack methods of instantly distinguishing creditprofile numbers from Social Security numbers—in part an
unintended consequence of a
How a Phantom Borrower Is Born
Fake
SSN
Loan
application
Scammer applies for loan using fake name and made-up
Social Security number.
Rejected
application
Query to credit-reporting firm reveals no borrowing history.
Applicant likely to be rejected.
Loan
application
Rejected
application
Query results in a new 'credit file,' a precursor to a credit report.
Suddenly, a new identity has been born.
Loan
applications
Scammer applies for more loans, expanding credit file,
giving lenders perception applicant is real.
Source: TransUnion
THE WALL STREET JOURNAL.
Social Security Administration
move meant to reduce identity
fraud. The agency used to generate numbers in predictable
patterns. The first few digits
corresponded to a person’s ZIP
Code when the number was issued, letting lenders cross-check
the number with other application entries. In 2011, the agency
began generating numbers randomly. That made it tougher for
lenders to spot fakes.
An agency spokesman, Darren Lutz, says “randomization
represents an important step
forward in preventing the compromise of SSNs and preventing identity theft” including by
making it harder for scammers
to reconstruct numbers using
public information.
Lenders can ask the agency
to cross-check numbers, but
most don’t. The agency requires an applicant’s handwritten signature, which can be
time-consuming.
The agency’s Mr. Lutz says:
“We are currently exploring authentication capabilities to enhance the consent process.”
The missing tool for preventing synthetic fraud is an
instant way to verify a Social
Security number through an
conversation began.
“I will give her a call to talk
about the weather,” said Mr.
Duffy, but “she’ll want to talk
about all the politics of the day
that she’s been watching on
MSNBC or CNN that she’ll want
to throw down on,” he said.
Despite the political divide,
Mr. Duffy said his mother kept
his Duffy bumper sticker on her
car. During the 2016 campaign,
“she had a big Bernie sign on
her yard. She also had a little
‘Duffy for Congress’ sign up
too,” her son said.
“People might expect a mom
to vote for her own son, but
Sean really had to earn my
vote,” Mrs. Duffy said in an ad
she filmed for her son during
the 2012 campaign.
Mr. Duffy also says he gets
advice from his conservative Republican in-laws in Arizona.
“If I’m not far enough on the
right, I hear it from them:
‘You’re a squish,’ ” he said.
Republican police officer
Mike Hill offered his daughter,
Katie, a Democrat, a campaign
boost her own party couldn’t
provide. He held a fundraiser
with his golfing buddies last
June. “A couple of them are so
hard-core that their minds
won’t be changed, but they were
impressed,” said Mr. Hill, who
will be casting his first vote for
a Democrat when he votes for
his daughter. Ms. Hill, who is
challenging GOP Rep. Steve
Knight in California, said having
a Republican father helps her
connect to voters of all stripes.
Elissa Slotkin is a Democrat
challenging GOP Rep. Mike
Bishop in Michigan. Her in-laws
voted for Donald Trump in 2016
but nonetheless joined a Democratic friend to hold a fundraiser
for Ms. Slotkin over Thanksgiving. Lillian Moore, Ms. Slotkin’s
mother-in-law, attended the
fundraiser with a tray of fruit,
cheese and crackers.
Regardless of party affiliation, some universal parenting
truths remain constant. Most
still want to dole out advice.
Bob Hartman, a Republican,
urges his Democratic daughter
to take a day off from her
crammed campaign schedule. “I
tell her once a week and she
takes it once a month,” he said.
Christina Hartman only discovered her father was a Republican when he didn’t vote for
her in a 2016 Democratic pri-
Shadow Boxing
Credit-card debt owed by
borrowers who likely don't exist.
$400 million
300
200
100
0
2012 ’13
’14
’15
’16
’17
Source: TransUnion
Credit
file
THE WALL STREET JOURNAL.
agency process, says Brian
Murphy, senior director of policy at the American Bankers
Association trade group.
Lenders tend to use their
own data and fraud-detection
tools and review information
from credit-reporting companies. Those companies build
histories for people based on
information lenders provide.
That can create openings for
fraud because of the vulnerability in the system. If an applicant
hasn’t received credit before, a
lender’s query to a credit-reporting firm will reveal no borrowing history, and the lender
will likely reject the application.
But that very query typically
results in the creation of a new
credit file for the person. If the
person applies for more loans,
that process expands the credit
file and can give the perception
the applicant is real.
If one lender approves a
card for that applicant, that information can make the file a
full-fledged credit report. While
the person probably won’t get a
high-spending-limit card without a repayment history, lenders who provide low-limit cards
often take chances on newer
borrowers. Some identity fabri-
cators pay bills promptly to
qualify for higher limits, then
“bust out,” running up the
maximum charge.
TransUnion’s Mr. Cookman
says it informs lenders when applicant information is consistent
with synthetic fraud. Experian
last year introduced a score
alerting lenders if an applicant
exhibits characteristics of a synthetic fraudster. TransUnion introduced a similar service in
2015. Banks are looking to put
more emphasis on factors besides Social Security numbers
and other static identifiers, says
the ABA’s Mr. Murphy.
Amanda Landers, a spokeswoman for Capital One, says:
“When opening new accounts,
Capital One has multiple defenses in place and layered verification checks to identify potential fraud.”
GEORGIA DEPARTMENT OF CORRECTIONS
mail-receiving agency in a strip
mall.
Risk managers at credit-card
issuer Capital One Financial
Corp. started noticing peculiar
patterns with transactions at
Horizon and other merchants in
the Atlanta area, according to
federal investigators.
A Capital One review found
even though the applications
were filled out in names of multiple individuals, several were
submitted from common IP addresses. Some cards were being
mailed to the same location.
Tracking Mr. Lyles
Mr. Lyles used credit-profile
numbers to win cards in nonexistent people’s names, investigators say. Investigators found a
receipt at his house from a website that sells such numbers.
One of his “people” was a
Mike Milton, born May 7, 1987,
and from Fayetteville, Ga. He
applied for and received a Capital One credit card in that
name, investigators say.
Mr. Lyles ran new cards
through phony merchant accounts he controlled with
Square Inc. and PayPal Holdings Inc. payment systems—resulting in payments from Capital One and other banks into
the accounts. Square and PayPal declined to comment. Investigators say he also used cards
for actual purchases and cash
advances. “Realizing how easy
that appeared to be and how
these CPNs were not real people,” said Mr. Matthews at the
hearing, “it seemed too easy.”
In late 2014, Capital One became concerned enough about
signs of fraud it was spotting as
well as delinquencies in the accounts used at Horizon that it
contacted Keith Speers, a U.S.
Postal Inspection Service investigator. Mr. Speers, a former U.S.
Air Force security-forces officer,
says he spent the first weeks of
2015 cross-referencing account
information with public records
and calling affected businesses,
hoping to uncover who was behind the transactions.
The addresses to which new
cards were mailed were often
vacant or mail centers from
which mail was forwarded elsewhere. In February 2015, Mr.
‘It was helping me
take care of my
family,’ said Mr.
Lyles at a hearing.
GPS data tied to payment terminals showed the activity centered in Mr. Lyles’s neighborhood.
Mr. Speers and six other
agents arrived at Mr. Lyles’s
home with a search warrant. Investigators found multiple payment terminals, five fake IDs, 30
credit and debit cards mostly in
other people’s names, a list of
more than 300 credit-profile
numbers and the receipt from
the site selling those numbers.
Among the IDs was one for
Mr. Milton.
The U.S. attorney’s office
charged Mr. Lyles not with
identity theft, because he didn’t
try to defraud real people, but
with wire fraud. He pleaded
guilty in January 2017.
At an April sentencing hearing, he told U.S. District Judge
Mark H. Cohen that “I thought it
was something legal at first...It
was helping me take care of my
family, it was actually helping
me grow my business. And life
just started to look up.”
Judge Cohen sentenced him
to 46 months in prison. “This is
not a victimless offense,” the
judge said. “This is basically
abusing the credit system of,
frankly, this country.”
SAMANTHA EISENMENGER
Continued from Page One
who prosecuted Mr. Lyles, at a
hearing, “one realizes how precarious our system actually is.”
While a small part of total
identity-fraud losses—that number hit about $16.8 billion in
2017, according to consulting
firm Javelin Strategy & Research—synthetic-identity
losses are soaring. TransUnion
says a record $355 million in
outstanding credit-card balances
was owed by people who it suspects didn’t exist in 2017, up
more than eightfold from 2012.
In January, Accenture PLC
listed synthetic-identity fraud
as one of the biggest threats
facing banks in 2018.
In Rock Hill, S.C., a 50-yearold man was arrested last year
after applying under synthetic
identities for more than 750
credit cards; he pleaded guilty.
Earlier, a Southern California
man pleaded guilty to conspiracy to commit bank fraud using
synthetic identities, agreeing to
forfeit properties bought with
the proceeds.
TransUnion says it began
hearing from lenders and law
enforcement about unusual
fraud cases between 2012 and
2014. It began investigating,
searching for driver’s licenses,
voter registrations and other
records to confirm identities.
When nothing turned up,
TransUnion investigators realized the cases could be tied to
fabricated identities. It blocked
thousands of credit reports
from future use, figuring any
real people would get in touch,
says Lee Cookman, a director in
its identity-solutions department. None did.
TransUnion and Experian say
it is tough to distinguish between a fake person and a real
person applying for credit for
the first time with legitimate
identifying information that
isn’t on file. Equifax didn’t respond to requests for comment.
Criminals have taken up this
new ruse in part because lenders and borrowers have gotten
better at protecting against
more traditional fraud, which
often involves using stolen data
about real consumers, says
Chris Pinion, who specializes in
fraud strategy at LexisNexis Risk
Solutions, a unit of RELX Group.
Bypassing actual consumers,
scammers such as Mr. Lyles
trip fewer alarms. An Alabama
native, he had worked at a
debt-collection firm and as a
U.S. Navy service member
trained in electronic warfare,
according to court records. He
was once chief financial officer
at Chosen Destiny Foundation
Inc., a nonprofit serving Atlanta’s homeless.
Over two decades, he was
convicted of crimes such as motor-vehicle theft and marijuana
possession, court records show.
“He’s a good son, a loving father, and he took care of his
family to the best of his ability,” says Betty Hollinger, his
mother. “Whatever else happened, I just don’t know.”
Mr. Lyles, in federal prison
for the fraudulent credit-card
scheme, didn’t respond to interview requests. His lawyer,
Careton Matthews, declined to
arrange an interview with his
client. “Mr. Lyles accepted responsibility early on,” he says.
“He is remorseful for having
committed the acts that caused
him to be sentenced.”
In 2014, Mr. Lyles registered
a business, Horizon Mediation
LLC. Its official address was a
RYAN GIBSON FOR THE WALL STREET JOURNAL
FRAUD
Congressman Beto O’Rourke says goodbye to his mom, Melissa,
after she spent three days on the campaign trail with him.
mary for a House seat in Pennsylvania. “It wasn’t even necessary,” Mr. Hartman explained,
noting his daughter ran unopposed in the primary. “I was focused on the general election.”
Julia Hartman, Christina’s
mother and a Democrat, said
she “was just horrified…That’s
your daughter; you’re not voting
for her?”
Christina Hartman, who lost
the 2016 race, is now challeng-
Speers received security-camera images of someone withdrawing $300 from a PNC Financial Services Group Inc.
ATM using a Capital One card
in a name flagged to Mr.
Speers. Images showed a man
with a buzzcut.
In March, Mr. Speers says,
information from Amazon.com
Inc. and other retailers about
online purchases of clothing,
shoes and other goods using
fraudulent cards shared a shipping address. The recipient appeared to be female.
Mr. Speers says he ran the
address through motor-vehicle
records and found Mr. Lyles.
His license photo matched the
man in the PNC pictures.
Discover Financial Services
had issued cards to some of the
same “people” that had raised
suspicions at Capital One, Mr.
Speers says. Discover, Amazon
and PNC declined to comment.
Given the number of suspicious identities involved, Mr.
Speers wanted to make sure
Mr. Lyles wasn’t a patsy. He recalls worrying that “we’re going to take off kind of one head
and there may be multiple people connected but essentially
independently capable of continuing, and then they would
know we were out.”
After subpoenaing cellphone
and other records, Mr. Speers
says, lenders “would always
come back with, ‘That linked us
to these additional accounts.’ ”
ing Rep. Scott Perry (R., Pa.).
Her father was prepared to
change his registration this time
around. Then, fate intervened.
The state altered the electoral
map last month, prompting Ms.
Hartman to run instead in a different district from the one in
which her father lives.
Regardless of political differences, most parents remain unswerving cheerleaders for their
children. An exception: the par-
ents of GOP Wisconsin Senate
candidate Kevin Nicholson. They
each donated $2,700 to Democratic Sen. Tammy Baldwin, the
maximum amount allowed in
the primary election. Mr. Nicholson and his parents didn’t respond to requests for comment.
Mr. Nicholson himself used to
be a Democrat, as he notes in a
video on his campaign website.
“I used to do nothing and know
everything,” he said. “But since
then, we’ve had three kids. I’ve
fought in two wars,” said Mr.
Nicholson, a Marine who served
in Iraq and Afghanistan. “After
you’ve been hit in the face with
that much reality, you cannot
help but become a strong conservative.”
Freshman Rep. Tom O’Halleran of Arizona is a Democrat
now, but he was a Republican
for more than 15 years. Both of
his Democratic parents had died
before Mr. O’Halleran formally
returned to their party, when he
ran for Congress in 2015. “My
dad wouldn’t have said anything,” Mr. O’Halleran said, “but
my mom would have looked at
me and said ‘I told you so.’ ”
—Julie Bykowicz contributed
to this article.
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A14A
NY
* *
GREATER NEW YORK
Trump administration
says they must put
more ‘skin in the game’
to pay for Gateway
BY TED MANN
AND PAUL BERGER
The Trump administration
is pressuring New York and
New Jersey to boost their
share of funding for a new rail
tunnel beneath the Hudson
River, furthering a standoff
over the fate of a $12.7 billion
project that Democratic and
Republican officials say is critical to the region’s economy.
Transportation Secretary
Elaine Chao told a House committee on Tuesday that the
states would need to put more
“skin in the game” to pay for
the Gateway program, which
includes the tunnel.
The administration previously had said it wouldn’t commit to funding half the program’s cost, a pledge offered
by the Obama administration.
Ms. Chao’s comments came
amid occasionally heated exchanges with members of the
New York and New Jersey congressional delegations, who
say they believed that Republican President Donald Trump
would commit the federal government to pay for half of the
program cost.
When Rep. Sean Patrick Maloney (D., N.Y.) demanded to
know if Mr. Trump intended to
“kill” the tunnel project, Ms.
Chao sharply responded: “Yes.”
“The president is concerned
about the viability of this project
and the fact that New York and
New Jersey have no skin in the
game. They need to step up and
bear their fair share,” she said.
Officials in the region, including New York Gov. Andrew
Cuomo, have long said they
would try to hold the federal
government to an Obama administration commitment to
pay for roughly half the Gateway program’s costs. But
there has never been a formal
grant agreement that would
make sure the federal government paid that share.
The Trump administration
has said for months that the
pledge wasn’t binding, and
that the states should fund a
much larger portion. Federal
funding for major recent transit projects has covered about
one-third of their cost at most,
the administration says.
Every year of delay raises the
project’s cost by $450 million,
according to a detailed financial
plan for the tunnel obtained by
The Wall Street Journal. The
plan, submitted by the Gateway
$450M
The amount each year that
delays raise the project’s cost.
Program Development Corp. to
the federal government in December, forecasts that failure to
hit a crucial deadline next year
would result in an annual cost
escalation of 3.5%.
Represenatives for Mr.
Cuomo and New Jersey Gov.
Phil Murphy, both Democrats,
didn’t respond to questions
about whether they have alternate funding plans for the tunnel or contingency plans in
place should the project fail.
“We expect the tunnel to get
funded and built with the full
support of the federal government,” said a spokesman for
Mr. Murphy.
In a statement, Mr. Cuomo
said: “The president should do
the right thing and stop playing politics with our transportation network, which is the
lifeblood of the Northeast region’s economy.”
The tunnel is one part of a
sprawling $30 billion Gateway
program to double rail capacity
between Newark, N.J., and New
York City. It includes building
new bridges, laying two new
sets of track and expanding
New York Penn Station.
Gateway’s leaders are aiming for a financial close on the
tunnel project in mid-2019. Before then, they must secure
federal grant funding and complete the contracting process.
“I need to have all my
KEVIN HAGEN FOR THE WALL STREET JOURNAL
States Press for Tunnel Funds
A tunnel under Hudson Yards is part of the Gateway project.
building blocks lined up during 2018 to hit summer 2019,”
said Frank Sacr, the program’s
interim finance director.
If the new tunnel isn’t built
before the current tubes must
be shut down, one at a time,
for repairs, rail capacity between New York and New Jersey would be reduced to six
trains an hour from 24.
That would sharply reduce
service for the 200,000 weekday passengers traveling
through the tunnel on NJ
Transit and Amtrak along the
busiest stretch of the nation’s
busiest rail line connecting
Washington, D.C., and Boston.
New York and New Jersey
have pledged $5.5 billion toward the first phase of the
tunnel project. But those funds
would be borrowed from lowcost federal loan programs
and paid back over time,
which the administration opposes. “It’s not that loans are
never acceptable—it’s the zero
down that’s the problem,” a
senior Trump administration
official said.
Judge Tells Jury
Not to Give Up
In Ex-Aide’s Case
MARK KAUZLARICH FOR THE WALL STREET JOURNAL
BY ERICA ORDEN
Mayor Bill de Blasio spoke on Tuesday with safe-street activists outside his Brooklyn gym, which is near the site of a fatal car accident.
Mother Hurt in Crash Is Tony Winner
BY ZOLAN KANNO-YOUNGS
AND CHARLES PASSY
Ruthie Ann Blumenstein
was living the dream of every
New York City actress until
she tried to cross a notorious
Brooklyn intersection and
landed in a nightmare.
A car plowed into the Tony
Award-winning Broadway actress, who goes by Ruthie Ann
Miles, and killed her 4-yearold daughter, Abigail, on Monday afternoon in Park Slope.
Ms. Blumenstein, 34 years old
and pregnant, was taken to
Brooklyn Methodist Hospital,
where she was in stable condition on Tuesday, a hospital
spokeswoman said.
She declined to comment
on the condition of Ms. Blumenstein’s unborn child.
The driver, identified by a
law-enforcement official as Dorothy Bruns, 44, of Staten Island,
also struck and killed 20-monthold Joshua Lew. His mother,
Lauren Lew, was injured but
later released from the hospital,
the spokeswoman said.
Ms. Bruns, who hasn’t been
charged, said she had a seizure
at the time of the incident, according to law-enforcement officials. She was released after
being taken to the hospital.
A woman who answered the
phone at a Staten Island address identified herself as Ms.
Bruns but hung up on a reporter on Tuesday when asked
for comment. A New York Police Department official on
Tuesday said Ms. Bruns’s license had been suspended as a
result of the incident and ongoing investigation.
Ms. Bruns inched her way to
the middle of the intersection
at Ninth Street and Fifth Avenue before accelerating west
down Ninth Street and hitting
the pedestrians, according to
officials who saw video footage.
Police believe the light was still
red when the white Volvo hit
the people, the officials said.
A search for Ms. Bruns’s license plate in the city’s database revealed 12 violations in
the last two years, including
four for failing to stop at a red
light and four speeding violations in a school zone.
Before Monday, five pedestrians had been killed on Ninth
Street between Third and Eighth
avenues by vehicles since 2003.
On Tuesday, a group of activists swarmed Mayor Bill de
Blasio as he walked into his
gym, the YMCA on Ninth
Street in Park Slope. Mr. de
Blasio hugged a mother of a
child mowed down by a car in
2013 and spoke to Doug Gordon, a neighborhood advocate
leading the demonstration.
Mr. Gordon said the group
wanted Ninth Street redesigned to have protected bicycle lanes and pedestrian islands built in the intersection
to ensure safety.
Since Mr. de Blasio’s pedestrian-safety plan, known as Vision Zero, began in 2014, pedestrian deaths have fallen by
about half despite the city’s
growing population. The 10year initiative has included a
mix of street redesigns and
speed cameras.
Polly Trottenberg, the city’s
transportation commissioner,
said road crews brightened
faded crosswalk markings
overnight at Ninth Street and
Fifth Avenue. The city also is
considering installing a pedestrian island at the intersection, and adding some kind of
protection for the bike lane at
the location, she said.
Many residents stopped by
the scene on Tuesday to leave
flowers. There was an outpouring of support from the theater
community. A GoFundMe campaign to help Ms. Blumenstein
already had received more than
$225,000 in contributions by
Tuesday afternoon—far eclipsing the $5,000 goal.
Ms. Blumenstein won a Tony
Award in 2015 as a featured
performer in the revival of the
musical “The King and I.” She
also has starred in off-Broadway shows—specifically, as
Imelda Marcos in the musical
“Here Lies Love” about the former first lady of the Philippines.
—Mara Gay
and Melanie Grayce West
contributed to this article.
Citing child-care woes, canceled cardiologist appointments and concerns about an
impending snowstorm, jurors
deliberating in the federal
corruption trial of a former
top aide to New York Gov. Andrew Cuomo told the court
Tuesday that they were frustrated and deadlocked.
“We cannot come to a
unanimous consent. We are
largely divided in opposing
views,” the jury foreperson
wrote in a note to the judge
shortly before noon on the
fourth day of deliberations.
“The only thing we seem to
agree on is that we cannot
agree.”
U.S. District Judge Valerie
Caproni was unmoved by
their pleas—which included
notes from three other jurors
asking to be dismissed—and
ordered the panel to continue
deliberating,
saying
the
amount of time they had been
discussing the evidence “is
not unreasonable and it’s not
excessive.”
“It is normal, and even
common, for jurors to have
differences of opinion,” Judge
Caproni told the jury. Separately, she told lawyers that
“they have not deliberated
long enough to declare an impasse.”
The trial in Manhattan of
the former aide to Mr. Cuomo,
Joseph Percoco, and three
businessmen accused of paying him bribes in exchange for
government favors was expected to take between four
and six weeks. Mr. Cuomo, a
Democrat seeking re-election
this year, isn’t accused of
wrongdoing.
Hindered by slow-moving
testimony, a defense attorney
felled by the flu and a cooperating witness who was arrested mid-trial, the proceeding is in its sixth week, and
an approaching nor’easter in
the New York City area may
further complicate the jury’s
progress. In advance of the
storm, the judge said the jury
wouldn’t sit on Wednesday.
Though the jury’s protestations raised the prospect of a
mistrial, Judge Caproni said
she wasn’t prepared to make
such a declaration just yet.
“The parties, meaning both
the government and the defendants, are entitled to a
verdict if we can get it,” she
said Tuesday.
And though Judge Caproni
ordered the 12 jurors to push
forward, she also said she
would consider the hardships
described by some individuals
and may replace them with
alternates.
‘I completely respect
this process and this
court, but need to
have my life back.’
“I believe I cannot do this
anymore!” wrote one juror,
who recounted having two
sick children for whom afternoon doctor appointments
were unavailable.
Another juror told of having to work until midnight after deliberations each day to
maintain her commission
earnings.
“I completely respect this
process and this court, but
need to have my life back,”
she wrote.
Still, while pleading to be
released from their duties,
the jurors said they understood the gravity of their obligations to the court.
“We are all very invested
in this case,” another wrote,
“and nobody wants to let each
other down or show any disrespect to the system/process.”
BY CHARLES PASSY
The Shed is looking to make
a statement in its inaugural
year.
The $455 million cultural
center, which sits adjacent to
the Hudson Yards development
on Manhattan’s far West Side,
is commissioning work from a
wide range of prominent artists, officials said Tuesday. The
pieces are slated to premiere
starting in spring 2019, marking the beginning of the center’s first season.
The emphasis on creating
new work is at the heart of the
Shed’s philosophy, officials
said. The name of the venue
speaks to the idea of toiling
away in a shed, though a
200,000-square-foot “shed” in
this case.
Perhaps the most ambitious
of the seven announced commissions is “Soundtrack of
America,” a piece being conceived by Oscar-winning filmmaker Steve McQueen (“12
Years a Slave”) that will trace
“the unrivaled impact of African-American music on art and
popular culture over the past
100 years,” according to the
center. “Soundtrack” is being
developed in part with
Grammy-winning music producer Quincy Jones.
Other commissioned works
will cover different artistic and
narrative terrains. “Reich Richter Pärt” will feature the music
of composers Steve Reich and
Arvo Pärt and the artwork of
Gerhard Richter. It will explore
the “shared language” between
the sonic and the visual.
And “Dragon Spring Phoenix
Rise,” a piece being created in
part by theater director Chen
Shi-Zheng, will look at a Chinese sect in Queens’ Flushing
neighborhood “that possesses
the magical power to extend
human life.” The piece will feature songs by Sia and incorporate aerial choreography.
Officials say the commissions are designed to showcase
the presentational possibilities
of the Shed, a futuristicminded venue that is being
built with the kind of flexibility
not associated with the traditional concert hall or opera
house. One of the center’s most
notable features is a movable
“shell” that can be rolled into
place over the adjoining plaza,
thus expanding the building’s
footprint.
The center “is one of the
great new institutions of the
21st century,” said Shed board
member Frank H. McCourt Jr.,
who heads the McCourt Global
asset-management firm.
Center officials also announced a $45 million gift
from Mr. McCourt and his family in support of the venue. The
Shed is run as a nonprofit organization separate from Hudson Yards’ operations. To date,
the center has raised $453 million—just $2 million shy of its
$455 million construction cost.
MARK KAUZLARICH FOR THE WALL STREET JOURNAL
New Arts Center Announces Splashy First Season
The Shed, which is on Manhattan’s far West Side, will mark its
first season in the spring of 2019 with a range of prominent artists.
.
A14B | Wednesday, March 7, 2018
NY
* *
THE WALL STREET JOURNAL.
GREATER NEW YORK
GREATER NEW
YORK WATCH
TERROR CASE
AMIR LEVY FOR THE WALL STREET JOURNAL (2)
Man Pleads Guilty
In Student’s Slaying
Coppy Holzman, left, and his daughter Logan Mikhly with their pooches in front of Boris & Horton,
their dog-friendly Manhattan cafe. Above, Christiaan Perez and his dog Maze chilled out at the eatery.
METRO MONEY | By Anne Kadet
This New Cafe Is Strictly ‘Bring Your Own Dog’
When Boris & Horton, New
York City’s first dog cafe,
opened last month, dog freaks
like me were disappointed.
Many expected
something along
the lines of the
city’s cat cafes—
establishments
where a pack of
friendly animals living on site
are available for schmoozing
and even adoption.
Alas, Boris & Horton is
merely the next best thing, a
“dog-friendly” cafe. It’s
strictly BYOD.
Given the obvious superiority of canines to felines by every conceivable measure, why
do we have three cat cafes in
this town and nothing comparable for dogs? This feels
deeply, existentially wrong.
Boris & Horton co-founder
and President Logan Mikhly
says she never considered
opening a cafe featuring dogsin-residence. Just launching a
restaurant where customers
can bring their own dogs was
challenge enough.
The city’s health code
doesn’t allow animals in restaurants. To comply, the
founders remodeled a corner
retail space in Manhattan’s
East Village to include a cafe
counter, a walled-off dog
area with a separate entrance and a takeout window
so patrons with pets can order from the sidewalk before
bringing their food inside.
Boris & Horton has to employ a separate team to staff
each space. They can’t even
take used dishes from the dog
area back to the coffee counter
for washing. They have to use
disposable plates and cups.
While the cafe does offer
evening rescue events where
shelters bring in dogs available
for adoption, boarding canines
on site would take the challenges to a whole new level.
Given the crazy rents for space
in Manhattan, for example, the
slim profits on coffee and muffin sales could never cover the
cost of sheltering pets.
That explains why, unlike
Boris & Horton, the city’s cat
cafes all charge admission fees.
The nonprofit Brooklyn Cat
Cafe, which bypasses city regulations by serving only packaged food and drink, for example, charges from $6 to $7 for
a half-hour stay. Koneko on the
Lower East Side charges $20
an hour for admission to the
“cattery” in back, separate
New York City’s first
dog-friendly eatery
isn’t comparable to the
city’s three cat spots.
from the cafe area. Dogs need
a lot more space than cats, of
course, which likely would
drive canine-cafe admission
fees even higher.
Dogs also require more supervision, says Andrea Nerep,
president and founder of
Petzbe, a social-media app for
pets. They’re more social with
each other than cats, and “different levels of energy, temperaments, sizes and ages can
make it difficult to know
whether or not two or more
dogs can safely interact, particularly in a space like a cafe.”
And while many cats are
content with indoor living,
dogs need several outdoor
walks a day, says Jessica
Lockhart, director of animal
behavior at the ASPCA Adoption Center in Manhattan.
“All of these differences
would need to be taken into
consideration when attempting to open a dog cafe,” she
says.
When all’s said and done,
the pet-friendly cafe starts to
look like a much smarter business model. Having customers
supply the animals is like
Facebook getting its users to
produce all the content. Indeed, Ms. Mikhly says roughly
a third of the customers at Boris & Horton are patrons who
don’t own a dog and come in
to meet other customer’s pets.
Some even come just for
the coffee. Inside, the space
looks like any cafe, save for
the wipeable vinyl cushions,
dog beds and an easy-wash
concrete floor. It serves stan-
dard fare for humans including avocado toast, and there’s
a separate baked-goods counter for dogs.
I recently spent an afternoon at Boris & Horton with
my Border Collie mix Minnie.
It was a lively scene, with the
barking, the tourists, the constant cooing from the photo
booth and a team from the
TV show Puppy Bowl on
hand, shooting a promo.
We met a Poodle mix
named Bandit, an American
Eskimo dog named Kai and a
mutt named Rose. We also
met a nice human named
Cherry Aw Young who
wheeled her Havanese,
Lumpia, in on a baby carriage.
She was treating the former
show dog to a hard-boiled
egg and the cafe’s $3 Louis
XIV crispy ham cupcake.
They were celebrating.
“She just got her good canine-citizenship accreditation” from the American
Kennel Club for good behavior, said Ms. Aw Young.
A man prosecutors said was
on a “jihad” to avenge U.S. policy
in the Middle East pleaded guilty
Tuesday to killing a college student in New Jersey and admitted killing three more people in
Washington state.
The Essex County prosecutor’s
office said Tuesday that Ali Muhammad Brown admitted shooting 19-year-old Brendan Tevlin in
late June 2014 as Mr. Tevlin sat
at a traffic light in West Orange.
Mr. Brown, a 34-year-old former Seattle resident, pleaded
guilty to multiple charges, including murder, robbery and terrorism. He was the first person
charged with terrorism connected to a homicide under a
New Jersey law.
During Tuesday’s court hearing, Mr. Brown also took responsibility for killing three people in
Washington state. Prosecutors
said he would have to formally
plead guilty in Washington for
those cases to be resolved.
— Associated Press
NEW YORK
Gun-Control Measures
Passed by Lawmakers
Democrats who control the
New York Assembly have
passed legislation aimed at reducing gun violence in the state.
The Assembly passed a package of five bills Tuesday afternoon, a day after the Republican-controlled state Senate
passed 15 bills focused on improving school security following
last month’s shooting at a Florida high school.
The Assembly measures
would keep firearms out of the
hands of people deemed a danger to themselves or others, set
a longer waiting period for delivery of a gun to a person who
hasn’t cleared a background
check, and prevent people convicted of domestic violence from
buying a firearm.
—Associated Press
alexa
—anne.kadet@wsj.com
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THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A15
LIFE&ARTS
A Risk That Spans Generations
Members of the Flowers family represented in red have tested positive
for a gene mutation indicating high risk for a type of stomach cancer.
FROM TOP: BRYAN TARNOWSKI FOR THE WALL STREET JOURNAL; STEPHEN VOSS FOR THE WALL STREET JOURNAL
= tested positive for
CDH1 mutation
= tested negative
Kathy
63 years
Carrie
35 years
(deceased)
Kendall
36 years
Peggy Flowers
80 years old
Steve
62 years
Austin
38 years
Kourtney
35 years
Kristen
33 years
Terry
61 years
Ashley
36 years
Kandace
29 years
Kenneth
56 years
couldn’t be
reached
Katelyn
26 years
Kameron
18 years
THE WALL STREET JOURNAL.
IN THE PHOTOGRAPH, left to right: Kathy Hayes, Ashley Cognevich,
Kandace Martin, Kenneth Flowers and Kristen Murphy have had their
stomachs removed since June. At bench, from left to right: Austin Flowers,
Terry Flowers and Kameron Flowers haven’t had the procedure. Carrie Hayes
Valentine, in the framed photograph held by Mrs. Hayes, died of stomach
cancer in 2013. The sibling represented in gray in the chart couldn’t be
reached for comment.
testing and provides opportunities
for researchers to understand
stomach cancer more broadly.
Testing for the CDH1 gene is beYOUR HEALTH | By Sumathi Reddy
coming more common as many
women are getting gene testing
done for breast cancer, searching
for abnormalities in the BRCA
genes, and finding mutations in
CDH1, Dr. Offit says. Mutations in
the CDH1 gene incur about a 55%
to 70% lifetime risk of developing
HDGC. Women with the mutation
also have a 42% lifetime risk of developing a type of breast cancer.
Dr. Strong does one to two prophylactic stomach removals a
month. The surgery entails removing the stomach and attaching the
esophagus to the small intestine.
Patients initially lose
IT WAS AN easy decision for Denweight and must eat more
nis Reilly. Stomach cancer wasn’t
slowly and chew well to
going to take him, too.
help break down the food.
He’d received no cancer diagnoMany patients become insis. But he’d lost two brothers to
tolerant of certain types of
the disease. A positive genetic test
foods, which can lead to
indicated a strong chance he
vomiting and diarrhea
would suffer the same fate. So he
caused by food rapidly envolunteered for a total stomach retering the small intestine.
moval three years ago.
Kathy Hayes found out
“I wanted to set an example for
about her family gene after
my children, to show them that
she was diagnosed with
you can have the surgery and still
breast cancer. That discovlive a very healthy and full life,”
ery left her close-knit family
says the 61-year-old McLean, Va.,
in a small Mississippi town
resident who is a vice president of
facing dramatic choices
sales for a cybersecurity company.
about whether to test themHis daughter, Cailyn Reilly
selves and what to do if the
Knapp, a 32-year-old attorney in
tests returned bad news.
Washington, D.C., followed suit
Mrs. Hayes’s daughter,
with a total stomach removal last
Carrie Hayes Valentine,
year. Both tested positive for a
died in 2013 at age 35, one
mutation in the CDH1 gene, the
month after doctors diagsame one her two uncles carried.
nosed her with stage-four
Dennis Reilly and his daughter, Cailyn Reilly Knapp, chose to have total stomach
More patients with family histocancer that originated in
removals after testing positive for a mutation in the CDH1 gene.
ries of cancer are receiving genetic
the stomach.
tests and undergoing prophylactic
But it wasn’t until Mrs.
cer. Most cases aren’t diagnosed
morial Sloan Kettering Cancer
surgery. This is the same kind of
Hayes received the breast cancer
until the cells have spread. The
Center in New York City.
procedure that causes women at
diagnosis two years ago that her
Gastric cancer is a leading cause cancer typically strikes at a median
risk for breast cancer to have preoncologist connected the dots and
age of 38 and has a five-year surof cancer deaths in the world. Inventive mastectomies. As drastic
recommended genetic tests. Mrs.
herited cancers such as hereditary
vival rate in the U.S. of 25% to 30%.
as these steps may be, doctors say
Hayes, a 63-year-old retired high“It’s the worst type you can get,”
they can provide major psychologi- diffuse gastric cancer (HDGC), a
school teacher who lives in Ellisparticularly deadly and aggressive
says Vivian Strong, a gastric surcal relief for families by eliminatville, Miss., tested positive for a
form of stomach cancer, make up a
geon at Sloan Kettering who opering the physical risk.
mutation in the CDH1 gene.
small proportion of gastric cancer,
ated on Mr. Reilly and his daughter.
No good screening tools exist
Her parents and three brothers
about 1% to 3%. Mr. Reilly and his
Experts say it’s unclear how
for detecting gastric cancer, unlike
got tested and the family learned
daughter risked developing this
many people have the mutation. At that the mutation was passed on
breast cancer. “In these circumtype of cancer.
least a few hundred documented
stances, the preventive surgery refrom her mother, Peggy Flowers.
HDGC cells that develop in the
cases exist, but doctors say there
ally is the first and most powerful
At 80, Ms. Flowers has lucked out,
lining of the stomach often aren’t
line of prevention,” says Ken Offit,
are likely many more. CDH1 highavoiding any stomach cancer diagvisible during endoscopy procea medical oncologist and chief of
lights the difficult decisions posed
nosis so far. She is now too old for
dures that screen for stomach canthe clinical genetics service at Mein an age of increasing genetic
surgery. Two of Mrs. Hayes’s
The Dangerous Gene
In the Family Tree
Families that discover a mutation of a gene linked to gastric cancer
find preventive removal of the stomach a harsh but necessary step
brothers tested positive for the
mutated gene; one tested negative.
One brother, Kenneth Flowers,
had three of his six children test
positive. Five members of the
larger Flowers family, including
Mrs. Hayes, have had their stomachs removed. “Of course I wish
we had known about this before
my daughter’s death, but I know
that she would have been very,
very happy that her death saved
so many family members’ lives,”
she says. Some in the family who
tested positive for the CDH1 mutation, like Mrs. Hayes’s brother,
Terry Flowers, and his son, Austin
Flowers, are waiting.
Terry Flowers’s daughter, Ashley Cognevich, had her stomach removed in November. She’s had
complications in her esophagus
and is having her fourth surgery
since the original procedure soon.
“I’m not quite eating normally,”
says the 36-year-old educator. “But
I would still do it again. I have two
kids and I have too much life to
live.”
After Dr. Strong removed Mr.
Reilly’s stomach in 2015, doctors
found four different areas in his
stomach with cancer cells. Mr.
Reilly spent a week in the hospital
and returned to the office full-time
a month after surgery. He lost
about 20% of his body weight.
Now he eats a bit every few
hours, avoiding red meat, fried
foods and sweets. With no stomach
to send him cues, he eats when he
feels low-energy. But his energy
levels are similar to pre-surgery.
The family experienced another
tragedy when a third brother died
from complications of the same
surgery. Still, Mr. Reilly is grateful
his daughter followed his example.
They declined to comment on the
health of other family members.
Mrs. Knapp wanted to wait for
surgery until after she had children. But after a biopsy found two
cancer spots, she decided to act.
Though she can still try to have
children naturally, she and her
husband are exploring other options. Among them: in vitro fertilization with pre-implantation genetic diagnosis to screen embryos
for the genetic mutation before
implanting them. Their hope: preventing passing the mutated gene
on to the next generation.
ROBERT NEUBECKER
WORK & FAMILY | By Sue Shellenbarger
GAINING POWER AT
WORK WHEN YOU
HAVE NONE
Networking, building skills in new areas and
cultivating charisma are all keys to success
MANY YOUNG EMPLOYEES are frustrated
when their first jobs land them in powerless
positions at the bottom of the organization
chart after years of leadership roles in
school, leading some to jump ship far
sooner than employers would like.
How do you gain power when you have
none?
More employers are opening new paths
to leadership by encouraging employees to
develop spheres of influence that have nothing to do with the org chart.
Such informal power is increasingly important—and valued—in today’s flatter organizations, where more jobs confer responsibility for teammates’ performance without
the authority to give orders or dish out rewards or punishment, says corporate trainer
Dana Brownlee, of Atlanta.
Specific behaviors can predict informal
power, and
many of them
can be learned,
she says. Networking across departments, building expertise
in new areas and cultivating
charisma are all ways to gain
power, and make you a go-to person for colleagues.
People who build strong networks
ask lots of questions of colleagues,
show respect for co-workers’ roles
and accomplishments, and look for
openings to help with projects that excite them, according to a 2017 study of
20 employers and 160 managers cowritten by Robert Cross, a professor of
global leadership at Babson College in
Massachusetts. “These people create
enthusiasm
in the networks around
them,” making
colleagues more
likely to offer them new
opportunities, says Dr.
Cross, who heads a 70-employer consortium studying collaboration. “I call them energizers.”
Many people wrongly assume
boasting about past accomplishments will make colleagues on a
new job want to work with them. In
fact, talking about your past record
is “almost a death knell for credibility” because it fosters mistrust, suggesting you care more about promoting yourself than getting in sync
with your new colleagues and their
needs, the study says.
B.J. Shannon is “an extreme example” of
the ability to build a strong internal network, says his former boss, David Niu.
Mr. Shannon, who headed customer relations for the past four years at Tinypulse, a
Seattle employee-engagement company,
forged warm, enthusiastic relationships
with co-workers in all parts of the company, says Mr. Niu, Tinypulse’s founder and
chief executive.
Mr. Shannon says he tries to “spread positivity” by showing genuine interest in others.
He made a point of praising colleagues’ good
work, sending at least five “cheers” a week on
the company’s internal-messaging system,
and tried to help others reach their goals,
says Mr. Shannon, who recently moved up to
a senior-management job at a larger company.
Prem Kumar, director of product at Tinypulse, says Mr. Shannon took a genuine interest in him from his first day on the job in
2016, and helped him learn new skills as he
advanced from product manager to a more
senior role.
Helping out your co-workers isn’t customarily seen as a path to power. But it can
motivate others to embrace you as a role
model—a valuable kind of informal power,
based on social-science research, Ms.
Brownlee says.
Increasingly, employers value this kind
of influence, too. Employees with strong internal networks tend to be high performers,
according to a 2016 study in the Harvard
Please see POWER page A16
.
THE WALL STREET JOURNAL.
A16 | Wednesday, March 7, 2018
LIFE & ARTS
MAX WHITTAKER FOR THE WALL STREET JOURNAL
POWER
MY RIDE | By A.J. Baime
For a 101-Year-Old Car
It Drives Pretty Well
Joe Hensler, below, with
his 1917 Dodge Brothers
touring car. Its gauges,
left, still work.
first model for a number of years.
Mine was built during the middle
of World War I. In fact, one of the
early customers of Dodge cars was
the United States Army.
Both Dodge brothers died of influenza in 1920. Five years later,
their company was sold to a banking consortium for $146 million. It
was said to be the largest check
ever drawn in a commercial deal
at that time. Dodge later became a
major part of Chrysler.
I found my 1917 Dodge Brothers
touring car in Florida listed on
eBay. I paid $19,000 for it in 2016,
plus the cost of shipping the car to
California. The vehicle was in good
condition. There is a plaque on the
dashboard that says “Best in
Show” from a car show in 1955,
which means a previous owner restored this car right around the
time I was born.
It is tricky to drive—geared very
low, so it likes to move at slow
speeds—and it takes some practice
to get the car moving without
grinding gears. The gauges all work,
what few of them there are.
Every time I see a Dodge on the
road, I think of my Dodge Brothers
car. It is amazing to think that this
one model launched a motoring
legacy that is still with us today.
Contact A.J. Baime at
Facebook.com/ajbaime.
ROBERT NEUBECKER
Joe Hensler, 63, a commercial real-estate investor from Fair Oaks, Calif.,
on his 1917 Dodge Brothers touring car, as told to
A.J. Baime.
When we think of
Dodge today, we think of
Ram trucks and muscle
cars—the millions of
Dodge vehicles that have
been built through the
years. The vehicle you see
here is the first model
Dodge ever created.
The company was
launched by two brothers—John and Horace Dodge—during the early days of the automobile. They became wealthy building
parts for some of the emerging Detroit car companies, most notably
for Henry Ford’s Model T. As the
legend has it, John and Horace
Dodge were hard-drinking brothers
who were so close, they wore identical clothing and would only open
mail that was addressed to both of
them.
In 1914 they went from building
car parts to building their own car,
with a logo that said “Dodge
Brothers, Detroit U-S-A.” Dodge
immediately became one of the
best-selling car brands in the
country. The brothers made this
ished the analysis, taking pains
to give all the credit to his boss
and Mr. Gayda, to avoid sparking
resentment. The CEO was delighted, promoting Mr. Bower
three times in his remaining 3½
years with the company.
Contrary to popular belief,
charisma also is a quality that
can be learned, says Ora Shtull, a
New York City executive coach.
“It means showing up as the best
version of ourselves for the people around us,” and making a
consistent effort to show authentic interest in others, she says.
Loan Mansy, a Philadelphiabased chemical engineer and client of Ms. Shtull, began her career
as a production supervisor thinking she had to prove herself by asserting her views. “Everything was
about me and what I thought,” she
says. As she gained experience
and worked with Ms. Shtull, Ms.
Mansy learned it’s more important
to focus on others, ask questions,
listen closely and show warmth
and empathy, she says.
She has since been promoted
to a series of increasingly challenging jobs, to become an area
president of a
waste-management company.
Continued from page A15
Business Review.
More companies are training
employees to network, presenting
it as a skill used by successful coworkers. Workday, a cloud-software company in Pleasanton, Calif., is piloting a one-day workshop
where new hires learn how to
build purposeful internal networks.
Booz Allen Hamilton Holding
Corp., a McLean, Va.-based government contractor, encourages
new hires to meet with colleagues
recommended by their supervisors
and explore ways to work together,
says David Sylvester, director,
global learning and development.
Limeade, a Bellevue, Wash.,
employee-engagement company,
encourages employees to start
“affinity groups” based on common interests such as golf or cycling, says chief executive Henry
Albrecht. He believes employees
who initiate such groups tend to
be among those with the highest
potential, he says.
Another route to informal
power is to acquire needed expertise in an emerging area, such
as helping others use the latest
presentation software, Ms.
Brownlee says.
Jay Bower, president of
Crossbow Group, a Westport,
Conn., marketing-services firm,
advises new hires to actively
seek out such opportunities.
“Look for the thing nobody
knows how to do or wants
to do, jump in with both
feet and do whatever it
takes to solve the problem,” he says.
Soon after Mr. Bower took
an entry-level job years ago
as a marketing analyst at a
retailing company, he got
wind of a pressing, unmet
need. The chief executive
wanted an analysis of
new data from an unexpectedly popular new customer-discount program.
But the company lacked the
staff to do it.
Mr. Bower asked the
company’s head of information systems, Ron Gayda,
to teach him a few of the
analytical skills he’d need
to do the analysis. Mr. Gayda,
now a retired IT executive in
Stamford, Conn., says he agreed
because Mr. Bower seemed capable and hardworking, and he
didn’t have enough staff in his department to do the work.
Working long hours to
squeeze in the work among
other duties, Mr. Bower fin-
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THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A17
LIFE & ARTS
JOE YARMUSH
Max Henry, Liam O’Neill, Ben Shemie
and Joseph Yarmush of Suuns
MUSIC REVIEW | By Jim Fusilli
A Liberating, Softer Sound
Montreal
SOME 10 YEARS into a fruitful career, the powerful art-rock quartet
Suuns shifts away from its signature sound on its new album, “Felt”
(Secretly Canadian). Minimizing
dark, droning guitars and pulsing
electronic beats, Suuns uses a mix
of acoustic and electronic percussion, clearly articulated guitars,
open spaces and bright, oscillating
soundscapes to accompany Ben
Shemie’s voice. Thus it creates a
sense of liberation not present on
the earlier Suuns recordings.
That’s not to say Suuns is completely distancing itself from the
stalking sound for which it is best
known. Prior to its March 25 set at
the annual Big Ears Festival in
Knoxville, Tenn., Mr. Shemie and
Joseph Yarmush, who plays guitar
and bass in the band, will participate in “12 Hour Drone: All Night
Flight,” an event that promises explorations of repetitive rhythms
and continuous tones—which is a
fairly accurate description of the
core of Suuns’s earlier recordings.
Based here, the band begins its
tour behind “Felt” this week with
three shows in Quebec; following
Big Ears, it will continue with concerts in Europe before playing the
U.S. starting in late April. (See
www.suuns.net for dates.)
If Suuns’s new music comes as a
surprise, it’s a satisfying one.
“Watch You, Watch Me” wanders
toward prog-rock, while “Control”
is a broody keyboard ballad with
spoken-word interludes. “Materials” finds Mr. Shemie singing
above abrasive beats until late in
the song, when the environment
abruptly changes. In “X-ALT,” guitar notes dance above four-beatsto-the-bar percussion augmented
by handclaps and disco-like beats
on a high-hat cymbal; saxophonist
Ted Crosby joins in with acid-jazz
bleats. “After the Fall,” “Daydream” and “Moonbeams” approximate the group’s old model, but
even they have different textures
than earlier works.
When I met here in late January with Suuns’s founding members Shemie and Yarmush—Liam
O’Neill plays drums, while Max
Henry alternates between keyboards and bass—they agreed
that “Felt” was something new,
but also a logical extension of
what the band had been up to.
Said Mr. Shemie, who also plays
guitar, “We didn’t set out to
change. There’s only one way—
forward, whatever that may
mean.”
The band’s recent history foreshadowed its altered approach.
Back in 2012, Suuns spent a week
recording tracks with Jerusalem in
My Heart, a project of producermusician Radwan Ghazi Moumneh,
a Montreal-based native of Beirut.
Released in 2015, the resulting album, “Suuns and Jerusalem in My
Heart,” with its Middle Eastern
modes and electronic dance
rhythms, finds the band in a new
context to which it responds with
customary power and confidence.
While Suuns’s 2016 album,
“Hold/Still,” doesn’t show much of
the collaboration’s influence, Mr. Shemie said
working with Mr.
Moumneh changed the
band’s approach to composition and recording,
making it less precious
about precision and
more eager to loosen up
its sound. “Hold/Still”
was subsequently remixed by electronic producers Dark Sky, Beatrice Dillon and Vril,
among others, who morphed it
into dance music. Though they
were influenced early on by
techno and Krautrock, Messrs. Shemie and Yarmush agreed that the
altered renditions had no effect on
Suuns’s latest work—though, Mr.
Shemie added, “I love that they
get played at 6 in the morning in a
club somewhere.” Like the Jerusalem in My Heart partnership, the
remixes created a different impression of Suuns.
Though it alludes to pop in
ways prior Suuns recordings never
did, “Felt” emphasizes the band’s
roots as a rock group that was
never robotic and allowed ample
room for improvisation in concert.
The almost-sweet “Make It Real”
is on a parallel path with contemporary pop-minded rock, though
its ever-changing underpinning
makes it more intriguing than the
standard fare. Suuns’s history creates an unintended sense of tension: In “Peace and Love,” Mr. Shemie sings against a single plucked
electric guitar until percussion and
sound waves fold in, but a roaring
explosion never comes.
In conversing with Messrs. Shemie and Yarmush, it became clear
that fear of risk isn’t part of their
thinking. This city’s prominent creative community, said Mr. Shemie,
allows artists be indulgent. “When
you put something down and
you’re feeling it, you go with it.”
Added Mr. Yarmush, “We still
feel like a new band.”
Mr. Fusilli is the Journal’s rock
and pop music critic. Email him at
jfusilli@wsj.com and follow him on
Twitter @wsjrock.
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THE WALL STREET JOURNAL.
A18 | Wednesday, March 7, 2018
SPORTS
GOLF
THE COUNT
The Analyst Pro Golfers Love to Hate
Brandel Chamblee thinks modern pros are doing it wrong—and he isn’t afraid to share his opinion
BY BRIAN COSTA
In 2017, Indians ace Corey
Kluber (pictured) finished with
the lowest earned-run average in
the majors among qualified starting pitchers with a 2.25 mark.
With teams increasingly
leaning on their bullpens and
rarely letting starters face an
opposing lineup more than twice
through the order, the number
of pitchers even eligible for the
ERA title has plummeted. Qualifying for an ERA title requires a
pitcher to average one inning
per game played by their team
(usually 162 innings). Last season, this minimum requirement
was met by only 58 pitchers.
The average number of innings thrown by starting pitchers has been on a steady decline since 2014, when 88
hurlers met the 162-inning
threshold. At the current rate,
the 200-inning pitcher may soon
go the way the 300-inning
pitcher did in 1980, when the
Phillies’ Steve Carlton last
topped that mark. Chris Sale of
the Red Sox led baseball last
season with 214.1 innings, the
lowest total ever for a league
leader in a non-strike year.
Now, nearly 50 years since
the Mets re-popularized the
five-man rotation in 1969, at
least one team, the Angels are
turning to a six-man rotation.
The move is to allow rookie
Shohei Ohtani to pitch about
once per week like he did in the
Japan Pacific League. At the
2017 average per start, no Angel hurler in a six-man rotation
would top 150 innings.
—Michael Salfino
In Need of Relief
ERA
QUALIFIERS
IP/G
2017
2016
2015
2014
2013
58
74
78
88
81
5.51
5.65
5.81
5.97
5.90
Source: Stats LLC
TONY DEJAK/ASSOCIATED PRESS
Number of pitchers who qualified
for the ERA title and average
innings pitched per game:
WSJ
T-B: PHELAN M. EBENHACK/ASSOCIATED PRESS; ANDREW REDINGTON/GETTY IMAGES
THE RELATIONSHIP between professional golfers and most television broadcasters is as warm as the
sport is genteel. Announcers speak
in hushed tones, often describing
players in reverential terms. Networks promote the players, whose
exploits fuel network profits, and
everyone goes home happy.
Then there is Brandel Chamblee,
the Golf Channel analyst who has become the game’s resident contrarian.
Jason Dufner, the 2013 PGA
champion, described his on-air
analysis as “pure editorial garbage.” Tiger Woods’s agent has
called his work “deplorable” and
“disgusting.” Rory McIlroy has argued with him repeatedly. And,
echoing the general sentiment
from some of his peers, the Englishman Ian Poulter tweeted sarcastically last year, “It’s clearly
very easy sitting on your
arse…thanks for the support.”
The reasons for their animus vary,
but the commentary by Chamblee, a
55-year-old former pro golfer, has a
recurring theme. He thinks modern
golfers are doing it wrong, including
the way they swing and the way
they train, and he thinks their
coaches are making them worse.
Chamblee dispenses these opinions with a mix of advanced statistics, video review and uncommon
bluntness. He is a professorial provocateur. And the reactions to him
are as notable for what they reveal
about golfers as for what they
show about him.
“If you play golf for a living, unlike every other sport, you’ve never
been criticized,” Chamblee said.
“Every other sport has a coach that
is yelling at them. Because you’re
part of a team, you’re singled out if
you make a mistake. But in golf, if
you’re good enough to play on the
PGA Tour, you’re lauded at every
step. Nobody is ever taken to task.”
Chamblee said he does not enjoy
getting a rise out of people, but he
has shown an exceptional ability to
do so. He has faulted McIlroy for
hitting the gym too hard, Poulter
for not playing to win and Sergio
Garcia, the 2017 Masters champion,
for his attitude, all of which elicited responses from the players.
He has also provided something
of a running soundtrack to Woods’s
fall from greatness, saying among
other things that Woods’s decline is
his own fault and that, before his
latest comeback, he could no longer
compete with the swing he had.
The sharpest responses from
Woods and his agent came in 2013,
when Chamblee suggested Woods
had tried to cheat in tournaments.
“If I had to do it over again, I
would do it more tactfully,” Chamblee said of that episode recently.
He said he has blocked more
DECLINE OF
THE STARTER
YEAR
Golf Channel analyst Brandel
Chamblee has become the
game’s resident contrarian.
Rory McIlroy, below, has
argued with him repeatedly.
Chuck Cook, who is
a proponent of a
teaching method
known as The Golfing Machine,
named for the 1979
instructional book
by Homer Kelly.
Chamblee thinks
the method, with
its focus on the geometry and physics
of the swing, has
robbed players of
their natural talent.
Cook declined to
comment. Dufner,
whose agent declined further comment, ended up defending his coach
more broadly in a
heated online exchange that included Chamblee.
The uproar over that sort of
nerdery is partly indicative of the
influence Golf Channel can have
over the industry. In a highly technical game in which many things
are subjective, what gets said on
the air can impact which methods –
and by extension, which coaches—
hold greater sway than others.
David Leadbetter, one of the
world’s top-rated coaches, said
amateurs are more easily influenced than pros. “Whatever Joe
Blow says on the air, it’s like, ‘OK.’
It’s taken as gospel,” he said.
Chamblee is in some ways in the
mold of Johnny Miller, the two-time
major champion and longtime NBC
than 10,000 people on Twitter for
what he deems nasty comments
toward him, including a few players. But Golf Channel has stood
firmly behind him throughout.
“We encourage our analysts to
have strong opinions, otherwise it
would be pretty laissez-faire,” said
Golf Channel executive producer
Molly Solomon. “What I admire
about Brandel is he’s blunt, he’s
unafraid, he’s fearless, and he’s
constantly prepared.”
What qualifies as inflammatory
stuff in golf might seem laughable
to people not involved in the
sport. Chamblee’s tiff with Dufner
can be traced to a philosophical
difference with Dufner’s coach,
The WSJ Daily Crossword | Edited by Mike Shenk
Weather
Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
d
Edmonton
30s
Vanco
Vancouver
20s
40s
0s
10s
ip
Winnipeg
30s
Por
d
Portland
Montreal
l
Helena
50s
20s
Bismarckk
g
Billings
g
Eugene
i
Boise
Reno
Salt Lak
Lake City
Angel
Los A
Angeles
Denver
San Diego
C l d
Colorado
Springs
Las
Vega
Vegas
70s
Ph
Phoenix
80s
Santaa F
Fe
Albuquerque
T c
Tucson
P
El Paso
10s
40s
60s
an
n Antonio
A t i
San
Honolulu
l l
30s
Houston
t
70s
Orlando
d
Tampa
70s
U.S. Forecasts
21
90s
100+
Rain
Stationary
Snow
Hi
34
74
37
82
42
37
56
68
39
47
65
58
51
28
42
Today
Lo W
19 pc
44 pc
31 sn
58 pc
24 sn
30 sn
44 pc
48 pc
26 pc
32 s
52 pc
27 s
41 pc
11 pc
33 c
Tomorrow
Hi Lo W
39 27 pc
68 41 s
42 28 pc
84 58 pc
34 26 sf
37 25 sn
54 45 r
66 45 sh
41 27 pc
58 40 pc
64 50 sh
65 30 pc
51 42 r
31 16 pc
44 30 pc
International
City
Amsterdam
Athens
Baghdad
Bangkok
Beijing
Berlin
Brussels
Buenos Aires
Dubai
Dublin
Edinburgh
Today
Hi Lo W
49 36 sh
69 54 pc
81 56 pc
94 79 t
41 23 pc
36 32 sn
48 37 sh
82 57 s
81 66 s
45 33 pc
44 30 c
Tomorrow
Hi Lo W
45 36 r
64 48 pc
81 62 pc
91 75 t
45 22 s
45 33 c
47 35 r
85 62 pc
84 68 s
46 30 pc
43 30 pc
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 City
Tokyo
Toronto
Vancouver
Warsaw
Zurich
Hi
50
45
84
74
62
88
72
80
49
53
91
85
71
44
23
90
49
90
88
56
82
49
52
89
74
74
45
39
47
44
46
Today
Lo W
37 sh
34 sh
64 pc
59 pc
53 pc
77 t
55 s
59 pc
38 pc
40 pc
77 s
56 s
48 pc
32 sh
11 c
72 pc
40 sh
78 t
63 s
42 t
71 pc
34 c
43 r
76 t
68 pc
59 pc
42 pc
28 c
37 c
32 r
34 sh
35
10
11
12
23
31
36
13
40
44
45
50
32
58
25
48
49
33
38
41
42
43
46
51
24
29
37
39
52
47
53
54
56
59
57
60
61
62
63
Flurries
Tomorrow
Hi Lo W
50 39 pc
46 41 sh
77 58 pc
63 55 sh
58 46 sh
88 75 t
78 52 pc
71 59 t
49 35 pc
56 49 sh
90 77 s
85 55 s
76 52 pc
54 40 pc
24 12 s
90 72 pc
52 40 r
88 77 pc
90 62 s
59 48 pc
84 74 pc
45 30 pc
51 34 c
90 78 c
73 68 c
61 51 r
50 47 r
37 29 c
49 38 r
45 31 c
50 36 pc
9
28
55
T-storms
8
20
27
30
34
7
22
26
70s
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.
6
15
30s
64
COURSE ADDITIONS | By Craig Stowe
Across
1 Bilaspur
bigwigs
6 Develop
gradually
14 Sleeps like a log
15 Removed slack
from
16 Track for truck
races?
18 Barneys rival
19 Corn Belt city
20 Swab
21 Article in
Cahiers du
Cinéma
26 Cupid’s love
28 Get by asking
29 Bank deposit
30 Canal in Vatican
City?
34 City north of
Ventura
37 Dandy
38 Workers in
kitchens,
perhaps
39 Elaborate
interstate?
44 Athletic
45 Buffet
fixture
22 Vending machine 46
inserts
50
23 It might serve a
story
Paragons
2000 National
Toy Hall of Fame
inductee
52 Site of at
least five
mountains
taller than
Everest
54 Service call
55 “To her ___, a
jolly thriving
wooer”:
“Richard III”
56 Greedy goal
57 Nonflowering
plant
58 Really short
transit line?
61 Indirect
insult
62 Handle
63 Suggested
64 John with five
Grammys
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s
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
31 21 c
30 24 sn
Atlanta
52 34 s
50 31 pc
Austin
65 37 s
66 50 pc
Baltimore
37 29 sn 42 26 pc
Boise
52 36 pc 53 41 sh
Boston
38 33 sn 43 29 sf
Burlington
39 29 sn 36 28 sn
Charlotte
54 32 pc 50 26 pc
Chicago
32 22 c
37 20 s
Cleveland
39 26 sf 34 28 sn
Dallas
61 40 s
67 48 pc
Denver
52 26 s
65 30 c
Detroit
38 24 sf 37 26 sn
Honolulu
78 67 pc 78 67 pc
Houston
65 42 s
68 49 pc
Indianapolis
37 22 sf 35 22 pc
Kansas City
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53 32 s
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54 31 s
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golf analyst known for his bluntness and occasional criticism of top
players. But Miller can only riff for
so long while calling live events. As
a studio analyst, Chamblee has no
live action to interrupt him.
He describes many top players
today almost as victims of what he
calls overly technical coaches and
overzealous trainers. That puts
him on a philosophical island in a
sport that has become both more
athletic at the highest level and
more scientific.
Trackman radar monitors have
become ubiquitous on driving
ranges, giving elite players more
data than ever on each practice
shot. Technology has made swing
video breakdowns easier than ever.
Leadbetter, who has coached dozens
of male and female tour pros, said
young players demand more detailed, technical feedback, which
leaves it to coaches to decide how
much information is too much. “It’s
a very touchy-feely subject,” he said.
But Chamblee said he flatly disagrees with the way players are
being taught, saying there has
been some “famous impoverishment” of top players in the past 10
to 15 years as a result. That has
irked players who feel indebted to
their coaches.
“In my mind, I’m trying to tell
them to trust their instincts, that
they’re the geniuses,” Chamblee
said. “I look at some Tour players
and think, ‘You’re Leonardo da
Vinci, and someone is standing behind you telling you how to paint.’
It makes no sense to me.”
Down
27 Smart
1 Terminates, like a 28 Swelter
contract
31 Tall tale
2 Six out of ten
32
Heartache
people
33 Mouthy Martha
3 Person who
might raise a
34 Does in
crop
35 Cooler
4 Puffins’ kin
36 Sophocles
5 Disco fanatic on
tragedy
“The Simpsons”
40 Clown around
6 “Who’s there?”
41 Swelter
response
42
Prepares an
7 They might be
undercover
shaved
agent, perhaps
8 Sticks you could
43 Many banners
scratch with
47 Utterly incorrect
9 Crow foe
10 When to retire
48 Smooth, in
scores
11 He ruled between
Gamal and Hosni 49 Extend a visit
51 Lunch hours,
12 Vilify
often
13 Name in the
52
Watteau’
s world
frozen aisle
53
Most
common
of
17 Film festival
the
noble
gases
group
22 “What have we
here!”
56 Saint Bernard,
e.g.
23 Based on instinct
57 Genesis
shepherd
24 Part of QED
58 Small stretch
25 Curious George
59 Regulus setting
creators H.A. and
Margret
60 Manipulate
Previous Puzzle’s Solution
B O S S
I N L O
D E A D
MA
B A D
A B U T
T O N E
H I K E
E L S
E
P I C A
U H U R
P A R S
I T S
L E E
E
V
E
N
S
D
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B
U
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T
S
D
D A H
E
R D A
N
C A D I
I L OW
L
E E R
AM
S A N D B A
E V E R
T R I
Y
MO K
S
O T I S M
O
C O I F
S K Y MA
I P S
O C
K O
S T
E T
A S
S O D
O R U
L L A C
A I L A
I D S T
R
D OM
E OWS
AWE D
U N T O
P O S
L L
E A N S
A Y I N
K S T O
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A19
OPINION
CEOs and Politics Are a Bad Mix
When a corporate leader
takes a political
stand
you happen
to favor, it’s
an act of
BUSINESS
b rav e r y.
WORLD
When he or
By Holman W.
she takes a
Jenkins, Jr.
stand
you
abhor, it’s an
act of cravenness.
That’s how things play in
the media, but it has little to
do with the real world. A CEO
who uses his corporate brand
in a way that doesn’t serve the
company’s interest is committing malfeasance.
Which brings us to the gun
issue. Delta Air Lines would
have wished for nothing more
than that its discounts for National Rifle Association members not come up. Nothing
good could come from the
subject surfacing in the wake
of the Parkland shooting.
CEO Ed Bastian’s thinking
would have been: I can’t be
seen making a pro-gun statement by defending the discounts. So instead I will have
to live for months, maybe
years, with gun owners reading my ending of the discounts
as essentially blaming them
for school shootings.
His decision may have been
wise or unwise in limiting the
cost to Delta. It was not meant
to be brave, except in the
sense that Mr. Bastian didn’t
spontaneously quit, as many
would have been tempted to
do, so somebody else would
have to deal with the fallout
from a no-win situation.
BlackRock, at first glance,
might seem an exception to
the theory that pressure to
comment on public controversies is a supremely unwelcome
intrusion in the boardroom.
BlackRock chief Larry Fink, a
name still unknown to most
Americans, rushed out a chiding letter to gun manufacturers whose shares account for a
minuscule 0.01% of BlackRock’s holdings.
The gun debate is not new.
Parkland is hardly the first
mass shooting. So if this
sounds like Mr. Fink chasing
the zeitgeist and calling it
principle, well . . .
Mr. Fink was last seen using
BlackRock’s clout to pressure
Exxon-Mobil to account for the
risk of future carbon regulation. Exxon is not better than
others at forecasting the iffy
politics of climate action. Every day the market already revalues Exxon’s assets in light
of possible eventualities. If Mr.
Fink is concerned about climate change, it would make
more sense to take his message to the policy makers who
actually have the power to enact climate policy.
But, of course, Mr. Fink’s
gestures are for public consumption, as was manifest in a
letter he sent in January to
1,000 CEOs insisting that their
companies must “serve a social purpose.”
Let me tell you about BlackRock. From its birth in 1988 as
a startup risk-management
outfit, it has grown to hold an
astonishing $6 trillion in assets, making it the biggest financial institution of any kind
on earth, without the heavy
regulation that befalls a Citibank or J.P. Morgan.
Mr. Fink is engaged in buying indulgences against the
day the political furies get
around to identifying BlackRock as the latest overprivileged economic villain. Yet he
kids himself if he believes
he’s acquiring real immunity.
BlackRock’s Larry
Fink thinks he’s
storing up indulgences.
He’s wrong.
Think how quickly the worm
turned on Google and Facebook, perceived as virtual extensions of the Obama administration. Amazon is becoming
a bad guy to a remarkable
range of liberal and conservative groups. Though it’s unfair to all of the above, it’s
hard not to think of Harvey
Weinstein rapidly disappearing beneath the waves while
frantically gesturing for help
from the progressive allies he
spent so much time and
money cultivating.
The truth about these matters is best illustrated by Kenneth Frazier of Merck. Seven
months after the fact, he still
goes around looking for audiences to tell that his vaguely
Trump-disapproving stance
after Charlottesville was a
matter of principle.
He protests too much. His
shareholders might get the
wrong idea, that he acts in the
interests of his own political
profile rather than his company. The pharmaceutical industry has hardly been a public favorite lately. As an
industry trade publication
headline noted at the time,
“Thank you, Ken Frazier, for a
mission impossible: Making
pharma look good.”
One of his friends took umbrage when my column at the
time found more virtue in the
stance of Under Armour CEO
Kevin Plank, who also dissociated himself from a Trump
panel after Charlottesville but
said he did so because “Under
Armour engages in innovation
and sports, not politics.”
Listen closely and that’s
what Delta’s Mr. Bastian is
saying. He is begging off from
the shouting match over guns.
In a letter to employees, he
said his goal in revoking the
NRA discounts was to “remove
Delta from this debate” and
“remain neutral.”
This attitude is a remarkably healthy one, and while it
persists among business leaders and, indeed, among millions of Americans for whom
politics is, at most, 5% of life,
hope for our country will remain intact.
Only horror attends the picture being drawn by some, in
which every business, media
outlet and even sports league
will have to decide which half
of the country it’s going to
serve, the red half or the blue
half, and forever write off 50%
of the customer base.
If you see that prognostication coming true, then it
will really be time to worry.
Reckoning With Xi’s Power Play
Something
rare has happened in recent weeks: A
longstanding
paradigm was
POLITICS abruptly upended. The
& IDEAS
optimistic
By William
view
of
A. Galston
China’s rise
held by many
in the West has given way to
alarm. For the U.S. and its allies, hope of cooperation with
Beijing is fading while fear of
conflict is rising.
In the early 1990s most experts believed China’s economy would gradually converge
with the West’s market-based
system. As economic growth
expanded the middle class,
Beijing would face irresistible
pressure to increase political
freedom. No one expected
quick multiparty elections,
but individual rights, civil society and the rule of law
seemed within reach for Chinese citizens. China eventually would be integrated into
the international order the
U.S. has maintained since
World War II.
This narrative of China’s
rise held up for nearly two
decades before reasons for
doubt began to emerge. A report from the Asia Society
and the 21st Century China
Center pinpoints 2008 as the
moment Beijing began to
change course. That year’s
global financial crisis undermined belief in the superiority of the Western economic
system, stimulating China’s
pride, self-confidence and nationalism. The regime adopted new protectionist policies that benefited stateowned enterprises and tilted
the playing-field against foreign competitors.
During the same period
China began to assert claims
over territories in nearby international waters, alarming
many regional neighbors. The
regime also stifled the spread
of independent perspectives
in China by campaigning
against liberal values and foreign influences, restricting internet access, and barring
overseas travel for Chinese intellectuals and others.
It took time for these
events to change attitudes in
the West. Xi Jinping claimed
the role of reformer when he
assumed the presidency in
2012, and his campaign
against powerful corrupt officials seemed to confirm the
act. Over time, however, it
became clear that Mr. Xi had
been centralizing power in
his own hands and those of
his closest associates. His 3½hour speech at the 19th Party
Congress last year announced
a bold new strategy with
global implications. He presented his regime’s policies
as a model for other countries to emulate, creating an
ideological conflict between
China and Western democracies. “Xi Jinping thought”
was enshrined in the party’s
constitution.
Against this backdrop, the
Feb. 25 announcement that
Mr. Xi intends to scrap the
two-term limit on his presidency confirmed the sense
that China’s global role had
transformed. Mr. Xi has ended
the era of Deng Xiaoping, architect of the term-limited
presidency and of China’s engagement with the U.S. Mr. Xi
The West hoped trade
and growth would
liberalize China. Now
that dream is dead.
has become the most powerful leader since Mao Zedong,
and his indefinite tenure will
allow him to change the balance of power in East Asia
and the world over the long
term.
Although President Trump
is not inclined to ideological
competition, he is determined
to challenge China on the economic front. Mr. Trump is not
alone in believing that China
has exploited its accession to
the World Trade Organization
by flooding the U.S. with manufactured goods, many produced with state sponsorship
or subsidies. China’s unwillingness to subject its state
sector to market forces has
sustained overcapacity in key
industries such as steel and
aluminum. A recent study by
the National Bureau of Economic Research estimates
that Chinese imports cost the
U.S. 2.65 million manufacturing jobs between 1999 and
2016. Mr. Trump’s recently
announced tariffs on these
metals may not have a large
effect on China, but they portend economic conflict on a
wider scale.
An even greater question is
whether this conflict will spill
into the military realm. The
Trump administration’s National Security Strategy labels
China a revisionist power,
stating that its regime “seeks
to displace the United States
in the Indo-Pacific region . . .
and reorder the region in its
favor.” The document asserts
that China’s efforts to build
and militarize outposts in the
South China Sea “endanger
the free flow of trade,
threaten the sovereignty of
other nations, and undermine
regional stability.”
To counter this threat, the
administration proposes to increase U.S. readiness on many
fronts, beginning with a large
military build-up. The question is what the U.S. will do if
China continues to challenge
the status quo and press for
regional dominance.
Last year, in a conversation
overheard by a reporter, Gen.
Joseph Dunford, chairman of
the Joint Chiefs of Staff,
asked Adm. Harry Harris, the
commander of the Pacific
Fleet: “Would you go to war
over Scarborough Shoals?” It
may not be long before a
president of the United States
is called upon to answer this
question.
Military Families Deserve School Choice
By Jim Banks
A
s a lieutenant in the
U.S. Navy Reserves and
the most recently deployed member of Congress, I
know firsthand that serving
in the armed forces requires
tremendous sacrifice. As a
husband and father of three
young daughters, I know the
decision to serve is never
taken lightly.
To prepare for today’s
challenges and tomorrow’s
uncertainties, our military
leaders must identify new and
creative ways to boost recruitment efforts. In 2015,
there were 1,340,533 activeduty troops—marking the
smallest active-duty force
since 2001.
As Army Chief of Staff Gen.
Mark Milley recently said,
“We need to grow in order to
meet the demands that the
nation expects at the readiness levels it expects.” Military readiness includes recruiting and retaining the
best and brightest. We must
do more to attract top-quality
service members and maintain a top-quality military.
That begins with removing
unnecessary barriers, which is
why Wednesday I am introducing the Education Savings
Accounts for Military Families
Act. A 2017 survey of Military
Times readers showed that
Education dollars
should follow students
who move frequently.
educational opportunities play
an important role in determining whether a military
family accepts a particular assignment—or even remains in
the service at all. Thirty-five
percent of service members
have considered leaving the
military because of the limited education options available, and 40% have either declined or would decline a
career-advancing opportunity
at a different installation if it
meant their child would have
to leave a high-performing
school.
In addition to these sobering statistics, half of all service members live in states
with no school-choice options. Military education savings accounts would allow
military-dependent children
to use a portion of funds currently allocated to the Federal
Impact Aid program—which
provides school districts with
revenue lost due to the presence of tax-exempt federal
property—to pay for educational expenses such as private-school tuition, textbooks,
online programs, tutoring,
computer equipment and college savings. Account balances could roll over every
year and the autonomy of education providers would be
preserved.
With a military ESA, dollars would follow the student
rather than the school. Portability is key for students who
are often required to move because of a change in a parent’s
military assignment. This
flexibility would allow military families the freedom to
tailor their children’s education to best fit their learning
needs and maximize academic
achievement.
Making better education
options available would help
our armed services find and
keep the highest-quality personnel, and it would give
parents who serve the peace
of mind to focus on their
missions.
There is a clear path forward and strong momentum
to enact this policy. Education
Secretary Betsy DeVos has endorsed the idea of military
ESAs, and my legislation already has strong support in
Congress.
The men and women who
serve our country in uniform
make sacrifices daily, but the
education of their children
should not be one of them.
Mr. Banks, a Republican,
represents Indiana’s Third
Congressional District.
BOOKSHELF | By Katherine Boyle
Mothers
Of Invention
Broad Band
By Claire L. Evans
(Portfolio, 278 pages, $27)
I
t is a misfortune for the writer of history to learn that
one’s subject has become suddenly fashionable. It’s even
worse when popular interest comes with controversies
bearing hashtags. While it’s true that the newfound currency
of the subject may broaden the audience for one’s work, a
larger conversation is already lighting up the Twitterverse,
framing one’s thoughts (and readers’ eventual response to
them) even as they’re being committed to paper.
Such seems the fate of Claire Evans, whose book “Broad
Band: The Untold Story of the Women Who Made the Internet”
is a spirited collection of portraits of women who contributed
to the infrastructure of the digital economy. Beginning in the
mid-19th century with Ada Lovelace and her Analytical Engine
and ending with the matriarchs of 1990s cyberfeminism,
“Broad Band” is a celebration of the women whose minds gave
birth to the motherboard and
its brethren.
But what starts as an
engaging series of biographical
essays on lesser known mathematicians, innovators and
cyberpunks is forced, either by
circumstance or opportunity, to
take on the heavy burden of
explaining the sexist ills of
today’s technology industry. The
droning question that dampens
this party is why these extraordinary women were erased from
computing history and why there
weren’t more of them to begin with.
While “Broad Band” excels as a collection of
brief lives, it struggles as a work of social history
and criticism, often resorting to trite asides and girl-power
platitudes that diminish its female subjects and their merits.
Ms. Evans, a former technology writer at Vice magazine,
warns readers that she is not really a historian, but her
portrait of Grace Hopper proves otherwise. Ms. Evans vividly
describes how Hopper, a teacher of mathematics at Vassar,
joined the Navy shortly after Pearl Harbor, expecting to
become a code-breaker but instead ending up as one of the
three programmers of Mark I, the Harvard-based, IBM-funded
electromechanical computer used to design atomic bombs
during the Manhattan Project. Despite knowing little about
either computers or bombs, the autodidact rose to the
occasion and to the rank of rear admiral, ultimately becoming
the mother of the Cobol programming language.
Similarly, the six women who wired and programmed the
Eniac, the Army’s first all-electronic general-use computer,
were thrown into some of the most complex computational
puzzles of World War II. Working without a programming
language, they perfected the process of manipulating the
hundreds of cables and switches within the room-size supercalculator with hand-punched tape loops. The Eniac would
make the work of what were then called “human computers”—
mathematicians tasked with problems like calculating firing
tables for ballistic weapons—faster and more accurate. The
human computers working with Eniac, like the Eniac Six
themselves, were drawn from the University of Pennsylvania’s
Moore School of Electrical Engineering—and all of them,
numbering around a hundred, were women.
The secret history of women’s role in the
computing revolution, from the Victorian era’s
Ada Lovelace to the ‘cybergrrls’ of the 1990s.
One of the great arcs of the book is the shift in computing’s
purpose: What began as an intellectual pursuit and then a
military necessity became, after World War II, a driver of the
global economy. Ms. Evans concludes that women became less
valued after American men returned from war and as
computing grew more commercially viable. “The shift from
programmer to software engineer was an easy enough signal
for female programmers to interpret,” she writes. But other
books, such as Emily Chang’s recent “Brotopia,” note that
women made up 40% of computer-science classes at
universities until the mid-1980s. Today that number is about
18%. The question of when and how women left the field
deserves further scrutiny, but the 150-year span of “Broad
Band” raises more questions than answers as to why.
Ms. Evans is sensitive to her subjects’ motivations, noting
that women of different eras were tinkering for different
reasons—intellectual challenge, wartime opportunity, financial
independence, freedom from an oppressive reality. And Ms.
Evans is careful to remind us that technology is not built in a
vacuum. She describes Jaime Levy, an “early true believer” in
new media who, in a few years during the mid-’90s, went from
celebrity cyberslacker to pioneer e-zine editor to casualty of
the dot-com bubble burst. Ms. Levy attributes the demise of
New York’s early tech ecosystem not to a financial crash but to
the more devastating impact of 9/11, a reminder of how one
random, large-scale tragedy can derail the dreams of
innovators for decades.
When writing of the ’90s, Ms. Evans fluctuates between
restraint and defensiveness, particularly on subjects whose
stories are not as triumphant as Hopper’s. She equates the
unknown workings of forgotten early online communities
(remember Women’s Wire? ChickClick? iVillage?) with the
military’s lack of acknowledgment of the Eniac Six until 1997, a
half-century too late. But it’s clear why some of these web
pioneers are relatively unknown: Their startups failed. The
market collapsed. Their companies were among the first drops
in what is now a sea of social networks. To their credit, these
women’s stories make “Broad Band” more intriguing—Silicon
Valley desperately needs a counterfactual to the unicorn myth.
But this too-often fannish, cheerleading and apologetic book
doesn’t make room for assessing merit or debating legacy—a
feature we can only hope will come when women innovators
proliferate and step off this tricky pedestal.
A number of women’s histories were surely green-lighted in
the past year, and I hope that more than a few of them will
prove themselves timeless. For a historian to focus squarely on
her subjects’ works would be a radical act in support of
women’s achievement. Until we have such books, it’s hard not
to empathize with Ms. Evans’s challenge, as it’s the challenge
that many women in technology face daily: How does one
celebrate merit, innovation, the elegance of superior code,
while also paying homage to the contemporary women’s
movement? We are all Ada Lovelace today. Here’s hoping that
in future histories we no longer are.
Ms. Boyle, a former reporter for the Washington Post, is a
venture capitalist at General Catalyst Partners in San Francisco.
.
A20 | Wednesday, March 7, 2018
* *
THE WALL STREET JOURNAL.
OPINION
REVIEW & OUTLOOK
S
North Korea’s Negotiation Play
outh Korean officials disclosed Tuesday
The new diplomacy offer also follows a fathat North Korean dictator Kim Jong Un miliar Pyongyang pattern. First make nuclear
says he’s ready to talk with the U.S. or missile advances that increase its threat to
about giving up his nuclear
South Korea and the world.
Maybe this means
weapons. That’s news because
Then make a diplomatic bid
Kim has long said he’d never
a dovish government
pressure is working, or once
negotiate away his weapons.
takes over in Seoul. This time
maybe it’s another con. Kim took advantage of the reBut the world has seen this
diplomatic movie before, only
cent Olympic games and the
to learn that the North was
aching, almost palpable, demerely buying more time to build more bombs sire of new South Korean President Moon Jae-in
and ballistic missiles.
for talks.
“I think that their statement, and the stateThe South Koreans said North also dements coming out of South Korea and North Ko- manded “security guarantees,” which it may derea have been very positive,” President Trump fine as the departure of U.S. forces from Korean
said Tuesday. “That would be a great thing for peninsula. That would be a security and geopothe world. A great thing for the world. So we’ll litical disaster as long as the North retains its
see how it all comes about.”
military threat.
Realism is warranted. The hopeful case is
China will want the U.S. to end its military
that the North’s reversal is a response to the exercises with the South in return for the North
Trump Administration’s policy of pressure “freezing” its nuclear program. The U.S. and
through tighter sanctions and diplomatic isola- South postponed training at the North’s request
tion. Building on United Nations sanctions, the to encourage its participation in the Olympics.
Treasury Department has been blacklisting But another delay would be the wrong prececompanies, most of them Chinese, for trading dent for talks, especially as the exercises are
with the North.
critical to deterring the North’s conventional
As the Journal reported last week, trade military threat.
across the border with China has declined
The temptation for the Trump Administrasharply. Despite its official ideology of self-suf- tion will be to accept partial denuclearization
ficiency, the North depends on imports of en- in return for some normalization of relations.
ergy, food and raw materials to survive. It also But that wouldn’t end the nuclear threat, and
needs luxury goods to reward top officials.
it would give the North the whip hand to extract
The Trump Administration’s threats of mili- concession after concession lest it revive an actary action if sanctions don’t work may also tive nuclear program. This is what the North did
have secured more Chinese cooperation, even after George W. Bush lifted sanctions and took
if a military strike carries huge risks. Beijing North Korea off the list of terrorist-sponsoring
has been forced to consider the possibility of states. When it didn’t immediately get everyconflict between nuclear states on its doorstep. thing it wanted, the North reneged.
It’s also notable that the North told South KoTo have any chance of success, the U.S. and
rean officials that it agreed to the U.S. demand U.N. will have to keep sanctions in place during
to halt nuclear and missile tests while talks are the talks. The U.S. and South Korea will also
underway. Perhaps Mr. Trump’s tough line have to stay united on strategy, since Kim’s
wasn’t as dangerous and destabilizing as his foremost goal will be to divide the two and coax
critics claimed.
the South to push U.S. forces out.
Yet the U.S. and the world should still be
Any deal must be structured so that the
skeptical that Kim will really put his nukes on North is rewarded only after it denuclearizes
the negotiating table. Kim’s father and grandfa- and allows unlimited inspections. If financial
ther used talks to stall for time while they con- and military pressure really is what coaxed Kim
tinued the nuclear program in secret. They also to this pass, then the pressure must be mainextracted concessions in return for talking and tained. Barack Obama’s Iran deal is the example
broke every promise they made.
not to follow.
S
California’s Water Hole
torms like the one that have doused supply 13.3 million Californians for a year.
arid California in recent days are cause
Then there’s the Temperance Flat reservoir
for celebration, but also for better con- northeast of Fresno, which would provide a
servation. The Sierra Nevada
more stable water supply for
Regulators resist
mountains received nearly
farmers in the Central Valley.
six feet of snow, which was
The reservoir as envisioned
storage
that
would
save
especially welcome in a dry
could capture an additional 53
for a non-rainy day.
winter. Snowpack in the Sierbillion gallons of water each
ras had measured a quarter
year.
Commission
staff
of its historical average.
deemed Temperance Flat inelBut precipitation that falls fast and furious igible for funding and offered the $5 billion
is often wasted. Reservoirs in the north can’t Sites Reservoir only $660 million. Both projects
store the excess runoff, which flows too rapidly scored low on public benefits, which the staff
into the Sacramento-San Joaquin River Delta defined narrowly as improvements in the ecoto pump to the Central Valley and southern Cal- system, water quality, flood control, emergency
ifornia. Regulatory protections for smelt and response and recreation.
salmon also limit pumping. Hundreds of billions
Yet the staff appears to have applied even
of gallons get flushed out to the ocean—rinse these narrow criteria too conservatively. For
and repeat each winter.
instance, the Sites Reservoir would help CaliGolden State voters in 2014 approved a $7.5 fornia’s endangered Chinook salmon by inbillion bond to expand water storage and im- creasing the amount of cold water in rivers
prove flood control. Yet the California Water available during droughts. Increasing surface
Commission, which doles out the cash, has tried storage could also reduce groundwater pumpto scuttle 11 water-storage projects. It says the ing in the Central Valley, which has resulted in
projects would provide negligible public bene- land subsidence.
fits as required by the law.
The real political problem, as always, is that
Seriously? The proposed Sites Reservoir, environmentalists oppose dams as an article of
which would be located west of Colusa in North- faith. Meanwhile, the state Water Resources
ern California, could store up to 1.8 million acre- Control Board—in California, the more regulafeet of water. According to Republican state as- tors, the merrier—recently proposed permasemblyman Frank Bigelow, Sites could have nent restrictions on water use. But every storm
captured more than 586 billion gallons of runoff that sweeps the state wastes more water than
between last October and February—enough to do millions of faucets left turned on.
T
The Cohn Departure
he resignation of Gary Cohn is a signifi- allies on international security issues, such as
cant blow to Donald Trump’s Presi- enforcing sanctions against North Korea.
dency, and recovering from it will be a
Mr. Cohn leaves behind a strong legacy. He
significant challenge.
pushed hard for deregulatory
Departures are normal af- The tariff mess has cost initiatives that have produced
ter a President’s second year,
strong growth. With Council
President Trump an
but the circumstances of Mr.
of Economic Advisers Chair
important ally.
Cohn’s leave-taking as top
Kevin Hassett, he ran point for
economic advisor are anythe White House on the big
thing but normal after only 14
tax-cut bill. As important, Mr.
months.
Cohn assembled a first-rate team of policy adviMr. Cohn was in the middle of a major policy sors, not just on taxes but also on health care
dispute inside the Trump administration over and infrastructure.
trade policy. On one side were Mr. Cohn and
So an obvious question: Who will replace
free-trade advocates, and on the other was the him? Put differently, who in the community of
Administration’s protectionist wing led by free-market economic specialists would take
Commerce Secretary Wilbur Ross, trade negoti- the job now? Mr. Cohn, a strong personality in
ator Robert Lighthizer and Mr. Trump’s per- his own right, provided ballast against some of
sonal trade swami, Peter Navarro.
Mr. Trump’s worst economic-policy instincts.
Losing policy disputes comes with the job, It is difficult to imagine that anyone outside the
but the particulars of this loss revealed more President’s current protectionist cheer-leading
about Mr. Trump’s increasingly self-damaging squad would volunteer to put up with more of
style of managing his senior officials.
what happened during the past week.
Last week, the President announced his inMr. Trump’s early appointments to key Cabitention to impose tariffs on imported steel and net positions and to the White House policyaluminum, though “announcement” overstates making apparatus were often stellar. Now,
what happened. Mr. Trump essentially blurted surely, the mill of rumors will begin grinding
out the news at a White House meeting, blind- about more departures of top people, such as
siding Mr. Cohn and the rest of the Administra- National Security Adviser H.R. McMaster.
tion team, in what amounted to a coup d’état
A successful President needs allies, and Mr.
by Mr. Ross and the protectionists.
Trump has had them so far. By contrast, the tarPredictably the news caused a firestorm in iff decision is a leadership fiasco that has cost
financial markets and among countries who are Mr. Trump a key ally in Gary Cohn. It is a loss,
not merely U.S. trading partners but its needed and this Presidency cannot afford more like it.
LETTERS TO THE EDITOR
Trump’s Words Are Essential to His Deeds
In “The Only Good Thing About
Donald Trump Is All His Policies”
(op-ed, Feb. 27), Joseph Epstein
misses some major differences between Presidents Trump and Obama.
Mr. Trump clearly loves this country.
He doesn’t apologize for our past. He
celebrates American exceptionalism.
President Obama, on the other hand,
isn’t so keen about our history and
apologized for it. He dwelt on the
darkness in our past instead of the
brightness. One other point: President Trump has never weaponized
the IRS, Justice Department and FBI.
So while President Obama doesn’t
have a checkered past with women,
I’ll take Donald Trump as president
any day.
GUY RANDOLPH
Savannah, Ga.
Mr. Epstein blames the press for
reporting on who Mr. Trump actually
is and what he actually does. The
press has, in fact, been doing its job,
and admirably. I suspect Mr. Epstein’s
real problem is that for every sensational New York Post Page Six story,
there are substantive items from the
Journal and other publications reporting on the incompetence, dishonesty and venality of Mr. Trump, his
staff and his cabinet.
SUSAN DAY
Virginia Beach, Va.
offended ex-first lady, her opponent
Rick Lazio, a civil gentleman, walked
to her podium and asked her to cosign a campaign-finance pledge. For
this unexpected sally, the ruling media defamed him as menacing, insulting, a sexist bully, a creep, Darth
Vader and more. Mr. Lazio learned
the intended lesson. On the other
hand, Mr. Trump’s boorishness in
2016 was breathtaking. He glowered
at Mrs. Clinton, interrupted and insulted her with abandon and said she
belongs in jail.
All the media hysteria was unavailing. Mr. Trump’s ungentlemanliness
put an end to one conventional limit
and abolished the deference owed to
the feminist wing of the ruling classes.
Only a human being unfazed by ruling
norms can break the old and establish
new and better modes and orders.
DENNIS TETI
Hyattsville, Md.
When is the last time a Republican
president wasn’t subjected to constant, obsessive scrutiny of his every
utterance and biographical fact,
reaching all the way back to his preschool days? If only the press had
subjected a few Democrats to the
same treatment. And let’s not forget
that Mr. Trump benefited hugely
from the free and unceasing publicity
given him by the liberal media during
the 2016 campaign—the direct result
of his nonstop, unpresidential utterances. Had he not been brash, willful
and utterly unafraid of the press, he
would not be president today.
CRAIG EDEL
Houston
Mr. Epstein claims the president’s
boorish talk trumps his policy virtues. I’ll take boorish talk with smart
policies over dignified talk with poor
policies all day long. Emerson’s “your
actions speak so loudly, I cannot hear
what you are saying” comes to mind.
Mitt Romney was the ultimate genFRED SIRIANNI
Marysville, Wash. tleman while running for president,
and the Democrats (including PresiCould any dignified posture have
dent Obama) cut him to shreds.
defeated Hillary Clinton? In a 2000
ELEANOR J. DUNN
West Dennis, Mass.
Senate debate with the perpetually
Elite vs. Proletariat in Democratic Civil War
Ted Rall puts his finger on the
pulse of something important in his
“Civil War in the Democratic Party”
(op-ed, March 1). My county in New
York state, on Nov. 8, 2016, voted exactly along the lines he describes.
The wealthy and privileged voted for
Hillary Clinton. The working class
voted for Donald Trump. Historically,
this is a reversal of representation.
Mr. Trump won the county by a fair
margin.
I don’t necessarily agree with Mr.
Rall’s assertion that the leftist working-class vote is driven by “Americans
who prefer socialism or even communism over capitalism.” I do agree that
the wealthy and privileged are out of
touch. What is unusual today is that
the wealthy and privileged mostly vote
Democratic. So is it surprising that
mainstream Democratic Party leaders
pander to the interests of the wealthy
and privileged over the working class?
HANK MUCHNIC
Amagansett, N.Y.
Mr. Rall states 37% of Americans favor socialism over capitalism with left
populists making up a large portion of
that percentage. Are the left populists
against capitalism or crony capitalism? There is a big difference between
the two. The party that favors free enterprise and begins to clean up the
crony system could be the party that
wins this group over.
MICHAEL COTTER
Denton, Texas
Mr. Rall writes that “a significant
slice of the 37% of Americans who prefer socialism or even communism over
capitalism” will “probably stay home
[this November] with Netflix.” Maybe
between bingeing on “Friends” reruns,
this new 21st-century proletariat could
take a few minutes to consider the
awesome entertainment options available to them, the abundant and diverse food in their electrically powered refrigerator and the
supercomputer that they probably all
carry in their pockets that has access
to almost the full extent of human
knowledge and learning—and then ask
themselves if the free market is really
all that bad.
MICHAEL A. WOOD
Fort Worth, Texas
A Monetization of Public Assets Offers Hope
As Prof. R. Richard Geddes notes,
there are boundless opportunities to
convert public infrastructure into revenue-producing assets (“Why Some
Stops Are a Cut Above the Rest,” oped, Feb. 20). The Chicago Skyway and
Indiana Toll Road concessions are
two such conversions that provided a
city and state with ready cash to address infrastructure and other public
needs. For the most part, though, U.S.
policy makers at all levels have
U.S. Suffered From Palate
Inherited From Old Country
Oh, come on, what is this in Barry
Estabrook’s review of Daniel Stones’s
“The Food Explorer”: “Before Fairchild’s discoveries, the nation’s diet was
drab, limited primarily to eating habits brought from Britain by colonists”
(Books, Feb. 17). The problem with
the U.S. is that it has never developed
a decent palate since Britain gave it
independence. The Brits by the end of
the 19th century were enjoying the
delights of fish and chips, jam roly
poly, steak-and-kidney pudding, bubble and squeak and, of course, that
pièce de résistance, spotted dick. All
washed down with nice, room temperature, bubble-free ale. What David
Fairchild brought to the U.S. never
came close to matching the British
cuisine of his day.
PROF. KENNETH BUTTON
George Mason University
Arlington, Va.
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to wsj.ltrs@wsj.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
mostly failed to take advantage of the
benefits offered by the monetization
of public assets. Changing the perception that infrastructure services are a
market commodity rather than a public good won’t be easy. However, the
shift away from the tax-allocation
model employed in the U.S. at the
federal level for the past 50 years to
pay for infrastructure has made such
public entrepreneurism a financial
necessity.
In light of the Trump administration’s recently released infrastructure
plan, this is a wonderful opportunity
for Congress and the administration
to figure out how to encourage and
facilitate the recapture of investment
stranded in public infrastructure so
the funds could be productively reallocated to today’s needs.
RICHARD G. LITTLE
Pinehurst, N.C.
Pepper ...
And Salt
THE WALL STREET JOURNAL
“Since installing video surveillance,
we’re losing fewer socks.”
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | A21
OPINION
Let Rouhani and Khamenei Fight
By Reuel Marc Gerecht
And Ray Takeyh
It’s in America’s interest
for the Iranian regime’s
bitter power struggle
to intensify further.
theocratic regime who remains deeply
implicated in many of its worst
crimes, Mr. Rouhani seeks to make
the economy work without structural
reforms that would free it from clerical control. He hopes that Western investment can help Iran’s corrupt, mismanaged economy grow.
Mr. Rouhani has now transformed
himself into a democrat and populist, albeit a deeply cynical one. Taking a swipe at Iran’s unelected leaders, he recently insisted that
“elections are the only means to govern” and “criticism and protest are
the people’s right.” The defiant president has called for a referendum on
democracy: “When the revolution
happened, we were all together
ATTA KENARE/AFP/GETTY IMAGES
I
ran’s Islamic revolutionaries
criticize each other regularly,
but recently the level of invective among the ruling elite has
reached new heights. The vicious infighting between President
Hassan Rouhani and his detractors
now threatens the governing edifice
of the Islamic Republic. Given the
clerical regime’s aggressive foreign
policy and nuclear ambitions, it is in
America’s interest to see this power
struggle intensify.
During the pro-democracy demonstrations in 2009, most of the Iranian
ruling class, including Mr. Rouhani,
rallied around Ayatollah Ali Khamenei, the supreme leader. In the wake
of the smaller but more widespread
provincial protests that started last
December, revolutionary elites appear divided. These contesting factions are further delegitimizing the
state they are trying to save.
This is a contest for power, not
ideals. Mr. Rouhani surely is not seeking to liberalize the political system
and make it more accountable to the
citizenry. A founding father of the
President Hassan Rouhani and a portrait of Supreme Leader Ali Khamenei.
aboard the train of the revolution;
some of us decided to get off the
train; others we forced off whom we
should not have. All should be invited back on the ‘success and a victorious revolution’ train.”
Then there’s the mysterious leak
of video from a 1989 Assembly of Experts meeting. The group, which
chooses the supreme leader of Iran,
was weighing whether to approve
Mr. Khamenei’s ascension to the
post. “Pity an Islamic society,” Mr.
Khamenei confesses in the video, “if
even the possibility is raised that
someone like me can be its leader.”
It is hard not to see the hands of the
president and his allies behind this
humiliation.
The same is true for the recent
budget disclosure, which showed
higher-than-expected funds going to
the detested virtue police and conservative religious foundations allied
with Mr. Khamenei. Mr. Rouhani and
his allies appear to be trying to chip
away at the regime, but their opponents nonetheless command the
country’s most powerful institutions: the office of the supreme
leader, the judiciary, the Revolutionary Guards and vigilante groups that
often terrorize their critics. The conservative press has mocked the idea
of a referendum, while belittling Mr.
Rouhani for relying on Westerners
to rescue the economy.
The supreme leader has warned
that “the enemy is waiting for an opportunity. He is waiting for the
emergence of a rift through which he
can infiltrate the country.” In an
even more stern rebuke, Revolutionary Guard commander Qasem Soleimani warned Mr. Rouhani, “I find it
unfortunate that some who are selfstyled as followers of the path of the
Imam don’t write an open letter to
the Global Arrogance (America) but
write open letters to the standing
[supreme] leader.”
Mr. Khamenei and the Revolutionary Guards harbor their own vision
of economic empowerment—the “resistance economy.” They want to
jump-start the economy while relying less on Western commerce. Their
plan calls for more use of the country’s internal markets and trade with
culturally nonthreatening countries
like Iraq and Central and East Asian
states.
For Mr. Khamenei, Western sanctions revealed that dependence on
foreign commerce is a country-crippling vulnerability. Mr. Rouhani differs, seeing the nuclear deal as the
gravestone of American-European
cooperation against Iran. For him,
more European investment will divide
the West, neutralizing the more
hawkish U.S. Mr. Khamenei and his
disciples aren’t enchanted, as Mr.
Rouhani is, with the China model, in
which autocracy, capitalism and a
certain cultural permissiveness coexist. They don’t see China’s vibrant
economy and growing military power;
they see a regime that has forfeited
its ideological inheritance.
Neither Mr. Rouhani’s pragmatic
revolutionaries nor Mr. Khamenei
and his allies can win this power
struggle. The president may be able
to agitate government and society,
but he cannot reinvent himself as an
opposition leader. He is merely
strengthening a national narrative
that has already rejected clerical
rule.
The supreme leader and his supporters can thwart Mr. Rouhani’s
legislative agenda and his attempt to
refashion the economy. But given
their contempt for democracy and
their ease with corruption, they cannot rebuild the regime’s battered legitimacy. As the clerical oligarchs
plot against one another, the system
is likely to grind to a halt. The result
of this factional fight is paralysis at
a time when the theocracy is facing
popular disaffection, economic decline and imperial overstretch.
The White House can crack the
regime. Pushback—any pushback—
against Tehran’s gains in Syria
would help, as would a tidal wave
of sanctions against the Revolutionary Guards. The president can also
use his bully pulpit and economic
sanctions aggressively to expose
and punish the regime’s tyrannical
behavior.
The potential for a democratic
transition exists in Iran, where such
aspirations have been growing for
over 100 years. As regime-shaking
street protests have repeatedly revealed, the country is a volcano. We
want it to erupt. For the U.S. and the
Middle East, sooner is better than
later.
Mr. Gerecht is a senior fellow at
the Foundation for Defense of Democracies. Mr. Takeyh is a senior
fellow at the Council on Foreign
Relations.
50 Years of Blaming Everything on Racism
After the deadly riots
of the 1960s in Los
Angeles and Detroit,
President Lyndon B.
Johnson appointed a
commission—which
is what politicians do
UPWARD
MOBILITY when they don’t really know what to do
By Jason L.
or need to stall for
Riley
time. The result was
the Kerner report, issued 50 years ago last month.
The report blamed black urban unrest on white racism, segregation and
official neglect, all of which continue
to get cited to explain the racial inequality that persists today. “What
white Americans have never fully understood—but what the Negro can
never forget—is that white society is
deeply implicated in the ghetto,” the
introduction read. “White institutions created it, white institutions
maintain it, and white society condones it.” The riots were attributed
to “the failure of all levels of government—Federal and state, as well as
local—to come to grips with the
problems of our cities.”
The Kerner report’s most famous
assertion was that the U.S. was “moving toward two societies, one black,
one white—separate and unequal,”
even though the decades leading up
to the riots had suggested the opposite. The Truman administration’s desegregation of the armed forces in
the 1940s was followed by Martin Luther King Jr.’s successful civil-rights
movement of the 1950s and the passage of landmark civil-rights and voting-rights legislation in the 1960s.
The educational and economic strides
blacks made during this period were
also unprecedented, and racial disparities were narrowing.
In 1960, just 7% of blacks between
20 and 24 were enrolled in college; by
1970, that percentage had more than
doubled, to 16%. College enrollment
among whites also rose during this
period, but not by as much. These educational gains allowed more blacks
to lift themselves out of poverty and
access better-paying jobs. Between
1940 and 1970, the proportion of families living below the poverty line fell
The 1968 Kerner report
on urban riots absolved
blacks of responsibility
and ignored real progress.
by 40 percentage points among
whites and by 57 points among
blacks. White-black gaps in homeownership, life expectancy and
white-collar employment also were
shrinking in the postwar era, contrary to the pessimism of the Kerner
Commission.
Moreover, white racial attitudes
were shifting. In 1942, national support for school integration stood at
30%; two decades later it would be
62%. By 1963, racial discrimination in
public accommodations was already
illegal in 30 states, and more than 80%
of whites were opposed to restricting
job opportunities by race.
None of this suggests that 50
years ago racial discrimination in
housing and employment, or bigotry
in the criminal justice system, was a
figment of blacks’ imagination. And
while there was measurable social
and economic improvement in the
postwar period, racial gaps persisted,
as they still do today. Nevertheless,
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it’s difficult to square this racial
progress with the Kerner report’s description of the riots as an “explosive
mixture which has been accumulating
in our cities since the end of World
War II.”
The reality is that the worst rioting of the 1960s was concentrated in
the North and West rather than in the
Deep South, where racial oppression
was most severe and racial attitudes
were slowest to change. The year before the 1965 riots in the Watts section of Los Angeles, a leading civilrights organization had ranked living
standards in L.A. as best in the nation
for black families. When Detroit rioted two years later, the black unemployment rate in the city was lower
than the white unemployment rate
nationwide; black Detroiters had the
highest homeownership rate in the
nation; and the black poverty rate in
Motown was just half the national average among blacks. The Kerner report’s attempts to blame everybody
for the rioting except the rioters
strain credulity.
The commission was also overly
pessimistic in many ways about the
direction the country was heading.
In his new book, “Enlightenment
Now,” Harvard psychologist Steven
Pinker shows that steady progress in
social attitudes continues today,
whether the measure is interracial dating, racist jokes or antiblack crimes.
“No form of progress is inevitable, but
the historical erosion of racism, sexism
and homophobia are more than a
change in fashion,” he writes. “Racial
segregation, male-only suffrage and
the criminalization of homosexuality
are literally indefensible: people tried
to defend them in their times, and
they lost the argument.”
We can’t hope to address effectively the social pathology on display
in so many black ghettos by playing
down the role of culture and personal
responsibility so as to keep the focus
on white racism. What blacks were
doing on their own to develop human
capital and to narrow racial gaps in
the first half of the 20th century has
a far better record of success than
any government program. This history is seldom discussed among politicians in search of votes or activists
in search of relevance, but it ought to
be part of any serious national debate
about racial inequality today.
Notable & Quotable: Tariffs
From a 1930 letter signed by 1,028
economists opposed to the SmootHawley Tariff Act:
We are convinced that increased
protective duties would be a mistake.
They would operate, in general, to increase the prices which domestic consumers would have to pay. By raising
prices they would encourage concerns
with higher costs to undertake production, thus compelling the consumer to subsidize waste and inefficiency in industry. At the same time
they would force him to pay higher
rates of profit to established firms
which enjoyed lower production costs.
A higher level of protection, such as is
contemplated by both the House and
Senate bills, would therefore raise the
cost of living and injure the great majority of our citizens.
Few people could hope to gain
from such a change. Miners, construction, transportation and public utility
workers, professional people and
those employed in banks, hotels,
newspaper offices, in the wholesale
and retail trades, and scores of other
occupations would clearly lose, since
they produce no products which could
be protected by tariff barriers.
The vast majority of farmers, also,
would lose. Their cotton, corn, lard,
and wheat are export crops and are
sold in the world market. They have
no important competition in the
home market. They can not benefit,
therefore, from any tariff which is
imposed upon the basic commodities
which they produce. They would lose
through the increased duties on
manufactured goods, however, and
in a double fashion. First, as consumers they would have to pay still
higher prices for the products, made
of textiles, chemicals, iron, and steel,
which they buy. Second, as producers, their ability to sell their products would be further restricted by
the barriers placed in the way of foreigners who wished to sell manufactured goods to us.
Our export trade, in general,
would suffer. . . . There are already
many evidences that such action
would inevitably provoke other
countries to pay us back in kind by
levying retaliatory duties against our
goods. There are few more ironical
spectacles than that of the American
Government as it seeks, on the one
hand, to promote exports through
the activity of the Bureau of Foreign
and Domestic Commerce, while, on
the other hand, by increasing tariffs
it makes exportation ever more difficult. President Hoover has well said,
in his message to Congress on April
16, 1929, “It is obviously unwise protection which sacrifices a greater
amount of employment in exports to
gain a less amount of employment
from imports.”
Yale and the
Puritanism
Of ‘Social
Justice’
By Walter Olson
A
nswering a question about
which there could hardly have
been much doubt, Yale’s admissions blog said last month the university would not penalize prospective
students who are suspended for joining antigun protests in the wake of
the Parkland shooting. “Yale will NOT
be rescinding anyone’s admission decision for participating in peaceful
walkouts for this or other causes.”
So far, so routine. A university like
Yale would not ordinarily snatch back
an admissions offer just because an
accepted senior had skipped a day of
class, no matter the reason.
But there’s more. The post’s author, senior assistant director of admissions Hannah Mendlowitz, makes
clear that Yale considers participation
in such a walkout to be a plus, rather
than a subject of indifference.
Ditching class to protest
won’t count against you—
at least if the university
approves of the cause.
“For those students who come to
Yale, we expect them to be versed in
issues of social justice,” Ms. Mendlowitz writes. “I have the pleasure of
reading applications from San Francisco, where activism is very much a
part of the culture. Essays ring of social justice issues.” Even if applicants
from less-fortunate areas of the
country cannot be expected to meet
the Bay Area standard, the message
is clear. The post is titled “In Support
of Student Protests.”
This endorsement of activism
raises a few questions. Would Yale really turn away a brilliant young flutist, chemist or poet who, while solidly educated in history, religion and
government, is not specifically
“versed in issues of social justice”?
What about students who have pursued courses based on great works of
the past? Must they be versed in contemporary views of social justice too?
Besides, which causes constitute social justice?
Yale’s admissions blog is eagerly
read by high-school students who
have not yet applied. What should
one advise aspiring Yalies who are
not versed in—or worse, not zealous
for—the Bay Area ideologies that so
please the admissions office?
It might be best not to feign progressive political views in hopes of
snagging a coveted Yale slot. That
would be insincere, after all. But
maybe it would be prudent to conceal
any contrasting views.
Suppose a student had been
deeply influenced by Friedrich
Hayek’s “The Mirage of Social Justice.” After reading it, she had concluded social justice does not offer a
particularly useful “take” on the
moral problems of society, and that
other standards—justice toward individuals, protection of personal rights,
peace and nonaggression, neutral
and impartial application of law—are
better.
Now suppose she put that in her
Yale application, knowing that
screeners would be looking for some
indication she was “versed in social
justice.” Would it affect her chances
of making the cut?
A similar scenario played out for
Hayek, actually. Despite his illustrious career at the London School of
Economics, he had trouble finding a
suitable berth in American academia
and eventually landed in a nonstandard appointment at the University
of Chicago through its Committee on
Social Thought. His thinking didn’t
quite fit in, even though it was destined to become immensely influential in several fields.
Yale says it will overlook walkouts
“for this or other causes.” To test
that, an applicant might engage in a
peaceful walkout for a cause of which
the admissions staff disapproves—
say, Second Amendment rights. But
what high schooler would want to be
that test case?
The issue is of principle, not law:
As a private university, Yale is not
subject to the First Amendment and
need not guarantee applicants a neutral forum. It can set what standards
it pleases, including screening out
students who march for a not-Yale
cause. By contrast, administrators in
public high schools are barred from
playing favorites, so they can’t approve or disapprove peaceful walkouts based on whether or not they
approve of the cause.
That being said, Yale started out
as a base for the training of Puritan
clergy. One wonders whether it has
really changed all that much.
Mr. Olson is a senior fellow at the
Cato Institute and a Yale alumnus.
.
A22 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
WORLD NEWS
China-India Rivalry Plays Out in Maldives
U.S. protests as
pro-Beijing president
tightens grip over
strategic island nation
The China-Maldives Friendship Bridge, under construction in Malé, is one result of a closer relationship between the two countries.
company is expanding the airport; another has leased an island close by for development.
Chinese contractors are building roads and housing units
for locals.
In December, Mr. Gayoom
signed a free-trade agreement
with China that Mr. Nasheed’s
Maldivian Democratic Party
called sudden, rushed and
“shrouded in secrecy.” China
called it a milestone in the
countries’ economic ties.
Mr. Gayoom describes
China as his country’s “closest
development and commercial
partner.” Mr. Nasheed says the
president has chipped away at
democratic oversight of his
deals with Beijing and is concealing the true nature and
extent of Chinese investment.
Many in the Maldives opposition have raised concerns
that Chinese infrastructure
loans will turn into “debt
traps,” particularly after a
major Chinese-financed port
in neighboring Sri Lanka
passed into Chinese control
RUSSIA
KAZAKH.
MONG.
Beijing
CH IN A
New Delhi
IN D IA
FRED DUFOUR/PRESS POOL
The Maldives archipelago,
popular among luxury honeymooners, has become a playing field for geostrategic rivalry as China expands its
influence in the Indian Ocean
and the U.S. and India push
back.
Maldives President Abdulla
Yameen Abdul Gayoom, who
has steadily swung his country toward Beijing and away
from traditional partner New
Delhi, has imposed a state of
emergency, jailed opponents
and clamped down on protests
to weaken his opposition,
which is led by pro-India exPresident Mohamed Nasheed.
“A new Cold War has been
brewing and the Maldives is
in the middle of it,” said Mr.
Nasheed, who is living in exile
to escape a 13-year prison
sentence for a 2015 terrorism
conviction. He has denied the
charges, and the U.S. expressed concern that the trial
didn’t follow proper procedure.
India and the U.S. don’t
want Beijing, already dominant in the South China Sea,
to entrench itself in these waters. The island nation sits
astride shipping lanes that
connect China to the oil-supplying countries of the Middle
East, via the Strait of Malacca.
The location also makes the
Maldives vital to Beijing’s Belt
and Road plan to develop land
and sea trading routes linking
China to Europe.
Chinese President Xi Jinping won Mr. Gayoom’s support for the project’s maritime
corridor on a visit to the Maldives in 2014, and China began investing in island infrastructure. A Chinese bridge
now under construction will
connect the capital city, Malé,
to a nearby island where its
airport is located. A Chinese
AGENCE FRANCE-PRESSE/GETTY IMAGES
BY NIHARIKA MANDHANA
Bay of
Benga l
MA LD IV E S
500 miles
INDO.
I nd i a n O cea n
500 km
Abdulla Yameen Abdul Gayoom, left, with China’s Xi Jinping
THE WALL STREET JOURNAL.
last year when Colombo
couldn’t repay.
U.S. Secretary of State Rex
Tillerson, ahead of an Asia
visit in October, urged U.S.-India collaboration to give IndoPacific countries an alternative to Chinese funds. He
called China’s infrastructurefinancing deals an example of
was meant to attract investment and critics in the country said could help Beijing establish a military foothold.
“China’s
actions
have
raised deep suspicions about
its military intentions in the
Indian Ocean,” said Srikanth
Kondapalli, a professor of Chinese studies at New Delhi’s
The Face
of Change
“predatory economics” that
saddle developing countries
with unsustainable debt and
could undercut their sovereignty.
Mr. Gayoom steered a constitutional
amendment
through parliament in 2015 allowing foreigners to own land,
a change the government said
Jawaharlal Nehru University.
“It’s a balance of power issue.”
In recent years, China has
built a naval base in Djibouti
in East Africa; in addition to
the port in Sri Lanka, it operates one in Pakistan. A senior
Indian navy officer said Chinese submarines and research
vessels are visiting the Indian
Ocean more frequently.
The Indian military deploys
aircraft specialized in antisubmarine warfare to patrol
the ocean, and its government
is negotiating the purchase of
U.S. drones with advanced
surveillance features. India
also plans to build new attack
submarines, and a military upgrade is afoot in its Andaman
and Nicobar Islands, whose
capital is around 1,200 nautical miles from Malé.
The U.S. State Department
called on Mr. Gayoom in a
statement last month to end
the state of emergency and
uphold the rule of law. China
has called the events “internal
affairs” and urged the international community to “respect
the Maldives’ sovereignty and
territorial integrity.”
In 1988, Indian troops
crushed an attempted coup in
the Maldives. Mr. Nasheed is
pressing India to act again
and oust Mr. Gayoom; India
has given no indication it is
considering an economic
blockade or military action.
“We are at a critical juncture,” Mr. Kondapalli said.
“The stakes are high with the
Maldives.”
In a sign of Mr. Gayoom’s
tilt away from New Delhi, the
Indian navy said last month
that the Maldives had declined its invitation to participate in military exercises. The
Maldives government said it
couldn’t be involved because
the state of emergency requires that security personnel
be at home in a heightened
state of readiness.
In February, a spokesman
for Mr. Gayoom’s office said
the solution to the political
crisis “would have to be a
Maldivian one.”
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Customer Experience
Atlanta, GA
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TECHNOLOGY: BLACKBERRY LAUNCHES PATENT SUIT AGAINST FACEBOOK B4
BUSINESS & FINANCE
© 2018 Dow Jones & Company. All Rights Reserved.
S&P 2728.12 À 0.26%
S&P FIN À 0.39%
* * * *
S&P IT À 0.24%
THE WALL STREET JOURNAL.
DJ TRANS À 0.84%
WSJ $ IDX g 0.38%
Wednesday, March 7, 2018 | B1
LIBOR 3M 2.047
NIKKEI (Midday) 21377.07 g 0.19%
U.S. Keeps Huawei in Its Sights
Chinese equipment
maker looms large
in government review
of bid for Qualcomm
In intervening this week in
the Broadcom-Qualcomm takeover battle, the U.S. government also had its eye on another
company:
China’s
Huawei Technologies Co.
The world’s top cellularequipment maker and a leading smartphone brand, Huawei in the past three months
has been the subject of a series
of interventions, or attempted
interventions, by the Trump
administration and Congress
across the telecommunications
industry.
The latest was Washington’s
move this week to intervene in
Singapore-based Broadcom
Ltd.’s attempted hostile takeover of U.S.-based Qualcomm
Inc. A government panel ordered Qualcomm to delay a
shareholder vote that Broadcom hoped would elevate directors friendly to its $117 billion bid.
In a letter explaining its interference, the Committee on
Foreign Investment in the U.S.,
which reviews foreign takeovers for national-security
concerns, cited its worry that
China, specifically Huawei,
could gain the upper hand in
the development of so-called
5G technology.
Translation: Removing an
able U.S. competitor to Huawei
risks strengthening the Chinese company at the expense
of the American wireless industry.
Broadcom on Tuesday tried
to dispel those concerns. “We
are fully cooperating with
CFIUS, and are absolutely committed to making the combined
company a global leader in
critical 5G and other technologies,” a spokesman said in a
Paint It Black
Lego Gets to Work Rebuilding Global Markets
BY STU WOO
Dialing Up
A few global players are playing major roles in developing 5G,
the next generation of wireless technology.
PATENTS
PHONE
CHIPS
PHONES
ROUTERS
CELL
TOWERS
Huawei
Nokia
Ericsson
Samsung
Qualcomm
Cisco
Source: the companies
statement.
5G is the next-generation
mobile-network technology
that the industry is preparing
to roll out around the world.
American officials and some
Western telecom companies
worry that if China implements
THE WALL STREET JOURNAL.
5G widely before the U.S. does,
it could have a head start in
technologies that the new networks’ speed and capacity are
expected to kick-start, like selfdriving cars.
Some Washington policy
makers and industry execu-
tives have suggested a deeper
worry that, with Huawei’s help,
China could displace Silicon
Valley as the world’s innovation center and lure top engineers there. Another concern:
If Huawei extends its lead in
the telecom-equipment industry, American wireless carriers
might have no choice but to
use Huawei gear in the future.
Major American wireless
carriers, such as AT&T Inc. and
Verizon Communications Inc.,
have said they are initially focusing 5G coverage in a few
cities. “What I see in the U.S. is
wireless carriers choosing particular geographic markets for
5G,” said Gartner Inc. analyst
Ian Keene. “The way the Chinese are going to approach it,
it’s going to be blanketed.”
The extent to which the U.S.
government shares that fear
was laid bare in unusual clarity
in the CFIUS letter. The committee said it would probe
whether a Broadcom-QualPlease see 5G page B2
Spotify's gross margin
30%
20
10
0
S&P Deal
Is Latest
Push Into
AI Sector
BY GUNJAN BANERJI
S&P Global Inc. said it
would buy technology startup
Kensho Technologies Inc. for
about $550 million, its second
investment in the artificial intelligence sector this year.
The deal is the latest sign
of Wall Street embracing AI.
Almost one-fifth of banks and
financial-services companies
surveyed by Greenwich Associates have implemented AI
technology into their businesses, according to an October report by the research
firm. Banks have tapped machine learning for their research, trading and compliance, the report said.
Kensho, based in Cambridge, Mass., uses AI to provide data analysis for financial
institutions.
“Kensho’s capabilities are
critical for S&P Global to be at
the forefront of the technology
transformation taking place
within the financial markets,”
said S&P Global Chief Financial Officer Ewout Steenbergen.
The company was founded
in 2013. Its staff consists of
former employees of Google
The company has in
recent years been
building its indexing
and data divisions.
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2016
2017
Source: company prospectus
THE WALL STREET JOURNAL.
HEARD ON THE
STREET
By Stephen Wilmot
MATT ALEXANDER/PA WIRE/ZUMA PRESS
Spotify
Won’t Be
The Netflix
Of Music
Musicians
have long
complained
about the
power of big
record labels.
Investors tempted to buy
Spotify stock when it goes
public later this month could
end up sympathizing. The
popular music-streaming app
has revived the recorded music industry but done little to
disrupt its balance of power.
This is most obvious in
the company’s gross margin—the gap between its revenues and variable costs.
These costs consist mainly of
the royalties it pays to the
“big three” rights holders—
Universal Music, Sony Music
Entertainment and Warner
Music—as well as Merlin, a
consortium of independent
labels.
Last year, the gross margin improved as Spotify
signed new licensing deals. It
hit 24.5% in the fourth quarter, up from 17.5% in the
comparable period of 2016,
according to the company
prospectus published last
week. But improving it to a
level more typical of the tech
industry will be a slow grind.
Licensing deals are negotiated every couple of years,
so investors will have to wait
for the next chance to strike
a new bargain. Growing bigger should help Spotify cut
incrementally better deals,
but won’t resolve the basic
problem that ownership of
must-have content is concentrated in so few hands. The
big three plus Merlin accounted for 87% of songs
streamed on Spotify last
year.
Video-streaming giant
Netflix—whose former Chief
Financial Officer Barry
McCarthy is now in the same
role at Spotify—ran into
something like this problem
Please see HEARD page B2
See more at WSJMarkets.com
BRICK BY BRICK: The Danish toy maker is struggling in North America and Europe. Its new CEO says there is ‘no quick fix.’ B10
Big Banks Score a Win on Munis
BY ANDREW ACKERMAN
WASHINGTON—Bipartisan
legislation expected to clear
the Senate as early as this
week has just one provision
that is set to directly benefit
the nation’s megabanks: a section aimed at making it easier
for them to buy state and local
bonds.
The provision, championed
by Citigroup Inc. and other
large banks, would ease a new
rule aimed at ensuring banks
can raise enough cash during
a financial-market meltdown
to fund their operations for 30
days, requiring them to hold
more cash or securities that
are easily salable.
Under federal banking rules
approved in 2014, those “high
quality liquid assets” included
cash, Treasury bonds and corporate debt but not municipal
debt. Banks like to hold municipal bonds because of their
safety and tax advantages.
The Senate on Tuesday
voted, 67-32, to formally begin
debate on the bill, which primarily benefits small and medium-size banks, easily reaching the 60 votes needed and
signaling that the measure has
enough support from Democrats to pass by a comfortable
margin. The legislation was
backed by 16 Democrats and
one independent, Maine Sen.
Angus King, bucking Massachusetts Sen. Elizabeth Warren and 31 other Democrats
who opposed the procedural
vote.
Including the municipalbond provision in the deregulatory bill was a priority for
the nation’s biggest banks that
buy a lot of municipal securities as investments. A Citigroup lobbyist recently told a
Senate staffer that the firm
would be pleased if easing the
treatment of municipal debt
under the bank-funding rule
was the one thing it could accomplish during the current
Congress, said a person familiar with the conversation.
State and local officials
have praised the move, saying
their securities could suffer if
banks begin to shun them.
A Citigroup spokesman said
the bond provision “is supported by a wide array of
groups focused on helping cit-
ies and states address critical
infrastructure needs.”
While the provision is a victory for Citigroup, the biggest
U.S. banks haven’t lobbied extensively on the Senate bill,
congressional aides said. Big
firms have spent billions of
dollars to comply with postcrisis rules and generally
aren’t eager to tear them
down.
Analysts have said changing
the rule for municipal products would be a mistake because it would erode the core
of a bank-safety rule put in
place after the 2010 DoddFrank law. While municipal securities have relatively low default rates, they are traded
thinly and shouldn’t count as
Please see MUNIS page B14
INSIDE
McDonald’s Adds Fresh Beef
BY PATRICK MCGROARTY
OAK
BROOK,
Ill.—
McDonald’s Corp. is freshening up the Quarter Pounder.
By May, quarter-pound
hamburgers at McDonald’s
restaurants in the contiguous U.S. will be made from
fresh beef.
The move to please customers who want less processed
food will make supplying
some 14,000 U.S. restaurants
more complicated at the same
time McDonald’s is trying to
position itself as the go-to
chain for inexpensive breakfasts and sandwiches. In January, McDonald’s said changes
to its value menu helped boost
same-store traffic in 2017 for
the first time in five years.
McDonald’s is facing increasing competition from
fast-casual chains such as
Shake Shack Inc. and Smashburger Master LLC that have
gained ground among customers willing to pay more for
meals they see as higher quality. For the past two years, the
fast-food company has been
working to win back fans of its
most well-known products.
“McDonald’s is a burger
company, and there’s no more
important place for us to focus
on improving the quality of
our food,” said McDonald’s
USA President Chris Kempczinski. That renewed focus on
burgers comes after mixed
success generating sales from
other menu changes. Selling
breakfast items such as the
Sausage McMuffin all day has
been popular, and McDonald’s
says its customers have embraced the removal of artificial
preservatives
from
chicken nuggets. Breakfast
items made from cage-free
eggs also have been well received among customers.
Other changes have been
less successful, such as different iterations of healthier
wraps and salads that failed to
gain traction.
Competitors brought the focus back to burgers. Wendy’s
Please see MENU page B2
parent Alphabet Inc., Facebook Inc. and Twitter Inc., an
S&P Global spokesman said.
While S&P Global is known
for its credit-ratings business,
the New York-based company
has in recent years been building its indexing and data divisions.
Last month, the firm completed the acquisition of Panjiva Inc., another machinelearning
and
analytics
company but one that tracks
global supply data.
It also invested last year in
London-based Algomi, which
uses AI in fixed-income trading.
In its fourth-quarter earnings presentation, S&P Global
indicated that it wants to expand its index division and invest in alternative data companies.
Companies, including those
outside of the technology industry, have been venturing
more into AI. Machine learning, a branch of AI, is the capability of computers to learn
things without programming
by humans. Machine-learning
computers tend to be able to
parse vast quantities of data
quickly.
On Monday, at a conference
in Orlando, S&P Global Chief
Executive Douglas Peterson
emphasized the company’s focus on data and analytics.
“About five, six years ago, we
repositioned the company
around the theme of essential
intelligence,” Mr. Peterson
said at the conference.
NEW MARKETER
MUST BUFF UP
CADILLAC
BIG OIL
INSISTS IT IS
NO FOSSIL
AUTOS, B5
ENERGY, B15
.
B2 | Wednesday, March 7, 2018
* ***
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.
H-I
Hasbro.......................B10
HNA Group..................B2
Huawei Technologies..B1
ING Groep....................B6
Intercontinental
Exchange.................B15
International Business
Machines...................B8
International Paper .. B16
J-K
JD.com.........................B4
J.M. Smucker..............B3
JPMorgan Chase . A6,B14
Kabbage.....................B14
Kairos Future..............B8
Kensho Technologies..B1
Kobe Steel.................B10
C
L-M
Canyon Bridge.............B2
China Oceanwide........B2
ChromaWay.................B8
Cigna............................B4
Citigroup..............B1,B14
Coima Res...................B6
Comcast...............B2,B16
Conagra Brands...........B3
Cottonwood
Management.............B6
CVS Health.....A1,B4,B15
Lattice Semiconductor
.....................................B2
Leggett & Platt.........B16
Lego...........................B10
Mahindra & Mahindra B5
Mattel........................B10
McDonald's..................B1
Microsoft ............. B8,B15
MoneyGram.................B2
D-E
Daimler........................B5
Depository Trust &
Clearing...................B14
Deutsche Bank............B6
Deutsche Wohnen ...... B6
Dick's Sporting GoodsB3
DLA Piper....................B6
EPAM Systems...........B8
EQT............................B14
Express Scripts...........B4
N-O
Natixis.........................B6
Netflix..................B1,B16
Nordstrom.................B16
Olin..............................B3
P-Q
Peakside Capital
Advisors....................B6
Qualcomm............B2,B16
R-S
R3 CEV ........................ B8
Real Capital AnalyticsB6
Sentiance .................... B8
Shake Shack................B1
Sky.............................B16
SkyBridge Capital.......B2
Smashburger Master..B1
Smurfit Kappa Group
...................................B16
Sony Music ................. B1
S&P Global..................B1
Spotify.........................B1
State Street..............B14
Sturm Ruger...............B3
T-U
Target..........................B3
Telia.............................B8
Tencent Holdings.B4,B16
The Abraaj Group ..... B14
The Co-operative Bank
...................................B14
Time Warner.............B16
TransferWise .............. B8
Trepp............................B6
Twitter ........................ B1
21st Century Fox
........................ B2,B3,B16
Uber Technologies ...... B8
Unify Square...............B8
UnitedHealth Group....B4
United Parcel Service
...................................B10
UQM Technologies......B2
V-W
Vista Outdoor Brands B3
Vonovia........................B6
Waldo Genetics...........B2
Walmart......................B3
Walt Disney.........B2,B16
Weinstein....................B3
Wells Fargo.................A6
Wendy's ...................... B1
Western Union............B8
X-Z
Xcerra..........................B2
Xiaomi.........................B4
Zhejiang Geely..........B10
ZTE..............................B2
Zurich Insurance Group
...................................B14
INDEX TO PEOPLE
A
Albrecht, Henry........A16
Allen, Paul .................. A7
Avakian, Stephanie...B15
B
Barber, Jim................B10
Blake, Matthew........B14
Blankfein, Lloyd..........A4
Bower, Jay................A16
Brownlee, Dana........A15
Buchzeiger, Mary........B5
Burkle, Ron ................. B3
Gillis, Paul...................B4
Goenka, Pawan...........B5
Grewal, Paul................B4
I
Iger, Bob....................B16
J
Jasper, Joe..................B2
K
Kawasaki, Hiroya......B10
Kogan, Roman.............B6
Kumar, Prem.............A15
C
L
Carr, Tom...................B14
Cassin, Nathan............B4
Conrad, Drew..............A6
Contreras-Sweet, Maria
.....................................B3
Corbyn, Jeremy...........B6
Cornell, Brian..............B3
Li, Robin......................B4
Li, Shufu....................B10
Liu, Richard.................B4
M
Niu, David.................A15
P
Peterson, Douglas ...... B1
Pokropp, Torsten.........B6
Polet, Gilles.................B6
R
Raymond, Peter........B14
Roberts, Brian...........B16
S
Scaramucci, Anthony..B2
Schumacher, Dan........B4
Schumacher, Peter ..... B6
Shields, Mike..............B6
Shtull, Ora ................ A16
Snäll, Mats..................B8
Steenbergen, Ewout...B1
Sullivan, ChristopherB15
Sylvester, David ....... A16
F-G
Ma, Jack......................B2
Ma, Pony.....................B4
Marchese, Joe.............B3
McKinney, Sarah.........B4
Mead, Dan...................A6
Modin, Jörgen.............B8
Moffett, Craig...........B16
Monheit, Barry............B3
Fejes, Balazs...............B8
Flowers, Paul............B14
Gayda, Ron................A16
N
Wahl, Deborah............B5
Warne, Kate..............B16
Willisch, Peter............B6
Wong, T.J....................B4
Naqvi, Arif.................B14
Nasser, Amin............B15
Zetsche, Dieter.........B10
D
Darden, Alex.............B14
Davis, Ed.....................B3
Debney, James............B3
HEARD
V
VanGosen, Linda.........B2
Vanparys, Toon...........B8
W
Z
Spotify could boost gross
margins by increasing prices.
But unlike Netflix, which
raised the cost of its key U.S.
streaming package before
Christmas, Spotify’s monthly
subscriptions fell in price
last year. This is partly because Spotify, in a bid to
compete with rival Apple
Music, rolled out “family
plans” that give six household members access for
only 50% more than the price
of an individual subscription.
Private share transactions
in February valued Spotify’s
equity at $19.7 billion, roughly
19 times last year’s gross profits. The equivalent multiple
for Netflix is 32 times.
If investors want Spotify to
be the Netflix for music with a
valuation to match, it needs to
demonstrate more pricing
power, both with consumers
and the music industry.
For all the growth on
show in its prospectus, Spotify still looks like a company
that will only ever make as
much money as the big record labels let it.
Continued from the prior page
in 2011, notes Wesley Lebeau, a fund manager for CPR
Asset Management. Faced
with escalating content
costs, it bet big on exclusive
productions, starting with
“House of Cards.” The gamble paid off so well that production houses are now
scrambling to consolidate
their bargaining power;
hence the battle between
Walt Disney and Comcast
for bits of 21st Century Fox.
Netflix had a 34% gross margin last year.
But music is different:
Apart from the concentration
of rights ownership, new albums don’t have the same
marketing pull as a new TV
series. Spotify’s prospectus
argues that “personalization,
not exclusivity, is key to our
continued success.” Competing with the record labels to
get a better deal just doesn’t
seem like a viable option.
ANGEL GARCIA/BLOOMBERG NEWS
F-G
Facebook................B1,B4
FirstEnergy................B16
General Motors...........B5
Genworth Financial .... B2
Goldman Sachs GroupA6
Greenwich Associates B1
Attendees at last month’s Mobile World Congress in Barcelona tried out virtual-reality headsets at the Huawei Technologies pavilion.
5G
Continued from the prior page
comm tie-up would “leave an
opening for China to expand
its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
Not everyone shares U.S.
worries about Huawei. U.K.based Vodafone Group PLC, the
world’s No. 2 wireless carrier
by subscribers, said it worked
“very well” with Huawei’s
equipment.
“They are a very innovative
company. They are very open.
We never found anything less
than normal in the Huawei
equipment and software,”
Vodafone Chief Executive Vittorio Colao said at a wirelessindustry conference last week.
“It’s not like the Cisco router
is very different. It’s made in
China,” he said, referring to
telecom equipment made by
one of Huawei’s American rivals.
In the past decade, U.S. telecom companies such as Lucent
and Motorola merged into foreign hands, leaving Qualcomm
as one of the few American
powerhouses in the industry.
Huawei buys chips from and
pays patent royalties to Qualcomm, and on Tuesday the two
sides were close to an agreement to settle a patent-royalty
dispute, according to people
familiar with the matter. The
two also fiercely compete for
cellular patents. In that $14
billion-a-year industry, Qualcomm dominates. Both are
leaders in the international
consortium currently setting
standards for 5G.
“When you look at the
whole package—the standards
innovations, the hardware innovation, the impact on the industry from a technology perspective—then yes, Qualcomm
is the leader in 5G,” said Bob
DiFazio, vice president at wireless-technology developer InterDigital.
Concern over Huawei isn’t
new. Congress effectively
barred major carriers from
dealing in the company’s
equipment, after a 2012 report
concluded Beijing could force
Huawei to exploit its own
equipment to spy or disable
telecom networks.
A Look at Deals
U.S. Discouraged
The Committee on Foreign
Investment in the U.S. over the
years has frustrated a number
of deals by citing national-security concerns—as might happen
with Broadcom Ltd.’s proposed
$117 billion takeover of Qualcomm Inc. Here is a recent
sampling.
•UQM Technologies Inc., a
Colorado company developing
motors for electric cars, said
Monday that China National
Heavy Duty Truck Group Co.
pulled a planned second investment in the firm, citing CFIUS
concerns. The deal reached in
August would have allowed the
Chinese truck company, which
has a 9.9% stake in UQM valued at $5.1 million, to increase
its ownership stake to 34%.
The two companies said they
plan to re-submit an application
for CFIUS to review.
•Beijing Dabeinong Technology Group Co. last week
•Chinese conglomerate HNA
Group Co. has been trying for
some time to get approval
from the panel to buy a controlling stake in SkyBridge
Capital, the investment firm
owned by former White House
adviser Anthony Scaramucci.
•A $2.7 billion deal for
China Oceanwide Holdings
Group Co. to buy Richmond,
Va.-based insurer Genworth Financial Inc. also is awaiting
clearance from the committee.
The outlook for foreign investment, especially Chinese,
could get tougher if bipartisan
bills introduced in November by
Senate Majority Whip John
Cornyn (R., Texas) and Rep.
Robert Pittenger (R., N.C.) pass.
CFIUS, which is chaired by
the Treasury Department,
doesn’t usually release its decisions or detail its deliberations.
In a statement, the Treasury
Department said it is prohibited
by law from publicly disclosing
information filed with the committee, saying its reviews focus
on national-security concerns.
—Austen Hufford
A China National Heavy Duty Truck plant. The company has pulled an investment in a U.S. firm.
A Huawei spokesman said
the company is employeeowned, and that no government has ever asked it to spy
on or sabotage operations in
another country. The spokesman said the company was
aware of U.S. government activities seemingly aimed at inhibiting its business, but that
its poses no greater risk than
other telecommunicationsequipment companies, given
they share a global supply
MENU
chain.
Late last year, congressional
pressure mounted on AT&T to
drop plans to sell Huawei
smartphones in the U.S. In a
surprise reversal, the company
did just that in January; it declined to cite a reason.
Then, a National Security
Council official cited Huawei’s
dominant position in telecom
equipment in a proposal to
build a government-backed nationwide, 5G wireless network.
After the proposal became
public in January, drawing
criticism from other government officials and the wireless
industry, a Trump administration spokeswoman said it was
only an early-stage idea.
In December, President Donald Trump signed a defensespending bill that will ban
equipment from Huawei and
China’s ZTE Corp. from the Defense Department’s nuclearweapon infrastructure.
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Continued from the prior page
Co., for instance, advertised
the fresh beef it used to make
its patties.
Since 1973, McDonald’s has
made its Quarter Pounder
burgers from frozen patties,
part of the company’s wider
strategy throughout that time
to prioritize reliable, clean
meals that could be prepared
in minutes.
Today, customers also expect flavors and ingredients
that reflect contemporary
tastes and trends, said Linda
VanGosen, the head of U.S.
menu for McDonald’s. The
company will also use the
fresh, cooked-to-order patties on its burgers that feature
artisanal buns and sauces such
as garlic white cheddar.
“We will have recipes that
do these patties justice,” Ms.
VanGosen said.
Franchisees are purchasing
new refrigerators and containers to store the fresh patties,
and tweaking cooking lines to
isolate raw beef from other in-
canceled a plan to buy Waldo
Genetics, a Nebraska-based
seller of breeding pigs, after it
said it failed to gain U.S. government approval. The company had struck a deal in
March 2017 to buy Waldo for
$16.5 million. Privately held
Waldo didn’t respond to a request for comment.
•Xcerra Corp., a Norwood,
Mass., provider of testing
equipment for semiconductors
and electronics, last month terminated its sale to a Chinese
group, citing difficulty in securing CFIUS approval for the
$580 million deal.
•CFIUS declined to approve
a $1.2 billion deal for Chinese
billionaire Jack Ma’s Ant Financial Services Group to buy
MoneyGram International Inc.,
the companies said in January.
•In September, President
Donald Trump blocked an attempt by Chinese governmentbacked Canyon Bridge Capital
Partners to buy Portland, Ore.based Lattice Semiconductor
Corp. after CFIUS recommended he block the deal.
GUO XULEI/XINHUA/ZUMA PRESS
A-B
Aetna.....................A1,B4
Alibaba Group.............B4
Alphabet ................ B1,B8
Amazon.com ............. B15
American Outdoor
Brands.......................B3
Ant Financial Services
Group.........................B2
Anthem ....................... B4
Apple....................B4,B16
BAIC Motor...............B10
Baidu ........................... B4
Banco BPM..................B6
Bankia ......................... B6
Bank of America.........A6
Bank of New York
Mellon.....................B14
Barclays.................A6,B8
Beijing Dabeinong
Technology Group.....B2
BlackBerry...................B4
BlackRock....................B3
Blackstone Group ..... B14
BNP Paribas................B6
Broadcom........B1,B2,B16
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McDonald’s has made Quarter Pounders from frozen patties since 1973. It will now use fresh beef.
gredients. It is up to franchisees whether to charge more
for the fresh-beef burgers.
McDonald’s says the more
complicated logistics and new
equipment is worth it to sell
burgers that stand up to those
made by fast-casual competitors without sacrificing the
consistency
and
speed
McDonald’s customers expect.
“Most of the boutique
burger places, you’re going to
have to wait,” said Joe Jasper,
a McDonald’s franchisee who
helped test the new burgers at
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he added. “We’ve been able to
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.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B3
* * * *
BUSINESS NEWS
Sales Boost
Target's comparable store sales,
change from previous year
4%
4Q 2017 s3.6%
3
2
1
0
–1
–2
’15
’16
’17
Note: Fiscal years end in January.
Sources: FactSet; the company
THE WALL STREET JOURNAL.
Target CEO: ‘Strategy Is Working’
BY KHADEEJA SAFDAR
MINNEAPOLIS—Strong
consumer spending during the
holiday season boosted Target
Corp.’s quarterly sales, and the
retailer signaled it would continue to invest this year to remodel stores and expand its
delivery services.
The company said fourthquarter same-store sales rose
by 3.6%, its third consecutive
quarter of growth. After a dismal holiday performance in
2016, the Minneapolis-based
company embarked on a multibillion-dollar spending plan
to improve its stores and digital capabilities.
“What a difference a year
makes,” CEO Brian Cornell said
on Tuesday at an investor presentation. “You don’t have to
get too far into the numbers to
see our strategy is working.”
Still, Target’s spending plan
has taken a toll on profits,
which trailed Wall Street estimates, sending shares of the
retailer down 4.5% on Tuesday. The stock has gained
about 27% in a year.
“Despite the good numbers,
the sustainability of performance is open to question,” Neil
Saunders, managing director of
GlobalData Retail, wrote. “After
all, Target’s results were delivered over a period of robust
trading for the retail sector.”
Target is among brick-andmortar chains that benefited
from rising wages and strong
consumer confidence over the
holidays. Best Buy Co., Macy’s
Inc. and Kohl’s Corp. posted
sales gains as well, though Walmart Inc. stumbled after misjudging its online inventory.
Like other big-box chains,
Target has been struggling to
compete with Amazon.com Inc.
Mr. Cornell has been investing
Fox Wants to Zap TV Commercials
BY ALEXANDRA BRUELL
A scene from ‘The Simpsons.’ Fox wants to reduce its TV ad time to two minutes an hour by 2020.
product officer for ad sales at
Fox Networks Group. “Creating a sustainable model for adsupported storytelling will require us all to move.”
Mr. Marchese’s 2020 target
was part of his closing remarks. “It was sort of an aspiration or goal. Not a declaration,” said an ad buyer who
attended the event. “His whole
closing section was about the
value of the commercial, and if
they can provide more value
by limiting commercials and
creating new commercialization it will be better for networks’ health and better for
advertisers.”
The move is in line with a
trend toward fewer ads on TV,
as consumers increasingly
ditch ad-supported cable and
broadcast television for adfree streaming platforms such
as Netflix and Amazon.
“We did reduce ad time by
75% in FX Originals on-de-
mand last year, and saw great
effectiveness in brand lift,”
Mr. Davis said. “We are tuning
our approach with the new
targeting and ad products so
we can scale more widely.”
21st Century Fox Inc. owns
the Fox broadcast network, cable channels such as FX and
television shows including
“The Simpsons.” It shares
common ownership with Wall
Street Journal parent company News Corp.
strophic border tax and a
looming retail apocalypse,”
Mr. Cornell said.
Target plans to remodel 325
more stores in 2018 and add
locations in urban areas. The
company said it also would
launch new brands, expand its
ship-from-store capabilities
and offer more delivery and
pickup options.
Target reported a profit of
$1.1 billion, or $2.02 a share,
up 35% from $817 million, or
$1.45 a share in the same period a year ago.
—Allison Prang
contributed to this article.
Gun Maker Is Wary
Of Smart Technology
BY DOUG CAMERON
AND AISHA AL-MUSLIM
20TH CENTURY FOX/EVERETT COLLECTION
Fox Networks Group is pursuing a lofty goal: reducing its
television ad time to two minutes an hour by 2020.
Ad-sales chief Joe Marchese
announced that target at a private event the media company
hosted last week in Los Angeles, where advertisers, buyers
and executives from industry
rivals discussed the challenges
that face TV advertising.
Bringing commercial time
down to only two minutes an
hour would be a significant
change. In 2017, the average
amount of ad time during an
hour of broadcast TV totaled a
little over 13 minutes, according to Nielsen. On cable, it was
16 minutes.
For Fox to avoid a steep
revenue drop, it would likely
need to charge a lot more for
the commercial slots it has left
after making the change.
The shift is contingent on
the industry changing how it
buys and sells media. Mr. Marchese wants to sell ads using a
metric based on time spent
watching television ad content, versus the number of
views of a TV show.
“The two minutes per hour
is a real target for Fox, and
also our challenge for the industry,” said Ed Davis, chief
in the company’s supply chain,
lower prices, exclusive brands,
store renovations and new
stores in urban areas. Target
recently agreed to acquire grocery-delivery startup Shipt
Inc., moving to match services
that have been rolled out by
rivals Amazon and Walmart.
At the investor meeting,
Target played a video, showing
negative news clips following
its 2016 holiday season and
changes the company has implemented in the past year.
“Coming out of soft holiday
sales, the headlines were all
about store closures, a cata-
Smith & Wesson’s parent
company said Tuesday that it
was wary of adding “smartgun” technology to its weapons,
as investors push the industry
to address safety issues in the
wake of mass shootings.
Asset manager BlackRock
Inc. urged listed firearms makers last week to address their
potential exposure to litigation
from mass shootings such as
the one at a school in Parkland,
Fla., last month that left 17
people dead. The world’s largest money manager by assets
is also the biggest investor in
many weapons and ammunition makers via its index funds.
American Outdoor Brands
Corp., Smith & Wesson’s owner
and the largest U.S. commercial
gun maker by sales, said in a
nine-page response to BlackRock that it supports gun-safety
measures including tighter
background checks and many
existing ownership regulations.
“We respect the national
debate that is currently underway regarding firearms and
safety,” American Outdoor
chairman Barry Monheit and
Chief Executive James Debney
wrote. “We share the desire to
make our communities safer.”
The company said it hasn’t
invested in nascent smart-gun
technology that can prevent
someone other than a gun’s
owner from firing it, citing concerns about its development and
demand from core customers.
Other listed companies including Sturm Ruger & Co.,
Vista Outdoor Brands Corp.
and Olin Corp. didn’t respond
to a request for comment
about BlackRock’s letter.
Retailers including Walmart Inc. and Dick’s Sporting
Goods Inc. said last week that
they would stop selling guns
to people younger than 21.
The alleged Parkland shooter
used a Smith & Wesson M&P 15,
a semi-automatic AR-15-style
rifle, authorities said. American
Outdoor didn’t mention such rifles in its letter. The company
derives more than 10% of sales
from such “modern sporting rifles,” also known as assaultstyle weapons. Similar guns
have been used in other mass
shootings, and some retailers
said they would halt sales.
Last week, American Outdoor reported that sales in its
latest quarter dropped 33% and
warned flagging demand was
expected to last at least a year.
It has cut hundreds of jobs.
Weinstein Deal Is Called Off
Weinstein Co. once again
appeared headed toward a
bankruptcy filing Tuesday after
its would-be buyer said it was
withdrawing from a deal.
A group organized by Ron
Burkle and led by Maria Contreras-Sweet said it called off a
By Ben Fritz,
Keach Hagey
and Jonathan Randles
deal for most of the film and
TV studio’s assets less than a
week after saying it would buy
them by assuming $225 million
of debt. The group planned to
invest $275 million to relaunch
Weinstein Co. with a new name.
“We have received disappointing information about the
viability of completing this
transaction,” Ms. ContrerasSweet said in a statement. A
person familiar with the group
said it had found about $65
million of additional liabilities.
Weinstein Co.’s board in a
statement called the notion
that the investors had learned
new information “an excuse”
and said the company “has
been transparent about its
dire financial condition to the
point of announcing its own
LIKELY bankruptcy.” It said
the company would explore
options while continuing to
pursue a bankruptcy process.
The fate of the company was
unclear following weeks of onand-off-again talks and threats
of a bankruptcy filing. The studio has been in chaos since allegations of sexual misconduct
against former co-chairman
Harvey Weinstein were first reported in October. Mr. Weinstein
has admitted mistakes but denied allegations of nonconsensual sex.
The Burkle-Contreras group
on Monday began due diligence
and soon found the additional
liabilities, the person said.
The group was to wire $1.7
million to Weinstein Co. Tuesday to help it meet obligations,
according to a person familiar
with the deal. Now, a bankruptcy filing appears imminent,
said people with knowledge of
its financial situation.
A week ago Sunday, Weinstein Co. said it would file for
bankruptcy because the BurkleContreras group hadn’t agreed
to provide adequate interim financing. However, the two
sides re-entered talks and on
Thursday reached agreement.
The talks were organized by
the office of New York Attorney
General Eric Schneiderman,
who in February filed a lawsuit
against Weinstein Co. and Bob
and Harvey Weinstein alleging
sexual harassment and other
civil-rights violations. The lawsuit stated Bob Weinstein, in
his role as co-chairman, failed
to investigate and root out the
harassment. At the time, the
Weinstein Co. board said that
many of the allegations related
to the board are inaccurate.
A spokeswoman for Mr.
Schneiderman said, “We’ll be
disappointed if the parties cannot work out their differences
and close the deal. Our lawsuit
against the Weinstein Company,
Bob Weinstein, and Harvey
Weinstein remains active and
our investigation is ongoing.”
Bid for Cooking Oil Slips Away
Noisy attacks aren’t
hard to find…
BY MARIA ARMENTAL
But could you catch the silent attacker lurking
beneath the surface?
Using artificial intelligence, Darktrace finds the quiet cyberthreats inside your organization, no matter how they got in.
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Find out how at darktrace.com
RICHARD B. LEVINE/NEWSCOM/ZUMA PRESS
J.M. Smucker Co. and Conagra Brands Inc. have called
off a deal over the Wesson
cooking-oil brand after federal
regulators said it could result
in higher prices for canola and
vegetable oils for consumers.
The Federal Trade Commission had filed an antitrust
lawsuit on Monday, saying
that by buying the Wesson
brand, Smucker would control
at least 70% of the market.
Ohio-based Smucker already
owns the Crisco brand.
The FTC said that each
brand had attempted price increases over the past two
years but was constrained by
the presence of the other.
With that restraint no longer
in place, Smucker could raise
prices on both brands, the
commission alleged.
The companies announced
the $285 million deal last May.
Conagra said it would continue to evaluate the role of
the Wesson oil business in its
portfolio.
Smucker's agreement with Conagra faced antitrust objections.
World-Leading Cyber AI
.
THE WALL STREET JOURNAL.
B4 | Wednesday, March 7, 2018
TECHNOLOGY
WSJ.com/Tech
Tencent and Alibaba,
already listed abroad,
would get clearance
to trade on home turf
BY CHAO DENG
AND LIZA LIN
BEIJING—The Chinese government is considering plans
that would allow shares in
technology giants such as
Tencent Holdings Ltd. and
Alibaba Group Holding Ltd. to
trade back home, a move that
could raise the profile of the
country’s tightly controlled
capital markets.
The country’s securities
regulator has reached out to a
number of state-owned investment banks to explore ways to
let already-listed companies
and private businesses issue
shares on the mainland, according to investment bankers
briefed on the discussions.
One option being considered is to allow such companies to issue depositary receipts, so they can bypass
Chinese law prohibiting firms
incorporated overseas from
going public on the mainland.
The likes of Tencent and Alibaba are incorporated abroad
in a special corporate structure so they can get around
Chinese restrictions on for-
eigners investing in sectors
such as technology.
It is part of China’s longerterm goal to turn the tide on
years of the country’s businesses
going public overseas. Beijing
would like to see more Chinese
companies choose the mainland
capital market as their primary
listing destination eventually,
the investment bankers said.
“At some point, it makes
sense for Alibaba and Tencent
to have their primary listings
in China,” said Paul Gillis, an
accounting professor at Peking
University’s Guanghua School
of Management. “The government has a long-term plan to
wean these companies off the
U.S.,” he added.
Tencent and Alibaba are already among the world’s most
valuable companies, and China
has earmarked technologies
such as artificial intelligence
as important growth drivers
for the country’s economy.
Shares in Hong Kong-listed
Tencent—the owner of China’s
most popular messaging app,
WeChat—more than doubled
last year. In the process Tencent became the first Chinese
tech company to crack the
$500 billion valuation club,
joining industry titans such as
Facebook Inc. and Apple Inc.
NYSE-listed shares of Alibaba, China’s largest e-commerce company, almost dou-
QILAI SHEN/BLOOMBERG NEWS
China Weighs Boost for Markets
An Alibaba campus in China. The firm is listed on the NYSE.
bled last year. Alibaba now has
a market capitalization of
more than $460 billion.
Recently, a number of tech
firms said they are open to a
China listing, though executives haven’t gone into details.
Tencent Chief Executive Pony
Ma said the company would
“actively consider” listing inside China. Baidu Inc. Chairman Robin Li said recently
that the search-engine company has “always wanted to
come home to China.” Richard
Liu, chairman of Nasdaq-listed
e-commerce company JD.com
Inc., said “if the authorities allow it, we are willing.” The executives were speaking on the
sidelines of China’s annual legislative meetings, currently
taking place in Beijing.
Chinese technology firms
have in the past often opted
for overseas listings, many in
the U.S., for the prestige and
to benefit from rules allowing
dual-class share structures
that give company owners
more control over the business. The Chinese regulator’s
tough listing rules, such as the
requirement for companies to
be profitable for three years
before listing, have also deterred high-growth technology
firms from seeking direct
share sales at home.
The Wall Street Journal reported earlier this month that
Chinese regulators have already approached smartphone
maker Xiaomi Corp., which
has plans to go public in Hong
Kong. Investors say it would
be sensible for China’s tech
companies to list at home,
given the brand awareness
they command there and the
likelihood their shares would
trade at high valuations.
Still, analysts have some
concerns. Depending on how
contracts are drawn up, Chinese individual investors buying depository receipts could
lack full shareholder rights,
they say. The listings of a few
hot names could also fuel
speculation by Chinese individual investors, who dominate trading on the mainland.
“When the government is
supporting something, everyone rushes in,” said T.J. Wong,
a professor of business administration and accounting at the
University of Southern California’s Marshall School of Business. “What you don’t want is
a huge bubble, then a burst.”
Chinese companies often
have to wait years before getting approval from the market
regulator to list their shares.
The authorities would likely
expedite this process for some
tech companies, the investment bankers said.
Letting a number of topquality companies issue shares
on the mainland could help
the Chinese market mature,
analysts said.
—Yoko Kubota
contributed to this article.
Rising Discounts and Where They Go
BRENDAN SMIALOWSKI/AGENCE FRANCE-PRESSE/GETTY IMAGES
Drugmakers are paying back a
larger share of their gross
revenue to insurers via
discounts and rebates.
U.S. drug spending
Spending after
discounts and
rebates
Discounts
and rebates
$400 billion
Employers often use these rebates to reduce spending, rather
than passing them to employees
taking those medicines.*
Rebate allocations†
Reduce member
out-of-pocket
costs at point
of sale
Other
Combination
of plan and
member
savings
1%
15%
300
4%
200
11%
100
Reduce plan
spending on
drug costs
68%
0
2005
UnitedHealth’s move, which affects a limited number of consumers, comes amid a general debate
over drug spending and the industry’s opaque system of discounts and rebates.
2010
2015 ’16
Offset
member premiums
*Based on a survey of 236 plan sponsors †Doesn’t add to 100% due to rounding
Sources: IQVIA Holdings (drug spending); Pharmacy
Benefit Management Institute (rebate allocations)
THE WALL STREET JOURNAL.
Insurer to Pass Drug Rebates to Customers
BY ANNA WILDE MATHEWS
AND JOSEPH WALKER
UnitedHealth Group Inc.’s
insurance arm will change how
it handles some rebates it gets
from drugmakers, passing
them on to individuals who
take the medicines amid pressure to reduce costs and bolster transparency around
pharmaceuticals.
The move by the biggest U.S.
insurer, which will affect only a
limited slice of customers, spotlights a broader debate over
spending on drugs and the industry’s opaque system of discounts and rebates. The Trump
administration has suggested it
might make a similar change in
the Medicare program.
At issue are the rebates that
drugmakers routinely pay to insurers and pharmacy-benefit
managers on brand-name drugs,
offsetting the full listed prices.
The companies use the rebates
in a variety of ways, including
lowering their own costs and
keeping premiums down. They
also often pass along much of
the benefit to employer clients.
But critics, including some
drugmakers, say more of the rebates should go directly to the
consumers who take the drugs.
UnitedHealth said that
starting next year, the plans
that its UnitedHealthcare unit
insures for employers will redirect the “overwhelming majority” of the rebate sums to the
individuals taking the affected
drugs. The change, for around
7.5 million covered people, will
reduce costs for individuals by
amounts ranging from a few
dollars to more than a thousand dollars per prescription,
UnitedHealth said.
Dan Schumacher, president
of UnitedHealthcare, said the
company believes it is the first
major insurer to make such a
change. “We see it, for those
most directly affected, as an
opportunity to provide greater
benefit and lower costs.”
But UnitedHealth said the
change won’t affect the approximately 18.6 million consumers in UnitedHealthcare’s
“self-insured” plans, where the
employer is the payer. PBMs
and insurers, including UnitedHealth, have previously offered employers the option to
pass along the rebates to individuals. But only around 4% of
employers do it, while 68% use
the money more generally to
offset their spending on drugs,
according to a survey of employers by the Pharmacy Benefit Management Institute.
A spokeswoman for Express
Scripts Holding Co. said most
of its clients “prefer to use the
savings from rebates to keep
costs low for all members” by
holding down premiums. CVS
Health Corp. said clients covering around 12 million people,
out of the 94 million whose
drug benefits the company manages, pass on the rebates to individuals taking the drugs.
Nathan Cassin, an assistant
vice president at Aon PLC,
said employers “like the flexibility” of being able to use rebate money as they choose,
and PBMs typically charge a
fee to pass along rebates to individuals. “That’s a reason not
to do it,” he said.
The focus on rebates has
grown as brand-name drug
prices skyrocketed in recent
years. Insurers and PBMs have
demanded ever-larger rebates
in exchange for covering the
drugs. Last year, rebates paid
by drugmakers to insurers and
PBMs represented an estimated
23.8% of gross drug costs in
Medicare’s Part D, the prescription-drug program for seniors
and the disabled, up from 9.6%
in 2007, according to Medicare’s board of trustees.
Currently, people enrolled in
high-deductible employer plans
can end up paying the full list
price of their medicine before
they meet their deductible,
even though the insurer is getting it at a discounted cost.
Aetna Inc. said, “The majority of rebates we receive go toward lowering premiums and
fees for members.” Cigna Corp.
said it “obtains and shares those
discounts with our clients according to the benefit plan design they have chosen.” Anthem
Inc. said, “Rebates are used in
helping to make premiums and
copays more affordable.”
Facebook
Sued by
BlackBerry
On Patents
BY DAVID GEORGE-COSH
TORONTO—BlackBerry
Ltd. claimed in a lawsuit Tuesday that Facebook Inc. and its
WhatsApp and Instagram units
have infringed its patents and
swiped intellectual property
from its BlackBerry Messenger
technology.
In its 117-page court filing in
U.S. federal court in Los Angeles, BlackBerry said the defendants “created mobile messaging applications that co-opt
BlackBerry’s innovations, using
a number of the innovative security, user interface, and functionality enhancing features
that made BlackBerry’s products
such a critical and commercial
success in the first place.”
The suit alleges the defendants improperly used BlackBerry’s intellectual property
that streamlines notifications to
“prevent users from being inundated,” as well as the display of
time stamps on messages and
the tagging of friends and family in social-media photographs.
The suit also claims the de-
The Canadian firm
says WhatsApp and
Instagram swiped
intellectual property.
fendants co-opted innovation
that allows users to more easily
interact while playing mobile
games.
The Canadian company
hasn’t said how much it wants
in financial compensation
from Facebook, but requested
a jury trial.
“We have a lot of respect
for Facebook and the value
they’ve placed on messaging
capabilities, some of which
were invented by BlackBerry,”
said Sarah McKinney, BlackBerry’s head of corporate communications. “However, we
have a strong claim that Facebook has infringed on our intellectual property, and after
several years of dialogue, we
also have an obligation to our
shareholders to pursue appropriate legal remedies.”
Facebook acquired Instagram for $1 billion in 2012 and
it bought WhatsApp, a mobile
messaging app, for $19 billion two years later. The
Menlo Park, Calif.-based company said it plans to contest
BlackBerry’s lawsuit.
“BlackBerry’s suit sadly reflects the current state of its
messaging business,” Facebook deputy general counsel
Paul Grewal said. “Having
abandoned its efforts to innovate, BlackBerry is now looking to tax the innovation of
others. We intend to fight.”
BlackBerry’s lawsuit comes
nearly a year after it was
awarded $815 million in patent
royalties by Qualcomm Inc. as
the company, based in Waterloo, Ontario, seeks to pursue
more patent deals.
—Deepa Seetharaman
contributed to this article.
The Face of Real News
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© 2018 Dow Jones & Company, Inc. All rights reserved. 6DJ6260
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B5
NY
BUSINESS NEWS
BY MIKE COLIAS
General Motors Co. has
tapped a former McDonald’s
Corp. executive to give the auto
maker’s Cadillac brand a shot
in the arm.
Deborah Wahl, who has
auto-industry experience including a stint with Toyota Motor Corp.’s Lexus, will take over
as Cadillac’s chief marketing
officer later this month. The
move comes 10 months after
Ms. Wahl left the same position
at McDonald’s amid a management shake-up aimed at reviving the burger chain’s fortunes.
Ms. Wahl succeeds Uwe Ellinghaus, a former BMW AG executive who led Cadillac’s marketing efforts for nearly four
years before leaving in December. Cadillac is expanding rapidly in China, but its attempts
at a comeback in the U.S. haven’t been as successful.
Once the dominant luxury
brand in the car business and a
prominent symbol of American
success, Cadillac now lags far
behind BMW, Lexus and Daimler AG’s Mercedes-Benz. Cadillac has lost U.S. market share
each year since 2014, even as
its sales in China—the world’s
biggest auto market—have tripled over the same period.
A Detroit native, Ms. Wahl
spent six years at Lexus, where
she worked to make the brand
more upscale, including the introduction of its first $100,000plus offering, a hybrid sedan.
She left Lexus to take the top
marketing job at Chrysler,
where she worked about 18
months before the company’s
2009 bankruptcy. She was later
marketing chief for home
builder PulteGroup, and spent
time at Ford Motor Co.
Cadillac President Johan de
Nysschen, hired in mid-2014 to
lead Cadillac’s turnaround, has
played down market share. Instead, he is focused on improving Cadillac’s bottom line by
eliminating marketing tactics
that harmed the brand’s image
for years, such as sales to
rental companies and steep
end-of-the-month discounts.
Cadillac’s dealers, stung by
sluggish sales, have expressed
frustration with the brand’s
marketing and have pressed
Mr. de Nysschen’s team for a
new direction, according to
people familiar with the matter. Although it is experimenting with subscription services
for consumers and semiautonomous driving features, Cadillac
Deborah Wahl
has worked in
marketing at
Toyota Motor’s
Lexus unit and
most recently
at McDonald’s.
isn’t often regarded as being in
a league with Tesla Inc. or
Volkswagen AG’s Audi luxury
brand.
Ms. Wahl’s appointment
comes as Mr. de Nysschen prepares model introductions to
fill out a thin lineup, a problem
that has exacerbated the sales
slump. Cadillac will launch five
models over the next two
years, starting with the XT4
crossover SUV this year.
Mr. de Nysschen also wants
better service at Cadillac’s 900
U.S. dealerships. In an interview last year, he said the
brand’s primary challenge is
getting luxury buyers to consider a Cadillac, which has improved its vehicles but has a
tough time getting a serious
look from Audi or Mercedes
owners. “Great brands are not
built overnight,” he said.
Mahindra Keeps Watch on Tariffs
BY JOHN D. STOLL
AUBURN HILLS, Mich.—In
this northern Detroit suburb,
tariffs broached by the Trump
administration could tilt the
equation for local businesses.
India’s Mahindra & Mahindra Ltd., a leading tractor seller
that has manufacturing operations here, on Friday started
selling its Roxor off-roader to
the public, and online orders
were coming in by the minute.
At the time, news was piping
out of Washington about President Donald Trump’s planned
tariffs on steel and aluminum.
To build the $15,500 Roxor,
Mahindra uses hydraulic lines
shipped from California, seatbelts from Indiana and instrument panels from a supplier
only a few cities away. Yet the
bulk of the parts needed to assemble it are delivered to Auburn Hills in five containers
coming from India.
Mahindra sank tens of millions of dollars into operations
in Auburn Hills and neighboring Pontiac and created dozens
of jobs. Pawan Goenka, the
company’s longtime automotive
chief, said that even though the
company has ways to deal with
increases in input prices, President Donald Trump’s trade policy could affect plans for nearterm expansion.
For now, he isn’t panicking.
“Tariffs go up and down,” Mr.
Goenka said during an event introducing the new product.
“We’re not importing steel, so
we don’t know what we are doing will be affected.”
The Roxor is an unusual vehicle, looking much like Fiat
Chrysler Automobiles NV’s
iconic Jeep Wrangler, but
priced and equipped to compete with four-wheelers that
aren’t certified for highway use.
Unlike certain competitors that
rely on plastic for much of the
body, the Roxor’s 3,000-pound
body is forged from nearly fin-
Sum of Its Parts
Average weight of a car produced in North America, broken down by individual materials.
Total average weight: 3,991 pounds
For a passenger car
Rubber 198
Glass 95
Iron castings 268
Steel,
2,138 pounds*
Aluminum Plastics
395
334†
Other
338
Fluids/Lubricants 225
Note: Data are based on 2015 North American production *All types †Includes plastic composites
Source: American Chemistry Council
THE WALL STREET JOURNAL.
JOHN STOLL/THE WALL STREET JOURNAL
GM’s Cadillac Gets
New Marketing Chief
A Roxor model under assembly in Michigan. The Indian firm began selling the vehicle in the U.S.
ished steel coming from outside
America’s borders.
Because the Roxor doesn’t
quite fit a type, Mahindra has
wiggle room on its price tag in
the event of a spike in material
costs. “A product becomes
price sensitive when there are
many different products” like
it, Mr. Goenka said in an interview near the Roxor factory
floor.
Still, the Roxor is vulnerable
to tariffs if they lead to a trade
war. Mahindra’s new vehicle is
targeted at ranchers, farmers,
off-road enthusiasts and motor
sports junkies, limiting its demand to specific regions, analysts say. Depressed prices for
commodities, including corn
and oil, could threaten a significant slice of the target audi-
ence.
Other customers, using allterrain vehicles for hunting or
trailblazing, could cut back if a
trade war cripples the economy
or costs Americans their jobs.
Less than a mile from Mahindra’s factory, executives at
Lucerne International, a small
auto-parts supplier, are puzzling over what the tariff plan
means.
“I woke up to crazy headlines about tariffs on steel and
aluminum ‘products,’ but I have
no idea what that actually encompasses. Raw material?
Blanks? Unfinished product? If
it includes finished, machined
components, then I’m absolutely screwed,” wrote Chief
Executive Mary Buchzeiger in a
text exchange while on business
in China.
The 43-year-old executive
splits time between Michigan
and China, where she sources
components that are shipped to
Auburn Hills, finished and then
used on the doors of Jeep
Wranglers and other automobiles. The White House, she
says, hasn’t delivered enough
clarity for her to know how Lucerne will be affected.
Machined steel and aluminum components—many made
overseas—represent 85% of the
$35 million worth of products
she sells annually.
Ms. Buchzeiger is planning
to move her family to Asia this
summer, hoping to take advantage of global opportunities.
—Chester Dawson
contributed to this article.
ADVERTISEMENT
Career Opportunities
To advertise: 800-366-3975 or WSJ.com/classifieds
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Phelps County Regional Medical Center
in Rolla MO is looking for
Multiple Hospitalist positions.
Send CV to Beth Hedrick
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B6 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
INTERNATIONAL PROPERTY REPORT
Europe
Banks Throw Off the Lending Shackles
Real-estate loans are
on the rise as lenders
ramp up business and
compete on rates
Revival
European commercialproperty investment
€350 billion
BY PETER GRANT
AND JEANNETTE NEUMANN
300
When Spain’s Bankia SA received a bailout in 2012, it was
prohibited from making the
kind of real-estate loans that
triggered the bank’s implosion.
That ban expired on Jan. 1
and, like other Spanish lenders, Bankia is now jumping at
the opportunity to finance
real-estate projects again.
“It’s a good time to be in
the sector; in terms of growth,
the cycle still has upside,” said
Alberto Manrique, head of
real-estate development finance at Bankia, Spain’s
fourth-largest bank by market
capitalization.
With the European economy expanding and most of
banks’ balance sheets restored
to health, many European financial institutions are boosting loan volumes in their realestate lending businesses and
competing aggressively on
rates.
BNP Paribas SA increased
its portfolio of commercial
real-estate loans by doubledigit percentages in 2016 and
again in 2017, said Gilles Polet,
head of European real-estate
finance for corporate and institutional banking at the
Paris-based bank. Its 40 deals
last year included a €625 million ($771 million) refinancing
200
250
150
100
PLP ARCHITECTS
50
0
2007 ’09
’11
’13
’15
’17
Note: €100 billion=$123 billion
Source: Real Capital Analytics
Coima obtained a loan for the redevelopment of the former Unilever headquarters in Milan.
THE WALL STREET JOURNAL.
of the Dundrum Town Centre,
one of Ireland’s largest shopping malls.
Paris-based Natixis SA,
meanwhile, has emerged as
one of the most active lenders
in the U.S. market. Late last
year, it led a group that provided a $480 million construction loan to Cottonwood Management
LLC
for
the
development of a more than
800,000-square-foot mixeduse project in Boston’s Seaport
District.
Some financial institutions
in a few countries, such as
Greece, remain troubled, and
the stocks of even well-capitalized banks are being
shunned by investors because
of low profitability. But realestate lending is back in vogue
among banks that have returned to health.
Some banks got back into
real-estate lending before others. ING Groep NV did so in
late 2013 partly because, as a
deposit-taking bank, it was under pressure by the ECB to deploy cash and diversify, said
Mike Shields, ING’s head of
real-estate finance for the
U.K., U.S. and Asia.
Domestic banks in the euro
area had €947.3 billion of realestate loans at the end of
2016, the last year for which
statistics are available, according to the ECB. That is up
from €910.7 billion at the end
of 2014.
European bank lending also
is rising sharply in the U.S. For
example, U.S. branches of German banks held $24 billion of
U.S. commercial real-estate
loans in the third quarter of
2017, compared with $14 bil-
“We have capital and we
have appetite,” said Roman
Kogan, Deutsche Bank AG’s
European head of commercial
real estate.
Bankia is building up a
pipeline of loans to finance
residential construction in
Spain. Mr. Manrique anticipates that within about three
years, Bankia will capture up
to an 8% market share of what
he estimates to be the country’s €5.5 billion annual realestate financing sector.
The availability of debt financing is a sign of health in
the European real-estate market. Sales of commercial property are strong, pushing values
in some markets to records.
Last year, investors purchased
€312 billion of commercial
property in Europe, up from
€281 billion in 2016, according
to data firm Real Capital Analytics.
Values have risen so high
that some bank regulators
have expressed concern. In his
remarks to the European Parliament in February, Mario
Draghi, the president of the
European Central Bank, said
commercial property was a
segment that needed close
monitoring to protect against
a possible asset bubble. “We
actually see stretched valuations,” he said.
The ramp-up in lending
comes after a long slog stemming back to the 2008 global
financial crisis. For years,
many European banks reined
in their real-estate businesses
because of a weak European
economy and pressures from
regulators and others to beef
up their capital.
lion in the third quarter of
2015, according to data firm
Trepp LLC.
Some market participants
said some lenders are trying
to win business by increasing
loan sizes relative to a property’s value. “Banks try to
stick to 65% to 70% loan-tovalue [ratio],” said Torsten
Pokropp, a lawyer in DLA
Piper’s Frankfurt office. “However, we now see 80% again.”
Many European bank executives said they are trying to
learn from past mistakes and
avoid softening underwriting
standards. They said they are
primarily dealing with increasing competition by cutting
rates. That is reducing borrowing costs for many real-estate investors even in a rising
interest-rate environment.
Still, some borrowers are
able to obtain bank financing
for new construction, renovations and other projects that
involve more risk.
For example, a €650 million
development fund raised by
Coima SGR SpA obtained a
€56.4 million loan from Banco
BPM SpA—an Italian bank
formed by the merger of
Banco Popolare and Banca
Popolare di Milano—for the
redevelopment of the former
Unilever headquarters in Milan’s Porta Nuova neighborhood.
Coima was able to get such
a loan thanks to its history of
paying off its debts, said Manfredi Catella, Coima’s chief executive. It would be tougher
without such a track record,
he said.
PLOTS
& PLOYS
In Germany, Housing Market Tightens Up
BY WILLIAM WILKES
MORTGAGE-BACKED LOANS
Default Rate Drops
Eight Months in Row
SEAN GALLUP/GETTY IMAGES
BERLIN—Property prices in
Germany are expected to keep
rising as the supply of housing
dwindles and demand increases.
Despite an annual shortfall
of about 100,000 homes, construction of new houses
slumped 8% in the first 11
months of 2017, compared
with the same period in 2016.
For investors, the worsening supply-demand imbalance
has been a boon. Property
prices in Berlin, Frankfurt, Cologne and other major cities
rose by about 10% last year to
records, according to property
advisory firm JLL.
Dedicated property investment firms are outperforming
even those gains, with many
posting 40% increases in portfolio value in 2017 after rises
of 20% in 2016. Investment
flows into German property
hit a record of $19.3 billion
last year, according to JLL.
After a record-long economic expansion, Germany’s
cities are rapidly running out
of land with government permits for new residential buildings. Stringent planning laws
mean new plots won’t be freed
up for housing soon.
Further restricting supply
are new energy regulations
and a shortage of construction
workers, which make new
housing projects complex and
expensive to undertake, say
architects, builders and planners.
German city property is
seen as attractive by international investors put off by the
London property market by
Brexit uncertainty and the
possibility of a Labour government led by self-described socialist Jeremy Corbyn.
Investment advisers warn,
however, that international
property speculators, used to
the light-touch regulation of
the London property market,
should keep an eye on potential government regulations
designed to protect German
residents at the expense of
landlords.
While U.K. government officials have largely avoided intervening to curb residential
price and rental growth, their
German equivalents in national and local government
have warned they could move
to tighten existing laws aimed
at capping rents.
In Germany, the scarcity in
supply appears here to stay.
While German cities aren’t
short of previously developed
or undeveloped land, strict
planning processes mean it
can take up to six years to
make this land available for
The housing supply in many large cities, like Berlin, hasn’t kept up with demand generated by Germany’s economic boom.
Hard to Get
Home prices in Germany's major cities are rising, as demand outstrips supply.
Berlin's private
house prices
New households looking for a
home in Germany
Total increase from a year earlier
Housing starts,
January through November
600 thousand
600 thousand
3,750
500
500
3,500
400
400
3,250
300
€4,000 a square meter
300
Projection
3,000
200
200
2,750
100
100
2,500
2014
0
0
2015
2016
2017
2014
2015
2016
2017
Sources: JLL (prices); Federal Statistical Office, Destatis (demand and supply)
construction, according to city
planners and property developers.
Most large municipalities
have failed to keep up with the
demand generated by Germany’s economic boom, which
is drawing young professionals, and an influx of immigrants. Adding to this is a tide
of retiring baby boomers who
are ditching suburban homes
for city-center apartments,
real-estate agents say.
“Mayors in big German cities have been getting the demographics wrong for years,”
said Peter Willisch, managing
director at Peakside Capital
Advisors, an investment advisory firm in Frankfurt. “Land
is very scarce.”
Even if land is available,
shifting regulations on building materials and rules that
demand developers incorporate children’s playgrounds
and parking spaces for bicycles mean many developers
have been hoarding land
rather than building on it, further crimping the supply of
new housing.
Strong energy regulations
also mean construction workers trained in how to build
properties that meet exacting
standards are hard to come by,
2014
2015
2016
2017
THE WALL STREET JOURNAL.
says Frankfurt architect Peter Schumacher.
Most city dwellers in Germany are tenants and they
have been putting pressure,
via campaigns and protests, on
local politicians to put a lid on
prices and rents. Rents per
square meter in Berlin rose 9%
in 2017 after growth of 13% in
2016, according to JLL. Rental
prices rose 5% in Munich and
3.6% in Frankfurt, with median
rents in the cities climbing
60% and 44%, respectively,
since 2008.
That has been good news
for Frankfurt-listed landlord
Deutsche Wohnen SE, whose
shares have more than doubled since 2014. Shares in
property firm Vonovia SE
have almost doubled over the
same period, far outstripping
the 27% gain in the blue-chip
DAX index.
One potential danger facing
landlords could be government
interventions to protect tenants from further rent rises,
which would cap returns for
investors. Germany introduced
rental price controls in certain
cities in 2015 in response to
sharp rent increases.
In many markets, landlords
have used loopholes to sidestep the rules, but the recent
coalition agreement between
Chancellor Angela Merkel’s
conservatives and the centerleft SPD promises to tighten
the regulations. One new law
expected by developers would
restrict the ability of landlords
to push renovation costs on to
tenants.
Meanwhile, houses built in
the former East Germany during the Cold War are vulnerable to drastic revaluations because of energy regulations,
said Mr. Willisch of Peakside
Capital Advisors. If the government decides to tweak
rules to demand residential
buildings become more energy
efficient, landlords may have
to install costly energy-saving
measures such as new windows, doors or insulation, or
face €50,000 ($61,600) fines.
The delinquency rate for securitized loans in the commercial
real-estate industry has dropped
for eight consecutive months,
defying expectations in recent
years of a wave of defaults.
The delinquency rate for commercial mortgage-backed securities came in at 4.51% in February, down from 5.31% in the
same period a year earlier, according to real-estate data provider Trepp Inc. The rate hit a
high of 10.34% in July 2012.
Investors had been expecting
an increase in defaults in 2016
and 2017 as the large volume of
commercial mortgage-backed securities packaged in 2006 and
2007 reached maturity. But rising real-estate values, low interest rates and a surge of debt
capital from insurers and other
sources have allowed property
owners to refinance or restructure debts.
The delinquency rate is likely
to decline further in the coming
months as fewer securitization
deals mature, according to
Trepp.
—Esther Fung
REITS
Boards With Women
Best All-Male Panels
The real-estate industry’s reputation for being an old boys’
network might be hurting investors in real-estate investment
trusts.
That is the conclusion of a
new report by Wells Fargo Securities that analyzed 165 equity
REITs from 2006 to 2017. The
analysis “determined that companies with more than the average percentage of women on its
boards achieved higher average
price and total returns over that
period,” the report said.
The average percentage of
women on REIT boards was
15.5%, the report said. The share
prices of REITs with higher-thanaverage percentages outperformed those with no female
representation by 1.93 to 2.33
percentage points, according to
the report. The outperformance
was 1.33 to 1.69 percentage
point when both share price and
dividend were taken into account.
“There is already a considerable volume of research that
delves into the benefits of a
more inclusive board,” such as
different skill sets, the report
said. “Our purpose here is to
shine a spotlight on board diversity in real estate.”
—Peter Grant
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B7
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B8 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
INTERNATIONAL PROPERTY REPORT: EUROPE
Tech Goes Further Afield
New outposts sprout
in overlooked cities
like Vilnius, Lithuania,
and Tallinn, Estonia
BY SHEFALI ANAND
PAU BARRENA/AFP/GETTY IMAGES
BY SHEFALI ANAND
New technology centers are
mushrooming throughout Europe, boosting office markets
in unlikely places.
Technology and related
companies are fueling 20% of
the office space demand in
small capital cities like Lisbon,
Vilnius, Lithuania, and Tallinn,
Estonia, according to brokerage firms. Leasing is equally
strong in second-tier cities
such as Barcelona, Kraków, Poland, and Edinburgh that are
becoming popular with the
tech industry for their lower
rents and growing pools of talent.
Strong leasing demand
from tech companies is helping to boost overall leasing activity in many of these markets.
For example, in Edinburgh,
tenants leased over 950,000
square feet of office space in
the first three quarters of
2017, more than all of both
2015 and 2016, according to
CBRE Group Inc. In Lisbon,
about 1.8 million square feet of
office space was leased in
2017, up 16% from 2016, CBRE
said.
“My clients are increasingly
asking to consider second and
third cities rather than just
the capital cities because of
the competition,” said Stephen
Fleetwood, head of location
advisory for Europe at CBRE
Group Inc. “They’re saying,
let’s start looking deeper and
deeper for talent.”
Barcelona, for instance, is
home to dozens of startups
and e-commerce firms that cater to local demand. Barcelona-based GetYourHero.com
allows customers to book a
cleaning service via an app or
online, while Deliberry.com
promises to deliver supermarket products within an hour.
Test of Blockchain for
Real Estate Is Readied
The Mobile World Congress was recently held in Barcelona. The city is getting popular with tech.
Several European cities are
riding on the availability of
venture funding. Last year,
venture-capital
investors
poured $15.4 billion into companies based in Europe, versus
$7.6 billion in 2014, according
to data provider Preqin.
Also fueling this trend are
initiatives by local governments to build their tech industries by doing such things
as funding startup incubators
and organizing mobile and
other tech conferences. Barcelona, for example, just hosted
the Mobile World Congress.
In Barcelona, leasing by
tech companies between 2016
and 2017 was 66% greater than
the 10-year average, according
to JLL. Tech companies in Vilnius, Kraków and Lisbon
leased 196%, 39% and 28% respectively more during the
same time frames, JLL said.
Historic buildings in the
Lisbon city center, for example, have been converted into
incubators and co-working
spaces. In 2016 and 2017, tech
firms acquired 28% more office space than their 10-year
average, according to JLL. New
tenants planning to open op-
erations and support centers
this year include Alphabet
Inc.’s Google and Uber Technologies Inc.
Vilnius, a northern European city has for years been
home to technology and business support centers for
firms like British bank Barclays and money-transfer
company Western Union Co.
Vilnius is now attracting technology development operations by big firms such as
Uber and smaller firms like
American software maker
Unify Square Inc. and Belgian
data science company Sentiance NV.
“We will probably build
smaller tech hubs in the future, based on the quality of
living and the availability of
talent,” said Toon Vanparys,
chief executive of Sentiance.
There has been a flurry of
construction of modern offices
in Vilnius lately. Office space is
expected to go up by 9% by the
end of this year to 8.2 million
square feet, according to OberHaus Real Estate Advisors.
Kraków also is now building
on its background in outsourcing work to attract new tech-
ADVERTISEMENT
Business Real Estate & Services
To advertise: 800-366-3975 or WSJ.com/classifieds
nology development. Software
developer EPAM Systems Inc.
in 2016 opened its second office in Kraków to service clients and to work on software
development.
EPAM has several offices in
central Europe but the one in
Kraków will be its largest in
this area, ultimately with a
staff of about 1,000 people,
said Balazs Fejes, EPAM’s cohead of global business. “Cost
is one driver, but the second
driver is availability of talent,”
said Mr. Fejes.
Other European cities have
capitalized on the success of
one or two technology companies. Tallinn was the home of
the early development of
Skype, the internet-phone service provider. Skype was
bought by Microsoft Corp. for
$8.5 billion in 2011, but continues to have a development office in Tallinn.
The founders of TransferWise, a global money transfer
startup that has been valued
at more than a $1 billion, are
Estonian. Tech companies
leased 21% of all office space
in the city between 2012 and
2017, according to JLL.
The blockchain technology
that underpins cryptocurrencies such as bitcoin could
change the way property deals
are done and recorded more
than any other new technology, real-estate and technology
experts say.
And Sweden’s nearly 400year-old land mapping and
registration authority is likely
to become one of the first government agencies to test using
blockchain technology for conducting property sales.
The Lantmäteriet expects to
conduct the first such transaction in the next few months
and is shortlisting volunteers
who want to buy or sell a
property using the blockchain
system. “From the technology
point of view, we are quite
ready,” said Mats Snäll, Lantmäteriet’s chief digital officer.
Proponents of blockchain
say the technology would
make recording and transferring titles faster and much
more efficient. Transactions
that today take months to
complete could take days or
even hours, they say.
Blockchain technology also
is practically bulletproof when
it comes to fraudulent transactions, experts say.
In a blockchain data structure, transactions are created
and shared among a network of
computers. There is a unique
digital record of every transaction, which is grouped into a
“block.” Any changes or additions to the block would need to
be verified by a majority of
other participants on the network, making it hard to alter information stored on the block.
Just as cybercurrencies use
the blockchain to record who
owns a particular coin, or
when ownership is transferred,
the technology could be used
to record who owns a particular property, experts say. Many
governments still use paper
records for recording titles, a
cumbersome process that is
vulnerable to fraud.
Title-insurance companies
in the U.S. are concerned that
blockchain would reduce the
need for title insurance,
threatening that multibilliondollar business. Title-insurance companies essentially
guarantee property owners
that their ownership claim to a
property is solid. If it isn’t, the
insurers cover the loss.
To be sure, there remain
hurdles to the full-scale adoption of blockchain to conduct
real-estate deals in Sweden.
For one thing, Swedish law
doesn’t accept digital signatures to register a property
sale or purchase, so the law
would need to change.
Governments and agencies
in other countries such as the
U.S., India and the Republic of
Georgia also have been experimenting with blockchain land
registries. Tech giants such as
The technology would
make recording titles
much more efficient,
proponents say.
International Business Machines Corp. and startups like
blockchain technology developer R3 CEV also have tested
the technology for recording
titles.
The Lantmäteriet has joined
with companies such as telecom firm Telia Co. AB, consulting firm Kairos Future and
blockchain company ChromaWay AB to create a structure
for conducting real-estate
deals on the blockchain.
The Lantmäteriet is already
highly digitized and paperless.
Still, it can take three to six
months from the signing of a
purchase contract to the registration of the sale. With blockchain, the processes would be
much faster, Mr. Snäll said.
“It could be hours,” said
Jörgen Modin, chief solutions
architect at ChromaWay.
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B9
.
B10 | Wednesday, March 7, 2018
BUSINESS WATCH
Steelmaker’s Head
To Exit Amid Scandal
Kobe Steel Ltd.’s chief
executive said he would step
down effective April 1 to take
responsibility for a quality
scandal that has shaken Japan’s
reputation for manufacturing.
“To demonstrate that Kobe
Steel has changed and to speed
up change, we need new
management,” said Hiroya
Kawasaki, the head of Japan’s
third-largest steelmaker.
Kobe Steel—which supplies
the makers of cars, planes and
nuclear plants—admitted in
October to falsifying quality
specifications on products
shipped to hundreds of
customers, prompting an
investigation by the U.S. Justice
Department. On Tuesday, the
company said some of the data
falsification went back 50 years.
For all the upheaval, Kobe
Steel’s results have yet to take a
significant hit.The company has
said the scandal would reduce net
profit by ¥10 billion ($94 million)
for the year ending March 31 to
¥45 billion, up from a loss the
previous year, thanks to higher
steel prices and strong demand
for construction machinery.
—Mayumi Negishi
UNITED PARCEL SERVICE
Delivery Company
Taps Operating Chief
United Parcel Service Inc.
named Jim Barber as chief
operating officer, giving the
globe-trotting executive an
inside track to eventually lead
the package-delivery giant.
Mr. Barber, 57 years old, is a
UPS lifer who has led the
company’s international business
for the past five years. On
Tuesday, he was elevated to the
position most recently held by
CEO David Abney, who rose to
the top job in 2014.
Mr. Abney, 62 years old, still
has several major tasks on his
plate. UPS is in the midst of a
BUSINESS NEWS
multiyear spending plan to
modernize, expand and speed up
its global network so it can
better accommodate the secular
shift to online shopping.
Mr. Barber started with the
company as a delivery driver in
1985. As head of the
international division since 2013,
he has overseen UPS’s vast
network outside the U.S. and
helped push the company into
more emerging markets.
UPS named another company
veteran to replace Mr. Barber.
Nando Cesarone, 46 years old,
will become international
president after having served as
president of the company’s
European division since 2015.
—Paul Ziobro
YUI MOK/PA WIRE/ZUMA PRESS
KOBE STEEL
THE WALL STREET JOURNAL.
* *
DAIMLER
Car Maker Seeks
Closer Ties to Geely
Daimler AG Chief Executive
Dieter Zetsche on Tuesday said
the German car maker is
interested in developing a closer
relationship with China’s Geely
automotive group, its largest
shareholder, but said any
cooperation needs the backing
of Daimler’s current Chinese
partner BAIC Motor Corp.
Speaking on the sidelines of
the Geneva International Motor
Show, Mr. Zetsche praised
Geely’s founder, billionaire Li
Shufu, as a gifted entrepreneur,
saying “everything he touches
seems to succeed.”
“It doesn’t take too much
imagination to see the potential
upside for Daimler,” he said,
adding that cooperation with Mr.
Li’s Zhejiang Geely Holding
“potentially gives us more
options.”
Mr. Zetsche’s comments are
the clearest indication yet that
the maker of Mercedes-Benz
automobiles could be open for
closer cooperation with Geely, a
fast-growing Chinese auto group
that has become a global
juggernaut since its 2010
acquisition of Swedish auto
maker Volvo Cars.
—William Boston
The Danish toy maker’s sales decline comes amid difficulties for the industry globally. Lego has faced challenges in mature markets.
Lego Struggles to Pick Itself Up
BY DOMINIC CHOPPING
AND SAABIRA CHAUDHURI
Lego A/S, the Danish maker
of tiny plastic bricks, reported
a sharp fall in earnings as it
continued to struggle in North
America and Europe, underscoring the challenge its new
chief executive faces in turning
the company’s fortunes around.
Lego said Tuesday that revenue for 2017 fell 7.7% to 35
billion Danish kroner ($5.8 billion). Net income declined to
7.81 billion kroner from 9.44
billion kroner in 2016, while
operating profit fell 17% to
10.36 billion kroner.
Last year “was a challenging year, and overall we are
not satisfied with the financial
results,” said Chief Executive
Niels B. Christiansen, who
took the reins in October,
shortly after the company reported its first midyear sales
decline in more than a decade.
“There is no quick fix and it
will take some time to achieve
longer-term growth.”
The sales drop at privately
held Lego comes amid headwinds across the global toy
market. Hasbro Inc. last month
reported a surprise fall in
fourth-quarter revenue, blaming
waning appeal for its “Star
Wars” lineup, weakness in Europe and disruptions related to
the Toys “R” Us bankruptcy.
Barbie maker Mattel Inc. has
struggled through a painful
turnaround and declining sales.
Lego still managed to pull
off one milestone in 2017: It
topped both its listed American rivals in overall annual
sales for the year, assuming
the title of the world’s biggest
toy maker by revenue. Lego’s
annual sales, converted into
dollars, beat out Hasbro’s
$5.21 billion and Mattel’s $4.8
billion. That comparison,
though, benefited from the
Not Clicking
Lego sales fell last year, an
abrupt turnaround from fast
growth over the past decade.
Annual change in sales
40%
30
t7.7%
20
10
0
-10
2007
’10
’15
THE WALL STREET JOURNAL.
steady drop in the dollar
against the Danish krone.
After years of double-digit
growth, Lego has struggled in
some mature markets such as
the U.S. as it competes with
makers of videogames and devices as well as more tradi-
New Highs and Lows | WSJ.com/newhighs
ADVERTISEMENT
Business Real Estate & Auctions
Tuesday, March 6, 2018
Stock
ILLINOIS
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Sym Hi/Lo Chg Stock
Highs
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The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSE
American 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.
To advertise: 800-366-3975 or WSJ.com/classifieds
ACI Worldwide ACIW 25.42
ACM Research ACMR 13.19
ANGI Homesvcs ANGI 15.35
48.25
Aaron's
AAN
Abiomed
ABMD 285.48
75.48
ActivisionBliz ATVI
Acushnet
GOLF 22.17
Acxiom
ACXM 30.20
AdtalemGlbEduc ATGE 48.63
6.19
Agenus
AGEN
AgiosPharm
AGIO 85.00
AkamaiTech
AKAM 70.70
38.16
Alteryx
AYX
Amazon.com AMZN1542.13
7.09
Ambev
ABEV
Ameresco
AMRC 10.00
20.57
AmerEagle
AEO
40.65
AmericanPubEdu APEI
21.93
AmericanRenal ARA
Analogic
ALOG 101.80
30.00
Apptio
APTI
ArchCoal
ARCH 100.82
ArrayBioPharma ARRY 18.61
ArrowheadPharm ARWR 7.80
Atlassian
TEAM 59.81
Azul
AZUL 31.84
Bandwidth
BAND 29.15
Baozun
BZUN 48.75
80.84
BarrettBus
BBSI
Bio-Techne
TECH 144.94
Bioverativ
BIVV 104.94
BisonCapAcqnRt BCACR 0.52
Blackbaud
BLKB 106.64
BlueprintMed BPMC 98.92
40.87
BofI
BOFI
BookingHldgs BKNG 2095.87
BridgfordFoods BRID 21.55
105.58
BroadridgeFinl BR
56.10
Brown-Forman A BF.A
16.53
Buenaventura BVN
45.00
CF Industries CF
55.49
CIT Group
CIT
CME Group
CME 170.30
17.77
CNX Resources CNX
CabotMicro
CCMP 106.69
Cactus
WHD 26.27
CadenceBancorp CADE 29.06
3.8
40.0
1.0
2.3
0.8
-1.6
3.0
1.6
1.5
-3.0
-1.4
0.2
0.6
0.9
2.8
18.6
2.9
13.3
-2.1
10.5
-0.1
3.6
-0.3
2.5
1.0
2.2
5.5
31.1
5.9
2.3
-0.2
0.6
1.7
1.7
2.7
0.6
9.5
2.2
1.2
-0.6
-3.1
1.8
0.7
-0.8
3.2
2.7
2.4
52-Wk %
Sym Hi/Lo Chg Stock
CallawayGolf ELY
CambridgeBncp CATC
CenterStateBank CSFL
Chegg
CHGG
ChemoCentryx CCXI
ChurchillDowns CHDN
ClearsideBiomed CLSD
Codexis
CDXS
ColonyBankcorp CBAN
CommerceBcshrs CBSH
CommerceHub C CHUBK
ComtechTel
CMTL
Conduent
CNDT
ConnectOneBncp CNOB
CornerstoneOnDem CSOD
CoStar
CSGP
CoupaSoftware COUP
Cree
CREE
CypressSemi CY
DeckersOutdoor DECK
D&B
DNB
DynegyUn
DYNC
Dynegy
DYN
EastmanChem EMN
EdgeTherap
EDGE
8x8
EGHT
EmmisComm EMMS
EncompassHealth EHC
Endocyte
ECYT
EnphaseEnergy ENPH
Everbridge
EVBG
FRP Holdings FRPH
FactSet
FDS
51job
JOBS
FirstBanCorp FBP
FirstUnited
FUNC
FirstCash
FCFS
500.com
WBAI
Fortinet
FTNT
GRAVITY
GRVY
Gaia
GAIA
GencoShipping GNK
GeneralFin9%PfdC GFNCP
Gerdau
GGB
Guidewire
GWRE
H&E Equipment HEES
HP
HPQ
Haemonetic
HAE
Heidrick&Strug HSII
16.15
88.00
28.34
22.11
11.54
269.00
13.35
11.15
15.10
60.35
22.59
24.14
20.32
30.30
43.89
359.82
47.93
42.80
18.27
98.73
130.19
87.30
13.33
106.32
16.66
20.00
4.36
57.04
7.36
3.98
35.23
56.53
210.57
80.17
6.38
19.50
76.95
23.22
51.93
108.97
14.25
15.19
103.63
5.32
85.70
44.07
24.15
72.65
28.85
1.8
-0.7
1.1
1.9
1.5
1.2
25.4
1.4
-0.3
1.4
28.3
-0.2
0.9
1.0
1.0
...
-1.1
9.7
2.4
3.8
0.3
2.7
3.2
2.6
5.7
-0.3
1.7
2.3
11.2
3.8
5.6
0.3
1.0
4.8
1.8
1.3
2.0
9.4
2.4
6.6
0.4
0.7
0.9
-2.7
0.3
5.1
1.1
1.6
4.2
52-Wk %
Sym Hi/Lo Chg
Herbalife
HLF
HercHoldings HRI
HewlettPackard HPE
HillIntl
HIL
HowardHughes HHC
Huami
HMI
HubSpot
HUBS
IAC/InterActive IAC
ILG
ILG
IcahnEnterprises IEP
iKangHealthcare KANG
Insperity
NSP
Instructure
INST
Intel
INTC
InteractiveBrkrs IBKR
Intra-Cellular
ITCI
JonesLang
JLL
KAR Auction KAR
KapStonePaper KS
KenonHoldings KEN
KeysightTechs KEYS
LivePerson
LPSN
LoxoOncology LOXO
lululemon
LULU
MIAcquisitionsUn MACQU
MKS Instrum MKSI
Macrogenics
MGNX
MagellanHealth MGLN
MalibuBoats
MBUU
MammothEnergy TUSK
MarketAxess MKTX
Mastercard
MA
McCormick
MKC
MediciNova
MNOV
MercadoLibre MELI
MicronTech
MU
Microsemi
MSCC
Mimecast
MIME
Mindbody
MB
MiratiTherap
MRTX
MotorolaSol
MSI
MuleSoft
MULE
NamTaiProperty NTP
Nasdaq
NDAQ
NatlGeneral
NGHC
NatlInstruments NATI
NetApp
NTAP
Netflix
NFLX
Noodles
NDLS
97.09
70.91
19.48
5.85
133.97
12.62
118.60
155.54
34.16
62.17
17.08
68.50
44.85
51.33
71.30
22.98
168.75
55.98
35.01
33.22
52.86
15.55
132.48
83.98
11.84
119.00
32.16
106.80
36.13
31.51
212.55
180.09
110.27
11.57
411.71
54.64
67.52
37.41
38.90
32.17
108.75
34.29
13.85
84.47
24.60
52.97
64.43
325.79
7.30
2.7
5.0
2.3
...
0.7
-1.2
1.3
0.8
0.7
2.4
2.3
1.9
0.9
1.9
2.5
2.9
2.2
1.8
0.3
2.5
4.0
1.3
3.7
3.2
0.5
3.8
3.4
6.2
3.4
6.3
1.1
-0.6
0.3
2.4
5.0
3.3
...
3.4
...
-1.9
1.0
1.1
1.5
2.6
0.5
1.7
2.6
3.2
5.8
Mutual Funds | WSJ.com/fundresearch
Explanatory Notes
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TotRt
Data provided by
Fund
Tuesday, March 6, 2018
Net YTD
Net YTD
NAV Chg %Ret Fund
American Century Inv
46.59 +0.20
Ultra
American Funds Cl A
33.55 +0.19
AmcpA p
AMutlA p 41.04 +0.03
27.16 +0.03
BalA p
12.58
...
BondA p
61.92 +0.07
CapIBA p
CapWGrA 52.38 +0.22
57.25 +0.35
EupacA p
63.58 +0.22
FdInvA p
52.75 +0.30
GwthA p
10.27 +0.02
HI TrA p
41.42 +0.11
ICAA p
23.15 +0.05
IncoA p
45.19 +0.23
N PerA p
48.50 +0.51
NEcoA p
NwWrldA 68.53 +0.30
57.31 +0.34
SmCpA p
12.80
...
TxExA p
46.19 +0.06
WshA p
Baird Funds
...
AggBdInst 10.60
CorBdInst 10.96 +0.01
BlackRock Funds A
GlblAlloc p 19.84 +0.06
BlackRock Funds Inst
22.84 +0.04
EqtyDivd
19.96 +0.06
GlblAlloc
7.71 +0.02
HiYldBd
StratIncOpptyIns 9.98 +0.01
Bridge Builder Trust
NA
...
CoreBond
Dimensional Fds
5GlbFxdInc 10.79 -0.01
EmgMktVa 32.28 +0.06
EmMktCorEq 23.81 +0.10
IntlCoreEq 14.53 +0.12
20.40 +0.14
IntlVal
21.43 +0.22
IntSmCo
22.83 +0.22
IntSmVa
US CoreEq1 23.31 +0.12
US CoreEq2 21.95 +0.14
36.13 +0.39
US Small
US SmCpVal 37.87 +0.44
US TgdVal 24.97 +0.28
39.47 +0.17
USLgVa
Dodge & Cox
Balanced 108.19 +0.21
14.01 +0.06
GblStock
13.61 +0.01
Income
46.75 +0.32
Intl Stk
208.42 +0.52
Stock
DoubleLine Funds
NAV Chg %Ret Fund
... -1.1
TotRetBdI 10.45
7.3 Edgewood Growth Instituti
EdgewoodGrInst 32.18 +0.27 8.9
6.5 Federated Instl
... -6.0
0.6 StraValDivIS 5.76
... Fidelity
-2.1 500IdxInst 95.68 +0.25 2.4
-1.4 500IdxInstPrem 95.68 +0.25 2.4
2.5 500IdxPrem 95.68 +0.26 2.4
1.8 ExtMktIdxPrem r 63.44 +0.57 2.2
2.2 IntlIdxPrem r 43.06 +0.24 -0.3
6.5 SAIUSLgCpIndxFd 14.63 +0.04 2.5
... TMktIdxF r 78.18 +0.30 2.4
2.6 TMktIdxPrem 78.17 +0.29 2.4
... -2.2
-0.9 USBdIdxInstPrem 11.28
4.7 Fidelity Advisor I
8.7 NwInsghtI 33.23 +0.13 6.0
2.4 Fidelity Freedom
16.69 +0.05 0.7
2.7 FF2020
14.53 +0.05 0.9
-1.3 FF2025
18.29 +0.07 1.3
1.2 FF2030
Freedom2020 K 16.67 +0.05 0.7
-2.1 Freedom2025 K 14.51 +0.05 0.9
-1.9 Freedom2030 K 18.27 +0.07 1.3
Freedom2035 K 15.49 +0.07 1.8
0.7 Freedom2040 K 10.88 +0.05 1.8
Fidelity Invest
24.17 +0.06 1.9
0.3 Balanc
93.98 +0.47 7.1
0.8 BluCh
129.75 +0.41 7.6
-0.2 Contra
129.69 +0.40 7.6
0.8 ContraK
10.29 +0.04 0.5
CpInc r
39.93 +0.27 -0.2
NA DivIntl
195.28 +1.13 9.3
GroCo
-0.7 GrowCoK 195.27 +1.12 9.3
7.73
... -2.0
3.4 InvGB
10.96
... -2.1
2.5 InvGrBd
54.92 +0.41 0.7
-0.1 LowP r
109.10 +0.34 4.3
-0.4 MagIn
118.59 +0.55 8.0
0.8 OTC
23.82 +0.05 1.7
-0.6 Puritn
2.3 SrsEmrgMkt 22.38 +0.16 4.5
1.8 SrsGroCoRetail 18.23 +0.11 9.6
0.5 SrsIntlGrw 16.33 +0.13 1.1
10.67 +0.05 -0.2
-0.1 SrsIntlVal
... -1.8
0.3 TotalBond 10.40
0.9 First Eagle Funds
59.01 +0.22 -0.1
GlbA
1.1 FPA Funds
35.44 +0.15 2.2
1.1 FPACres
-1.1 FrankTemp/Frank Adv
2.30 +0.01 -1.3
0.9 IncomeAdv
2.4 FrankTemp/Franklin A
7.28
... -1.9
CA TF A p
IncomeA p
RisDv A p
2.32 +0.01
60.83 +0.26
FrankTemp/Franklin C
Income C t 2.35 +0.01
FrankTemp/Temp A
GlBond A p 11.85 -0.01
Growth A p 27.29 +0.18
FrankTemp/Temp Adv
GlBondAdv p 11.81 -0.01
Harbor Funds
CapApInst 75.50 +0.33
67.21 +0.49
IntlInst r
Harding Loevner
NA
...
IntlEq
Invesco Funds A
11.04 +0.02
EqIncA
John Hancock Class 1
15.32 +0.06
LSBalncd
16.33 +0.08
LSGwth
John Hancock Instl
DispValMCI 23.68 +0.11
JPMorgan Funds
MdCpVal L 40.40 +0.25
JPMorgan R Class
11.33
...
CoreBond
Lazard Instl
EmgMktEq 20.91 +0.15
Lord Abbett A
...
ShtDurIncmA p 4.21
Lord Abbett F
...
ShtDurIncm 4.21
Metropolitan West
10.41 +0.01
TotRetBd
...
TotRetBdI 10.40
9.79
...
TRBdPlan
MFS Funds Class I
40.80 +0.09
ValueI
MFS Funds Instl
25.27 +0.16
IntlEq
Mutual Series
31.75 +0.15
GlbDiscA
Oakmark Funds Invest
32.38 +0.05
EqtyInc r
86.74 +0.32
Oakmark
OakmrkInt 28.44 +0.22
Old Westbury Fds
14.69 +0.10
LrgCpStr
Oppenheimer Y
44.63 +0.28
DevMktY
44.11 +0.36
IntGrowY
Parnassus Fds
43.39 +0.30
ParnEqFd
PIMCO Fds Instl
NA
...
AllAsset
-1.3
-0.5
-1.4
0.1
0.1
0.1
8.7
-0.5
NA
0.7
0.9
1.6
1.6
0.3
-1.8
4.4
-0.3
-0.3
-2.0
-2.0
-2.0
...
-0.7
-0.2
0.6
2.9
-0.5
1.6
3.9
1.1
1.7
NA
44.50
32.00
39.59
32.88
62.05
80.02
25.73
59.26
78.16
44.80
35.80
183.56
106.40
10.35
23.21
14.93
13.92
39.27
10.10
118.03
78.99
78.70
27.43
152.31
52.35
266.23
3.94
23.93
124.69
72.69
93.58
29.14
171.91
83.13
52.60
55.52
104.69
28.95
34.40
30.70
23.51
6.59
52.10
18.89
43.68
22.67
42.84
4.00
42.00
87.47
212.05
41.19
34.11
81.18
10.09
21.60
27.77
67.77
78.11
12.30
5.0
-2.9
-1.6
0.1
3.9
2.3
4.1
1.1
1.1
1.1
3.6
1.6
1.5
2.4
2.4
0.3
0.6
2.3
1.0
1.6
1.6
-0.3
2.6
-0.1
-0.4
2.3
0.5
2.4
1.6
-0.1
-0.1
5.2
1.6
2.6
3.8
2.8
2.5
3.4
2.3
1.5
1.7
10.0
-2.2
2.3
3.6
6.0
0.7
8.4
13.6
1.2
0.9
0.8
1.9
1.8
0.1
1.4
-1.7
...
-0.4
-1.3
52-Wk %
Sym Hi/Lo Chg
VeriskAnalytics VRSK
WD-40
WDFC
WesBanco
WSBC
WestAllianceBcp WAL
WestlakeChem WLK
Workday
WDAY
Worldpay
WP
XPO Logistics XPO
Zillow C
Z
Zillow A
ZG
104.55
131.75
43.53
61.99
117.37
135.98
85.09
103.15
52.88
52.61
1.1
0.6
1.3
1.4
2.8
2.3
0.8
1.7
2.7
2.6
Lows
ADT
ADT
AcerTherapWt ACERW
ArgoGroup
AGII
ArmstrongFlooring AFI
BRF
BRFS
BlinkChargingWt BLNKW
BlueApron
APRN
BluerockResPfD BRGpD
CIM Comm
CMCT
CamberEnergy CEI
ChinaMobile
CHL
ConnecticutWater CTWS
CorpAmAirports CAAP
EQT GP
EQGP
FAT Brands
FAT
ForestCIty A
FCE.A
GovtPropIncoTr GOV
HuttigBuilding HBP
iFresh
IFMK
KingswayFin
KFS
LifetimeBrands LCUT
LifewayFoods LWAY
Mack-Cali
CLI
Nautilus
NLS
NextDecade
NEXT
OrmatTech
ORA
OutfrontMedia OUT
PacificEthanol PEIX
PetroQuestEner PQ
PortlandGenElec POR
Qumu
QUMU
RandCapital
RAND
RaveRestaurant RAVE
SCYNEXIS
SCYX
SentinelEnerSvs STNL
SinoGlobalShip SINO
SocialCapHed IPOA.U
Sparton
SPA
SpectraEnerPtrs SEP
SummitMidstream SMLP
TataMotors
TTM
USAutoPartsNtwk PRTS
UnitedTherap UTHR
UrstadtBiddle UBP
VEON
VEON
WGLHoldings WGL
WheelerREITPfdD WHLRD
XTL Biopharm XTLB
Net YTD
NAV Chg %Ret Fund
10.05
...
PIMCO Funds A
NA
...
PIMCO Funds D
NA
...
IncomeFd
PIMCO Funds Instl
NA
...
IncomeFd
PIMCO Funds P
NA
...
IncomeP
Price Funds
105.73 +0.49
BlChip
28.54 +0.04
CapApp
33.60 +0.08
EqInc
73.40 +0.20
EqIndex
67.62 +0.21
Growth
73.73 +0.04
HelSci
40.29 +0.14
InstlCapG
18.74 +0.11
IntlStk
15.04 +0.09
IntlValEq
91.58 +0.70
MCapGro
30.65 +0.16
MCapVal
56.19 +0.32
N Horiz
9.26
...
N Inc
OverS SF r 11.39 +0.05
22.73 +0.06
R2020
17.80 +0.06
R2025
26.31 +0.09
R2030
19.31 +0.07
R2035
27.78 +0.10
R2040
37.53 +0.05
Value
PRIMECAP Odyssey Fds
AggGrowth r 50.35 +0.28
41.09 +0.25
Growth r
Principal Investors
DivIntlInst 13.95 +0.09
Prudential Cl Z & I
14.18 +0.02
TRBdZ
Schwab Funds
42.17 +0.11
S&P Sel
TIAA/CREF Funds
20.11 +0.08
EqIdxInst
IntlEqIdxInst 20.16 +0.11
Tweedy Browne Fds
28.24 +0.16
GblValue
VANGUARD ADMIRAL
500Adml 252.72 +0.68
34.92 +0.08
BalAdml
CAITAdml 11.58 -0.01
CapOpAdml r161.17 +1.33
39.66 +0.10
EMAdmr
EqIncAdml 77.46 +0.05
ExplrAdml 93.41 +1.18
ExtndAdml 86.65 +0.77
...
GNMAAdml 10.21
GrwthAdml 75.73 +0.35
HlthCareAdml r 87.83 -0.02
...
HYCorAdml r 5.80
25.15 -0.01
InfProAd
IntlGrAdml 100.69 +1.03
...
ITBondAdml 11.01
ITIGradeAdml 9.49 +0.01
LTGradeAdml 9.97 +0.02
MidCpAdml 195.68 +1.41
...
MuHYAdml 11.20
...
MuIntAdml 13.89
...
MuLTAdml 11.39
...
MuLtdAdml 10.85
...
MuShtAdml 15.72
PrmcpAdml r140.18 +0.81
SmCapAdml 71.80 +0.64
...
STBondAdml 10.27
STIGradeAdml 10.52 +0.01
IncomeFd
Net YTD
NAV Chg %Ret
52-Wk %
Sym Hi/Lo Chg Stock
Nutanix
NTNX
OdonateTherap ODT
Okta
OKTA
OldLineBcshs OLBK
Ollie'sBargain OLLI
OnAssignment ASGN
ON Semi
ON
OrthofixIntl
OFIX
PTC
PTC
PacificPremBncp PPBI
PagSeguroDig PAGS
PaloAltoNtwks PANW
PaycomSoftware PAYC
Pearson
PSO
Perficient
PRFT
PetroleoBrasil PBR
PetroleoBrasilA PBR.A
PlanetFitness PLNT
PlatinumEagle EAGLU
Proofpoint
PFPT
ProsperityBcshs PB
Qualys
QLYS
Rapid7
RPD
RedHat
RHT
SS&C Tech
SSNC
SVB Fin
SIVB
SafeBulkers
SB
SailPointTechs SAIL
Salesforce.com CRM
SareptaTherap SRPT
ScrippsNetworks SNI
SendGrid
SEND
ServiceNow
NOW
Shutterfly
SFLY
SolarEdgeTech SEDG
SoCopper
SCCO
Splunk
SPLK
StarsGroup
TSG
Surmodics
SRDX
SussexBancorp SBBX
TCF Fin
TCF
TCF Fin Wt
TCF.WS
Talend
TLND
TechTarget
TTGT
Teladoc
TDOC
TenetHealthcare THC
Teradata
TDC
TidewaterWtA TDW.WS.A
TrancntlRlty
TCI
2U
TWOU
TylerTech
TYL
US Cellular
USM
US Foods
USFD
US PhysTherapy USPH
UnionAcqnUn LTN.U
UnityBancorp UNTY
UplandSoftware UPLD
Validus
VR
VeevaSystems VEEV
Vericel
VCEL
Fund
Top 250 mutual-funds listings based on total net assets for Nasdaq-published share
classes. 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. f-Previous day’s
quotation. p-Distribution costs apply, 12b-1. r-Redemption charge may apply. tFootnotes p and r apply. NA-Not available due to incomplete price, performance or
cost data. NE-Not released by Lipper; data under review. NN-Fund not tracked. NSFund didn’t exist at start of period.
!
!" #!$! !!
’17
Source: the company
tional toys for children’s attention. In September, the
company said it would lay off
8% of its workers and thin the
ranks of its decision makers.
While sales in North America and Europe fell during the
year, Lego said revenue in
China—an area of focus for the
company—grew in the high
double digits in 2017. It also
said it would open an office in
Dubai toward the end of 2018
to support its efforts to expand
in the Middle East and Africa.
Lego’s restructuring comes
as Hasbro and Mattel are also
scrambling to slash turnaround
times. Hasbro last year created
a team called “Quick Strike”
that aims to turn social-media
trends into products, while
Mattel has a small team developing toys based on trends.
Mr. Christiansen has defended the company’s high
prices, saying he doesn’t believe
the slowdown is tied to price.
-1.7 TotBdAdml
10.27 -3.5
0.00 -28.6
53.55 1.3
13.10 -2.3
7.45 -0.9
0.40 -2.4
2.52 -1.9
21.41 -2.2
14.80 -2.3
1.57 -13.6
45.11 -1.1
49.05 -2.3
14.62 -1.9
23.13 -1.0
7.15 -5.4
20.73 -0.7
13.36 1.2
4.89 6.4
8.70 -10.2
4.38 -2.2
13.25 ...
6.54 -1.6
16.67 0.3
11.30 -2.4
4.69 -3.0
54.18 -1.3
19.72 ...
3.50 -3.4
1.20 -11.1
39.27 -2.2
1.55 -10.3
2.54 -4.2
1.25 -3.3
1.35 -15.1
9.63 -3.2
1.74 -3.1
10.02 -0.1
16.35 0.7
38.30 -0.8
15.85 -2.1
26.78 -0.7
1.84 -2.0
108.65 2.1
15.37 -0.6
2.83 -2.1
80.97 -0.2
16.02 -3.5
1.70 -2.9
Net YTD
NAV Chg %Ret
10.47
...
TotIntBdIdxAdm 21.62 -0.01
NA TotIntlAdmIdx r 30.63 +0.18
TotStAdml 68.29 +0.25
NA TxMIn r
14.34 +0.11
41.66 +0.05
ValAdml
NA WdsrllAdml 67.35 +0.15
WellsIAdml 63.87 +0.02
NA WelltnAdml 72.15 +0.11
WndsrAdml 80.79 +0.37
9.8 VANGUARD FDS
0.9 DivdGro
26.63 +0.02
0.8 HlthCare r 208.24 -0.04
2.4 INSTTRF2020 22.58 +0.06
7.9 INSTTRF2025 22.97 +0.07
4.8 INSTTRF2030 23.28 +0.08
9.2 INSTTRF2035 23.59 +0.09
0.4 INSTTRF2040 23.89 +0.09
-0.5 INSTTRF2045 24.10 +0.10
5.2 IntlVal
40.18 +0.17
0.8 LifeCon
19.90 +0.03
6.9 LifeGro
33.99 +0.12
-1.9 LifeMod
27.23 +0.07
0.7 PrmcpCor
27.88 +0.16
0.8 SelValu r
30.94 +0.23
1.2 STAR
27.11 +0.11
1.5 STIGrade
10.52 +0.01
1.8 TgtRe2015 15.32 +0.03
2.0 TgtRe2020 31.45 +0.07
0.6 TgtRe2025 18.58 +0.06
TgtRe2030 33.86 +0.11
13.6 TgtRe2035 20.87 +0.07
10.3 TgtRe2040 36.18 +0.14
TgtRe2045 22.78 +0.10
0.4 TgtRe2050 36.66 +0.16
13.50 +0.01
TgtRetInc
-2.2 TotIntBdIxInv 10.81 -0.01
26.36
...
WellsI
2.4 Welltn
41.77 +0.06
37.96 +0.09
WndsrII
2.3 VANGUARD INDEX FDS
... 500
252.67 +0.68
ExtndIstPl 213.83 +1.89
-0.9 SmValAdml 56.84 +0.53
10.43
...
TotBd2
18.31 +0.11
2.4 TotIntl
68.26 +0.25
0.6 TotSt
-1.2 VANGUARD INSTL FDS
34.93 +0.09
4.9 BalInst
3.9 DevMktsIndInst 14.36 +0.11
-0.6 DevMktsInxInst 22.44 +0.16
86.65 +0.77
5.7 ExtndInst
75.74 +0.35
2.2 GrwthInst
10.24 -0.01
-1.9 InPrSeIn
249.28 +0.67
4.7 InstIdx
249.30 +0.67
1.3 InstPlus
-1.2 InstTStPlus 60.88 +0.23
-1.8 MidCpInst 43.23 +0.32
5.3 MidCpIstPl 213.19 +1.54
-2.6 SmCapInst 71.80 +0.64
-2.1 SmCapIstPl 207.25 +1.86
-5.7 STIGradeInst 10.52 +0.01
10.47
...
2.2 TotBdInst
...
-1.4 TotBdInst2 10.43
...
-1.2 TotBdInstPl 10.47
-1.8 TotIntBdIdxInst 32.44 -0.02
-0.1 TotIntlInstIdx r122.50 +0.75
0.3 TotItlInstPlId r122.53 +0.75
68.31 +0.26
4.9 TotStInst
41.66 +0.05
1.4 ValueInst
-0.7 Western Asset
NA
...
-0.6 CorePlusBdI
-2.2
-0.2
0.4
2.4
-0.5
0.6
0.3
-2.2
-0.6
2.3
0.3
1.3
0.2
0.5
0.7
0.9
1.1
1.3
0.8
-0.3
1.0
0.3
3.6
-1.1
1.2
-0.6
-0.1
0.2
0.4
0.7
0.9
1.1
1.2
1.3
-0.4
-0.2
-2.2
-0.6
0.3
2.4
2.2
-0.3
-2.3
0.4
2.3
0.6
-0.5
-0.5
2.2
4.7
-1.8
2.4
2.4
2.4
2.2
2.2
1.4
1.4
-0.6
-2.1
-2.3
-2.1
-0.2
0.4
0.4
2.4
0.6
NA
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B11
BIGGEST 1,000 STOCKS
How to Read the Stock Tables
The following explanations apply to NYSE, NYSE
Arca, NYSE American and Nasdaq Stock Market
listed securities. Prices are composite quotations
that include primary market trades as well as
trades reported by Nasdaq BX (formerly Boston),
Chicago Stock Exchange, Cboe, NYSE National and
Nasdaq ISE.
The list comprises the 1,000 largest companies
based on market capitalization.
Underlined quotations are those stocks with
large changes in volume compared with the
issue’s average trading volume.
Boldfaced quotations highlight those issues
whose price changed by 5% or more if their
previous closing price was $2 or higher.
Footnotes:
s-New 52-week high.
t-New 52-week low.
dd-Indicates loss in the most recent four
quarters.
FD-First day of trading.
h-Does not meet continued listing
standards
lf-Late filing
q-Temporary exemption from Nasdaq
requirements.
t-NYSE bankruptcy
v-Trading halted on primary market.
vj-In bankruptcy or receivership or being
reorganized under the Bankruptcy Code,
or securities assumed by such companies.
Wall Street Journal stock tables reflect composite regular trading as of 4 p.m. and
changes in the closing prices from 4 p.m. the previous day.
Tuesday, March 6, 2018
Stock
A B C
s
s
s
s
s
s
ABB
ABB 24.33
AECOM
ACM 36.39
AES
AES 10.93
Aflac
AFL 88.78
AGNC Invt
AGNC 18.39
ANGI Homesvcs ANGI 15.31
Ansys
ANSS 163.77
ASML
ASML 202.84
AT&T
T
36.87
AbbottLabs ABT 60.88
AbbVie
ABBV 114.56
Abiomed
ABMD 281.54
Accenture
ACN 158.03
ActivisionBliz ATVI 73.92
AcuityBrands AYI 154.20
AdobeSystems ADBE 212.01
AdvanceAuto AAP 118.59
AdvMicroDevices AMD 11.76
AdvSemiEngg ASX
7.15
Aegon
AEG
6.87
AerCap
AER 49.31
Aetna
AET 178.23
AffiliatedMgrs AMG 191.80
AgilentTechs A
68.11
AgnicoEagle AEM 39.17
AirProducts APD 164.20
AkamaiTech AKAM 69.94
AlaskaAir
ALK 64.30
Albemarle
ALB 100.14
Alcoa
AA
46.99
AlexandriaRlEst ARE 125.41
AlexionPharm ALXN 118.13
Alibaba
BABA 187.37
AlignTech
ALGN 255.97
Alkermes
ALKS 58.88
Alleghany
Y
633.80
Allegion
ALLE 83.92
Allergan
AGN 150.71
AllianceData ADS 235.09
AlliantEnergy LNT 38.17
Allstate
ALL 93.43
AllyFinancial ALLY 28.12
AlnylamPharm ALNY 123.25
Alphabet A GOOGL 1100.90
Alphabet C GOOG 1095.06
Altaba
AABA 75.17
AlticeUSA
ATUS 20.25
Altria
MO 64.77
AlumofChina ACH 14.99
Amazon.com AMZN 1537.64
Ambev
ABEV 7.07
Amdocs
DOX 67.18
Amerco
UHAL 332.82
Ameren
AEE 53.94
AmericaMovil AMX 18.63
AmericaMovil A AMOV 18.60
AmerAirlines AAL 53.57
AEP
AEP 65.50
AmerExpress AXP 96.07
AmericanFin AFG 114.39
AIG
AIG 58.03
AmerTowerREIT AMT 138.88
AmerWaterWorks AWK 79.69
Ameriprise AMP 155.57
AmerisourceBrgn ABC 94.70
Ametek
AME 76.11
Amgen
AMGN 190.35
Amphenol
APH 89.75
AnadarkoPetrol APC 58.81
AnalogDevices ADI 91.93
Andeavor
ANDV 96.43
AndeavorLog ANDX 46.36
AB InBev
BUD 112.76
AnnalyCap
NLY 10.26
AnteroResources AR
20.53
Anthem
ANTM 232.75
Aon
AON 142.17
Apache
APA 35.36
ApartmtInv AIV 38.62
ApolloGlbMgmt APO 32.85
Apple
AAPL 176.67
ApplMaterials AMAT 59.99
Aptiv
APTV 89.95
AquaAmerica WTR 33.20
Aramark
ARMK 41.10
ArcelorMittal MT
33.16
0.14
0.23
-0.05
0.53
0.08
0.15
0.56
4.49
0.17
0.51
-1.10
2.27
-0.82
-1.18
4.36
0.85
2.23
-0.15
0.12
0.07
0.18
-0.23
3.64
0.56
0.86
0.92
0.13
0.68
3.70
1.34
0.42
-1.37
5.77
0.48
-1.03
16.94
0.91
1.98
3.32
-0.76
0.54
0.19
-3.33
6.14
4.13
1.73
0.06
0.64
0.33
14.03
0.19
-0.08
1.13
-1.18
-0.28
-0.29
0.38
-0.99
-0.59
1.47
0.41
2.07
-0.50
-0.05
-0.20
0.91
0.22
0.57
-0.14
0.79
1.98
-0.13
1.10
0.10
0.14
0.71
0.79
0.15
-0.14
0.40
-0.15
2.36
1.13
-0.37
0.12
0.38
Net
Sym Close Chg
Stock
Net
Sym Close Chg
s
t
s
s
s
s
s
ArchCapital ACGL 90.05 0.91
ArcherDaniels ADM 43.12 0.40
Arconic
ARNC 24.55 0.22
AristaNetworks ANET 288.60 6.74
ArrowElec
ARW 81.82 1.25
AstraZeneca AZN 33.78 -0.12
Athene
ATH 49.70 1.24
Atlassian
TEAM 59.14 0.56
AtmosEnergy ATO 80.04 -0.57
Autodesk
ADSK 119.87 1.00
Autohome
ATHM 80.95 1.05
Autoliv
ALV 151.07 2.13
ADP
ADP 115.41 -0.25
AutoZone
AZO 664.72 8.97
Avalonbay
AVB 155.96 -0.12
Avangrid
AGR 48.39 -0.48
AveryDennison AVY 114.52 0.18
AxaltaCoating AXTA 31.90 0.38
BB&T
BBT 55.25 0.33
BCE
BCE 43.94 0.38
BHPBilliton BHP 46.67 0.97
BHPBilliton BBL 41.13 0.95
BOK Fin
BOKF 97.79 1.66
BP
BP
39.55 0.39
BRF
BRFS 7.52 -0.07
BT Group
BT
16.77 0.04
BWX Tech
BWXT 63.92 -0.50
Baidu
BIDU 258.73 3.84
BakerHughes BHGE 28.55 0.53
Ball
BLL 40.56 0.63
BancoBilbaoViz BBVA 8.26 0.08
BancodeChile BCH 101.09 -0.58
BancoMacro BMA 107.61 0.26
BcoSantChile BSAC 32.60 -0.15
BcoSantMex BSMX 7.10 0.03
BancoSantander SAN
6.83 0.02
BanColombia CIB
43.48 0.59
BankofAmerica BAC 32.11 -0.02
BankofMontreal BMO 75.09 0.69
BankNY Mellon BK
56.87 0.46
BkNovaScotia BNS 61.55 0.68
BankofOzarks OZRK 52.99 0.76
Barclays
BCS 11.86 0.24
BarrickGold ABX 11.84 0.21
BaxterIntl
BAX 67.01 0.16
BectonDicknsn BDX 216.96 -0.31
BeiGene
BGNE 152.45 0.97
Berkley
WRB 70.52 0.34
BerkHathwy B BRK.B 204.55 1.31
BerkHathwy A BRK.A 3070052505.00
BerryGlobal BERY 54.80 1.20
BestBuy
BBY 76.77 1.71
Bio-RadLab A BIO 262.34 2.36
Biogen
BIIB 285.98 -0.97
BioMarinPharm BMRN 82.37 1.58
Bioverativ
BIVV 104.72 -0.16
BlackKnight BKI
48.10 -0.10
BlackBerry
BB
12.44 0.05
BlackRock
BLK 548.66 6.28
Blackstone
BX
33.61 0.18
BlueBuffaloPet BUFF 39.90 -0.04
bluebirdbio BLUE 219.35 3.85
Boeing
BA 348.92 -3.83
BookingHldgs BKNG 2085.51 12.85
BorgWarner BWA 48.87 0.15
BostonProps BXP 122.10 0.74
BostonSci
BSX 27.41
...
Braskem
BAK 29.10 0.69
BrighthouseFin BHF 52.86 0.12
Bristol-Myers BMY 65.47 -1.35
BritishAmTob BTI
58.61 -0.14
Broadcom
AVGO 250.96 3.98
BroadridgeFinl BR 105.55 2.23
BrookfieldMgt BAM 39.64 0.39
BrookfieldInfr BIP
40.97 0.63
Brown&Brown BRO 53.01 0.17
Brown-Forman A BF.A 55.67 0.66
Brown-Forman B BF.B 56.04 -0.48
BuckeyePtrs BPL 44.19 -0.60
Bunge
BG
77.11 -0.88
BurlingtonStrs BURL 122.74 3.07
CA
CA
35.72 0.18
CBD Pao
CBD 21.23 0.19
CBRE Group CBG 46.96 0.21
CBS A
CBS.A 53.46 0.24
CBS B
CBS 53.23 -0.18
CDK Global CDK 69.84 0.81
CDW
CDW 74.11 0.17
CF Industries CF
43.20 -1.36
CGI Group
GIB
58.64 0.25
Stock
Sym Close
CH Robinson CHRW 89.99
CIT Group
CIT
55.31
CME Group CME 169.59
CMS Energy CMS 42.69
CNA Fin
CNA 51.93
CNOOC
CEO 143.48
CPFLEnergia CPL 14.96
CRH
CRH 34.19
CSRA
CSRA 40.61
CSX
CSX 56.14
CVS Health CVS 67.65
CabotOil
COG 25.19
CadenceDesign CDNS 38.98
CaesarsEnt CZR 12.35
CamdenProperty CPT 79.11
CampbellSoup CPB 43.90
CIBC
CM
90.69
CanNtlRlwy CNI 73.94
CanNaturalRes CNQ 30.92
CanPacRlwy CP 176.01
Canon
CAJ 37.14
CapitalOne COF 98.04
CardinalHealth CAH 69.92
Carlisle
CSL 105.77
Carlyle
CG
22.80
CarMax
KMX 61.49
Carnival
CCL 66.15
Carnival
CUK 65.82
Caterpillar
CAT 153.75
Cavium
CAVM 89.53
CboeGlobalMkts CBOE 118.17
Celanese A CE 107.46
Celgene
CELG 89.17
Cemex
CX
6.99
CenovusEnergy CVE
8.17
Centene
CNC 101.03
CenterPointEner CNP 26.77
CentraisElBras EBR
7.52
CenturyLink CTL 18.06
Cerner
CERN 64.98
CharterComms CHTR 337.96
CheckPoint CHKP 103.95
Chemours
CC
49.39
CheniereEnergy LNG 54.70
CheniereEnerPtrs CQP 30.42
CheniereEnHldgs CQH 27.89
Chevron
CVX 113.65
ChinaEastrnAir CEA 41.29
ChinaLifeIns LFC 14.75
ChinaLodging HTHT 152.15
ChinaMobile CHL 45.26
ChinaPetrol SNP 79.80
ChinaSoAirlines ZNH 63.63
ChinaTelecom CHA 43.58
ChinaUnicom CHU 12.31
Chipotle
CMG 318.04
Chubb
CB 141.93
ChunghwaTel CHT 37.40
Church&Dwight CHD 50.77
Cigna
CI
194.13
CimarexEnergy XEC 93.41
CincinnatiFin CINF 76.04
Cintas
CTAS 172.00
CiscoSystems CSCO 44.29
Citigroup
C
74.06
CitizensFin CFG 45.32
CitrixSystems CTXS 93.64
Clorox
CLX 132.33
Coca-Cola
KO
43.93
Coca-Cola Euro CCE 40.05
Coca-Cola Femsa KOF 69.97
Cognex
CGNX 53.10
CognizantTech CTSH 83.07
ColgatePalm CL
69.64
Comcast A CMCSA 36.87
Comerica
CMA 100.65
CommerceBcshrs CBSH 60.27
CommScope COMM 40.22
SABESP
SBS 11.65
ConagraBrands CAG 38.29
ConchoRscs CXO 151.36
ConocoPhillips COP 54.06
ConEd
ED
75.14
ConstBrands B STZ.B 221.04
ConstBrands A STZ 222.56
ContinentalRscs CLR 51.57
Cooper
COO 240.40
Copart
CPRT 49.04
Corning
GLW 29.20
CoStar
CSGP 357.10
s
s
t
s
s
Average Yields of Major Banks
MMA
1-MO
2-MO
3-MO
D E F
1-YR
2-YR
2.5YR
Weekly change
Savings
Jumbos
0.14
0.28
0.07
0.07
0.07
0.07
0.15
0.16
0.22
0.24
0.39
0.42
0.55
0.60
0.53
0.65
1.00
1.07
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.01
-0.01
-0.01
0.00
0.00
0.03
0.00
0.02
Explanation of ratings: Safe Sound SM, (855) 733-0700, evaluates the financial condition of federally insured institutions and assigns a rank of 1,2,3,4 or 5 based on data from the fourth quarter
of 2015 from federal regulators. 5: most desirable performance; NR: institution is too new to rate,
not an indication of financial strength or weakness. Information is believed to be reliable, but not
guaranteed.
High yield savings
Minimum
Yield
(%)
Money market and savings account
DollarSavingsDirect /4
(866) 395-8693
CIT Bank /5
(855) 462-2652
Northern Bank Direct /4
(844) 348-8996
$1
1.80
$100
1.55
$5,000
1.51
One-month CD
0.81
0.30
0.15
Two-month CD
Yield
(%)
Six-month CD
Ally Bank /5
$25,000
(877) 247-2559
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
TAB Bank /5
$1,000
(800) 837-4136
1.75
1.63
1.61
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
M.Y. Safra Bank, FSB /NR $5,000
(212) 652-7200
Barclays /5
$0
(888) 720-8756
2.07
2.06
2.05
Two-year CD
$10,000
0.15
$1,000
0.05
Three-month CD
Ally Bank /5
(877) 247-2559
Luana Savings Bank /5
(800) 666-2012
TAB Bank /5
(800) 837-4136
Minimum
One-year CD
EH National Bank /5
$0
(888) 392-5265
M.Y. Safra Bank, FSB /NR $5,000
(212) 652-7200
VirtualBank /4
$10,000
(877) 998-2265
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Bank/rank
Phone number
MyeBanc,ADivisionofBACFloridaBank/4 $5,000
(855) 512-0989
VirtualBank /4
$10,000
(877) 998-2265
M.Y. Safra Bank, FSB /NR $5,000
(212) 652-7200
2.40
2.36
2.31
Five-year CD
$25,000
1.50
$1,000
1.41
$1,000
1.36
M.Y. Safra Bank, FSB /NR
(212) 652-7200
Barclays /5
(888) 720-8756
Capital One 360 /5
(800) 289-1992
$5,000
2.66
$0
2.65
$0
2.65
High yield jumbos - Minimum is $100,000
Money market and savings account
Discover Bank /5
(877) 505-4051
M.Y. Safra Bank, FSB /NR
(212) 652-7200
First Internet Bank of Indiana /4
(888) 873-3424
1.40
1.26
1.16
One-month CD
EH National Bank /5
(888) 392-5265
M.Y. Safra Bank, FSB /NR
(212) 652-7200
USAA /NR
(800) 583-8295
0.30
0.22
1.63
1.60
First Internet Bank of Indiana /4
(888) 873-3424
M.Y. Safra Bank, FSB /NR
(212) 652-7200
MyeBanc,ADivisionofBACFloridaBank/4
(855) 512-0989
2.07
2.06
2.05
Two-year CD
0.15
0.05
0.01
Three-month CD
Luana Savings Bank /5
(800) 666-2012
First Internet Bank of Indiana /4
(888) 873-3424
EverBank /4
(855) 228-6755
1.71
One-year CD
0.83
Two-month CD
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Citizens Trust Bank /4
(404) 659-5959
Six-month CD
Luana Savings Bank /5
(800) 666-2012
First Internet Bank of Indiana /4
(888) 873-3424
MyeBanc,ADivisionofBACFloridaBank/4
(855) 512-0989
MyeBanc,ADivisionofBACFloridaBank/4
(855) 512-0989
VirtualBank /4
(877) 998-2265
M.Y. Safra Bank, FSB /NR
(212) 652-7200
2.40
2.36
2.31
Five-year CD
1.56
1.26
1.25
M.Y. Safra Bank, FSB /NR
(212) 652-7200
VirtualBank /4
(877) 998-2265
EverBank /4
(855) 228-6755
Intuit
INTU
IntuitiveSurgical ISRG
InvitatHomes INVH
IonisPharma IONS
IronMountain IRM
IsraelChemicals ICL
ItauUnibanco ITUB
s
s
s
s
s
s
s
s
s
GGP
GGP 21.36
Gallagher
AJG 69.61
Gaming&Leisure GLPI 33.18
Gap
GPS 34.59
GardnerDenver GDI 31.81
Garmin
GRMN 59.81
Gartner
IT
120.96
Gazit-Globe GZT 10.14
GeneralDynamics GD 224.81
GeneralElec GE
14.64
GeneralMills GIS
51.06
GeneralMotors GM
37.93
Genpact
G
31.65
Gentex
GNTX 23.17
GenuineParts GPC 92.53
Gerdau
GGB
5.05
Gildan
GIL
29.08
GileadSciences GILD 79.32
GSK
GSK 36.93
GlobalPayments GPN 114.18
GoDaddy
GDDY 60.91
Goldcorp
GG
13.20
GoldmanSachs GS 266.93
Goodyear
GT
28.37
Graco
GGG 45.14
Grainger
GWW 267.76
GreatPlainsEner GXP 29.70
Grifols
GRFS 21.67
GrubHub
GRUB 101.42
GpoAvalAcc AVAL 8.54
GpoFinGalicia GGAL 62.23
GrupoTelevisa TV
16.88
Guidewire
GWRE 85.23
HCA Healthcare HCA 100.99
HCP
HCP 22.29
HDFC Bank HDB 97.35
HD Supply
HDS 36.47
HP
HPQ 23.95
HSBC
HSBC 49.38
Halliburton HAL 45.92
Hanesbrands HBI 20.32
HarleyDavidson HOG 44.33
Harris
HRS 154.67
HartfordFinl HIG 54.42
Hasbro
HAS 95.87
Heico A
HEI.A 71.45
Heico
HEI
86.00
Helm&Payne HP
66.56
HenrySchein HSIC 66.03
Herbalife
HLF 96.84
Hershey
HSY 99.37
Hess
HES 48.48
HewlettPackard HPE 19.41
Hexcel
HXL 67.29
Hilton
HLT 78.94
HollyFrontier HFC 45.23
Hologic
HOLX 38.41
HomeDepot HD 181.64
HondaMotor HMC 34.94
Honeywell
HON 149.33
HormelFoods HRL 33.43
DR Horton
DHI 43.44
HostHotels HST 18.20
HuanengPower HNP 25.20
Hubbell
HUBB 129.27
Humana
HUM 273.11
JBHunt
JBHT 118.57
HuntingtonBcshs HBAN 16.20
HuntingIngalls HII 258.62
Huntsman
HUN 32.00
HyattHotels H
76.35
IAC/InterActive IAC 155.25
ICICI Bank
IBN
9.22
IdexxLab
IDXX 190.59
IHSMarkit
INFO 47.51
ING Groep
ING 17.83
Invesco
IVZ
33.12
IPG Photonics IPGP 241.44
IQVIA
IQV 100.66
IRSA Prop
IRCP 47.50
IcahnEnterprises IEP 61.49
Icon
ICLR 116.92
IDEX
IEX 141.03
IllinoisToolWks ITW 161.65
Illumina
ILMN 235.76
ImperialOil
IMO 27.35
Incyte
INCY 91.09
Infosys
INFY 17.99
Ingersoll-Rand IR
86.99
Ingredion
INGR 133.63
Intel
INTC 50.71
InteractiveBrkrs IBKR 71.25
ICE
ICE
73.34
InterContinentl IHG 63.18
IBM
IBM 155.72
IntlFlavors
IFF 139.63
IntlPaper
IP
57.70
Interpublic
IPG
23.67
0.01
-0.05
-0.09
0.50
-0.23
0.21
1.58
0.12
0.17
0.22
0.44
0.19
0.11
0.27
0.75
-0.14
0.43
1.40
0.15
0.45
-0.12
0.45
3.81
0.21
0.58
7.93
-0.31
0.42
-0.56
-0.01
0.47
-0.11
0.29
-0.12
0.03
0.17
0.26
0.26
0.07
-0.16
0.03
-0.90
0.41
0.48
-0.93
-0.70
-0.30
-0.05
-0.01
2.57
-0.08
0.04
0.43
0.43
0.72
0.81
-0.23
-0.10
0.16
0.82
0.56
1.22
0.08
-0.26
0.43
2.52
1.16
0.19
-1.46
0.04
0.15
1.16
-0.23
-0.55
0.10
0.21
0.45
5.46
0.97
...
1.44
1.83
2.13
1.97
4.88
0.33
0.12
-0.01
0.77
2.09
0.96
1.75
0.66
0.62
-1.23
1.06
-1.24
0.08
2.66
2.65
2.65
Notes: Accounts are federally insured up to $250,000 per person effective Oct. 3, 2008. Yields
are based on method of compounding and rate stated for the lowest required opening deposit to
earn interest. CD figures are for fixed rates only. MMA: Allows six (6) third-party transfers per
month, three (3) of which may be checks. Rates are subject to change.
Source: Bankrate.com, a publication of Bankrate, Inc., North Palm Beach, FL 33408
Internet: www.bankrate.com
Stock
169.46 -0.72 s
426.50 2.25
22.11 0.06
51.63 1.70
32.39 0.29
4.47 0.06
16.18 0.10 s
J K L
s
s
s
s
JD.com
JD
43.14
JPMorganChase JPM 115.16
JackHenry
JKHY 121.90
JacobsEngg JEC 60.20
JamesHardie JHX 17.57
JanusHenderson JHG 34.85
JazzPharma JAZZ 144.85
JetBlue
JBLU 21.44
J&J
JNJ 128.22
JohnsonControls JCI
37.39
JonesLang
JLL 167.59
JuniperNetworks JNPR 25.94
KAR Auction KAR 55.88
KB Fin
KB
59.21
KKR
KKR 22.28
KLA Tencor KLAC 116.07
KT
KT
13.45
KSCitySouthern KSU 105.83
Kellogg
K
69.90
KeyCorp
KEY 21.70
KeysightTechs KEYS 52.55
KilroyRealty KRC 68.73
KimberlyClark KMB 113.05
KimcoRealty KIM 14.96
KinderMorgan KMI 16.11
Knight-Swift KNX 48.02
Kohl's
KSS 66.82
KoninklijkePhil PHG 38.81
KoreaElcPwr KEP 15.01
KraftHeinz
KHC 67.77
Kroger
KR
28.01
Kyocera
KYO 58.00
LATAMAirlines LTM 15.51
L Brands
LB
45.11
LG Display
LPL 13.41
LINE
LN
39.69
LKQ
LKQ 39.55
L3 Tech
LLL 205.22
LabCpAm
LH 172.72
LamResearch LRCX 207.94
LamarAdv
LAMR 65.79
LambWeston LW
56.82
LasVegasSands LVS 72.64
Lazard
LAZ 54.46
Lear
LEA 186.84
Leggett&Platt LEG 45.51
Leidos
LDOS 66.20
Lennar A
LEN 59.17
Lennar B
LEN.B 47.47
LennoxIntl
LII
202.63
LeucadiaNatl LUK 24.07
LibertyBroadbandC LBRDK 88.04
LibertyBroadbandA LBRDA 87.62
LibertyGlobal C LBTYK 31.58
LibertyGlobal A LBTYA 32.65
LibertyQVC A QVCA 27.66
LibertyVenturesA LVNTA 52.90
LibertyFormOne C FWONK 32.37
LibertyFormOne A FWONA 30.92
LibertyBraves A BATRA 23.61
LibertyBraves C BATRK 23.66
LibertySirius C LSXMK 43.35
LibertySirius A LSXMA 43.72
LibertyProperty LPT 39.89
EliLilly
LLY
77.19
LincolnElectric LECO 89.46
LincolnNational LNC 75.85
LionsGate B LGF.B 28.12
LionsGate A LGF.A 29.98
LiveNationEnt LYV 44.12
LloydsBanking LYG
3.79
LockheedMartin LMT 339.50
Loews
L
50.88
LogitechIntl LOGI 39.66
LogMeIn
LOGM 120.10
Lowe's
LOW 87.12
lululemon
LULU 83.69
LyondellBasell LYB 109.74
0.15
0.10
0.89
0.09
0.09
0.23
1.46
0.17
-1.57
0.47
3.68
0.10
1.00
0.67
0.30
2.24
0.05
1.26
0.70
0.25
2.01
0.55
-0.13
-0.18
-0.10
0.19
0.73
0.24
-0.16
0.34
0.02
1.12
-0.08
0.51
0.04
0.25
0.63
-1.01
-1.27
9.74
-0.85
0.94
1.07
0.49
2.78
1.58
0.27
0.86
1.00
3.46
0.15
-0.99
-0.77
0.31
0.48
0.10
-0.71
0.38
0.24
0.29
0.32
0.85
1.03
0.49
-0.51
1.41
0.95
0.72
0.85
0.09
-0.01
-2.86
0.51
0.29
-2.15
0.79
2.56
1.07
s
s
s
s
s
s
s
s
s
M N
M&T Bank
MTB 195.34
MGM Resorts MGM 34.75
s MKS Instrum MKSI 118.90
MPLX
MPLX 34.97
MSCI
MSCI 148.99
Macerich
MAC 59.18
Macy's
M
30.36
MagellanMid MMP 63.85
MagnaIntl
MGA 52.71
Manpower
MAN 118.62
ManulifeFin MFC 18.78
MarathonOil MRO 15.03
MarathonPetrol MPC 67.39
Markel
MKL 1138.69
s MarketAxess MKTX 211.47
Marriott
MAR 137.61
Marsh&McLen MMC 83.54
MartinMarietta MLM 208.63
MarvellTech MRVL 23.57
Masco
MAS 41.14
s Mastercard MA 177.53
MatchGroup MTCH 42.42
MaximIntProducts MXIM 62.78
1.59
0.90
4.40
-0.25
3.06
0.02
0.01
0.11
0.21
0.04
0.12
-0.12
1.23
8.23
2.27
1.88
0.21
3.21
0.08
-0.02
-1.00
0.71
1.05
ETF
Tuesday, March 6, 2018
Closing Chg YTD
Symbol Price (%) (%)
s
s
s
s
s
s
s
AlerianMLPETF
CnsmrDiscSelSector
CnsStapleSelSector
EnSelectSectorSPDR
FinSelSectorSPDR
GuggS&P500EW
HealthCareSelSect
IndSelSectorSPDR
iShIntermCredBd
iSh1-3YCreditBond
iSh3-7YTreasuryBd
iShCoreMSCIEAFE
iShCoreMSCIEmgMk
iShCoreMSCITotInt
iShCoreS&P500
iShCoreS&P MC
iShCoreS&P SC
iShS&PTotlUSStkMkt
iShCoreUSAggBd
iShSelectDividend
iShEdgeMSCIMinEAFE
iShEdgeMSCIMinUSA
iShEdgeMSCIUSAMom
iShFloatingRateBd
iShGoldTr
iShiBoxx$InvGrCpBd
iShiBoxx$HYCpBd
iShJPMUSDEmgBd
iShMBSETF
iShMSCI ACWI
iShMSCIBrazil
iShMSCI EAFE
iShMSCI EAFE SC
iShMSCIEmgMarkets
iShMSCIEurozone
iShMSCIJapan
iShNasdaqBiotech
iShNatlMuniBd
iShRussell1000Gwth
iShRussell1000
iShRussell1000Val
iShRussell2000Gwth
iShRussell2000
iShRussell2000Val
iShRussell3000
iShRussellMid-Cap
iShRussellMCValue
iShS&PMC400Growth
iShS&P500Growth
iShS&P500Value
iShUSPfdStk
iShShortTreaBd
iShTIPSBondETF
iSh1-3YTreasuryBd
iSh7-10YTreasuryBd
iShRussellMCGrowth
PIMCOEnhShMaturity
PwrShQQQ 1
PwrShSrLoanPtf
SPDR BlmBarcHYBd
SPDR Gold
SchwabIntEquity
SchwabUS BrdMkt
SchwabUS Div
SchwabUS LC
SPDR DJIA Tr
SPDR S&PMdCpTr
SPDR S&P 500
SPDR S&P Div
TechSelectSector
VanEckGoldMiner
VangdInfoTech
VangdSC Val
VangdSC Grwth
VangdDivApp
VangdFTSEDevMk
VangdFTSE EM
VangdFTSE Europe
VangdFinls
VangdFTSEAWxUS
VangdGrowth
VangdHlthCr
VangdHiDiv
VangdIntermBd
VangdIntrCorpBd
VangdLC
VangdMC
VangdMC Val
AMLP
XLY
XLP
XLE
XLF
RSP
XLV
XLI
CIU
CSJ
IEI
IEFA
IEMG
IXUS
IVV
IJH
IJR
ITOT
AGG
DVY
EFAV
USMV
MTUM
FLOT
IAU
LQD
HYG
EMB
MBB
ACWI
EWZ
EFA
SCZ
EEM
EZU
EWJ
IBB
MUB
IWF
IWB
IWD
IWO
IWM
IWN
IWV
IWR
IWS
IJK
IVW
IVE
PFF
SHV
TIP
SHY
IEF
IWP
MINT
QQQ
BKLN
JNK
GLD
SCHF
SCHB
SCHD
SCHX
DIA
MDY
SPY
SDY
XLK
GDX
VGT
VBR
VBK
VIG
VEA
VWO
VGK
VFH
VEU
VUG
VHT
VYM
BIV
VCIT
VV
VO
VOE
10.15
105.00
54.25
67.70
28.96
102.07
84.28
76.37
106.99
103.73
119.94
66.28
58.70
63.54
274.95
191.81
78.16
62.50
106.42
97.07
73.45
52.64
109.97
50.92
12.80
116.31
85.87
112.17
103.92
73.16
46.24
70.20
65.76
48.65
43.77
60.61
111.12
108.33
141.24
151.98
123.83
194.76
155.37
124.91
161.66
210.77
88.17
222.17
161.04
113.03
37.51
110.21
112.07
83.41
101.93
125.70
101.48
168.54
23.15
36.03
126.53
33.91
65.99
50.58
65.29
248.84
349.04
272.88
92.83
68.52
22.01
178.91
132.32
166.66
103.23
44.69
47.56
58.91
72.70
55.00
147.11
158.74
85.35
81.26
84.49
125.57
158.02
112.38
–0.59
0.69
0.07
0.06
0.42
0.44
–0.14
0.45
–0.01
–0.04
–0.03
0.70
0.95
0.79
0.27
1.06
1.20
0.39
0.02
–0.08
0.53
0.13
0.29
0.06
1.11
0.09
0.14
0.15
–0.03
0.52
0.70
0.59
1.31
0.93
0.69
0.61
0.23
–0.07
0.38
0.32
0.23
1.17
1.08
1.03
0.36
0.67
0.51
1.25
0.27
0.24
0.24
0.01
–0.03
–0.02
–0.01
0.77
0.03
0.42
...
0.14
1.08
0.77
0.37
0.08
0.32
...
1.06
0.25
0.36
0.22
1.66
0.34
1.00
0.86
0.31
0.83
0.30
0.77
0.54
0.75
0.43
0.08
0.06
0.02
0.09
0.28
0.73
0.63
–5.9
6.4
–4.6
–6.3
3.8
1.0
1.9
0.9
–2.0
–0.8
–1.8
0.3
3.2
0.7
2.3
1.1
1.8
2.2
–2.7
–1.5
0.6
–0.3
6.6
0.2
2.3
–4.3
–1.6
–3.4
–2.5
1.5
14.3
–0.2
2.0
3.2
0.9
1.1
4.1
–2.2
4.9
2.3
–0.4
4.3
1.9
–0.7
2.2
1.3
–1.1
2.9
5.4
–1.1
–1.5
–0.0
–1.8
–0.5
–3.4
4.2
–0.1
8.2
0.5
–1.9
2.3
–0.5
2.3
–1.2
2.4
0.6
1.1
2.3
–1.7
7.1
–5.3
8.6
–0.3
3.6
1.2
–0.4
3.6
–0.4
3.8
0.5
4.6
3.0
–0.3
–3.1
–3.3
2.4
2.1
0.7
Closing Chg YTD
Symbol Price (%) (%)
ETF
VangdRealEst
VangdS&P500
VangdST Bond
VangdSTCpBd
VangdSC
VangdTotalBd
VangdTotIntlBd
VangdTotIntlStk
VangdTotalStk
VangdTotlWrld
VangdValue
WisdTrJapanHdg
VNQ
VOO
BSV
VCSH
VB
BND
BNDX
VXUS
VTI
VT
VTV
DXJ
74.57
250.83
78.29
78.32
149.90
79.35
54.11
57.14
140.31
75.35
106.81
56.16
0.47 –10.1
2.3
0.25
–0.01 –1.0
–0.11 –1.2
1.4
0.94
0.04 –2.7
–0.11 –0.5
0.6
0.76
2.2
0.36
1.5
0.59
0.5
0.13
0.48 –5.3
Net
Sym Close Chg
McCormick MKC 110.06
McCormickVtg MKC.V 109.57
McDonalds MCD 151.20
McKesson
MCK 151.17
Medtronic
MDT 80.41
MelcoResorts MLCO 27.01
MercadoLibre MELI 410.25
Merck
MRK 54.30
MetLife
MET 47.07
MettlerToledo MTD 605.29
MichaelKors KORS 62.07
MicroFocus MFGP 28.23
MicrochipTech MCHP 96.57
MicronTech MU
53.74
Microsemi
MSCC 67.41
Microsoft
MSFT 93.32
MidAmApt MAA 86.22
Middleby
MIDD 121.50
MitsubishiUFJ MTU 6.97
MizuhoFin
MFG 3.74
MobileTeleSys MBT 12.15
MohawkInds MHK 241.29
MolsonCoors B TAP 78.79
Momo
MOMO 33.97
Mondelez
MDLZ 45.57
Monsanto
MON 123.37
MonsterBev MNST 55.67
Moody's
MCO 166.06
MorganStanley MS
56.56
Mosaic
MOS 27.74
MotorolaSol MSI 108.38
Mylan
MYL 43.23
NICE
NICE 95.98
NRG Energy NRG 29.21
NTTDoCoMo DCM 25.82
NVR
NVR 2959.97
NXP Semi
NXPI 124.40
Nasdaq
NDAQ 83.91
NationalGrid NGG 53.17
NatlInstruments NATI 52.97
NatlOilwell
NOV 36.70
NatlRetailProp NNN 38.43
NektarTherap NKTR 98.09
NetApp
NTAP 63.80
Netease
NTES 300.70
Netflix
NFLX 325.22
Neurocrine
NBIX 90.00
NewOrientalEduc EDU 87.45
NY CmntyBcp NYCB 14.36
NewellBrands NWL 27.89
NewmontMin NEM 38.85
NewsCorp A NWSA 16.42
NewsCorp B NWS 16.60
NextEraEnergy NEE 153.26
Nike
NKE 65.24
NiSource
NI
23.21
NobleEnergy NBL 30.69
Nokia
NOK
5.82
NomuraHoldings NMR 6.03
Nordson
NDSN 136.54
Nordstrom
JWN 52.49
NorfolkSouthern NSC 141.08
NorthernTrust NTRS 106.72
NorthropGrum NOC 341.87
NorwegCruise NCLH 56.00
Novartis
NVS 81.53
NovoNordisk NVO 50.61
Nucor
NUE 67.78
Nutanix
NTNX 44.13
Nutrien
NTR 51.56
NVIDIA
NVDA 242.16
0.32
-0.02
0.17
-0.14
0.67
0.65
19.36
-0.10
0.68
5.34
0.16
0.13
2.10
1.71
-0.03
-0.32
-0.53
1.49
-0.01
...
-0.28
2.85
0.76
0.70
0.51
0.37
-0.07
-1.44
1.07
-0.24
1.11
1.69
0.21
0.26
-0.21
68.61
-0.38
2.14
0.35
0.87
0.33
0.26
-3.99
1.61
5.92
10.22
-0.20
1.40
0.12
-0.20
0.57
0.27
0.20
-1.76
0.19
-0.32
-0.26
-0.03
-0.07
0.60
0.59
0.25
0.36
-2.92
0.42
0.22
-0.22
-0.08
2.10
-0.24
6.51
s
OGE Energy OGE 31.20
ONEOK
OKE 57.02
OReillyAuto ORLY 251.74
OccidentalPetrol OXY 65.66
OldDomFreight ODFL 139.47
Omnicom
OMC 75.34
ON Semi
ON
25.47
OpenText
OTEX 35.15
Oracle
ORCL 51.50
Orange
ORAN 17.30
OrbitalATK OA 132.62
Orix
IX
88.14
Oshkosh
OSK 79.30
OwensCorning OC
81.46
PG&E
PCG 42.42
PLDT
PHI
28.94
PNC Fin
PNC 159.34
POSCO
PKX 81.87
PPG Ind
PPG 115.07
PPL
PPL 27.68
PTC
PTC 78.07
PVH
PVH 143.00
Paccar
PCAR 69.91
PackagingCpAm PKG 119.07
PacWestBancorp PACW 53.96
PagSeguroDig PAGS 34.76
PaloAltoNtwks PANW 183.22
ParkerHannifin PH 177.84
ParsleyEnergy PE
26.82
Paychex
PAYX 65.09
PaycomSoftware PAYC 105.86
PayPal
PYPL 79.23
Pearson
PSO 10.32
PembinaPipeline PBA 32.18
Pentair
PNR 68.52
People'sUtdFin PBCT 19.90
PepsiCo
PEP 109.58
PerkinElmer PKI
75.61
Perrigo
PRGO 82.42
PetroChina PTR 68.76
PetroleoBrasil PBR 14.66
PetroleoBrasilA PBR.A 13.66
Pfizer
PFE 35.88
PhilipMorris PM 107.98
Phillips66
PSX 93.93
PilgrimPride PPC 24.11
PinnacleFoods PF
57.15
PinnacleWest PNW 76.30
PioneerNatRscs PXD 169.96
PlainsAllAmPipe PAA 22.23
PlainsGP
PAGP 22.13
PolarisIndustries PII 119.09
Pool
POOL 147.61
Praxair
PX 153.65
PrincipalFin PFG 61.59
Procter&Gamble PG
80.02
Progressive PGR 58.62
Prologis
PLD 61.60
Proofpoint
PFPT 117.36
PrudentialFin PRU 107.54
Prudential
PUK 50.58
PublicServiceEnt PEG 47.19
PublicStorage PSA 198.16
PulteGroup PHM 29.90
Qiagen
QGEN 33.87
-0.72
0.11
4.89
-0.26
1.17
-0.54
1.01
0.17
0.21
0.13
0.12
0.19
1.09
1.72
0.47
-0.40
0.63
-0.14
2.31
-0.64
0.85
-0.63
1.10
2.14
0.79
1.20
2.95
0.72
0.01
0.05
1.54
0.16
0.24
0.31
0.86
0.23
0.15
1.10
-0.39
0.08
0.04
0.08
-0.24
0.28
0.87
-0.19
0.23
-1.75
-1.73
0.10
0.45
3.23
4.04
1.74
0.22
-0.27
-0.17
0.51
1.85
1.32
0.40
-0.88
0.81
0.59
0.41
Stock
Net
Sym Close Chg
Qorvo
Qualcomm
QuestDiag
QRVO 83.68 0.49
QCOM 62.14 -1.87
DGX 104.14 1.25
Stock
R S
s
s
s
s
s
s
O P Q
Largest 100 exchange-traded funds, latest session
5YR
Consumer Savings Rates
Bank/rank
Phone number
50.50 0.81
57.57 0.51
92.92 1.31
10.63 0.05
51.85 1.20
33.08 0.01
75.12 0.86
62.23 1.13
71.38 1.26
39.60 0.22
18.70 0.51
51.76 -0.03
G H I
-0.23
-1.37
-0.15
0.17
-0.33
-0.13
0.97
1.60
0.05
0.51
0.17
-0.67
-0.50
-3.16
0.82
-0.26
-0.15
-2.65
-0.12
1.53
-0.27
0.01
1.72
-0.78
1.83
-2.14
0.50
1.44
1.13
0.21
-1.63
-0.04
-0.14
-0.80
-0.94
-0.07
1.78
0.98
2.70
0.72
0.69
-0.05
1.06
0.02
-0.60
1.61
-2.01
-1.55
0.32
-0.01
0.20
-0.01
-0.01
...
-0.05
-0.18
-0.20
-0.85
-0.12
0.04
3.11
0.97
0.42
0.05
4.34
1.04
1.65
-1.04
-0.21
-0.51
0.95
0.23
-0.18
0.03
-0.09
1.30
1.69
-0.62
2.11
1.20
0.45
1.10
1.25
1.04
0.58
-0.78
-0.88
0.30
0.57
0.12
-0.25
0.14
3.28
1.40
-0.78
-0.71
-0.28
0.18
Net
Sym Close Chg
Stock
Exchange-Traded Portfolios | WSJ.com/ETFresearch
Tuesday, March 06, 2018
6-MO
Net
Sym Close Chg
Stock
Costco
COST 191.46 -0.02 FlirSystems FLIR
Coty
COTY 19.25 -0.09 Fluor
FLR
Credicorp
BAP 224.52 1.24 FomentoEconMex FMX
CreditAcceptance CACC 335.04 4.22 FordMotor
F
CreditSuisse CS
18.14 0.16 s Fortinet
FTNT
CrownCastle CCI 107.73 0.01 Fortis
FTS
CrownHoldings CCK 50.27 0.77 Fortive
FTV
Ctrip.com
CTRP 47.54 0.49 FortBrandsHome FBHS
Cullen/Frost CFR 109.03 1.06 Franco-Nevada FNV
Cummins
CMI 160.65 -0.29 FranklinRscs BEN
CurtissWright CW 135.00 1.13 FreeportMcM FCX
s CypressSemi CY
18.07 0.43 FreseniusMed FMS
National average
Savings
Jumbos
Net
Sym Close Chg
DISH Network DISH 41.22
DTE Energy DTE 101.20
DXC Tech
DXC 101.85
Danaher
DHR 97.75
Darden
DRI 94.12
DaVita
DVA 72.06
Net
DE 158.51
Chg Deere
DellTechs
DVMT 75.60
DAL 53.84
0.21 DeltaAir
DentsplySirona
XRAY 56.37
1.00
16.06
1.10 DeutscheBank DB
DevonEnergy
DVN
31.33
-0.60
DEO 133.43
0.46 Diageo
DiamondbkEner
FANG
127.09
1.07
0.19 DigitalRealty DLR 101.18
-0.14 DiscoverFinSvcs DFS 76.81
-0.09 DiscovComm C DISCK 22.86
-0.24 DiscovComm B DISCB 26.00
-0.66 DiscovComm A DISCA 24.42
DIS 104.94
-0.12 Disney
DLB 65.37
-0.52 DolbyLab
93.44
0.10 DollarGeneral DG
DollarTree
DLTR 104.36
-0.49
72.92
0.38 DominionEner D
DPZ 221.44
1.10 Domino's
DCI 44.89
-0.86 Donaldson
36.97
-0.11 DouglasEmmett DEI
DOV 100.01
0.39 Dover
DowDuPont
DWDP
70.79
-0.22
0.14 DrPepperSnap DPS 116.12
DukeEnergy
DUK
75.86
-0.48
1.96 DukeRealty DRE 24.94
ENI
E
33.03
-0.05
EOG 101.01
1.03 EOG Rscs
0.96 EPAM Systems EPAM 115.36
EQT 51.82
0.80 EQT
ETFC 54.40
2.63 E*TRADE
0.18 EastWestBncp EWBC 69.07
2.82 s EastmanChem EMN 105.82
ETN 80.94
1.24 Eaton
55.27
0.13 EatonVance EV
EBAY 43.14
0.10 eBay
ECL 131.01
0.28 Ecolab
EC
17.60
-0.89 Ecopetrol
EIX
60.07
-0.38 EdisonInt
EdwardsLife
EW
137.85
0.01
0.22 ElbitSystems ESLT 137.56
0.65 ElectronicArts EA 124.55
-8.64 EmersonElec EMR 70.47
-0.30 EnbridgeEnPtrs EEP 12.60
ENB 31.77
0.73 Enbridge
ECA 10.84
1.41 Encana
0.45 EnelAmericas ENIA 11.41
ENIC 6.16
0.45 EnelChile
0.50 EnelGenChile EOCC 28.05
0.54 EnergyTransferEq ETE 15.56
0.07 EnergyTransfer ETP 18.05
ETR 77.72
3.99 Entergy
-0.49 EnterpriseProd EPD 24.98
EFX 121.39
0.01 Equifax
EQIX 391.62
-0.59 Equinix
ELS 84.71
0.32 EquityLife
EquityResdntl
EQR 56.89
0.17
ERIC 6.79
-2.12 Ericsson
EssexProp
ESS 230.05
0.37
142.68
0.24 EsteeLauder EL
EverestRe
RE 254.70
0.35
56.68
1.79 EversourceEner ES
EXEL 24.62
-3.28 Exelixis
EXC 37.17
0.15 Exelon
EXPE 108.61
0.59 Expedia
-0.23 ExpeditorsIntl EXPD 63.72
-0.36 ExpressScripts ESRX 74.58
0.46 ExtraSpaceSt EXR 86.25
0.93 ExxonMobil XOM 76.18
-0.60 F5Networks FFIV 152.14
FMC 82.42
0.04 FMC
FB 179.78
0.65 Facebook
FDS 210.47
2.07 s FactSet
FAST 56.47
0.58 Fastenal
0.80 FederalRealty FRT 116.96
FDX 243.04
-0.43 FedEx
RACE 122.75
0.09 Ferrari
FiatChrysler
FCAU 21.27
1.80
0.86 FibriaCelulose FBR 19.38
FNF 37.70
0.36 FidNatlFin
FIS
98.71
0.08 FidNatlInfo
0.50 FifthThirdBncp FITB 33.66
WUBA 76.70
-1.59 58.com
0.07 FirstAmerFin FAF 57.32
-0.95 FirstData
FDC 15.36
2.00 FirstHorizonNatl FHN 19.97
3.04 FirstRepBank FRC 97.44
FSLR 67.45
0.24 FirstSolar
3.90 FirstEnergy FE
31.85
1.54 Fiserv
FISV 144.22
0.32 FleetCorTech FLT 203.42
FLEX 18.30
0.02 Flex
BANKRATE.COM® MMA, Savings and CDs
Type
Stock
s
t
s
RELX
RENX 20.62
RELX
RELX 20.81
RPM
RPM 51.37
RSP Permian RSPP 40.78
RalphLauren RL 106.96
RandgoldRscs GOLD 83.84
RaymondJames RJF 95.85
Raytheon
RTN 213.24
RealtyIncome O
50.54
RedHat
RHT 149.72
RegencyCtrs REG 58.95
RegenPharm REGN 333.48
RegionsFin RF
19.90
ReinsGrp
RGA 156.29
RelianceSteel RS
92.83
RepublicSvcs RSG 68.08
ResMed
RMD 96.18
RestaurantBrands QSR 57.80
RioTinto
RIO 53.22
RobertHalf RHI 59.55
Rockwell
ROK 181.50
RockwellCollins COL 136.39
RogersComm B RCI
45.69
Rollins
ROL 51.24
RoperTech
ROP 273.74
RossStores ROST 80.51
RoyalBkCanada RY
78.21
RoyalBkScotland RBS
7.40
RoyalCaribbean RCL 123.80
RoyalDutchA RDS.A 64.11
RoyalDutchB RDS.B 65.15
Ryanair
RYAAY 121.44
SAP
SAP 105.08
S&P Global SPGI 190.99
SBA Comm SBAC 156.50
SEI Investments SEIC 74.76
Sina
SINA 121.42
SINOPEC
SHI
59.48
SK Telecom SKM 24.23
SLGreenRealty SLG 99.83
SS&C Tech SSNC 51.58
SVB Fin
SIVB 266.11
Sabre
SABR 23.11
SageTherap SAGE 174.66
Salesforce.com CRM 124.48
Sanofi
SNY 39.50
SantanderCons SC
16.90
Sasol
SSL 34.52
Scana
SCG 40.96
Schlumberger SLB 66.63
SchwabC
SCHW 54.73
ScrippsNetworks SNI 90.04
Seagate
STX 56.23
SealedAir
SEE 44.39
SeattleGenetics SGEN 55.27
SemicondctrMfg SMI
6.94
SempraEnergy SRE 109.36
SensataTech ST
52.29
ServiceCorp SCI
38.64
ServiceMaster SERV 50.38
ServiceNow NOW 171.07
ShawComm B SJR 19.43
SherwinWilliams SHW 401.03
ShinhanFin SHG 42.28
Shire
SHPG 134.68
Shopify
SHOP 141.51
SignatureBank SBNY 156.59
SimonProperty SPG 157.63
SiriusXM
SIRI
6.36
SkechersUSA SKX 41.18
Skyworks
SWKS 111.85
SmithAO
AOS 63.28
Smith&Nephew SNN 36.60
Smucker
SJM 129.68
Snap
SNAP 18.01
SnapOn
SNA 158.94
SOQUIMICH SQM 48.40
Sony
SNE 50.16
Southern
SO
44.10
SoCopper
SCCO 54.75
SouthwestAir LUV 58.25
SpectraEnerPtrs SEP 38.51
SpectrumBrands SPB 101.55
SpiritAeroSys SPR 87.84
Splunk
SPLK 103.89
Sprint
S
5.35
Square
SQ
49.60
StanleyBlackDck SWK 153.49
Starbucks
SBUX 57.03
StateStreet STT 105.46
Statoil
STO 23.20
SteelDynamics STLD 46.97
STMicroelec STM 23.27
Stryker
SYK 162.73
SumitomoMits SMFG 8.72
SunComms SUI
87.19
SunLifeFinancial SLF 41.93
SuncorEnergy SU
32.10
SunTrustBanks STI
71.07
Symantec
SYMC 26.96
SynchronyFin SYF 36.20
Synopsys
SNPS 86.26
SynovusFin SNV 51.67
Sysco
SYY 60.87
0.13
0.14
1.08
-0.90
-0.46
1.50
2.24
-1.76
0.23
-0.11
0.23
-0.43
0.18
0.94
-0.33
0.15
0.74
-0.13
0.97
0.91
0.39
-0.62
0.53
0.99
1.21
2.53
0.49
-0.01
3.04
0.52
0.47
0.79
0.48
0.62
-0.18
1.47
3.80
-0.61
0.03
1.42
-0.21
5.99
0.17
5.91
1.98
-0.40
0.21
0.52
0.23
0.47
1.12
-0.06
1.09
0.45
0.56
0.18
-1.33
0.34
0.43
0.40
2.77
0.07
7.93
0.08
0.01
2.22
0.72
0.17
0.04
0.46
0.37
0.47
0.09
-0.34
-0.24
2.89
1.65
-0.37
-0.74
1.49
-0.01
-0.31
-1.39
0.27
2.52
-0.03
-0.82
1.27
0.04
-0.39
0.41
-0.34
0.59
0.19
-0.02
0.18
0.60
0.14
0.40
-0.13
-0.03
0.20
0.97
0.83
s
s
s
s
0.06
0.88
0.34
0.34
0.38
0.19
0.56
0.61
1.51
-1.44
0.05
-1.22
0.22
-0.30
-3.35
-0.18
0.18
0.52
0.49
0.54
0.60
0.66
3.81
0.04
0.10
-0.06
-0.14
Teradyne
TER 47.39
Tesla
TSLA 328.20
TevaPharm TEVA 19.18
TexasInstruments TXN 109.69
Textron
TXT 58.59
ThermoFisherSci TMO 210.12
ThomsonReuters TRI
39.62
ThorIndustries THO 121.61
3M
MMM 233.66
Tiffany
TIF 101.35
TimeWarner TWX 95.12
Toll Bros
TOL 45.06
Torchmark
TMK 84.72
Toro
TTC 61.81
TorontoDomBk TD
58.67
Total
TOT 56.99
TotalSystem TSS 88.91
ToyotaMotor TM 131.34
TractorSupply TSCO 64.78
TransCanada TRP 44.17
TransDigm
TDG 284.09
TransUnion
TRU 57.05
Travelers
TRV 141.39
Trimble
TRMB 38.38
TripAdvisor TRIP 42.38
TurkcellIletism TKC
9.74
TurquoiseHill TRQ
3.24
21stCenturyFoxA FOXA 37.54
21stCenturyFoxB FOX 37.02
Twitter
TWTR 34.43
TylerTech
TYL 211.88
TysonFoods TSN 74.05
UBS Group UBS 18.58
UDR
UDR 33.88
UGI
UGI 43.52
US Foods
USFD 34.10
UltaBeauty ULTA 200.22
UltSoftware ULTI 252.11
UltraparPart UGP 22.57
UnderArmour A UAA 17.62
UnderArmour C UA
15.73
Unilever
UN
52.99
Unilever
UL
52.17
UnionPacific UNP 131.29
UnitedContinental UAL 67.52
UnitedMicro UMC 2.41
UPS B
UPS 109.80
UnitedRentals URI 184.99
US Bancorp USB 54.17
US Steel
X
44.53
UnitedTech UTX 131.61
UnitedHealth UNH 226.18
UniversalHealthB UHS 124.95
UnumGroup UNM 49.96
VEREIT
VER
6.94
VF
VFC 73.43
Visa
V
121.06
VailResorts MTN 213.58
Vale
VALE 13.53
ValeroEnergy VLO 91.72
VarianMed
VAR 123.44
Vedanta
VEDL 19.49
VeevaSystems VEEV 76.74
Ventas
VTR 50.45
VeriSign
VRSN 117.45
VeriskAnalytics VRSK 104.27
Verizon
VZ
48.89
VertxPharm VRTX 168.72
Viacom B
VIAB 34.21
Viacom A
VIA 39.70
Vipshop
VIPS 16.85
VirtuFinancial VIRT 31.85
VistraEnergy VST 20.47
VMware
VMW 120.53
Vodafone
VOD 28.56
VornadoRealty VNO 67.60
VoyaFinancial VOYA 52.03
VulcanMatls VMC 119.41
1.27
-5.15
-0.15
0.68
0.21
3.36
0.13
2.87
0.85
0.32
0.53
0.74
0.61
0.02
0.65
0.16
0.44
0.36
0.36
0.25
-1.49
-0.93
1.81
0.04
0.41
0.02
0.08
0.89
0.87
-0.15
1.85
0.45
0.20
0.21
-0.28
0.63
2.34
-0.43
0.25
0.20
0.17
-0.15
-0.18
0.97
0.31
0.02
3.99
4.28
0.20
-0.22
-0.10
-2.20
1.10
...
0.01
-0.14
-0.82
1.93
0.11
0.16
0.78
-0.17
-0.29
-0.32
0.19
1.18
0.18
-4.44
-0.07
0.15
-0.85
-0.20
0.56
2.29
0.20
0.38
0.06
1.68
W X Y Z
s
s
T U V
TAL Education TAL 36.07
TD Ameritrade AMTD 59.03
TE Connectivity TEL 101.93
Telus
TU
36.52
Ternium
TX
34.40
TIM Part
TSU 21.89
TJX
TJX 84.39
T-MobileUS TMUS 63.56
TRowePrice TROW 113.36
TableauSftwr DATA 84.36
TaiwanSemi TSM 43.54
TakeTwoSoftware TTWO 110.71
Tapestry
TPR 51.20
TargaResources TRGP 46.25
Target
TGT 71.79
t TataMotors TTM 27.10
TechnipFMC FTI
29.98
TeckRscsB
TECK 28.45
TelecomArgentina TEO 31.68
TelecomItalia TI
9.64
TelecomItalia A TI.A 8.50
TeledyneTech TDY 189.64
Teleflex
TFX 254.32
TelefonicaBras VIV 16.24
Telefonica
TEF
9.85
TelekmIndonesia TLK 29.39
Tenaris
TS
35.28
Net
Sym Close Chg
s
s
s
s
s
WABCO
WBC 140.02 1.02
WEC Energy WEC 60.08 -0.83
WEX
WEX 157.41 1.79
W.P.Carey
WPC 60.96 0.19
WPP
WPP 87.36 -0.31
WPX Energy WPX 14.55 -0.33
Wabtec
WAB 83.44 0.26
WalgreensBoots WBA 69.79 -0.76
Walmart
WMT 89.06 -0.92
WasteConnections WCN 71.93 0.50
WasteMgt
WM 85.82 0.13
Waters
WAT 205.32 3.94
Watsco
WSO 171.08 1.65
Wayfair
W
83.13 1.91
Weibo
WB 135.60 4.32
WellCareHealth WCG 195.59 0.46
WellsFargo WFC 57.07 -0.52
Welltower
WELL 52.86 -1.21
WestPharmSvcs WST 89.68 2.48
WestarEnergy WR 49.72 -0.43
WestAllianceBcp WAL 61.72 0.87
WesternDigital WDC 93.80 3.85
WesternGasEquity WGP 35.66 -0.29
WesternGasPtrs WES 45.87 0.03
WesternUnion WU 19.90
...
WestlakeChem WLK 117.16 3.14
WestpacBanking WBK 23.65 -0.13
WestRock
WRK 66.40 0.40
Weyerhaeuser WY 34.23 0.22
WheatonPrecMet WPM 20.12 0.65
Whirlpool
WHR 161.42 2.84
Williams
WMB 27.63 0.39
WilliamsPartners WPZ 36.63 -0.23
WillisTowers WLTW 157.43 0.51
Wipro
WIT
5.49
...
WooriBank WF
44.47 -0.95
Workday
WDAY 135.95 3.03
Worldpay
WP 84.27 0.68
Wyndham
WYN 117.61 0.92
WynnResorts WYNN 166.78 1.72
XPO Logistics XPO 102.57 1.68
XcelEnergy XEL 42.91 -0.92
Xerox
XRX 30.04 -0.25
Xilinx
XLNX 73.98 1.18
Xylem
XYL 75.28 1.42
YPF
YPF 22.50 0.13
YY
YY 118.76 -16.66
Yandex
YNDX 42.66 0.94
YumBrands YUM 81.38 0.75
YumChina
YUMC 42.78 0.57
ZTO Express ZTO 16.92 0.96
ZayoGroup ZAYO 36.20 0.01
ZebraTech
ZBRA 143.22 2.20
Zillow A
ZG
52.55 1.34
Zillow C
Z
52.85 1.37
ZimmerBiomet ZBH 118.09 -0.04
ZionsBancorp ZION 56.54 0.83
Zoetis
ZTS 81.51 -0.38
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.
THE WALL STREET JOURNAL.
B12 | Wednesday, March 7, 2018
MARKETS DIGEST
EQUITIES
S&P 500 Index
Dow Jones Industrial Average
Last Year ago
24884.12 s 9.36, or 0.04%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio 26.04 21.36
P/E estimate *
16.52 17.94
Dividend yield
2.14
2.31
All-time high 26616.71, 01/26/18
Nasdaq Composite Index
Last
2728.12 s 7.18, or 0.26%
High, low, open and close for each
trading day of the past three months.
Year ago
Trailing P/E ratio * 25.23 24.90
P/E estimate *
17.14 18.39
Dividend yield
1.90
1.98
All-time high: 2872.87, 01/26/18
Last Year ago
7372.01 s 41.30, or 0.56%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio * 26.31
25.78
P/E estimate *
20.34
20.13
Dividend yield
1.01
1.15
All-time high: 7505.77, 01/26/18
Current divisor 0.14523396877348
26300
2900
7500
25500
2825
7300
24700
2750
7100
23900
2675
6900
23100
2600
65-day moving average
Session high
t
DOWN
Session open
t
Close
UP
Close
6700
65-day moving average
Open
65-day moving average
22300
Session low
6500
2525
Bars measure the point change from session's open
Dec.
Jan.
Dec.
Nov.
Feb.
6300
2450
21500
Nov.
Jan.
Dec.
Nov.
Feb.
Jan.
Feb.
*Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
Major U.S. Stock-Market Indexes
High
Latest
Close
Low
Net chg
% chg
High
52-Week
Low
% chg
% chg
3-yr. ann.
YTD
Dow Jones
24995.24 24708.41 24884.12
9.36
Transportation Avg 10451.08 10325.94 10435.52
87.18
Industrial Average
Utility Average
Total Stock Market
Barron's 400
677.31
668.28
669.68
-8.23
0.04
0.84
-1.21
0.37
28257.16 28046.68 28237.63 105.04
726.25
717.09
7.44
726.22
Nasdaq Stock Market
Nasdaq Composite
7378.03
Nasdaq 100
6937.03
7319.68
6872.06
7372.01
6913.02
1.03
0.56
41.30
31.74
0.46
S&P
500 Index
2732.08
2711.26
2728.12
7.18
MidCap 400
SmallCap 600
1917.11
950.48
1892.51
934.28
1916.99
949.83
19.32
10.37
1.02
Other Indexes
Russell 2000
1562.20
1538.63
1562.20
16.16
NYSE Composite
12735.44 12648.25 12720.77
554.67
560.26
4.26
NYSE Arca Biotech
4736.03
4678.92
4724.37
4.04
NYSE Arca Pharma
540.45
533.68
536.06
-4.39
KBW Bank
114.06
112.44
0.54
PHLX§ Gold/Silver
113.77
81.60
79.85
1.70
PHLX§ Oil Service
80.80
139.67
136.56
137.65
-0.07
1399.99
19.64
1381.51
17.68
1396.47
18.36
PHLX§ Semiconductor
Cboe Volatility
0.7
11.7
8783.74
12.0
-1.7
5.4
774.47
647.90
-3.8
-7.4
5.5
29630.47 24125.20
757.37
610.89
15.1
16.7
2.0
2.2
9.3
9.4
7505.77
7022.97
5793.83
5332.53
6.8
8.1
26.4
29.2
15.2
2.0
9.6
1.10
1995.23
979.57
1681.04
815.62
11.5
13.4
0.9
1.4
8.8
10.9
1.04
1610.71
1345.24
13.6
1.7
8.7
Volume, Advancers, Decliners
Company
Symbol
SPDR S&P 500
SPY
9,901.4 269.45
Close
0.15
0.68
22.17
22.01
67.55
0.36
0.54
67.55
67.19
IPG Photonics
IPGP
4,357.8 240.00
-1.44
-0.60 242.00 240.00
Cnsmr Staples Sel Sector XLP
3,702.7
53.94
-0.31
-0.57
54.27
53.94
Industrial Select Sector XLI
2,469.1
75.37
-1.00
-1.31
76.38
75.26
New York Mortgage Tr NYMT 2,319.3
AMAT 2,160.0
Applied Materials
6.05
…
unch.
6.05
5.95
58.60
-1.39
-2.32
60.02
58.35
66.59
Percentage gainers…
Medifast
MED
7.5
76.50
8.99
13.32
77.06
VS 2x VIX Short Term
TVIX
1,518.5
9.32
0.96
11.48
9.36
8.33
ProSharesUltVIXST
UVXY
1,160.8
18.24
1.52
9.09
18.26
16.68
1,120.5 129.50
5.5
3.6
0.09
4939.86
3449.61
34.6
11.9
5.7
593.12
498.46
5.5
-1.6
-1.1
...And losers
0.47
116.52
88.02
17.6
6.6
15.9
Intellia Therapeutics
93.26
76.42
2.1
-5.2
6.1
AeroVironment
172.14
117.79
-20.0
1396.47
37.32
960.01
9.14
43.0
60.3
9.63
8.03 133.74 112.00
35.9
11.21
0.83
8.00
11.21
10.33
NTLA
12.8
25.11
-2.76
-9.90
27.90
25.11
AVAV
49.2
46.00
-4.53
-8.96
52.55
44.03
78.8
19.38
-1.71
-8.11
21.50
18.50
382.7
6.85
-0.58
-7.81
8.25
6.71
5.1
32.85
-2.75
-7.72
37.00
32.85
ADSK
Autodesk
Diamondrock Hospitality DRH
-8.0 -11.0
Spectrum Pharmaceuticals SPPI
11.4
66.3
SunRun
RUN
Raven Industries
RAVN
25.2
6.5
Percentage Gainers...
Net chg
3106.25
400.83
266.10
20.74
2.74
2.74
Americas
Brazil
Canada
Mexico
Chile
DJ Americas
653.34
Sao Paulo Bovespa 85653.02
S&P/TSX Comp
15545.19
S&P/BMV IPC
47884.63
Santiago IPSA
4191.54
2.36
–369.81
3.91
163.72
7.32
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
371.37
374.19
3916.41
5170.23
12113.87
1482.12
22202.50
528.36
1281.43
9586.80
566.34
8765.88
7146.75
0.50
1.43
9.37
3.00
23.00
5.34
382.59
1.85
1.92
–4.00
4.65
–42.50
30.77
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
S&P/ASX 200
5962.40
Shanghai Composite 3289.64
Hang Seng
30510.73
S&P BSE Sensex
33317.20
Nikkei Stock Avg
21417.76
Straits Times
3491.92
Kospi
2411.41
Weighted
10784.34
The Global Dow
DJ Global Index
DJ Global ex U.S.
Latest
% chg
–0.43
YTD
% chg
0.67
0.69
1.04
0.6
0.9
–0.2
0.36
1.7
12.1
–4.1
–3.0
–0.5
0.03
0.34
0.17
0.13
0.38
0.24
0.06
0.19
0.36
1.75
0.35
0.15
–0.04
–0.48
0.83
0.43
67.40
32.72
624.34
–429.58 –1.27
375.67
53.31
36.35
141.44
1.14
1.00
2.09
1.79
1.55
1.53
1.33
–4.6
–2.9
–1.5
–2.7
–6.2
–1.8
1.6
–3.0
11.0
–4.6
–0.4
–6.6
–7.0
–1.7
–0.5
2.0
–2.2
–5.9
2.6
–2.3
1.3
Symbol
ACM Research Cl A
Baozun ADR
CommerceHub Series C
Clearside Biomedical
Zosano Pharma
ACMR
11.00 3.15
48.21 11.44
CHUBK 22.42
4.95
CLSD
12.95 2.62
ZSAN
9.28 1.83
40.04
31.11
28.33
25.36
24.56
13.19 4.74
48.75 13.95
22.59 14.85
13.35 5.30
51.20 3.61
CommerceHub Series A
Synthesis Energy Systems
Checkpoint Therapeutics
Ameresco
Siebert Financial
CHUBA 22.50
3.40
5.60
9.90
9.35
4.23
0.55
0.90
1.55
1.41
23.15
19.45
19.15
18.56
17.76
Amedica
CGG ADR
SELLAS Life Sciences
OncoMed Pharmaceuticals
Transcontinental Realty
AMDA
2.33
4.43
6.00
2.90
41.98
0.33
0.60
0.73
0.35
5.02
16.50
15.52
13.85
13.73
13.58
BZUN
SES
CKPT
AMRC
SIEB
SLS
OMED
TCI
High
52-Week
Low
% chg
Company
CGG
Company
Symbol
...
226.8
36.7
81.9
-80.6
Lianluo Smart
GlycoMimetics
Infinity Pharmaceuticals
Yangtze River Port
Innovate Biopharm
LLIT
24.53 14.94
10.24 2.00
13.25 3.20
10.00 5.25
21.61 2.43
36.0
-50.0
-56.9
66.4
240.0
TransAct Technologies
Marinus Pharmaceuticals
Orchids Paper Products
YY ADR
Deciphera Pharmaceuticals
TACT
6.93 2.00
7.67 3.26
24.24 4.70
10.42 1.74
42.00 16.50
-50.2
-38.5
-68.3
-67.0
99.9
Allied Healthcare Prods
iFresh
Intellicheck
Freshpet
Boston Omaha
AHPI
Most Active Stocks
Company
Symbol
Micron Technology
SPDR S&P 500
General Electric
iShares MSCI Emg Markets
Bank of America
MU
Finl Select Sector SPDR
VanEck Vectors Gold Miner
BioPharmX
Advanced Micro Devices
Intel
XLF
SPY
GE
EEM
BAC
GDX
BPMX
AMD
INTC
Volume % chg from Latest Session
(000) 65-day avg Close % chg
71,223
68,054
56,662
55,868
49,904
60.3
-39.0
-35.0
-22.5
-36.4
53.74 3.29
272.88 0.25
14.64 1.53
48.65 0.93
32.11 -0.06
49,161
47,711
46,257
44,962
38,102
-27.9
14.6
341.7
-16.7
10.6
28.96 0.42
22.01 1.66
0.34 18.38
11.76 -1.26
50.71 1.93
52-Week
High
Low
54.64 24.81
286.63 231.61
30.54 13.95
52.08 37.39
32.85 22.07
30.33
25.58
0.90
15.65
51.33
22.00
20.84
0.10
9.70
33.23
Benchmark
Yields
Treasury
yield
curve
andtoRates
Yield
maturity of current bills,
Five-year ARM, Rate
2.00
1.00
t
0.00
MAM J J A S O N D J F M
2017
2018
FinancialResourcesFederalCreditUnion
3.00%
Bridgewater, NJ
800-933-3280
Foxboro Federal Savings
Foxboro, MA
3.00%
877-369-3331
StateDepartmentFederalCreditUnion
3.00%
Alexandria, VA
800-296-8882
Elmira Savings Bank
Elmira, NY
3.13%
607-734-3374
Citizens Equity First Credit Union
3.25%
Peoria, IL
309-633-3603
Tuesday
t
3.00
3.75%
4.29%
Bankrate.com avg†:
t
4.00%
Yen, euro vs. dollar; dollar vs.
major U.S. trading partners
notes and bonds
One year ago
1
3 6
month(s)
1 2 3 5 710
years
maturity
15%
3.00
10
2.25
5
1.50
0
0.75
–5
0.00
–10
30
Euro
Yen
WSJ Dollar index
2017
2018
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Yield/Rate (%)
Last (l)Week ago
Federal-funds rate target
1.25-1.50 1.25-1.50
Prime rate*
4.50
4.50
Libor, 3-month
2.01
2.05
Money market, annual yield
0.30
0.30
Five-year CD, annual yield
1.57
1.60
30-year mortgage, fixed†
4.40
4.47
15-year mortgage, fixed†
3.89
3.93
Jumbo mortgages, $424,100-plus† 4.74
4.72
Five-year adj mortgage (ARM)† 4.29
4.29
New-car loan, 48-month
3.60
3.52
3-yr chg
52-Week Range (%)
Low 0 2 4 6 8 High (pct pts)
0.50 l
l
3.75
l
1.11
0.25 l
1.25 l
l
3.73
l
2.99
l
4.21
l
3.20
l
2.85
1.50
4.50
2.05
0.36
1.60
4.47
3.94
4.96
4.37
3.60
1.25
1.25
1.78
-0.07
0.11
0.42
0.74
0.24
0.63
0.47
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
Corporate Borrowing Rates and Yields
Bond total return index
Close
Yield (%)
Last Week ago
52-Week
High
Low
Total Return (%)
52-wk
3-yr
1424.789
2.686
2.716
2.736
1.818
0.253 0.709
10-yr Treasury, Ryan ALM 1666.711
DJ Corporate
370.768
Aggregate, Barclays Capital 1902.310
High Yield 100, Merrill Lynch 2841.518
Fixed-Rate MBS, Barclays 1949.200
Muni Master, Merrill
515.548
2.877
3.714
3.170
6.023
3.390
2.440
2.910
3.647
3.170
6.010
3.390
2.445
2.943
3.734
3.180
6.319
3.400
2.451
2.058
2.879
2.380
4.948
2.660
1.736
1.215
2.541
1.080
3.332
0.593
2.649
790.908
5.985
5.954
6.077
5.279
3.444 5.785
Treasury, Ryan ALM
EMBI Global, J.P. Morgan
0.027
2.544
1.449
3.645
1.168
2.047
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
WSJ
.COM
High
56.1
190.2
-19.6
-16.5
5.1
11.80 -1.90 -13.87
4.53 -0.72 -13.71
TIS
9.40 -1.35 -12.56
YY
118.76 -16.66 -12.30
DCPH
24.27 -3.34 -12.10
15.80 6.80
9.87 1.13
28.94 8.31
142.97 42.90
29.98 15.15
71.0
230.7
-66.0
163.6
...
-10.55
-10.15
-10.10
-10.09
-9.81
5.25 1.53
18.48 8.70
4.55 1.80
20.85 9.25
35.49 12.15
69.5
-50.7
10.3
94.7
21.3
INFI
YRIV
INNT
-0.59
-4.07
-0.47
-0.70
-2.80
-20.34
-17.84
-17.28
-17.16
-16.18
52-Week
Low
% chg
1.05
3.82
0.93
2.61
3.43
3.69
26.05
3.75
25.47
23.50
MRNS
IFMK
IDN
FRPT
BOMN
3.39
8.85
2.58
18.50
23.35
-0.40
-1.00
-0.29
-2.08
-2.54
Ranked by change from 65-day average*
Company
Symbol
First Tr Cloud Computing
CommerceHub Series A
ACM Research Cl A
Caladrius Biosciences
iShares MSCI Pacific xJp
SKYY
CommerceHub Series C
Vanguard Materials
Clearside Biomedical
PIMCO Dyn Mult US
WisdomTree Japan SC
CHUBK
Country/currency
CHUBA
ACMR
CLBS
EPP
VAW
CLSD
MFUS
DFJ
Volume % chg from Latest Session
(000) 65-day avg Close % chg
4690
3608
3360
3359
2646
9,754
5,412
1,209
1,827
13,662
4,078
2,601
7,900
130
1,729
US$vs,
YTDchg
Tues
in US$ per US$ (%)
50.43
22.50
11.00
5.48
47.79
0.76
23.15
40.04
8.95
0.70
2076 22.42
1959 136.50
1867 12.95
1797 28.03
1700 81.70
28.33
1.19
25.36
0.08
1.26
52-Week
High
Low
50.54 37.81
24.53 14.94
13.19 4.74
7.79 2.63
50.34 43.04
22.59
144.65
13.35
29.49
85.64
14.85
115.35
5.30
25.00
64.94
Track the Markets
Compare the performance of selected global stock
indexes, bond ETFs, currencies and commodities at
WSJ.com/TrackTheMarkets
US$vs,
YTDchg
Tues
in US$ per US$ (%)
Country/currency
Americas
Europe
Argentina peso
.0492 20.3123 9.2
Brazil real
.3114 3.2110 –3.1
Canada dollar
.7765 1.2878 2.4
Chile peso
.001666 600.20 –2.5
Ecuador US dollar
1
1 unch
Mexico peso
.0534 18.7397 –4.7
Uruguay peso
.03515 28.4500 –1.2
Venezuela b. fuerte .00002835245.0001 340699.8
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
Asia-Pacific
Australian dollar
.7829 1.2773
China yuan
.1585 6.3102
Hong Kong dollar
.1277 7.8336
India rupee
.01542 64.869
Indonesia rupiah .0000726 13775
Japan yen
.009424 106.12
Kazakhstan tenge .003132 319.30
Macau pataca
.1239 8.0708
Malaysia ringgit
.2568 3.8943
New Zealand dollar
.7289 1.3719
Pakistan rupee
.00903 110.750
Philippines peso
.0193 51.907
Singapore dollar
.7597 1.3163
South Korea won .0009399 1063.96
Sri Lanka rupee
.0064479 155.09
Taiwan dollar
.03423 29.210
Thailand baht
.03195 31.300
Vietnam dong
.00004392 22770
Commodities
–0.3
–3.0
0.3
1.6
2.2
–5.8
–4.0
0.3
–4.1
–2.7
0.1
3.9
–1.6
–0.3
1.0
–1.5
–4.0
0.3
.04886 20.468 –3.8
.1665 6.0056 –3.2
1.2404 .8062 –3.2
.003963 252.31 –2.6
.010011 99.89 –3.5
.1285 7.7793 –5.2
.2962 3.3763 –2.9
.01764 56.690 –1.7
.1219 8.2057 0.2
1.0630 .9407 –3.5
.2636 3.7941 –0.02
.0377 26.5275 –5.7
1.3888 .7200 –2.7
Middle East/Africa
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6520 .3771 –0.01
.0567 17.6310 –0.8
.2892 3.4576 –0.6
3.3370 .2997 –0.6
2.5974 .3850 0.01
.2744 3.644 –0.1
.2666 3.7508 0.01
.0849 11.7808 –4.7
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 83.46 –0.32–0.38 –2.92
Sources: Tullett Prebon, WSJ Market Data Group
COMMODITIES
Tuesday
52-Week
Pricing trends on someClose
raw materials,
or commodities
Net chg % Chg
High
Low
DJ Commodity
Get real-time U.S. stock quotes and track most-active
stocks, new highs/lows and mutual funds. Plus,
deeper money-flows data and email delivery of key
stock-market data. Available free at WSJMarkets.com
Latest Session
Close Net chg % chg
U.S.-dollar foreign-exchange rates in late New York trading
Forex Race
s
A consumer rate against its
benchmark over the past year
* 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.
Currencies
s
Selected rates
NYSE Arca
* Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least
5,000 shares =Has traded fewer than 65 days
* Volumes of 100,000 shares or more are rounded to the nearest thousand
s
U.S. consumer rates
Nasdaq
Total volume*2,090,491,572 243,443,447
Adv. volume*1,356,745,523 197,868,335
Decl. volume* 707,092,939 41,663,651
Issues traded
3,082
1,353
Advances
1,894
993
Declines
1,012
324
Unchanged
176
36
New highs
136
25
New lows
28
13
Closing tick
195
26
Closing Arms†
0.98
0.65
Block trades*
7,076
1,171
2.31
18.75
2.25
3.38
14.50
GLYC
Volume Movers
CREDIT MARKETS & CURRENCIES
Consumer Rates and Returns to Investor
Total volume* 833,885,275 12,685,439
Adv. volume* 534,150,241 7,939,116
Decl. volume* 289,751,191 4,565,102
Issues traded
3,074
329
Advances
2,033
142
Declines
923
161
Unchanged
118
26
New highs
90
0
New lows
34
7
Closing tick
37
89
Closing Arms†
1.28
0.30
Block trades*
6,245
117
Percentage Losers
Latest Session
Close Net chg % chg
Sources: SIX Financial Information; WSJ Market Data Group
Interest rate
Low
-1.26 273.32 269.16
Sources: SIX Financial Information; WSJ Market Data Group
Region/Country Index
5-year Treasury
note yield
-3.43
22.16
-0.7
International Stock Indexes
5-year adjustablerate mortgage
t (ARM)
After Hours
% chg
High
4,936.7
-0.4
1.50
Net chg
5,701.0
8.6
20.61
-0.37 -1.98
Last
ALE
10.6
-0.05
Volume
(000)
Allete
503.24
2.15
NYSE NYSE Amer.
VanEck Vectors Gold Miner GDX
589.69
-0.81
13637.02 11324.53
Trading Diary
Most-active and biggest movers among NYSE, NYSE Arca, NYSE Amer.
and Nasdaq issues from 4 p.m. to 6:30 p.m. ET as reported by electronic
trading services, securities dealers and regional exchanges. Minimum
share price of $2 and minimum after-hours volume of 5,000 shares.
Most-active issues in late trading
14.4
16.3
2328.95
0.77
Nasdaq PHLX
World
18.9
11373.38
2872.87
0.32
40.04
560.50
Value Line
0.26
26616.71 20404.49
Late Trading
TR/CC CRB Index
Crude oil, $ per barrel
Natural gas, $/MMBtu
Gold, $ per troy oz.
638.50
2.50
196.76
62.60
2.749
1333.60
0.09
0.03
0.045
15.50
0.39
% Chg
YTD
% chg
645.87
532.01
11.72
2.10
0.05 200.52
66.14
0.05
3.63
1.66
1.18 1362.40
166.50
42.53
2.55
1200.10
4.65
17.80
-2.66
9.75
1.49
3.61
-6.91
2.09
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B13
COMMODITIES
Futures Contracts
Contract
Open
High hi lo
Low
Settle
Chg
Copper-High (CMX)-25,000 lbs.; $ per lb.
3.1045
3.1550
3.1045
3.1370 0.0315
March
May
3.1275
3.1780
3.1265
3.1590 0.0310
Gold (CMX)-100 troy oz.; $ per troy oz.
March
1321.60 1333.40
1321.40 1333.60 15.50
April
1320.90 1339.90
1320.80 1335.20 15.30
June
1328.00 1345.50
1326.60 1341.00 15.30
Aug
1334.90 1351.20
1333.60 1346.90 15.30
Oct
1341.30 1356.80
1341.30 1352.60 15.10
Dec
1345.80 1363.00
1345.80 1358.80 15.30
Palladium (NYM) - 50 troy oz.; $ per troy oz.
987.15
987.15
981.10
988.15
0.80
March
June
978.85
987.80
968.55
978.30
0.80
Sept
977.95
981.00
t 964.90
973.40
0.80
Platinum (NYM)-50 troy oz.; $ per troy oz.
...
...
...
969.10
8.50
March
April
963.30
976.30
960.80
970.60
8.50
Silver (CMX)-5,000 troy oz.; $ per troy oz.
16.370
16.810
16.370
16.715 0.377
March
May
16.435
16.895
16.410
16.784 0.372
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl.
62.59
63.28
62.17
62.60
0.03
April
May
62.41
63.05
62.03
62.45
0.06
June
62.06
62.69
61.74
62.16
0.11
July
61.80
62.18
61.32
61.73
0.13
Sept
60.69
61.08
60.28
60.70
0.15
Dec
59.20
59.64
58.87
59.26
0.11
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal.
1.8980
1.9111
1.8830
1.9033 .0066
April
May
1.9038
1.9155
1.8889
1.9097 .0080
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal.
1.9345
1.9443
1.9157
1.9331 –.0018
April
May
1.9466
1.9572
1.9300
1.9475
…
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
2.712
2.757
2.702
2.749
.045
April
May
2.747
2.785
2.738
2.778
.040
June
2.787
2.824
2.779
2.816
.038
July
2.834
2.867
2.824
2.861
.038
Sept
2.819
2.852
2.811
2.848
.037
Oct
2.832
2.863
2.822
2.860
.037
Open
interest
...
1246.50
...
1254.00
...
1243.00
1231.00
1248.00
March
May
498.75
506.25
501.75
507.75
494.00
495.25
502.00
507.00
–.25
738
–2.25 231,026
March
May
527.75
543.75
527.75
543.75
520.00
530.00
529.25
541.50
–4.25
110
–4.00 134,527
March
May
618.00
623.25
627.25
630.00
618.00
614.50
627.25
629.00
4.25
4.75
26
32,743
March
April
145.250
147.175
146.400
148.400
144.150
145.775
144.300
146.125
–.850
–.750
9,531
18,816
April
June
123.325
115.350
124.825
116.475
122.450
114.500
122.825
114.775
–.400 121,427
–.575 132,924
Wheat (CBT)-5,000 bu.; cents per bu.
3,578
143,543
Wheat (KC)-5,000 bu.; cents per bu.
616
309,292
107,805
27,446
4,526
38,605
Wheat (MPLS)-5,000 bu.; cents per bu.
Cattle-Live (CME)-40,000 lbs.; cents per lb.
Hogs-Lean (CME)-40,000 lbs.; cents per lb.
17
68,324
69.275
81.000
April
June
377.75
386.50
380.25 s
388.50 s
377.25
385.50
379.75
388.25
March
May
265.50
269.00
265.50
270.25
261.25
267.25
262.00
267.75
1066.00
1077.00
March
May
1067.00
1077.75
1060.75
1070.25
Soybean Meal (CBT)-100 tons; $ per ton.
1064.50
1074.75
68.125
79.850
68.200 –.600
79.950 –1.025
75,680
54,970
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft.
510.50
514.20
509.70
510.00 –1.90
827
March
May
480.60
489.50
478.00
488.60
9.10
4,883
Milk (CME)-200,000 lbs., cents per lb.
14.14
14.20
14.12
14.17
.02
4,395
March
April
14.19
14.29
14.10
14.15
–.04
3,651
Cocoa (ICE-US)-10 metric tons; $ per ton.
March
2,452
2,452 s
2,451
2,454
–5
274
May
2,420
2,471 s
2,404
2,441
–5 128,865
Coffee (ICE-US)-37,500 lbs.; cents per lb.
March
120.10
120.10
120.10
119.95
.75
56
May
121.20
122.30
120.40
121.25
.15 139,580
Sugar-World (ICE-US)-112,000 lbs.; cents per lb.
13.51
13.65
13.40
13.45
–.11 434,032
May
July
13.71
13.81
13.58
13.63
–.12 163,577
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb.
24.75
24.93
t
24.75
24.93
…
3,196
May
July
25.65
25.83
t
25.65
25.83
.01
2,913
Cotton (ICE-US)-50,000 lbs.; cents per lb.
87.75
87.75 s
85.21
83.84 –1.57
21
March
May
84.97
86.60 s
81.71
82.43 –2.80 133,921
Orange Juice (ICE-US)-15,000 lbs.; cents per lb.
March
142.40
142.40
142.00
141.95
2.05
16
May
141.40
143.35
139.50
142.45
2.05
9,131
954
148,293
463,667
271,713
305,533
142,578
120,585
239,111
112,197
73,147
124,515
90,148
307,648
213,307
82,709
107,290
73,713
127,838
Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
1.50
6,296
1.00 748,057
–2.75
–1.25
–2.25
3,395
–2.75 397,237
32.06
32.18
32.30
32.48
.29
439
.27 258,621
March
April
98.503
98.340
98.505
98.340
… 95,514
–.005 417,658
30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg.
98.505
98.345
98.505
98.345
Tuesday, March 06, 2018
These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace—
separate from the futures price on an exchange, which reflects what the commodity might be worth in future
months.
Tuesday
Metals
Tuesday
16.6200
12395
(U.S.$ equivalent)
Coins,wholesale $1,000 face-a
Other metals
LBMA Platinum Price PM
*957.0
Platinum,Engelhard industrial
969.0
Platinum,Engelhard fabricated
1069.0
Palladium,Engelhard industrial
1001.0
Palladium,Engelhard fabricated
1101.0
Aluminum, LME, $ per metric ton
*2135.0
Copper,Comex spot
3.1370
Iron Ore, 62% Fe CFR China-s
75.0
Shredded Scrap, US Midwest-s,m
339
Steel, HRC USA, FOB Midwest Mill-s
811
Fibers and Textiles
Gold, per troy oz
1335.42
1435.58
1331.40
1477.85
*1326.30
*1320.40
1388.30
1401.65
1401.65
1617.49
1311.47
1401.65
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA Gold Price AM
LBMA Gold Price PM
Krugerrand,wholesale-e
Maple Leaf-e
American Eagle-e
Mexican peso-e
Austria crown-e
Austria phil-e
Silver, troy oz.
16.6900
20.0280
16.8420
21.0530
£11.9600
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA spot price
.0057 128,692
.0057
9,095
March
June
March
June
1.3853
1.3915
1.3936
1.3994
1.3821
1.3881
1.3893
1.3950
.0057 180,170
.0057 14,010
March
June
1.0650
1.0734
1.0694
1.0779
1.0627
1.0712
1.0640 –.0003
1.0725 –.0003
March
April
May
June
Sept
Dec
.7763
.7783
.7774
.7764
.7755
.7830
.7842
.7841
.7842
.7844
.7770
.7835
.7757
.7766
.7764
.7760
.7755
.7822
March
June
.05309
.05238
.05348
.05271
.05308
.05235
Australian Dollar (CME)-AUD 100,000; $ per AUD
.7818
.7818
.7819
.7820
.7826
.7832
60,132
1,593
.0057 103,912
.0057
956
.0057
543
.0057
4,202
.0057
487
.0057
308
Mexican Peso (CME)-MXN 500,000; $ per MXN
Burlap,10-oz,40-inch NY yd-n,w
Cotton,1 1/16 std lw-mdMphs-u
Cotlook 'A' Index-t
Hides,hvy native steers piece fob-u
Wool,64s,staple,Terr del-u,w
0.6200
0.8143
*91.45
65.750
n.a.
Grains and Feeds
Barley,top-quality Mnpls-u
Bran,wheat middlings, KC-u
Corn,No. 2 yellow,Cent IL-bp,u
Corn gluten feed,Midwest-u,w
Corn gluten meal,Midwest-u,w
Cottonseed meal-u,w
Hominy feed,Cent IL-u,w
Meat-bonemeal,50% pro Mnpls-u,w
Oats,No.2 milling,Mnpls-u
Rice, Long Grain Milled, No. 2 AR-u,w
Sorghum,(Milo) No.2 Gulf-u
SoybeanMeal,Cent IL,rail,ton48%-u
n.a.
101
3.6100
107.5
496.2
323
95
258
2.9825
25.50
8.3163
391.00
Tuesday
Soybeans,No.1 yllw IL-bp,u
10.3100
Wheat,Spring14%-pro Mnpls-u
7.6400
Wheat,No.2 soft red,St.Louis-bp,u
5.0600
Wheat - Hard - KC (USDA) $ per bu-u 5.3150
Wheat,No.1soft white,Portld,OR-u
5.5450
Food
200.74
193.21
0.9142
2.2325
151.50
160.25
64.75
2576
1.2043
1.3976
1.6950
16.55
0.80
66.51
n.a.
0.9290
n.a.
172.88
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
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
24695
24718
24852
24877
–12 111,013
–12
3,874
2720.50
2734.50
2734.00
2735.10
2711.00
2716.00
2723.90
2728.90
5.50
5.80
80,586
300
2719.00
2723.75
2734.50
2739.00
2710.25
2715.25
2724.00
2729.00
5.50 3,109,807
6.00 168,640
Mini S&P Midcap 400 (CME)-$100 x index
1897.00
1906.80
1918.10
1921.20
1891.10
1896.70
1917.00
1920.50
19.60
18.40
74,112
26
Mini Nasdaq 100 (CME)-$20 x index
March
June
6880.5
6908.3
6939.3
6965.3
6871.8
6898.3
6907.8
6933.8
30.3 222,802
30.0 14,448
Mini Russell 2000 (ICE-US)-$100 x index
March
June
1545.80
1559.00
1562.50
1565.50
1535.90
1541.40
1559.00
1562.90
15.10
14.90
25,569
289
1509.70
3.80
253
89.59
89.16
–.45
–.48
30,623
4,960
Mini Russell 1000 (ICE-US)-$100 x index
March
1509.60
1512.40
1503.70
U.S. Dollar Index (ICE-US)-$1,000 x index
89.92
89.53
March
June
90.04
89.62
89.47
89.05
Source: SIX Financial Information
-2.2
3.170 2.380 3.180
U.S. Aggregate
U.S. Corporate Indexes Bloomberg Barclays
-2.7
3.750 3.030 3.750
U.S. Corporate
-1.6
2577.18
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
Mortgage-Backed Bloomberg Barclays
Broad Market Bloomberg Barclays
1949.20
-1.9
Mortgage-Backed
1912.58
-2.1
Ginnie Mae (GNMA) 3.400 2.630 3.400
1143.58
-1.9
Fannie mae (FNMA) 3.380 2.670 3.400
-1.9
Freddie Mac (FHLMC) 3.400 2.680 3.410
Intermediate
3.420 2.530 3.420
1761.76
Long term
4.450 3.990 4.680
515.55
3.390 2.660 3.400
-1.3
Muni Master
2.440 1.736 2.451
554.89
-2.3
Double-A-rated
3.220 2.470 3.230
358.32
-2.0
7-12 year
2.561 1.744 2.573
703.83
-2.5
Triple-B-rated
4.010 3.340 4.020
404.07
-1.9
12-22 year
2.843 2.213 2.872
391.89
-2.1
22-plus year
3.259 2.716 3.449
3738.34 -5.1
415.88
-0.4
High Yield Constrained 6.215 5.373 6.394
Global Government J.P. Morgan†
Triple-C-rated
10.358 9.640 11.091
538.52
-1.0
Global Government 1.600 1.300 1.650
2841.52
-0.7
High Yield 100
6.023 4.948 6.319
750.85
-0.5
Canada
2.220 1.570 2.340
377.79
-0.3
Global High Yield Constrained 5.571 4.934 5.738
369.80
-0.2
EMU§
1.226 0.956 1.363
305.40
-0.3
Europe High Yield Constrained 2.783 1.897 3.196
705.66
-0.7
France
0.980 0.690 1.210
502.11
-1.0
Germany
0.680 0.210 0.740
Japan
0.380 0.340 0.460
1.4
425.99
U.S Agency Bloomberg Barclays
1620.40
-1.0
U.S Agency
2.590 1.690 2.600
289.62
1453.34
-0.6
10-20 years
2.460 1.490 2.470
554.45
-1.1
Netherlands
0.770 0.390 0.830
20-plus years
3.320 2.730 3.410
911.65
-2.1
U.K.
1.720 1.340 1.830
Yankee
3.420 2.610 3.420
790.91
-2.1
Emerging Markets ** 5.985 5.279 6.077
2417.89
-1.8
0.3
*Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds
** EMBI Global Index
† In local currency § Euro-zone bonds
Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan
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
2.250
2.750
4.500
Australia 2
2.750
10
0
1
l
2.020 s
2.803 s
l
l
l
Germany 2 -0.612 s
10 0.677 s
l
0.750
0.050
2.050
0.100
0.100
2.750
l
l
Italy 2 -0.193 t
10 2.000 s
l
Japan 2 -0.169 t
10 0.057 s
l
Spain 2 -0.359 t
10 1.405 t
l
1.750
U.K. 2
4.250
10
Yield (%)
3 4 Previous
2
l
France 2 -0.469 t
10 0.928 s
0.000
0.000
Latest(l)-2 -1
U.S. 2 2.250 s
10 2.876 t
1.450
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;
M=monthly; 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 3/5
Source: WSJ Market Data Group
25047
25070
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
0.500
30.0000
0.2225
n.a.
0.3083
0.2575
n.a.
.0079 508,058
.0078 40,799
Bonds | WSJ.com/bonds
Tracking Bond Benchmarks
3266.09 -3.6
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
24885
24925
.05328 .00036 183,064
.05252 .00036
5,310
High Yield Bonds Merrill Lynch
Cash Prices | WSJ.com/commodities
0.7681
0.9690
2.730
2.670
3.030
2.210
2.420
2.280
2.600
63.100
12.400
.7753
.7767
2722.47
32.31
32.54
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
.7696
.7712
Swiss Franc (CME)-CHF 125,000; $ per CHF
1.2414
1.2500
Mini S&P 500 (CME)-$50 x index
.7776
.7789
British Pound (CME)-£62,500; $ per £
1.2338
1.2425
Open
interest
S&P 500 Index (CME)-$250 x index
.7706
.7723
–.5 61,815
–.7 3,301,081
32.26
32.21
March
June
March
June
Canadian Dollar (CME)-CAD 100,000; $ per CAD
114-095
113-315
March
May
1,311,079
1,627,040
1,856,236
2,091,428
1.2430
1.2516
Chg
Index Futures
March
June
114-060
113-280
–.2 43,412
–.2 1,800,756
–.0200
–.0150
–.0100
–.0200
1.2344
1.2433
Settle
Mini DJ Industrial Average (CBT)-$5 x index
March
June
114-085 114-127
113-312 114-032
106-172
106-085
1,237
4,079
.9421 –.0001 270,026
.9481 –.0002
6,410
March
June
106-165
106-075
–.0075
–.0050
.9399
.9460
1902.31
106-170 106-182
106-085 106-097
32,996
8,755
.9454
.9513
.5 72,052
… 3,457,562
March
June
–.016
…
.9421
.9482
120-215
120-010
–4.80
1,572
–5.20 231,111
94.047
March
June
120-145
119-265
384.50
388.00
93.875
Japanese Yen (CME)-¥12,500,000; $ per 100¥
120-210 120-270
120-000 120-070
383.30
387.00
94.281
94.016
Currency Futures
March
June
388.90
394.40
Energy
March
June
9.0 16,295
9.0 809,454
388.90
394.10
Contract
High hilo
Low
Open
Euro (CME)-€125,000; $ per €
94.000
93.891
t 93.750
93.828
1 Month Libor (CME)-$3,000,000; pts of 100%
98.1850 98.1850
98.1850 98.1825
March
April
98.1525 98.1525
98.1500 98.1500
Eurodollar (CME)-$1,000,000; pts of 100%
March
97.9050 97.9125
97.8900 97.8900
June
97.7700 97.7750
97.7550 97.7600
Dec
97.5100 97.5250
97.4900 97.5050
Dec'19
97.1750 97.2000
97.1550 97.1650
144-130
143-120
2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
Open
interest
Chg
10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
143-220
142-220
5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
Settle
March
June
144-010 144-240
142-310 143-220
Treasury Notes (CBT)-$100,000; pts 32nds of 100%
10
4,716
Contract
High hilo
Low
Open
March
June
March
May
Soybean Oil (CBT)-60,000 lbs.; cents per lb.
69.325
81.325
103
6,117
Interest Rate Futures
March
May
Soybeans (CBT)-5,000 bu.; cents per bu.
1.00
1.00
Cattle-Feeder (CME)-50,000 lbs.; cents per lb.
53
24,994
776
Open
interest
Chg
March
May
Agriculture Futures
Oats (CBT)-5,000 bu.; cents per bu.
Settle
Rough Rice (CBT)-2,000 cwt.; $ per cwt.
Metal & Petroleum Futures
Corn (CBT)-5,000 bu.; cents per bu.
Contract
High hilo
Low
Open
WSJ.com/commodities
l
l
l
0.701 t
1.522 s
l
l
Spread Under/Over U.S. Treasurys, in basis points
Latest
Prev
Year ago
Month ago
Year ago
2.246
2.884
2.109
2.803
1.309
2.500
1.978
2.021
1.841
-23.0
-26.8
53.2
2.727
2.813
2.816
-7.4
-15.6
31.7
-0.455
-0.422
-0.510
-270.1
-181.9
0.898
0.958
0.963
-198.5
-153.7
-0.623
-0.566
-286.8
-213.6
0.646
0.695
-0.826 -286.2
0.341
-219.9
-223.8
-215.9
-0.174
-0.200
-0.028
-242.0
-133.8
1.997
1.987
2.158
-87.7
-88.7
-34.2
-0.169
-0.139
-0.290
-241.9
-241.5
-159.9
-271.9
-194.8
-244.3
0.075 -281.9
-283.7
-242.5
-258.8
-147.7
0.046
0.076
-0.343
-0.373
-0.168
1.419
1.422
1.700
-147.1
-146.4
-80.0
0.733
0.610
0.106
-154.9
-151.2
-120.4
1.501
1.523
1.216
-138.3
-128.4
-260.9
-135.4
Source: Tullett Prebon
Corporate Debt
in that same company’s share price.
Borrowing Benchmarks | WSJ.com/bonds
Money Rates
Investment-grade spreads that tightened the most…
March 6, 2018
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
Jan. Index
level
Chg From (%)
Dec. '17 Jan. '17
U.S. consumer price index
0.54
0.43
247.867
254.638
All items
Core
2.1
1.8
International rates
Latest
Week
ago
52-Week
High
Low
Prime rates
U.S.
Canada
Japan
Euro zone
Switzerland
Britain
Australia
0.00
0.50
0.50
1.50
0.00
0.50
0.50
1.50
0.00
0.50
0.50
1.50
0.00
0.50
0.25
1.50
Overnight repurchase
1.62
0.50
U.S. government rates
Discount
2.00
2.00
2.00
1.25
Federal funds
Effective rate
High
Low
Bid
Offer
1.4200
1.6500
1.3000
1.4100
1.4300
1.4200
1.5625
1.3000
1.4100
1.4300
1.4500
1.6500
1.4100
1.4300
1.4400
0.6600
0.8125
0.5000
0.6600
0.6700
Week
Latest ago
—52-WEEK—
High Low
Euro Libor
1.550 1.495 1.550 0.570
1.660 1.645 1.660 0.745
1.830 1.830 1.830 0.835
4 weeks
13 weeks
26 weeks
Secondary market
-0.402
-0.379
-0.330
-0.254
One month
Three month
Six month
One year
-0.403
-0.379
-0.324
-0.254
-0.388
-0.354
-0.245
-0.110
-0.420
-0.387
-0.339
-0.263
Fannie Mae
Euro interbank offered rate (Euribor)
30-year mortgage yields
One month
Three month
Six month
One year
4.087 4.038 4.087 3.253
4.123 4.074 4.123 3.281
30 days
60 days
Other short-term rates
Latest
Week
ago
52-Week
high
low
-0.371
-0.327
-0.271
-0.191
Latest
3.25
3.25
3.25
2.50
1.508
1.532
Treasury
MBS
Commercial paper (AA financial)
90 days
-0.371
-0.328
-0.271
-0.191
Value
Traded
-0.366
-0.325
-0.240
-0.106
-0.375
-0.332
-0.279
-0.194
52-Week
High
Low
DTCC GCF Repo Index
Call money
2.01
1.94
2.01
27.200 1.836 0.506
88.940 1.852 0.526
Open Implied
Settle Change Interest Rate
0.87
Libor
1.48
1.51
U.S.
Treasury bill auction
4.50 4.50 4.50 3.75
3.45 3.45 3.45 2.70
1.475 1.475 1.475 1.475
Policy Rates
—52-WEEK—
High Low
DTCC GCF Repo Index Futures
One month
Three month
Six month
One year
1.71131
2.04728
2.24051
2.51200
1.66418
2.00625
2.21125
2.48125
1.71131
2.04728
2.24051
2.51200
0.85444
1.10622
1.39072
1.69511
Treasury Mar
Treasury Apr
Treasury May
98.405 -0.010 1737 1.595
98.250 -0.005 697 1.750
98.230 -0.005 551 1.770
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 December 14, 2017. Other prime rates aren’t directly comparable; lending practices
vary widely by location; Discount rate is effective December 14, 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;
Tullett Prebon Information, Ltd.
Issuer
Symbol Coupon (%)
Maturity
Current
Spread*, in basis points
One-day change
Last week
Stock Performance
Close ($)
% chg
Anheuser–Busch Inbev Worldwide ABIBB
2.500
July 15, ’22
Hartford Financial Services
HIG
8.125
June 15, ’68
–91 –17
171 –16
159
...
90 –15
100
56.56
40
–18
54
...
n.a.
54.42
...
0.89
BNP Paribas S.A.
BNP
6.750 March 14, ’49
Morgan Stanley
MS
3.875
April 29, ’24
Kraft Heinz Foods
KHC
3.000
June 1, ’26
117
–14
127
…
JPMorgan Chase
JPM
2.950
Oct. 1, ’26
84
–13
n.a.
115.16
0.09
Mylan
MYL
5.400
Nov. 29, ’43
195
–12
n.a.
43.23
4.07
Philip Morris International
PM
2.375
Aug. 17, ’22
57
–12
56
107.98
0.26
0.09
...
1.93
…
…And spreads that widened the most
JPMorgan Chase
JPM
2.550 March 1, ’21
n.a.
115.16
ING Groep
INTNED
6.000
April 16, ’49
134
10
12
n.a.
...
International Paper
IP
4.350
Aug. 15, ’48
148
9
n.a.
57.70
–2.10
Viacom
VIA
5.875
Feb. 28, ’57
254
9
237
39.70
0.38
Massmutual Global Funding II* MASSMU 1.950 Sept. 22, ’20
63
8
60
...
July 15, ’49
54
8
39
56.56
64
...
...
Morgan Stanley
MS
5.450
Molson Coors Brewing
TAP
3.000
July 15, ’26
109
7
105
78.79
0.97
AbbVie
ABBV
2.300
May 14, ’21
65
6
64
114.56
–0.95
1.93
High-yield issues with the biggest price increases…
Maturity
Bond Price as % of face value
Current
One-day change
Symbol
Coupon (%)
DJO Finco
ENMC
8.125
June 15, ’21
99.750
2.25
96.750
...
Frontier Communications
FTR
6.250 Sept. 15, ’21
87.063
2.19
84.886
7.88
Iheartcommunications
IHRT
9.000 Sept. 15, ’22
Whiting Petroleum
WLL
6.250
April 1, ’23
102.000
Covey Park Energy
COVPAR
7.500
May 15, ’25
101.280
1.53
101.500
...
...
Acosta
ACOSTA
7.750
Oct. 1, ’22
72.000
1.50
71.250
...
...
Hilton Worldwide Finance
HLT
4.875
April 1, ’27
101.225
1.48
100.000
…
…
Meg Energy
MEGCN
6.375
Jan. 30, ’23
86.500
1.47
87.500
...
...
...
82.750
2.19
2.06
Last week
Stock Performance
Close ($)
% chg
Issuer
75.250
...
102.500
29.30
...
6.78
...
–0.61
…And with the biggest price decreases
Dividend Changes
Dividend announcements from March 6.
Company
Symbol
Amount
Yld % New/Old Frq
Payable /
Record
Increased
OCI Partners
Sabine Royalty Tr UBI
Amount
Yld % New/Old Frq
Payable /
Record
11.6 .27 /.08 Q
6.0 .2107 /.19122 M
Apr06 /Mar23
Mar29 /Mar15
CLNS
7.5
Apr16 /Mar29
Orion Engineered Carbons
Orion Engineered Carbons
Mar29 /Mar14
KEY: A: annual; M: monthly; Q: quarterly; r: revised; SA: semiannual;
S2:1: stock split and ratio; SO: spin-off.
.11 /.27
Q
Initial
PS Business Parks Pfd. Y
Symbol
Stocks
OCIP
SBR
Reduced
Colony NorthStar
Company
PSBpY
.41167
Sibanye-Stillwater ADR
4.00%
SBGL
Apr20 /Apr13
Foreign
OEC
OEC
2.8
2.8
.20
.20
Q
Q
Mar29 /Mar12
Jun30 /Jun20
Altice Financing S.A.
ALTICE
7.500
May 15, ’26
99.500
–1.00
101.250
...
Revlon Consumer Products
REV
5.750
Feb. 15, ’21
78.500
–1.00
80.000
…
MGM Resorts International
MGM
4.625
Sept. 1, ’26
97.000
–0.88
97.750
34.75
2.66
…
Ball
BLL
4.000
Nov. 15, ’23
98.250
–0.86
99.500
40.56
1.58
Goodyear Tire & Rubber
GT
8.750
Aug. 15, ’20
111.950
–0.82
n.a.
28.37
0.75
Precision Drilling
PDCN
7.750
Dec. 15, ’23
105.000
Blue Cube Spinco
OLN
10.000
Oct. 15, ’25
117.750
Sunoco
SUN
5.500
Feb. 15, ’26
98.188
–0.66
106.000
...
–0.54
119.250
…
–0.50
100.500
28.32
...
…
0.28
*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
.
B14 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
BANKING & FINANCE
Infrastructure: It’s More Than Just Roads
BY RYAN DEZEMBER
AND MIRIAM GOTTFRIED
Airport luggage trolleys, coinoperated laundry machines and
college-town apartment buildings probably aren’t what President Donald Trump had in mind
when he pledged to steer more
private money into U.S. infrastructure.
But deals involving traditional public works like roads,
train stations and sewage-treatment plants that Mr. Trump describes as in disrepair have been
in short supply for infrastructure investors. Those projects
also can lock up cash for longer
than the life of most funds and
can become mired in local politics.
Instead, many investors are
finding ways to put their money
to work by stretching the definition of infrastructure to other
deals they hope will offer steady,
predictable returns.
“I’d bet washers against toll
roads, dollars to doughnuts,”
said Alex Darden, a partner at
private-equity firm EQT, which
bought WASH Multifamily Laundry Systems LLC, a company
that owns 550,000 clothes washers and dryers in apartment
complexes and dormitories in 20
states and Canada.
In 2017, a little more than half
of all U.S. infrastructure deals
fell into the category of social
infrastructure, which covers assets from clinics and assistedliving facilities to government
buildings and apartment complexes near colleges, according
to research firm Preqin.
The proportion of such deals
has grown in recent years as
firms have raised more money
in infrastructure investing funds
and have $150 billion ready to
Power Plays
In 2017, hospitals, student housing
and other ‘social infrastructure’
deals were the most popular
among infrastructure investors,
though the lion's share of the cash
they invested went into energy
and utilities.
Percentage of infrastructure
deals in the U.S. by...
Number
of deals
9.6%
Value
of deals
5.2%
Telecom
10.1%
Other
Social
10.6%
Renewable
energy
10.2%
Transport
25.1%
34.6%
Energy
36.9%
Utilities
DAVID PAUL MORRIS/BLOOMBERG NEWS
Assisted-living sites,
college-town
apartments, even
laundries are funded
51.8%
Source: Preqin
THE WALL STREET JOURNAL.
The Goethals Bridge connecting New Jersey and Staten Island. Traditional infrastructure deals like bridges are in short supply.
spend.
“When Main Street and the
typical citizen think about infrastructure, they’re thinking about
the roads they drive on, the water systems they use, transit
systems,” said Peter Raymond,
who leads PricewaterhouseCoopers LLP’s capital projects and
infrastructure advisory business.
“It’s difficult to get those kinds
of projects packaged and into
market.”
It can take years for major
construction projects to grind
through planning and permitting and to structure privatization agreements with local governments, with which there is
always a risk that administrations will turn over and change
course.
Preqin says the median annual return for infrastructure
funds that began investing between 2000 and 2005 is 17%.
For those that started making
infrastructure deals since the financial crisis, it is about 10%.
Returns on some projects, including several toll roads that
went into bankruptcy during the
financial crisis, have disappointed.
Though fewer in number,
most U.S. infrastructure investment in dollar terms remains related to energy, from wind farms
to pipelines, and utilities. Such
assets have long been privately
held in the U.S. and usually don’t
provoke political backlash the
way that privatizations of roads
and water systems do. Like
health-care facilities and student
housing, they are easier for
firms to collect cash from and
eventually sell than deals involving more typical infrastructure,
said Preqin’s Tom Carr.
With not enough attractive
public works to go around, infrastructure-fund managers are
looking elsewhere.
In October, British firm 3i announced its push into U.S. infrastructure with a deal to buy airport luggage-cart concessionaire
Smarte Carte International
Holdings Inc. for $385 million.
The firm became Smarte Carte’s
seventh private-equity owner
over the past 25 years.
Mr. Darden said EQT seeks
assets essential to daily life that
provide steady cash flow and
can somehow be improved. In
the case of WASH, improvement
means converting coin-operated
machines to digital payments to
alleviate the expense of collecting truckloads of quarters, and
using data analysis to reduce
water use and predict maintenance trips.
Private-equity firms do sometimes delve into traditional public works. KKR & Co. last year
sold a concession it struck in
New Jersey and Pennsylvania to
repair and maintain municipal
water systems in exchange for a
cut of billing revenue. The Manhattan buyout firm also has
committed $100 million to upgrade wireless communication
systems in rural areas.
Blackstone Group LP is trying to raise $40 billion for the
largest ever infrastructure fund.
A key feature is that it is perpetual, meaning there will never be
a deadline to liquidate investments. Blackstone has said it
will target deals in four segments, energy, transportation,
water and communications, according to an investor presentation.
Still, in a footnote included in
the pitch document, Blackstone
notes that the term infrastructure is open to interpretation:
“There is no generally accepted
definition of infrastructure.”
Abraaj Weighs Job Cuts; Fundraising Stalls Fintech
Abraaj Group, a Dubai-based
firm at the center of an investigation into claims of missing
By Nicolas Parasie,
William Louch
and Joice Alves
funds, may cut its workforce as
lenders and investors review
their relationship with the firm
and efforts to raise a $6 billion
fund stall, people familiar with
the matter said.
The staff cuts under consideration are part of a wider reorganization of Abraaj’s fundmanagement unit under the
division’s two new chief executives, the people said. Abraaj
last month said it had suspended all investment activi-
ties at the unit and that Arif
Naqvi, the firm’s founder,
would step down as the unit’s
chief executive.
A number of senior executives at the firm are also considering stepping down, the
people familiar with the matter said.
A spokesman said Abraaj
wouldn’t comment on whether
cuts would be made, confirming only that a wider review
and reorganization is ongoing
and the firm currently employs
364 staff. The spokesman said
fundraising efforts are on hold
while the firm reorganizes.
Mr. Naqvi said in an interview with The Wall Street
Journal that he couldn’t comment on any potential staff
DAVE THOMPSON/REUTERS
Ex-Banker Flowers Barred in U.K.
Paul Flowers, the former
chairman of Co-operative Bank
PLC, has been banned from the
financial services industry in the
U.K. for misconduct that included discussing drug deals
over work email, the Financial
Conduct Authority said on Tuesday.
The U.K. regulator said Mr.
Flowers, a former Methodist
minister, isn’t “fit and proper” for
financial jobs because of messages about sex and drugs he
sent from his work email account in 2012 and 2013, and for
calling premium-rate chat lines
from a work cellphone.
Mr. Flowers left Co-op Bank
in June 2013, two weeks before
the lender said it needed £1.5
billion ($2.07 billion) in fresh
capital to survive.
In November 2013, the Mail
on Sunday newspaper published
a tape showing Mr. Flowers
counting out money for an alleged drug buy, sparking a police
investigation and winning Mr.
Flowers the moniker “the Crystal
Methodist.”
Mr. Flowers was convicted in
May 2014 of possessing cocaine,
methamphetamine and ketamine
after pleading guilty.
The FCA cited the drug conviction as another strike against
Mr. Flowers, and “further evidence of Mr. Flowers’s unwillingness to comply with the standards and requirements
expected of him.”
In a statement released by
his lawyer, Mr. Flowers apologized for any embarrassment
caused to Co-op Bank as a result of the actions described in
the FCA’s notice. He said the
findings only concerned “personal actions” and took place at
a time of distress in his private
life.
cuts as he is no longer involved in the day-to-day running of the fund-management
business. Mr. Naqvi will remain in charge of Abraaj Holdings, the vehicle that owns the
wider Abraaj Group and of
which he is the largest shareholder, according to the firm.
The firm last month said it
had begun a review of the
fund-management business’s
operations following complaints from investors about a
$1 billion health-care fund that
Abraaj is managing.
Following the announcement, some investors in
Abraaj’s slated $6 billion global
private-equity fund decided to
withdraw their commitments
after the firm offered investors
MUNIS
Continued from page B1
liquid assets, critics say.
“It’s an outrageously bad
idea,” said Phillip Swagel, a
professor at the University of
Maryland who served in the
George W. Bush Treasury,
characterizing the provision
as an implicit federal guarantee of the municipal market.
In the next crisis, banks will
have trouble selling their municipal securities, freezing up
the market for them and requiring the government to
step in to backstop it, he predicted.
While lawmakers agreed to
include the municipal-debt
measure, they rebuffed Citigroup and JPMorgan Chase &
Co. efforts to water down a
Lenders Could Get
Help From Senate
The Senate is voting on a bill
as early as this week that would
make the largest changes to financial regulatory law since
2010, when the Dodd-Frank Act
passed. Supporters say it will
help small lenders without undoing Dodd-Frank’s core tenets.
Opponents say the bill cuts protections against consumer
abuses and financial crises.
Here’s what’s in Senate Bill 2155.
HELP FOR REGIONAL BANKS
• Dodd-Frank said larger
banks must follow stricter rules
the chance to get their money
back, the Journal reported. Subsequently, Abraaj scaled back
the size of its fundraising ambitions, according to one of the
people familiar with the matter.
Some investors have been
looking to reduce exposure to
the firm by selling their stakes
in existing funds, two of the
people said. And some investors in Abraaj Holdings are
weighing a sale of their stake
in the business, said the people familiar with the matter.
An Abraaj spokesman said
the firm is in active dialogue
with investors about their investments in the firm. Rival
private-equity firms and buyers of secondhand stakes have
expressed interest in the firm’s
assets as they think Abraaj
might sell at a discount, one of
the people said. The firm said
it hasn’t received any requests
from investors looking to sell
stakes in the past six months.
Some of the group’s lenders
are now reviewing credit lines,
said the people familiar with
the matter.
Private-equity firms typically use bank loans to fund
deals and pay for the day-today running of their businesses. “Capital call facilities,
in respect of funds where we
have voluntarily suspended investment activity, have been
affected,” Abraaj said Sunday.
“This is not the case in respect
of the financing facilities for
Abraaj Holdings.”
separate postcrisis capital requirement known as the supplementary leverage ratio.
That regulation effectively
restricts banks from making
too many loans without adding new capital, forcing firms
to maintain a proportion of
capital to fund their assets.
The legislation includes a
provision to diminish the leverage ratio in a way that lawmakers say would only benefit
financial institutions primarily
engaged in “custody services,”
in which they hold assets on
behalf of other banks. Citigroup and JPMorgan, global
banks that don’t fit the definition but still offer custody services, have argued it is unfair
to carve out certain banks
from the provision and not
others.
“As Congress has sought to
make a common sense change
to the way capital rules treat
custody assets, we have asked
that they apply that change to
all custody banks to maintain
a level playing field in this important business,” a Citigroup
spokesman said.
Senate aides said lawmakers crafted a delicate compromise that can pass the chamber and don’t want to broaden
the bill with more provisions
helping big banks and risk
having the bill fail.
Federal Reserve Chairman
Jerome Powell has said that
the Fed would prefer that
Congress allow regulators to
rewrite the leverage ratio rule.
Instead, the bill directs regulators to exclude certain assets
from the calculation of the leverage ratio for custody
banks.
—Ryan Tracy
contributed to this article.
than smaller ones. It drew the
line at $50 billion in assets, leaving about 40 of the roughly
5,670 U.S. banks above it. The
bill would effectively raise that
threshold to $250 billion in assets, leaving 12 banks facing
mandatory annual “stress tests”
and other hurdles.
sets for safekeeping, rather than
lending out client money like traditional banks. Some observers
say other big banks in the custody business, including JPMorgan Chase & Co. and Citigroup
Inc., may end up qualifying for
this help.
HELP FOR BIG BANKS
• The bill would make it easier for big banks to buy bonds
from state and local governments.
• It would lower a capital requirement called the leverage ratio for State Street Corp. and
Bank of New York Mellon Corp.,
two large “custody” banks that
predominantly hold clients’ as-
HELP FOR SMALL LENDERS
• Small banks would be exempt from the Volcker rule,
which bans banks from making
speculative bets.
• Small banks would file
shorter financial reports with
regulators, be examined less often and be released from some
capital rules as long as they
maintain a relatively high ratio
of equity to assets.
Cyber Risk
Draws
Attention
BY LALITA CLOZEL
WASHINGTON—Four financial companies, including Citigroup Inc. and online lender
Kabbage Inc., said they have
formed a consortium to address the cybersecurity risks
of financial-technology firms,
a sign of the industry’s growing links to traditional banks
and insurers.
The consortium, which was
created in response to recommendations in a World Economic Forum report released
Tuesday, also includes Zurich
Insurance Group AG and Depository Trust & Clearing
Corp., a U.S. clearinghouse.
“There are a lot of these
fintechs popping up left and
right,” said Matthew Blake,
head of the financial and monetary system initiative at the
World Economic Forum. “The
financial system is becoming
much more modular,” he
added, noting that the “onestop shop” model of banking is
being challenged by new types
of financial services firms.
The group’s first objective
will be to establish criteria to
enable fintech companies to
evaluate the level of their cybersecurity defenses. The
World Economic Forum report
called for the creation of such
criteria as well as a common
metric to measure fintech
firms’ cybersecurity exposure.
Those steps would allow traditional financial institutions
to better evaluate the level of
risk they are exposing themselves to when partnering
with fintech firms, Mr. Blake
suggested.
“Technologists are not incentivized to focus on cybersecurity upfront in the design
phase,” said Mr. Blake. “Really
innovative companies [have]
some cybersecurity preparedness but not to the level of
what an incumbent company
would offer,” he said.
The
recommendations,
based on input from bank
leaders and other financial executives, lays out more than a
dozen additional steps financial companies should take to
evaluate and improve fintech
firms’ cybersecurity defenses.
.
THE WALL STREET JOURNAL.
Wednesday, March 7, 2018 | B15
* *
MARKETS
BY SARAH MCFARLANE
AND ALISON SIDER
Oil prices edged higher
Tuesday, supported by moves
in stock markets and currencies, even as investors continued to anticipate a massive increase in U.S. crude output.
U.S. crude futures settled
up 3 cents, or 0.05%, at $62.60
a barrel on
COMMODITIES the
New
York Mercantile Exchange. Brent, the global
benchmark, rose 25 cents, or
0.38%, to $65.79 a barrel on
ICE Futures Europe.
World stocks have been
particularly volatile since a
rout in early February, with oil
broadly tracking their moves.
“Oil and equities were trading very much hand in hand
and basically equity markets
were calling the shots in terms
of direction and trading patterns,” said Bjarne Schieldrop,
chief commodities analyst at
SEB Markets.
Mr. Schieldrop said he expects this trend will continue
in the short term and that the
equities selloff isn’t over yet.
A slightly weaker dollar
also supported oil on Tuesday.
As oil is priced in dollars, it
becomes more affordable for
holders of other currencies
when the dollar weakens.
The Wall Street Journal
Dollar Index, which tracks the
U.S. currency against a basket
of others, was down 0.4%
Tuesday.
Aramco CEO Sees Growth for Oil
Saudi executive rejects
view that fossil-fuel
demand will soon peak,
urges investment
BY SARAH KENT
AND MIGUEL BUSTILLO
HOUSTON—The heads of
some of the world’s largest oil
companies pushed back on
Tuesday against predictions
that demand for petroleum
could erode in coming decades
due to the rise of renewable
energy and electric vehicles.
Amin Nasser, chief executive of Saudi Arabian Oil Co.,
known as Saudi Aramco, told
the CERAWeek conference in
Houston that such forecasts
overstate the economic costs
of shifting to greener sources
of energy and underestimate
the continued dominance of
fossil fuels.
“I’m not losing any sleep
over peak oil demand or
stranded resources,” Mr. Nasser said. He warned instead
that more investment is
needed in the oil sector to ensure there is enough supply to
meet future demand.
Bob Dudley, CEO of BP PLC,
said that while the company
could foresee a potential peak
in oil demand and a transition
to a diverse mix of fuels, a recent study showed that demand would remain robust
even under a scenario in
which the sale of new internalcombustion vehicles was
banned by 2040.
“The pace of decline is
likely to be very slow,” Mr.
Dudley said. “Think plateau.”
F. CARTER SMITH/BLOOMBERG NEWS
Prices of
Crude Rise
Slightly
Mr. Nasser said electric vehicles won’t address climate change unless power is produced more cleanly.
Mr. Dudley also said carbon
emissions would continue to
rise in such a scenario, underscoring the need to focus on
ways to reduce emissions
across all sources.
“A race to renewables will
not solve the challenge that we
all have,” he said. We need to
be agnostic about new fuels.”
The comments on the future of oil demand are the latest in a spirited debate over
what the next few decades
may hold for the oil sector,
with some major companies
predicting that efforts to curb
global warming could mean oil
consumption stops growing
before the end of the next decade.
Investors are increasingly
calling on oil-and-gas companies to show they have a plan
to manage a transition away
from fossil fuels, even staging
a rare revolt at Exxon Mobil
Corp.’s annual meeting last
year over the issues.
Companies will likely have to
disclose more about the potential impact of climate change
and regulations tied to limiting
emissions on their businesses
in the next five to 10 years,
ConocoPhillips Chief Executive
The Bloom Is Off Tech’s Rose for Some Money Managers
Ryan Lance said Tuesday.
“The disclosure is getting
more difficult,” he said, noting
that he, along with other executives, received a letter from
BlackRock Chief Executive
Larry Fink this year, which
pushed companies to articulate a “social purpose.”
“More of that’s going to
have to come,” Mr. Lance said.
Patrick Pouyanné, CEO of
France’s Total SA, sounded a
slightly different note at the
conference on Monday, describing a future in which his
company becomes a bigger
player in natural gas and elec-
Treasurys Gain Amid
Huge CVS Bond Sale
BARTEK SADOWSKI/BLOOMBERG NEWS
BY DANIEL KRUGER
A robot moves between shelving units at an Amazon warehouse in Poland. The S&P 500’s tech sector climbed nearly 40% last year.
Technology stocks continue
to surge, but some fund managers are cooling on the sector.
Fund managers who actively
pick stocks have cut their exposure to tech shares to the lowest level in 15 months, according
to a report from Bank of America Merrill Lynch.
Tech now trails the discretionary sector, which includes
companies such as retailers and
hotels, as the most crowded
trade for large-capitalization
fund managers.
A February report from Goldman Sachs Group Inc. showed
hedge funds also trimmed tech
exposure in the fourth quarter.
Shares of tech companies
have soared in recent years as
strong earnings and sales
growth attracted investors amid
an otherwise lackluster backdrop
for many U.S. companies.
But U.S. companies are benefiting from a recovery in global
growth, a weaker U.S. dollar and
stronger energy prices. Meanwhile, the reduction in the U.S.
corporate tax rate is expected to
bolster corporate earnings.
That has made tech’s growth
look less exceptional. Six S&P
500 sectors had record revenue
growth in the fourth quarter, according to Yardeni Research Inc.
Some investors have also expressed concern that the big
run-up in tech shares and widespread bullishness on the sector
have left it vulnerable to a cor-
rection, or a decline of 10% or
more from a recent high. The
S&P’s tech sector soared nearly
40% last year, roughly double
the broader index’s 19% gain.
Despite the pullback from
money managers, tech stocks
continue to climb and act as a
driver for the broader market.
The S&P 500 is up 2% this
year, driven by Amazon.com
Inc.’s 31% gain and Microsoft
Corp.’s 9.1% advance.
—Chelsey Dulaney
tricity as the world moves to
lower-carbon energy sources.
“Maybe we will become, I am
sure, a gas-and-oil company,”
instead of an oil-and-gas company, Mr. Pouyanné said.
Mr. Nasser said that the internal combustion engine still
has 99% of the market and
that adopting electric vehicles
won’t address climate change
unless the electricity needed
to power the cars is produced
more cleanly, which he believes renewables won’t do economically for years to come.
—Bradley Olson
contributed to this article.
Prices of U.S. government
bonds edged higher as the
bond market absorbed one of
the biggest corporate bond offerings in history.
The yield on the benchmark
10-year Treasury yield fell to
2.877%, from 2.879% Monday.
Yields fall as
CREDIT
prices rise. The
MARKETS yield has fallen
in six of the past
nine sessions yet
is down just 0.066 percentage
point from its four-year high
of 2.943% reached last month.
One factor spurring gyrations in bond prices was pharmacy chain CVS Health Corp.’s
sale of $40 billion of bonds
Tuesday to help pay for its $69
billion acquisition of health insurer Aetna Inc. In early trading, Treasurys gained on expectations that bond dealers
would need to unwind hedging
trades that will force them to
buy government bonds. Later,
they declined as other investors sold government debt to
free up cash to buy the CVS
deal, analysts said.
Bond dealers often sell
Treasury bonds to protect
themselves against the risk of
moves in interest rates while
they hold large corporate-bond
positions on their books ahead
of a big sale. The CVS deal was
the largest corporate-bond
sale in more than two years,
creating a significant hedging
need and signaling potential
demand for Treasurys as the
hedges are unwound.
“The resilience of the Treasury market has kind of surprised us, because a lot’s been
thrown at it,” said Christopher
Sullivan, a bond manager at the
United Nations Federal Credit
Union. Mr. Sullivan said he bid
Swings
Yield on the 10-year Treasury
note, minute by minute
2.91%
2.90
2.89
2.88
2.87
2.86
2.85
3 a.m. 6
Tuesday
9
noon
3
Source: Thomson Reuters
THE WALL STREET JOURNAL.
on three-year floating-rate CVS
notes, which were an attractive
hedge against the potential for
an acceleration of inflation.
Yields climbed briefly earlier in the session after officials in Seoul said North Korean leader Kim Jong Un told
a visiting South Korean delegation that he was willing to
hold talks with the U.S. about
giving up nuclear weapons and
normalizing relations with
Washington. U.S. governmentbond prices declined on the
announcement as it encouraged some investors to sell the
debt to buy risky assets.
AUCTION RESULTS
Here are the results of Tuesday's Treasury auction.
All bids are awarded at a single price at the marketclearing yield. Rates are determined by the difference
between that price and the face value.
FOUR-WEEK BILLS
$195,923,728,200
Applications
$65,000,523,200
Accepted bids
$622,778,800
" noncompetitively
$640,000,000
" foreign noncompetitively
99.879444
Auction price (rate)
(1.550%)
1.573%
Coupon equivalent
35.02%
Bids at clearing yield accepted
912796NY1
Cusip number
The bills, dated March 8, 2018, mature on April 5, 2018.
BY DAVE MICHAELS
AND ALEXANDER OSIPOVICH
The New York Stock Exchange agreed Tuesday to pay
$14 million to settle regulatory
investigations into a series of
market malfunctions and technical errors that disrupted
trading on three occasions in
2015.
The settlement represents
the first case in which the Securities and Exchange Commission accused a stock exchange of violating rules
established to prevent outages
of critical market infrastructure.
The SEC also faulted NYSE
for using unapproved “price
collars” to damp price swings
during a wild trading session
on Aug. 24, 2015, which had
the unintended effect of exacerbating volatility.
“For retail investors to
have confidence in our markets, exchanges must provide
accurate information and
comply with legal requirements,
including
being
equipped for unexpected market disruptions,” said Stephanie Avakian, co-director of the
SEC’s enforcement division.
Chaotic trading on the
morning of Aug. 24, 2015, exposed flaws in the way U.S.
stocks and exchange-traded
funds trade and prompted
criticism of the NYSE’s unusual market design, in which
human traders on an old-fash-
ioned trading floor coexist
with electronic trading. Critics
of NYSE’s model said human
traders, given discretion to set
the opening price of stocks,
made things worse.
The many price swings
that morning triggered nearly
1,300 halts of stocks and
ETFs. Many shares didn’t formally open for trading until
9:45 a.m. or, in some cases,
after 10 a.m., as the NYSE’s
market makers struggled to
find valid starting prices for
stocks.
During the upheaval, dozens of ETFs traded at sharp
discounts to the sum of their
holdings, worsening losses for
fundholders who sold during
the panic.
Tuesday’s fine won’t have a
big financial impact on NYSE
parent Intercontinental Exchange Inc., a global exchange
operator that had profits of
$2.5 billion last year. But it is
a black eye for the Atlantabased firm, known as ICE,
which has a reputation for
bringing cutting-edge technology to the exchange industry.
ICE completed its acquisition
of NYSE in 2013.
NYSE and its two sister exchanges, NYSE Arca and NYSE
American, agreed to settle the
SEC claims without admitting
or denying fault. “We believe
this settlement is in the best
interest of the NYSE Exchanges,” NYSE said in an
emailed statement.
MICHAEL NAGLE/BLOOMBERG
NYSE to Settle With SEC Over Malfunctions
The New York Stock Exchange was accused of violating rules.
.
B16 | Wednesday, March 7, 2018
THE WALL STREET JOURNAL.
* ***
MARKETS
Stocks Advance as Trade Tensions Ease
BY RIVA GOLD
AND ALLISON PRANG
The S&P 500 climbed Tuesday, notching a third straight
day of gains, as investors
weighed signs of opposition in
Washington to planned U.S.
tariffs on steel and aluminum
imports.
Expectations for escalating
trade tensions had dragged
down stocks around the world
last week, as investors worried
that rising materials costs and
retaliatory trade measures
could hurt companies’ bottom
lines.
In recent sessions, though,
pushback to the planned tariffs
from some senior Republicans
has helped soothe investors’
nerves, with House Speaker
Paul Ryan saying Tuesday that
the White House should take a
“more surgical or more targeted” approach to trade policy.
“Our view is that it’s going
to be really difficult to institute
this kind of steel tax in perpetuity without some adjustments,” said Jeff Mills, co-chief
investment strategist at PNC
Financial Services Group. He is
advising clients not to alter
their portfolios at this stage in
light of trade developments.
Still, investors are keeping
in mind the impact of trade
tariffs, as well as continuing
worries about inflation, said
Kate Warne, investment strategist for Edward Jones.
“I think tariffs will continue
to be an issue for investors going forward because the major
impact isn’t just what the U.S.
does,” she said. The rest of the
world’s response to U.S. tariffs
is also something to think
about, she said.
The Dow Jones Industrial
Average rose 9.36 points, or
less than 0.1%, to 24884.12, recouping losses after declining
more than 150 points earlier in
the session. The S&P 500
added 7.18 points, or 0.3%, to
2728.12, and the Nasdaq Composite increased 41.30 points,
or 0.6%, to 7372.01.
U.S. index performance since Friday's close
S&P 500 utilities sector
1.75%
1.50
1.25
1.00
252
Dow Jones
Industrial
Average
251
S&P 500
0.75
250
249
0.50
0.25
248
0
–0.25
247
–0.50
–0.75
246
Monday
Tuesday
Monday
Cboe Volatility Index
European index performance since Friday's close
3.0%
2.5
DAX (Germany)
2.0
FTSE MIB (Italy)
1.5
Stoxx Europe 600
Tuesday
How many South Korean won one U.S. dollar buys
21.5
1,060
21.0
1,065
20.5
20.0
1.0
0.5
1,070
19.5
0
1,075
19.0
–0.5
18.5
–1.0
1,080
18.0
–1.5
–2.0
17.5
Monday
Note: Scale inverted to show the strengthening won.
1,085
Tuesday
Monday
Tuesday
Monday
Gains were broad, with nine
of the 11 sectors in the S&P 500
posting advances for the day.
Shares of materials companies
led advances in the S&P 500,
rising 1.1%.
Shares of consumer-discretionary companies rose 0.7% in
the S&P 500, with Leggett &
Platt adding $1.58, or 3.6%, to
$45.51, and Netflix gaining
10.22, or 3.2%, to 325.22.
Meanwhile, the S&P 500
utilities sector fell 1.4%, making
it the biggest decliner. FirstEnergy dropped 78 cents, or 2.4%,
to 31.85, posting the steepest
one-day percentage loss within
the sector.
Elsewhere, the Stoxx Europe
600 closed up 0.1% and Germany’s export-heavy DAX
added 0.2%, lifted by gains in
shares of auto makers.
Stocks and bonds in Italy
rallied, with the benchmark
FTSE MIB closing up 1.8%,
more than reversing Monday’s
decline.
Italy entered a fresh period
of political instability after
weekend national elections
boosted populists but failed to
produce a winner with enough
support to patch together a
parliamentary majority.
“It’s almost the worst outcome for markets that we could
envisage: a long period of uncertainty ahead and it’s hard to
see how a stable government
can be formed,” said Richard
Turnill, BlackRock’s global
chief investment strategist.
Still, there is limited scope
for the results to spill over into
other European assets, and investors are already familiar
with Italian political uncertainty, he said.
In Asian trading, shares of
export-oriented
companies
climbed as the trade tensions
eased. Hong Kong stocks led
gains in Asia, with the Hang
Seng Index up 2.1% after Monday’s 2.3% slide.
It was led by index heavyweight Tencent Holdings, a
Chinese internet company,
which rose 3.2%, and by shares
of banks that had fallen in the
previous session.
Japan’s Nikkei Stock Average was as much as 2.4%
higher before giving up some
of its gains as Bank of Japan
Gov. Haruhiko Kuroda again
touched on an eventual exit
from the bank’s ultraeasy monetary policy. The Nikkei ended
up 1.8%, snapping a four-day
losing streak. At midday
Wednesday in Tokyo, the Nikkei was down 0.2%.
The South Korean won was
HEARD ON THE STREET
FINANCIAL ANALYSIS & COMMENTARY
Qualcomm Gets the Right Friends
Collect Call
Qualcomm's operating results for fiscal years ended September.
$30 billion
Revenue
R&D
25
20
15
10
5
0
2007
’08
’09
’10
’11
Source: S&P Capital IQ
“well-known” and “trusted”
by the U.S. government. The
letter also lauded the company’s “unmatched expertise
and R&D expenditure”—particularly as it relates to the
coming wireless technology
standard known as 5G.
The government then contrasts that with Broadcom’s
“private equity-style” approach to companies it owns
where it cuts spending to
boost profits. CFIUS said
that would likely hurt Qual-
’12
’13
’14
’15
’16
’17
THE WALL STREET JOURNAL.
comm’s competitiveness,
which in turn would “significantly impact” U.S. national
security. The letter doesn’t
mention that Broadcom is incorporated in Singapore,
which is reason CFIUS could
weigh in on the deal. The
company is currently in the
process of reincorporating in
the U.S.
The letter appears to put
an end to Broadcom’s
chances of acquiring Qualcomm. More important, it
could put a chill on foreign
acquisitions of U.S. companies that do a lot of R&D.
The chip sector in particular
could be vulnerable to a deal
freeze, given the growing interest of Chinese companies
in procuring semiconductor
assets.
Still, Qualcomm’s business
model is unique, even among
chip makers. The company
spent the equivalent of about
25% of its trailing 12-month
revenue on R&D, more than
other peers. That in turn
feeds Qualcomm’s licensing
business, which accounts for
more than two-thirds of its
operating profit.
That licensing business
has landed it in bitter disputes with Apple and other
mobile-phone makers. Broadcom has criticized Qualcomm
for spending too much on
R&D when its licensing business could be endangered.
That could ultimately prove
to be the case, but as the letter from CFIUS shows, Qualcomm’s spending has at least
bought some friends in the
right places.
—Dan Gallagher
OVERHEARD
One can’t expect busy aging rock stars to keep up
with the news, particularly of
the financial variety. Perhaps
they should, though.
Donald Trump’s plan to
thrash trading partners allegedly harming U.S. steel and
aluminum producers remains
up in the air, but countermeasures already are taking
shape. That should concern
thrash metal band Metallica.
While their music doesn’t
involve any actual metal and
intellectual property such as
recorded music so far hasn’t
been drawn into the tariff
tussle, the band’s newest
venture already has a target
on it. Metallica is getting into
the whiskey business, according to an industry publication,
by teaming up with a Kentucky distiller. That industry
and state, home of Senate
Majority Leader Mitch
McConnell, are being targeted specifically if the metals tariffs are enacted.
Maybe the band can name
their business venture after
their recent album, “Hardwired…to Self Destruct.”
The Hulu Factor: What Comcast May Want in Bid for Sky
What is Comcast really
after?
The media company has
offered $41 billion for U.K.
satellite-TV provider Sky,
praising it for its strategic
value and proprietary content. But the deal doesn’t really make sense.
First, satellite TV may do
better in Europe than in the
U.S., but comparisons with
DirecTV, which has hemorrhaged subscribers, are difficult to ignore. Sky’s Now TV,
a Netflix-like product, is designed to fight back against
streaming services, but cordcutting is still bad news for
Sky. Around 2% to 3% of
households a year are trading down from Sky’s pre-
Binge-watching
Hulu subscribers
20 million
15
10
5
0
2010 ’11 ’12 ’13 ’14 ’15 ’16 ’17
Source: the company
mium package to Now TV.
Second is Sky’s high valuation. Instead of bidding for
Sky at 12.5 times earnings
before interest, taxes, depreciation and amortization,
Comcast could buy back
shares at just 7.5 times
Ebitda—something that
would please its shareholders.
Another possibility is that
Comcast Chief Executive
Brian Roberts is trying to
get himself a place at the table, hoping that he can pry
away a prize asset or two
from Walt Disney. Hulu perhaps?
The idea has merit. Fox,
Disney and Comcast each
own 30% of the streaming
service. Time Warner owns
the remaining 10%, which it
bought in August 2016 when
the platform was valued at
$5.8 billion. After recent hits
like “The Handmaid’s Tale,”
and the huge rally in Netflix
Tuesday
THE WALL STREET JOURNAL.
Sources: FactSet (U.S. indexes, utilities, won); Thomson Reuters (European indexes, VIX)
Email: heard@wsj.com
Qualcomm just provided
the recipe for companies trying to thwart foreign takeovers: Spend big, first on research and development,
then on lawyers.
That seems like the main
takeaway from a letter the
Committee on Foreign Investment in the U.S. sent to
lawyers for Broadcom and
Qualcomm on Monday. That
letter, made public by Qualcomm on Tuesday, explains
the rationale for a relatively
unprecedented move by
CFIUS to examine Broadcom’s proposed hostile takeover of Qualcomm ahead of a
shareholder vote on the matter. That vote, originally
scheduled for Tuesday, has
been pushed back by a
month on order from CFIUS
while it examines the $117
billion deal.
But the letter strongly
suggests that the committee
would reject what would be
the largest technology deal
in history. In language that
closely mimics Qualcomm’s
talking points against the
deal, the committee describes the company as
Nasdaq
Composite
shares, Hulu is almost certainly worth more now.
Mr. Roberts is clearly eager for such a service. He
has repeatedly cited Now TV
as a reason for his interest
in Sky. Yet Hulu is the better
platform. A controlling
stakeholder could clear up
what analysts see as Hulu’s
management problems and
take it global.
Disney CEO Bob Iger has
already talked of plans to
load Fox’s film studio and FX
television shows onto Hulu,
making it the company’s
adult-focused streaming service.
Comcast’s bid for Sky is
unlikely to give it the leverage it would need to wrest
Hulu from Disney. “Disney
isn’t going to give it up,”
says Craig Moffett of research firm MoffettNathanson. “If Comcast is trying to play a game of poker
here, the risk is Bob Iger
calls Comcast’s bluff and
says, ‘Fine, take Sky.’ ”
Disney may be wise to let
Comcast overpay for Sky.
Raising its own bid would
make the transaction less accretive to Disney, though it
could certainly afford to pay
more. Comcast, meanwhile,
is playing a risky game, and
with shareholders’ money no
less. Mr. Roberts had better
be serious about wanting
Sky, because he might just
get it.
—Elizabeth Winkler
up 1.3% against the dollar late
Tuesday in New York after
North Korean leader Kim Jong
Un told a visiting South Korean
delegation that he was willing
to hold talks with the U.S.
about giving up nuclear weapons and normalizing relations
with Washington, and would
halt weapons tests during any
negotiations, officials in Seoul
said.
South Korea’s Kospi Composite Index rose 1.5%, ending a
four-day losing streak. Early
Wednesday, the Kospi was up
0.5%.
—Ese Erheriene
contributed to this article.
WSJ.com/Heard
U.S. Tax Cuts
Fuel a Spree
In Mergers
Tax cuts and economic
growth are spurring a spending spree by U.S. companies
on deal making and share
buybacks. But with some
deals being done at big earnings multiples, companies
and their investors may find
they haven’t spent wisely.
Not all deals will get
done: Comcast’s bid for European pay TV giant Sky
faces competition from Walt
Disney, while a private-equity-backed bid for department store Nordstrom has
been rebuffed by its board.
International Paper’s bid
Tuesday for Irish cardboard
box giant Smurfit Kappa
earned an initial rejection.
Still, deals announced by
U.S. acquirers in 2018 are
running at the highest dollar
volume since the first two
months of 2000, according
to Dealogic.
More than $325 billion of
bids have been launched so
far in 2018, according to Dealogic, with all-cash offers
outstripping all-share offers
by 3-to-1 in dollar terms,
highlighting the continued
availability of cheap debt as
well as the income boost to
come from tax cuts.
Deals for growth at home
also outnumber bids for
overseas targets by more
than 3-to-1 in dollar terms.
This corporate shopping
spree adds to the cash flowing back to investors via
buybacks, which exceeded
$200 billion in the three
months to the end of February, according to a Wall
Street Journal analysis.
With the Federal Reserve
expected to tighten monetary conditions only gradually and with companies and
private-equity firms flush
with cash and confidence,
this M&A party looks likely
to get bigger and louder before it ends. —Paul J. Davies
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