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The Wall Street Journal 6 September 2017

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DJIA 21753.31 g 234.25 1.1%
NASDAQ 6375.57 g 0.9%
STOXX 600 373.71 g 0.1%
10-YR. TREAS. À 25/32 , yield 2.072%
OIL $48.66 À $1.37
GOLD $1,339.20 À $14.70
Tensions Rise on Korean Peninsula as U.S. Presses for Sanctions
What’s
News
Business & Finance
T
he Dow slid 234.25 to
21753.31 as banking and
insurance shares tumbled
amid concerns about low
inflation, North Korea and
Hurricane Irma. Treasurys
and gold rallied. A1, B15, B16
Gasoline prices at the
pump hit a fresh two-year
high, but the futures market signaled that the supply
crunch will soon ease. B1
“Black swan” strategies
that offer investors protection should markets plunge
have fallen out of favor. B1
Boeing raised concerns
about United Technologies’
proposed takeover of Rockwell Collins, threatening to
cancel some contracts. B1
The ECB is expected to
signal soon that it will start
winding down its $2.7 trillion stimulus program. A7
Rovio plans an IPO in
Helsinki that could value
the “Angry Birds” maker
at about $2.38 billion. B15
France’s Schneider has
agreed to take control of
British engineering software provider Aveva. B2
Merck KGaA is considering options for its consumerhealth operations, including a full or partial sale. B3
Takeda said another major acquisition is unlikely
soon, allaying fears over the
drugmaker’s debt load. B5
Arnstein & Lehr and Saul
Ewing are merging, adding to
a trend among law firms. B3
World-Wide
Trump said he would end
the Dreamers program for
undocumented immigrants
and called on Congress to
pass broad immigration
legislation by March. A1
The president pressed
harder on potential military
options in North Korea, offering billions in U.S. military
equipment to Asian allies. A6
Hurricane Irma strengthened into a Category 5
storm, threatening the Caribbean and prompting
evacuations in Florida. A3
CHOPPY SEAS: South Korean naval ships conducted drills on Tuesday in a display of Seoul’s military capabilities. North Korea,
meanwhile, issued a defiant response to U.S. attempts to impose new sanctions, hinting at an unspecified ‘counteroffensive.’ A6
‘Dreamers’ Program Ended
President calls for
broader immigration
legislation as he kills
Obama-era policy
BY LAURA MECKLER
WASHINGTON—President
Donald Trump urged lawmakers on Tuesday to pass broad
immigration legislation by
March as he said he would end
a program that shields undocumented immigrants who entered the U.S. as children.
The move ignited an emotional battle in Congress and, in
particular, among Republicans,
who are divided over the five-
year-old program. Congressional leaders in both parties
promised to protect these
young people from deportation,
but the path to achieve that
goal was unclear. Under the
GOP president’s order, some of
these immigrants will begin losing protections in March.
The White House suggested
it wanted legislation addressing
not just the young people affected by Tuesday’s move but
other immigration issues, such
as enforcement, border security
and limiting future legal immigration. Each piece is controversial on its own, and putting
them together has proved elusive over many years of efforts
on Capitol Hill.
A Nation Divided
In the U.S., a wide gulf is visible in an array of issues and attitudes,
helping explain why political divisions are now especially hard to bridge,
a Wall Street Journal/NBC News survey has found. A4
Proportion of people polled who describe themselves as...
a supporter of the traditional definition of marriage as being
between one man and one woman
17%
42%
Democrats
4%
34%
a supporter of taking immediate action to address climate change
31%
4%
Senate GOP leaders signaled they will tie an increase in the debt ceiling to
aid for Harvey victims. A3
comfortable with social changes of recent years
Brazil’s top prosecutor accused da Silva, Rousseff and
some of their allies of embezzling around $500 million. A7
Nafta negotiators notched
relatively minor progress in
a second round of talks on
revising the agreement. A4
The Syrian military
broke a three-year Islamic
State siege in the eastern
city of Deir Ezzour. A6
Opinion.............. A13-15
Property Report B6-7
Sports........................ A12
Technology............... B4
U.S. News............. A2-4
Weather................... A12
World News........ A6-7
>
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
1%
77%
30%
Source: WSJ/NBC News telephone poll of 1,200 adults conducted August 5-9;
THE WALL STREET JOURNAL.
margin of error +/– 2.82 pct. pts.
Save the Bats!
Drink This
Tequila Shot
i
i
Mexico’s ‘Batman’
has distillers biting
on his pollen pleas
ARANDAS, Mexico—Tequila
might benefit from a closer relationship with the lesser longnosed bat, and the bat could
sure use a little more tequila.
So let’s reunite them, even if
thousands of agave plants need
to die.
You can help down at the
tavern.
That’s the message from
Mexican biologist Rodrigo Medellín, who wants bars to start
stocking tequila made from
agave grown by farms that let
some of the plants flower so
bats can imbibe their nectar at
night.
For more than a century,
Please see BATS page A8
Republicans face sprint on
tax changes....................... A2
Senate GOP to tether
storm aid to debt vote... A3
Minor progress made in
Nafta deal.......................... A4
The president, who has argued that his Democratic predecessor overstepped his authority when he created the
program, said Congress must
work on a legislative fix.
“Congress now has 6 months
to legalize DACA,” he said in a
tweet Tuesday evening. He
added: “If they can’t, I will revisit this issue!,” but it wasn’t
clear what he had in mind.
The Deferred Action for
Childhood Arrivals program
covers nearly 800,000 people
who were brought to the U.S.
as children and meet other
qualifications—such as schooling or military service—and
are temporarily granted work
permits and given safe harbor
from deportation.
Any effort to pass immigration legislation must compete
with other priority items on a
packed congressional calendar.
Among them: raising the federal-debt ceiling, funding the
government and paying for
Hurricane Harvey relief, plus efforts to rewrite the tax code
Please see DACA page A4
YEN 108.81
Array of
Threats
Stir Up
Markets
BY SAABIRA CHAUDHURI
The maker of Legos, long
immune to the struggles weighing on other toy companies, reported its first sales drop in 13
years on Tuesday, betraying
cracks in its strategy to compete against a rising array of
digital distractions for children.
Lego AS, the Danish company
built on a foundation of tiny
plastic blocks, said it would lay
off 8% of its workers and thin
the ranks of decision makers to
speed up product rollouts.
“The car has gone off the
road and landed in a ditch and
now we have to pull it out and
get it back up to speed again,”
said Jørgen Vig Knudstorp,
chairman of Lego Brand
Group, in an interview.
In some ways, the sales
drop is a result of Lego’s own
success.
Its current structure was
created to cope with doubledigit sales growth, but the
company says it now has too
many layers and overlapping
U.S. government bonds rallied and banking and insurance
stocks tumbled in the latest
signs of rising anxiety hitting financial markets.
The action reflects a warning from a Federal Reserve official Tuesday that persistently
low inflation could make it difficult for the central bank to
continue raising interest rates
as many investors expect. Adding to the pressure, Hurricane
Irma is threatening the U.S.
coastline and the U.S. is facing a
potential confrontation with
North Korea over nuclear tests.
The Dow Jones Industrial
Average fell 234.25 points, its
largest one-day decline since
Aug. 17, while gold, a haven in
turbulent times, settled at its
highest value since last September. The yield on the benchmark
10-year U.S. Treasury note fell
to 2.072%, its lowest close since
Nov. 9, the day after the U.S.
presidential election. Bond
yields fall as prices rise.
Tuesday’s bond rally added
to a two-month decline in Treasury yields, largely driven by a
run of soft inflation data, which
investors have been less willing
to dismiss as resulting from
one-time factors than some
Federal Reserve officials.
Some investors said the
combination of events Tuesday
heightened concerns that many
already had about the economy
and global politics.
Skepticism toward the inflaPlease see RATES page A4
For more about the markets,
see pages B15 and B16
AUTOMATION’S SURPRISE
BENEFIT: MORE JOBS
E-commerce more than compensates for layoffs by traditional retailers
For retailers, the robot apocalypse isn’t a
science-fiction movie. As digital giants swallow a growing share of shoppers’ spending,
thousands of stores have closed and tens of
thousands of workers have lost their jobs.
Belinda Duperre, who sold jewelry at
Sam’s Club in Fall River, Mass., was one. In
early 2016, the struggling store closed.
But Ms. Duperre, a lifelong resident of the
once-thriving factory town an hour south of
Boston, went from victim of the digital revolution to beneficiary. Amazon.com Inc. announced plans to hire 500 full-time workers
for a new 1.2-million square foot fulfillment
center on the outskirts of town. “I was just
dying, waiting for Amazon to open,” she recalls. She was among the center’s first hires
last fall; full-time employment has since
soared to about 2,000.
Lego Hits Brick Wall
As Digital Play Grows
i
BY SANTIAGO PÉREZ
Oxford and Cambridge
took the top two spots in
global university ratings, a
setback to U.S. dominance. A2
CONTENTS
Business News.. B3,5
Crossword.............. A12
Heard on Street. B16
Life & Arts......... A9-11
Management.......... B8
Markets............. B15-16
28%
On the Table
BY GREG IP
a supporter of the Black Lives Matter movement
A survey of social trends
found deep divisions among
Americans on the economy,
politics and culture. A4
Republicans
a National Rifle Association supporter
Houston and the EPA are
investigating a potentially
hazardous benzene plume
in one neighborhood. A3
U.N. envoy Haley laid out
a path for the White House
to declare Iran isn’t complying with the nuclear deal. A6
EURO $1.1915
BY SAM GOLDFARB
AND BEN EISEN
REPUBLIC OF KOREA NAVY/YONHAP/REUTERS
Lego reported its first
sales drop in 13 years and
said it would lay off 8% of its
workers, as toy makers battle digital competition. A1
HHHH $4.00
WSJ.com
WEDNESDAY, SEPTEMBER 6, 2017 ~ VOL. CCLXX NO. 56
* * * * * *
business functions, making it
tougher to implement marketing strategies, slower to react
to trends and disconnected
from retailers.
“We have built an increasingly complex organization, an
organization that is complex to
a degree that makes it difficult
for us to realize the growth potential we have,” said Mr. Knudstorp, who served as Lego’s
CEO until the end of last year.
To turn sales around, Lego
last month named Niels B.
Christiansen, the 51-year-old
former boss of Danish industrial
group Danfoss AS, as its new
CEO, succeeding Bali Padda,
who had been its chief operating officer before the CEO job.
Like Mattel Inc. and other
toy makers, Lego is being buffeted by a host of new rivals
for children’s attention, including playing videogames
and watching YouTube videos.
In response, the industry has
tried to modernize toys for the
digital age: Lego has rolled out
Please see LEGO page A2
Ms. Duperre earns $2 more per hour at
Amazon than at Sam’s, in part because she’s
a lot more productive. At Sam’s, she served
perhaps one to 20 customers a day. At Amazon, she packs 75 to 120 boxes an hour that
are then whisked via high-speed automated
conveyor belts to fleets of trucks that fan
out across the region. The work is more
physically demanding, but Ms. Duperre, 54,
sees a bright side. “I lost 25 pounds working
here,” she says. “This is a free gym membership.”
The brick-and-mortar retail swoon has
been accompanied by a less headline-grabbing e-commerce boom that has created
more jobs in the U.S. than traditional stores
have cut. Those jobs, in turn, pay better, because its workers are so much more productive.
This demonstrates something routinely
Please see JOBS page A8
Salesforce.
#1 CRM.
Salesforce ranked #1 for CRM based on IDC 2016
Market Share Revenue Worldwide.
18.1%
9.4%
7.2%
2012
2013
2014
2015
2016
Source: IDC Worldwide Semiannual Software Tracker, May 2017
salesforce.com
© 2017 salesforce.com, inc. All rights reserved. Salesforce.com is a registered
trademark of salesforce.com, inc., as are other names and marks.
A2 | Wednesday, September 6, 2017
* *****
THE WALL STREET JOURNAL.
U.S. NEWS
GOP Faces Sprint on Tax Changes
WASHINGTON—The
U.S.
policy makers on taxes known
collectively as the “Big Six”
gathered Tuesday with President Donald Trump at the
White House—and they have
some big decisions to make.
Republicans are trying to rewrite significant portions of the
tax system by year’s end, giving
them little time to agree on policy changes and then muscle
them through Congress.
The six are Reps. Paul Ryan
(R., Wis.) and Kevin Brady (R.,
Texas), Sens. Mitch McConnell
(R., Ky.) and Orrin Hatch (R.,
Utah), Treasury Secretary Steven Mnuchin and White House
economic policy chief Gary
Cohn.
“We are all on the same page
for delivering tax reform this
year,” Mr. Brady said after the
meeting.
Many Republicans are optimistic about getting a tax bill
done and are moving “as expeditiously as possible,” White
House Press Secretary Sarah
Huckabee Sanders said after
Tuesday’s meeting.
With control of the House,
Senate and White House, the
ALEX WONG/GETTY IMAGES
BY RICHARD RUBIN
House Speaker Paul Ryan, left, and Senate Majority Leader Mitch
McConnell are among the GOP’s ‘Big Six’ working on tax policy.
GOP is eager for the chance to
overhaul tax policy and lower
rates. Failure to do so would
mark a political setback. But
they must contend with inherent trade-offs, competing priorities and a tight time frame.
“I can’t imagine they can get
to the end of the year without
passing something, but I can’t
figure out what the something
would be or how they would
get it done,” said Leonard Burman, a fellow at the Urban Institute in Washington and a former Treasury official in the
Clinton administration.
Mr. Trump is scheduled to
head to an Andeavor Corp. facility in North Dakota on
Wednesday for his second
speech on taxes in two weeks.
Both are in states he won in
2016 that also have Democratic
senators up for re-election in
2018.
Sen. Heidi Heitkamp (D.,
N.D.) will travel with the president on Air Force One, according to her office.
Mr. Trump will say, as he did
in Missouri, that voters should
defeat Democrats who don’t
work with him on taxes, senior
White House officials said. He
will be making similar trips to
pitch tax policy almost every
week, they said.
Ms. Heitkamp was one of
three Senate Democrats who
didn’t sign a letter outlining the
party’s position against deficitfinanced tax cuts and lower
taxes for high-income households.
Asked
Tuesday
about
changes to the tax system, Ms.
Heitkamp said, “The bottom
line is, is it going to be good for
North Dakota? Is it going to be
good for North Dakota farmers
who are struggling, who now
have huge operating loans, and
so the interest deduction is important.” She added, “But you
know, I’m curious about what
the plan is.”
Getting many Democrats on
board will be a lot more difficult. “If Democrats were included in the debate, tax reform
would be much more likely to
help the middle class,” Senate
Minority
Leader
Charles
Schumer (D., N.Y.) said Tuesday.
“If Republicans are the only
ones in the room on tax reform,
the vast majority of benefits are
likely to go to those at the very,
very top.”
Republicans are trying to decide how much money they
want the government to collect.
Mr. Trump uses the terms “tax
cuts” and “tax reform” almost
interchangeably. “This is more
than just tax reform,” he said
before Tuesday’s meeting. “This
is tax cutting, to put it in a very
simple term. We’re going to cut
taxes.”
Tax cuts generally refer to
lowering the tax burden, while
“reform” typically means making structural changes and repealing tax breaks to make the
system simpler and more economically efficient.
Republicans,
particularly
Messrs. Ryan and Brady, have
long talked about “reform” that
would limit or repeal tax
breaks. And some Republicans
may be concerned about increasing budget deficits.
But tax cuts are broadly popular among GOP policy makers.
Republicans could end up splitting the difference by removing
some tax breaks but not enough
to cover the cost of the tax cuts.
—Siobhan Hughes
and Louise Radnofsky
contributed to this article.
U.S. WATCH
EPA
Hundreds of Workers
Leave in Buyouts
Nearly 400 workers have
left the Environmental Protection Agency in recent days, the
agency said Tuesday, a wave of
departures that soon could take
the agency’s staffing to its lowest point in almost 30 years.
The departures come primarily from buyouts offered as
part of President Donald
Trump’s efforts to fulfill a campaign promise of “tremendous
cutting” at the EPA. His budget
proposal in March suggested a
31% funding cut that would result in about 3,200 fewer jobs
at the agency.
The voluntary buyouts were
offered in June to more than
1,200 workers. Almost a third
of those eligible took the buyout and, coupled with a dozen
retirements on Aug. 31, the
agency trimmed its staff by
about 2.5% in less than a week.
Several dozen more workers
could retire or opt to take the
buyout later this month, which
would cut EPA’s total number
of employees to almost 14,400
workers, the lowest since 1988.
—Timothy Puko
U.S. Colleges Lose Luster in Global Rankings
HEALTH
BY DOUGLAS BELKIN
Two U.S. government researchers who helped develop a
vaccine to prevent cervical cancer and other tumors are among
the winners of the 2017 Lasker
Awards, one of the highest honors in medical research.
The winners of this year’s
Lasker-DeBakey Clinical Medical
Research Award are Douglas R.
Lowy and John T. Schiller, researchers with the taxpayerfunded National Cancer Institute
who, starting in the 1990s,
helped develop a vaccine against
human papillomavirus, or HPV.
The sexually transmitted virus causes cervical cancer and
certain other tumors.
—Peter Loftus
LEGO
Continued from Page One
its own videogames based on
its plastic bricks as well as a
set of programmable robots.
The shift, however, hasn’t
come fast enough to counter
eroding sales of more traditional toy lines. Lego said Tuesday its overall sales for the six
months to June 30 fell 5% from
a year earlier. In July, Mattel
said its half-year sales fell 6.4%.
One bright spot for Lego:
Tuesday’s half-year sales of
14.9 billion Danish kroner
($2.38 billion) pushed it above
rival Mattel, which in July reported half-year sales of $1.71
billion. Sales were above the
$1.82 billion Hasbro reported
for its first half. But Lego’s net
profit has slipped to 3.4 billion
kroner from 3.5 billion kroner
a year earlier.
Lego has in some ways been
ahead of the curve in efforts to
experiment digitally, even as it
has promised to remain committed to its physical brick sets.
Following the launch of its
Chima toy line in 2013, for instance, it introduced related online games, videos and a TV series. It has created Lego Boost, a
robot-building kit that combines
computer coding with elements
of physical construction. And in
February, the company launched
an app-based social network—
promising strict moderation and
u 1. University of Oxford
(U.K.)
u 2. University of Cambridge
(U.K.)
u T-3. California Institute of
Technology (U.S.)
u T-3. Stanford University
(U.S.)
CARL COURT/GETTY IMAGES
The U.S. continues to lay
claim to more elite research
universities than any other
country in the world, but that
dominance is beginning to
fray.
Oxford and Cambridge, the
intellectual one-two punch of
the U.K., took the first and
second spots in the 2018
Times Higher Education
World University Rankings.
Their showing marked the
first year schools outside the
U.S. seized the two top positions in the 14-year history of
the list.
The U.S., led by California
Institute of Technology and
Stanford University, took
seven of the top 11 spots.
But this also marked the
fifth year of consecutive decline in the overall showing of
the U.S. This ranking listed 62
U.S. schools in the top 200. In
2014, 77 U.S. universities
ranked in the top 200.
By contrast, the cumulative
reputation of Chinese research institutions is swelling. In the latest ranking,
seven
Chinese
schools
cracked the top 200. In 2014,
there were just two. Peking
University and Tsinghua University
topped
Chinese
schools, ranking 27th and
30th,
respectively.
That
placed them ahead of the
Georgia Institute of Technology (No. 33), Brown University (No. 51) and the University of North Carolina at
Chapel Hill (No. 56).
“It’s not doom and gloom,
The Top 15
Oxford, above, and Cambridge rank first and second among elite research universities.
the U.S. still dominates the
list, but there are clear warning signs and fairly significant flashing red lights that
the U.S. is under threat from
increasing competition,” said
Phil Baty, rankings editor at
Times Higher Education.
The World University
Ranking awards about a third
of its score to the research
generated by a university’s
scholars, in part by culling 62
million citations and 12.4 million research publications.
Research funding also plays a
role.
Institutional income—the
money generated by the university—and research reputation dinged U.S. schools,
while it pulled up the scores
privacy controls—that lets children share their Lego creations.
Digital offerings aren’t
threatening to wipe out physical toys anytime soon. Kids
“are still reading books, still
using Legos, people are making a place for physical toys,”
said Judy Ishayik, owner of
Mary Arnold Toys, an independent toy shop in Manhattan.
Play on touch-screen devices outranks all other kinds
of play in frequency—including with blocks, board games
and puzzles—according to a
2014 survey by New York research firm Michael Cohen
of Chinese schools.
The ascendance of Oxford
and Cambridge comes after
years of increases in research
revenue—but much of that
money, as well as the researchers who use it, come
from the European Union.
Britain’s decision to withdraw
from the EU has thrown that
revenue source into question.
The rise of Chinese universities comes as the Chinese
Communist Party has invested
heavily in research universities. Elizabeth Perry, a professor at Harvard and expert
on China, said the Chinese are
actively “gaming” the system.
“They are hiring an army
of postdocs whose responsibility is to produce articles,”
Group of 350 parents with
children age 12 and under.
The shift underscores the
challenge for Mr. Christiansen,
who takes the reins next
month. In his nine years heading Danfoss, Mr. Christiansen
is credited with making operations more efficient and agile,
and investing in research and
development as well as digital
capabilities. At Lego, he takes
over from Mr. Padda, who will
have been in the job just nine
months.
On Tuesday, Lego said it
would cut roughly 1,400 jobs,
with between 500 to 600 of
Digital Child’s Play
Children prefer to spend more time playing with touch-screen devices
over construction and block-based toys.
Frequency of play, by type, for children 12 and under
Touch screens
Very often play
Total
Often play
Dolls/Action figures
58%
Arts/Crafts
51%
Construction/Blocks
49%
Game consoles
Play vehicles
62%
48%
42%
Board games
38%
Puzzles
38%
Note: 2014 national survey of 300 parents of children ages 3-12
Source: Michael Cohen Group
THE WALL STREET JOURNAL.
she said. “They are changing
the nature of a university
from an educational institution to basically a factory that
is producing what these rankings reward.”
Times Higher Education is
a unit of TES Global Ltd., a
London company owned by
private-equity firm TPG Capital since 2013.
Times Higher Education
was sold in 2005 by News
Corp, the parent of The Wall
Street Journal owner Dow
Jones & Co. Times Higher Education has a business relationship with The Wall Street
Journal to develop college
rankings.
—Te-Ping Chen
contributed to this article.
these coming from its Billund,
Denmark, headquarters alone.
It is also working to reduce
layers of management and administration to speed product
rollout, which Mr. Knudstorp
said can involve 20 teams on
average before a product is
ready for global launch.
“We are simply not executing well enough on our activities across the business, on
product development, marketing, sales,” said Mr. Knudstorp,
who as chairman of Lego
Brand Group oversees the Kirk
Kristiansen family’s 75% stake
in Lego.
It could be a couple of years
before the changes yield results,
warned Mr. Knudstorp while
declining to specify whether he
expects Lego to return to sales
growth this year or even next.
Lego previously said a big marketing push in the U.S. had
failed to pay off, and on Tuesday said its U.S. sales had declined in the first half.
Lego’s results sent tremors
through the toy industry.
Shares of Mattel were down
1.5% and Hasbro stock was off
nearly 3% in New York.
Some of Lego’s recent woes
are because toys tied to movies have underperformed retailers’ and manufacturers’ expectations. Lego products tied
to last year’s “Star Wars”
movie, “Rogue One,” didn’t
generate the same excitement
as had the prior installment,
“The Force Awakens,” which
u 5. Massachusetts Institute
of Technology (U.S.)
u 6. Harvard University (U.S.)
u 7. Princeton University
(U.S.)
u 8. Imperial College London
(U.K.)
u 9. University of Chicago
(U.S.)
u T-10. ETH Zurich – Swiss
Federal Institute of Technology Zurich (Switzerland)
u T-10. University of Pennsylvania (U.S.)
u 12. Yale University (U.S.)
u 13. Johns Hopkins University (U.S.)
u 14. Columbia University
(U.S.)
u 15. University of California,
Los Angeles (U.S.)
was the first “Star Wars”
movie in a decade.
Another big bet that didn’t
fully deliver: the company’s
second movie based on its
toys, called “Lego Batman.”
Toys “R” Us Inc. said toys
tied to the movie missed sales
goals, even though Lego spent
heavily to try to boost interest. “It didn’t manifest itself
into the kind of sales momentum that we expected or they
expected,” Toys “R” Us CEO
David Brandon said in June.
Mr. Knudstorp, who served
as CEO from 2004 until the
end of 2016, acknowledged his
share of the blame for the recent troubles.
He refocused the company
on its iconic brick sets, and
scaled back on the array of
merchandise the company had
rolled out. Initially, he also cut
jobs, outsourced manufacturing
and simplified the management
structure. All that buoyed sales,
giving
Lego
double-digit
growth for more than a decade.
More recently, though, he
boosted staff to keep up with
resurgent demand—and the
expectation that it would continue to boom. Between 2012
and 2016, Lego added 7,000
new employees.
“This investment has not materialized into a good harvest,”
he said. “We have clearly built
too large an organization and
we need to make it smaller.”
—Paul Ziobro
contributed to this article.
Researchers Honored
For HPV Vaccine
PORTLAND
Wildfire Covers Part
Of City With Ash
A growing Oregon wildfire
covered parts of Portland’s metropolitan area Tuesday with ash
and prompted the shutdown of
a lengthy stretch of highway
through the state’s scenic Columbia River Gorge.
It was one of dozens of wildfires burning in Western U.S.
states that sent smoke into cities from Seattle to Denver—
prompting health warnings and
cancellations of outdoor activities for children by many school
districts.
—Associated Press
CORRECTIONS AMPLIFICATIONS
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* * * *
U.S. NEWS
Irma Gains Strength, Threatens Florida
Category 5 storm
prompts evacuations
in Sunshine State,
disrupts air, sea travel
Hurricane Irma grew into
one of the most powerful
storms ever recorded over the
Atlantic Ocean, raising severe
threats to islands in the Caribbean while prompting evacuations in Florida and disrupting
air and sea travel.
The National Hurricane
Center on Tuesday called
Irma, whose maximum sustained winds increased to
185 miles per hour, a “potentially catastrophic” Category
5 storm. Irma is the strongest hurricane ever recorded
in the Atlantic basin outside
the Caribbean Sea and the
Gulf of Mexico, the agency
said, and ranks among the
five strongest Atlantic hurricanes.
The storm’s center was
about 130 miles east of Antigua and on track to pass over
or near a string of islands, including St. Kitts and Nevis, by
Tuesday night or Wednesday
morning.
A hurricane warning covered an area stretching from
the island of Montserrat to
the Dominican Republic.
Forecasters said Irma is expected to remain a powerful
ALVIN BAEZ/REUTERS
BY ARIAN CAMPO-FLORES
AND JON KAMP
Men covered the windows of a car-parts store on Tuesday in preparation for Hurricane Irma’s high winds in San Juan, Puerto Rico.
Category 4 or 5 hurricane for
the next couple of days.
Puerto Rico Gov. Ricardo
Rosselló declared a state of
emergency and activated the
National Guard on Monday.
He said public schools and
the University of Puerto Rico
would be closed. The island’s
housing secretary said 456
shelters were available to
take in more than 62,000
people.
In Florida, which faces the
possibility of a direct strike
from the storm, Gov. Rick
Scott on Monday declared a
state of emergency in all of
the state’s 67 counties. Irma
could become the most severe hurricane to strike Florida since Andrew tore across
the state’s southern reaches
in 1992.
Carlos Giménez, mayor of
Miami-Dade County, said the
county would begin evacuating special-needs residents
Wednesday morning, and he
closed county offices on
Thursday and Friday.
Miami Beach Mayor Philip
Levine made a personal appeal Tuesday for residents
and tourists to leave the island as soon as they could, in
advance of what he expects
will be a mandatory evacuation order from Miami-Dade
County.
Authorities in Broward
County, north of Miami,
Benzene Found in Part of Houston
The city of Houston, the Environmental Protection Agency
and an environmental advocacy group are investigating a
potentially hazardous plume of
a carcinogenic substance in
one neighborhood after a
nearby oil refiner reported its
operations suffered hurricanerelated damage.
The city and the Environmental Defense Fund said extra
air monitors they dispatched to
Houston’s Manchester region
on Monday detected the presence of benzene, a component
of crude oil and gasoline.
Two monitors detected significantly different levels of
the carcinogen at different
times of the day, and additional sampling is needed to
determine the concentration,
according to Loren Raun, chief
environmental science officer
for the Houston Health Department, and Elena Craft, a
senior scientist at the Environmental Defense Fund,
which became involved in the
probe after offering the city
assistance.
A Valero Energy Partners LP
refinery in the neighborhood
reported a hurricane-related
ADREES LATIF/REUTERS
BY MELANIE EVANS
A Valero refinery reported a Harvey-related leak on Aug. 27.
leak on Aug. 27.
The EPA said it was deploying an air monitor to the area
on Tuesday to help the investigation. Officials are seeking to
pinpoint the source of the benzene plume, the concentration
and how far-reaching the
emissions may have spread,
Ms. Raun said Tuesday morning, after a call with EPA, EDF
and Houston city officials.
“EPA continues to conduct
ambient air monitoring in
Houston and is focusing on an
area of potential concern associated with reported air emissions from a Valero facility in
Houston,” said David Gray, a
spokesman for the agency.
A Manchester oil refinery
that is a subsidiary of Valero
Energy Partners said the leak
on Aug. 27 resulted in the
emission of benzene and other
hazardous compounds, according to a copy of the refiner’s
report to the Texas Commission on Environmental Quality.
The report, which was filed
through the State of Texas Environmental Electronic Reporting System and is available on
TCEQ’s website, said the leak
was a result of “heavy rainfall
complications,” and that
CHICAGO
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PHILADELPHIA
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N E W FA B R I C S A N D U PDAT E YO U R
LO O K WITH THE L ATE S T SILH O UE T TE S.
MADISON + 61ST
Friday, September 8
Ermenegildo Zegna, 6th floor
Saturday, September 9
Di Bianco, Isaia, 6th floor
Saturday, September 9
Luciano Barbera, 1st floor
Friday, September 15
Hurricane Irma starts to
rattle markets......................... B16
Senate GOP to Tether
Storm Aid to Debt Vote
BY KRISTINA PETERSON
AND SIOBHAN HUGHES
WASHINGTON—Senate GOP
leaders signaled Tuesday they
will tie an increase in the nation’s borrowing limit to an
aid package for victims of
Tropical Storm Harvey, a move
that could boost the debt-limit
legislation’s chances of passage ahead of a deadline this
month.
Facing a long list of legislative deadlines in September,
lawmakers on Capitol Hill are
seeking quick approval of an
initial measure providing $7.85
billion in emergency aid to
help relief efforts in the wake
of Harvey, which first made
landfall in Texas as a hurricane on Aug. 25.
The initial Harvey aid faces
little opposition on its own in
Congress and is expected to
sail through the House on
Wednesday. But it will become
more controversial when it
reaches the Senate, where GOP
leaders said they plan to attach a measure lifting the debt
limit.
Treasury Secretary Steven
Mnuchin has urged lawmakers
to raise the debt ceiling by the
end of September to ensure
that the government has
enough cash to pay its bills on
time. Failure to increase the
debt limit could cause the government to miss payments to
bondholders and result in a
default on government debt.
Senate Majority Leader
Mitch McConnell (R., Ky.) said
he was acting to deliver on
President Donald Trump’s top
priorities of providing Harvey
relief, preventing a default on
the debt and avoiding a government shutdown when its current funding expires on Oct. 1.
“They are my immediate
priorities as well,” Mr. McConnell said on the Senate floor
Tuesday. “In the case of the
debt limit, we need to act
quickly given the new uncertainty from the large costs of
storm recovery.”
The combined bill’s prospects in the Senate weren’t yet
apparent. Although Senate
Democrats back both the Harvey aid and raising the debt
limit, they haven’t signed off
on the plan since they haven’t
seen details of it yet, a Senate
Democratic aide said.
ERMENEGILDO ZEGNA
BARNEYS.COM
NEW YORK
cleanup was under way.
Valero Energy Corp. is the
majority owner of Valero Energy Partners. In an Aug. 29
statement on its website,
Valero Energy Corp. said Harvey’s pounding rainfall sank
the floating roof of a crude-oil
tank, leading to an oil leak.
The statement said the
company’s air-quality monitoring found “no detectable levels
of emissions in the community.” Valero said it didn’t
have an immediate update on
Tuesday.
Companies must report
emissions that exceed permitted amounts, a TCEQ spokesman said, adding that the state
“investigates all emissions
events that are reported to the
agency.”
Houston Health Department
investigators who visited the
Valero refinery Tuesday found
low traces of hazardous compounds using a hand-held air
monitor, which is used to identify whether compounds are
present, but doesn’t identify
specific compounds, Ms. Raun
said. Investigators didn’t detect hazardous emissions from
the damaged tank Tuesday using an infared camera. “That’s
good news,” she said.
urged residents in evacuation zones to leave and stay
with family and friends elsewhere. School officials in Miami-Dade and Broward also
canceled school for Thursday
and Friday.
In the Florida Keys, Monroe
County officials said Tuesday
they would be issuing a mandatory-evacuation order for
tourists and residents, with
the exact times still to be determined.
The threatening storm
caused cruise lines to cancel
and divert sailings in the
popular Caribbean. Airlines
on Tuesday were canceling
flights in the region and offering waivers to passengers
in Florida.
Irma is forecast to dump up
to a foot of rain in the northern Leeward Islands, with isolated instances of 20 inches.
Drenching rains are also forecast for parts of Puerto Rico,
the British and U.S. Virgin Islands.
The Turks and Caicos Islands and southeastern Bahamas could see storm
surges of 15 to 20 feet, as
well as large, destructive
waves, forecasters said.
The northern coast of
Puerto Rico could experience
a storm surge of 3 to 5 feet.
In an effort to stabilize the
island’s rocky finances, Puerto
Rico’s government and municipalities have cut back on
staffing in a wide range of areas, from utility crews to
emergency personnel, said Edwin Meléndez, director of the
Center for Puerto Rican Studies at Hunter College in New
York. If Irma generates “the
worst possible scenario,
Puerto Rico might not be
ready to weather the storm,”
he said.
—Valerie Bauerlein
contributed to this article.
Sartorio, 6th floor
Saturday, September 16
Canali, 6th floor
Saturday, September 23
Kiton, 6th floor
A4 | Wednesday, September 6, 2017
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THE WALL STREET JOURNAL.
****
U.S. NEWS
Poll Shows America’s Divisions Growing
A WSJ/NBC News
survey indicates a
wide partisan split on
culture and economy
BY JANET HOOK
Divisions in America reach
far beyond Washington into the
nation’s culture, economy and
social fabric, and the polarization began long before the rise
of President Donald Trump, a
new Wall Street Journal/NBC
News survey of social trends
has found.
The findings help explain
why political divisions are now
especially hard to bridge. People who identify with either
party increasingly disagree not
just on policy; they inhabit separate worlds of differing social
and cultural values and even
see their economic outlook
through a partisan lens.
The wide gulf is visible in an
array of issues and attitudes:
Democrats are twice as likely
to say they never go to church
as are Republicans, and they
are eight times as likely to favor action on climate change.
One-third of Republicans say
they support the National Rifle
Association, while just 4% of
Democrats do. More than
three-quarters of Democrats,
but less than one-third of Republicans, said they felt com-
fortable with societal changes
that have made the U.S. more
diverse.
What is more, Americans’
view of the economy, the direction of the nation and the future has even come to be
closely aligned with their feelings about the current president, the survey found.
“Our political compass is totally dominating our economic
and world views about the
country,” said GOP pollster Bill
McInturff, who conducted the
survey with Democratic pollster Fred Yang.
The poll found deep splits
8%
Portion of Democrats who approve
of the job the president is doing
along geographic and educational lines. Rural Americans
and people without a four-year
college degree are notably
more pessimistic about the
economy and more conservative on social issues. Those
groups make up an increasingly
large share of the GOP.
One measure of how much
more polarized the electorate
is than a generation ago can be
found in views of the president.
Eight months into the 1950s
presidency of Republican
Dwight Eisenhower, 60% of
Democrats approved of the job
he was doing. That level of
cross-party support for a new
president remained above 40%
until Bill Clinton, when only
20% of Republicans approved
of his performance after eight
months in 1993. For Barack
Obama, Republican support
dropped to 16% at this point in
his presidency in 2009.
Under Mr. Trump, that trend
has continued and intensified.
His job-approval rating among
Americans overall has remained in recent months at
about 40%, but just 8% of Democrats approve of the job he is
doing, the survey found. By
contrast, 80% of Republicans
approve.
Mr. Trump’s election has
brought a sharp mood swing
among Republicans. In August
2014, 88% of Republicans said
they weren’t confident that life
for their children’s generation
would be better than their own.
Eight months into the Trump
presidency, just 46% of Republicans say they lack confidence
in their children’s future—a 42point swing that is more dramatic than improvements in
the economy seem to justify.
Two groups in particular
have a relatively pessimistic
view of the economy—rural
Americans and those with less
education, the survey found.
Some 43% of rural residents
gave a high rating to their local
economy’s health, compared
with 57% of urban dwellers.
Among people without a fouryear college degree, only 47%
viewed the economy in their
area as good or excellent, compared with two-thirds of people with a degree.
Both groups have been moving from the Democratic Party
to the GOP. Among people
without a four-year college degree, a plurality of 44% identified as Democrats in 2010.
Now, only 36% do. Among college graduates, just 36% now
identify as Republican, versus
41% in 2010.
While there is broad agreement that the country is riven
by division, there is no consensus on why.
Fully 80% of those surveyed
saw the country as mainly or
totally divided. But Democrats
and independents tended to see
the division as rooted in economics—the income gap between the rich and the poor.
Republicans saw the split as
political, with people divided
based on party affiliation, and
as a function of which media
outlets they follow.
“It’s as if everyone agrees
that it’s too divisive and we
can’t get along, but also that
everyone else is wrong,” said
Mr. Yang.
Partisan Lens
Members of the two parties have moved further apart on
several issues over the past decade or two.
Attitudes toward gun rights
Concerned that government will go too far in restricting gun rights
Democrats
June 1995
August 2017
0%
25%
RATES
Continued from Page One
tion outlook is shared broadly
by investors, if not the majority
of Fed policy makers, who have
long said they expect inflation
to trend higher. Implied inflation expectations, derived from
the difference between nominal
and inflation-adjusted Treasury
yields, are forecast to be about
1.79% annually over the next decade, according to data from
Tradeweb. That’s down from
more than 2% earlier in the
year.
While North Korea’s latest
nuclear test and Hurricane Irma
helped bolster Treasurys, the
long-term argument for buying
bonds also got a boost Tuesday
from Federal Reserve governor
Lael Brainard, who said in a
speech that the Fed’s “persistent failure” to hit its 2% inflation target could merit a slower
path of interest-rate increases
going forward.
“We have been falling short
of our inflation objective not
just in the past year, but over a
longer period as well,” she said.
“My own view is that we should
be cautious about tightening
policy further until we are confident inflation is on track to
50%
75%
100%
Attitudes toward immigration
Immigration strengthens the U.S.
April 2005
August 2017
Attitudes toward the future
Confident life will be better for our children’s generation
August 2010
August 2017
0%
25%
50%
75%
100%
Source: WSJ/NBC News telephone poll of 1,200 people conducted August 5-9;
margin of error +/-2.82 pct. pts.
THE WALL STREET JOURNAL.
The Wall Street Journal/NBC News poll was based on telephone interviews of 1,200 adults, including 540 who use only a cellphone. It
was conducted from Aug. 5-9, 2017, by the polling organizations of Bill
McInturff at Public Opinion Strategies and Fred Yang at Hart Research
Associates.
The sample was drawn in the following manner: Individuals were
randomly selected from national lists of households. Adults age 18 or
older were selected by a systematic procedure to provide a balance of respondents
by sex. Respondents reached on their cellphone were randomly selected from national lists of cellphone numbers.
Of the 1,200 interviews, 540 respondents (45%) were reached on a cellphone and
screened to ensure their cellphone was the only phone they had. In addition, 24 respondents were reached on a cellphone but reported also having a landline.
Overall, the data’s margin of error is plus or minus 2.82 percentage points. The
margin of error for subgroups is larger.
DACA
Minor
Progress
Made in
Nafta Deal
BY WILLIAM MAULDIN
AND DUDLEY ALTHAUS
PATRICK T. FALLON/BLOOMBERG NEWS
Continued from Page One
and shore up the health law’s
insurance exchanges.
The decision to end the program, which was created by former President Barack Obama,
was welcomed by advocates for
stricter immigration enforcement, including the attorney
general of Texas, whose threat
to sue the administration over
the program added to the pressure on the White House.
The move was widely condemned by Democrats, some
Republicans, business executives, immigrant-rights advocates and educational leaders as
a cruel step that will hurt people who they said did nothing
wrong and are contributing to
the nation.
Attorney General Jeff Sessions announced the policy
shift, reiterating his long-held
belief that Mr. Obama had overstepped his authority. The
Obama administration “deliberately sought to achieve what the
legislative branch specifically
refused to authorize,” he said.
Mr. Sessions said the participants were taking jobs from
U.S. citizens, that the program
was encouraging more illegal
migration and that it was implemented even though Congress had declined to pass the
same policy into law.
The reaction was swift. Protesters gathered in front of the
White House and at Trump
Tower in New York, where nine
immigrants protected by the
program and three other people
were arrested. In Denver, hundreds of people took to the
streets to protest the move.
Mr. Obama issued a rare public statement in opposition to
Republicans
A DACA applicant in Bakersfield, Calif., in March 2015, filling out forms for the program, created by former President Barack Obama
his successor. “Whatever concerns or complaints Americans
may have about immigration in
general, we shouldn’t threaten
the future of this group of
young people who are here
through no fault of their own,
who pose no threat,” he said.
Officials said that the permits given to young immigrants
under the program, which are
good for two years, will remain
in force until they expire. Some
150,000 participants whose
grants expire before March 5,
2018, will be able to renew their
status if they file applications
by Oct. 5. Officials said no new
applications filed after Tuesday
would be processed.
Many immigrant advocates
expressed concern that the government would use information
collected as part of the program’s application process to
track people down for possible
deportation. On Tuesday, Department of Homeland Security
officials said they wouldn’t target former program participants and would only use their
information if there was a significant law-enforcement or national-security risk.
People participating in the
program were both angry and
nervous about their futures.
“Immigrant youth are standing up today and saying in no
uncertain terms this is our
home, we are here to stay,” said
Cristina Jimenez, executive di-
rector of United We Dream, an
advocacy group that represents
these people.
In taking the action, Mr.
Trump fulfilled a campaign
promise to end the program,
but the move contradicts assurances he has given since taking
office that these people, often
dubbed Dreamers, had nothing
to worry about.
Mr. Trump encouraged action on Capitol Hill to protect
program participants, while signaling he would want any legislation to include his own immigration priorities.
Republicans are divided
among those who see an urgency to protect these immigrants, those who oppose such
action and those who are willing to go along only as part of
increased immigration enforcement of some sort.
Sen. Lindsey Graham (R.,
S.C.), a longtime backer of liberalized immigration laws, called
this a “defining moment” for
the Republican Party and hoped
action on the Dream Act, which
would provide a path to citizenship for young people brought
to the U.S. as children, would be
a first step. “This may be what
we needed in Congress to get
our act together…a real issue of
real live people who need us to
act decisively,” he said.
—Alicia A. Caldwell, Byron
Tau and Nancy A. Youssef
contributed to this article.
Lower Expectations
litical fights in Washington
and natural disasters.
The decline in yields and the
low spread between the twoand 10-year Treasury note are
bad for banks. Banks in recent
years have suffered from a narrow spread, which leads to a
thinner gap between what they
pay on deposits and charge on
loans, a spread known as their
net-interest margins.
Those margins had recently
ticked up slightly, leading investors to expect bank profits
could soon expand. Tuesday’s
bond-market action cast doubt
on that expectation.
Shares of J.P. Morgan Chase
& Co. fell 2.4%, BankAmerica
Corp.’s shares fell 3.2% and Citigroup’s shares lost 2.1%. Shares
in financial firms that aren’t as
sensitive to interest rates and
lending, such as Goldman Sachs
Group Inc. and Morgan Stanley,
also fell sharply.
Insurers were among the
S&P 500’s biggest decliners, as
Hurricane Irma threatened to
do more damage to the U.S.
coastline. Everest Re Group declined 6.9%, XL Group fell 5.8%
and Travelers Cos. lost 3.7%.
Low inflation makes government bonds more appealing to
investors because it helps preserve the purchasing power of
their fixed payments. It also
makes it less likely that the Fed
will raise interest rates, which
is another major threat to the
value of outstanding Treasurys.
Since topping the Fed’s 2%
target in February, one of the
Fed’s preferred inflation measures, the personal-consumption expenditures price index,
has been in retreat, rising just
1.4% in July from a year earlier, the Commerce Department said last week.
The inflation slowdown has
surprised many investors and
analysts because it has defied
many economists’ expectations
that a low jobless rate should
soon lead to higher wages and
costlier goods and services.
The U.S. unemployment rate
was 4.4% in August, just off a
16-year low, but wage growth
and inflation have both remained sluggish. That has left
investors debating whether
tepid inflation and low bond
yields could be the result of
large, potentially intractable
forces, such as globalization
and technological advances,
rather than just a consequence
of the normal economic cycle.
“I think there’s something
really powerful” happening,
said Rick Rieder, chief investment officer of global fixed income at BlackRock Inc., the
world’s largest asset manager.
Technological innovation from
companies like Amazon.com
Inc. and Uber Technologies Inc.,
he added, are behind “the
greatest cost revolution of all
time,” in a development that
has far-reaching consequences
for financial markets.
For years, some analysts
have argued that technology
and increased global competition as well as aging populations and mounting debt levels
could all play some role in holding down economic growth, inflation and bond yields. What
has changed, investors and analysts say, is how seriously these
arguments are now being taken
by market participants.
In recent years, investors
have frequently blamed low
yields on factors including monetary stimulus from major central banks or fears that the
global economy could soon tip
into another recession. But the
Fed now has plans to start
slowly reducing its large portfolio of Treasurys and mortgagebacked securities, after already
raising interest rates twice this
year.
Meanwhile, many investors
also expect the European Central Bank to soon start scaling
back its own stimulus program,
as the entire global economy
shows signs of improvement.
Bond market-derived
expectations for annual inflation
over the next decade have been
falling for much of this year.
2.2%
Nov. 8
Election day
Federal Reserve’s
inflation target
2.0
1.8
1.6
1.4
2016
’17
Source: Tradeweb
THE WALL STREET JOURNAL.
achieve our target.”
Ms. Brainard has expressed
concern about low inflation
before. But her latest remarks
came at a critical time, as Fed
officials gear up for a debate
over whether to stick to the
central bank’s plan of raising
interest rates a third time this
year or hit the pause button to
wait for more inflation data
and see how the economy and
markets react to the latest po-
MEXICO CITY—U.S., Canadian and Mexican officials,
buffeted by political disagreements and controversial
moves by the Trump administration, notched relatively minor progress in recent days in
a big push to renegotiate the
North American Free Trade
Agreement this year.
The second round of Nafta
talks in Mexico City wasn’t intended to result in major
breakthroughs or serious
horse-trading among negotiators, and more substantive
progress is expected in the
third round later this month in
Ottawa, officials said. Canadian Foreign Minister Chrystia
Freeland said the second
round built on the preparatory
work of the first round.
“We have found mutual
agreement on many important
issues,” U.S. trade representative Robert Lighthizer said.
U.S. officials said they
reached broad consensus, but
not full agreement, in provisions governing small and medium businesses, services, digital
trade
and
the
environment.
Mexico’s Economy Minister
Ildefonso Guajardo said he expects to “start seeing results
in the third round of talks.”
An adverse political backdrop isn’t helping negotiators
with a goal of wrapping up
talks around the end of the
year and submitting a new
Nafta for approval in the countries’ congresses and parliament as soon as next year.
President Donald Trump,
who made criticism of Nafta a
centerpiece of his 2016 campaign,
recently
renewed
threats to pull out of the trade
agreement, which has bound
North American economies
through shared commercial
rules and duty-free trade for
23 years.
Participants in the talks described the meetings as professional and not unfriendly.
But observers say the public demands and often-unwelcome policy moves from the
governments back home are
challenging Nafta negotiators,
who will need a combination
of hard work, flexibility and
luck to hammer out a deal that
can survive political scrutiny.
Mr. Lighthizer disputed the
notion that the political demands are hurting the talks.
Mexican President Enrique
Peña Nieto addressed Nafta
on Saturday, telling Mexicans
in an annual speech that he
won’t accept a deal that hurts
the country’s “dignity.”
Washington seeks further trade
negotiations with Seoul........... A6
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | A5
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* *
THE WALL STREET JOURNAL.
WORLD NEWS
U.S. Presses Military Options in Asia
Trump offers new arms
deals to allies in Tokyo,
Seoul following North
Korea nuclear test
President Donald Trump
pressed harder on potential
military options in North Korea, offering billions of dollars
in new American military
equipment to allies in Asia and
saying South Korea should use
bigger conventional payloads
on its missiles as deterrence.
YONHAP NEWS/NEWSCOM/ZUMA PRESS
By Jonathan Cheng
in Seoul and
Farnaz Fassihi
at the United Nations
The military emphasis came
as U.S. officials faced an uphill
negotiation at the United Nations Security Council over
new sanctions against Pyongyang, with China and Russia
expressing reluctance and a
Monday vote on the matter
sought by U.S. Ambassador
Nikki Haley in doubt.
North Korea, meanwhile, issued a defiant response on
Tuesday to U.S. attempts to
impose new sanctions, declaring that it wasn’t cowed by
the Trump administration’s
warnings and hinting at an unspecified “counteroffensive.”
Pyongyang said that Mr.
Trump was “begging for
war”—not North Korea—as
Ms. Haley had said on Monday
during an emergency Security
Council meeting.
The exchanges came two
days after North Korea tested
its sixth and by far most powerful nuclear bomb, raising
alarm in world capitals from
Washington to Beijing and
weighing on markets from the
U.S. to Asia.
Mr. Trump’s offer to sell
more arms, made in a Tuesday
Adm. Scott Swift, commander of the U.S. Pacific Fleet, left, met with South Korean Defense Minister Song Young-moo in Seoul on Tuesday.
Washington Seeks
Further Negotiations
On Trade With Seoul
The Trump administration’s
chief trade negotiator said on
Tuesday that he is looking to negotiate some changes to the Korea-U.S. free-trade agreement
and is hoping for a “successful
tweet, underscored his message in a weekend call with
South Korean President Moon
Jae-in. In that call, the U.S.
leader agreed to scrap payload
limits on South Korean missiles under a decades-old U.S.South Korean treaty, allowing
Seoul to use more powerful
discussion”—avoiding any mention of a possible termination of
the five-year-old pact.
The remarks by Robert
Lighthizer, the U.S. trade representative, were the first public
comments by a top policy
maker about the trade agreement, known as Korus, since
administration officials said
over the weekend that President Donald Trump was consid-
ering terminating the pact.
When asked the administration’s views on possible Korus
withdrawal, Mr. Lighthizer said
“we have negotiations,” and that
“we would like some amendments to the Korean agreement.”
He didn’t address directly the
prospect of a pullout. It is unclear
whether Mr. Trump is still weighing the withdrawal option.
—Jacob M. Schlesinger
conventional weapons, the
White House said.
Mr. Trump also in that call
provided what officials said
was his “conceptual approval”
for the purchase of billions of
dollars in U.S. military weapons and equipment.
The Pentagon declined to
provide specifics, but is unaware of any pending sales of
the size specified by the White
House, a U.S. official said.
Mr. Trump needs congressional approval to authorize
most weapons transfers. But it
wouldn’t be difficult to advance
the process due to close ties
and pre-existing U.S. accords
with South Korea and Japan,
said Patrick Cronin, director of
the Asia-Pacific Security Program at Center for a New
American Security, a defense
think tank in Washington.
Some U.S. military options,
such as integrating Japan into
military exercises already held
between the U.S. and South
Korea, would add pressure
both on North Korea and its
key ally, China.
The military pressure comes
as the U.S. tries to convince
the U.N. to maximize economic
pressure on Pyongyang.
The U.S. began negotiating
the draft of a new sanctions
resolution with China at the
U.N. on Tuesday, diplomats
said, although the draft hasn’t
been circulated to all 15 mem-
Why Xi Refuses to Go Ballistic on North Korea
CHINA’S WORLD
By Andrew Browne
SHANGHAI—At a moment
when Xi Jinping desperately
craves stability, Northeast
Asia is in turmoil.
The escalating nuclear crisis on the Korean Peninsula
presents Mr. Xi with an acute
challenge just weeks ahead
of a Communist Party Congress expected to return him
to power for
another fiveyear term.
Kim Jong
Un is playing
him, as he
does President Donald Trump, by ignoring admonishments and
warnings from Beijing and
Washington alike.
The North Korean dictator
set off his country’s most
powerful nuclear explosion yet
over the weekend. The timing
could hardly have been worse
for Mr. Xi, who was preparing
B
ut this is a critical moment of leadership
transition for Mr. Xi,
and Mr. Kim knows it. The
Chinese president seeks elevation to the pantheon of
Chinese Communist greats
along with Deng and Mao.
Some speculate Mr. Xi wants
a setup that would enable
him to extend his tenure beyond five years. Any missteps ahead of the Congress
could open Mr. Xi to attack
from the many enemies he’s
made and derail his legacy.
There is plenty more the
Chinese president could do
FRED DUFOUR/AGENCE FRANCE-PRESSE/GETTY IMAGES
to lead a Chinese-hosted summit of major emerging economies. The summit was intended to bolster Mr. Xi’s
international standing ahead
of next month’s Congress. Instead, Mr. Kim made a mockery of the Chinese strongman
by exposing Beijing’s inability
to rein in its neighbor’s nuclear ambitions.
If Mr. Kim is calculating
that Mr. Xi won’t risk precipitous action against him
ahead of the 19th Party Congress, he’s likely correct.
North Korea has become a
wild card for Mr. Xi, and it
grates on the Chinese leader
to be toyed with, no less
than it angers Mr. Trump.
President Xi at the summit in
Xiamen, China, on Tuesday.
to punish Pyongyang and put
Mr. Kim in his place, from
expelling North Korean
workers to cutting off oil
and food lifelines. However,
the dangers of reacting
forcefully at this moment are
too great for Mr. Xi.
From his perspective, the
most obvious peril is squeezing North Korea so hard it
collapses, spilling refugees
across the border into an
area of China with a large
and potentially restless ethnic Korean population.
Worse, such a scenario,
likely bringing down the
Pyongyang regime, would be
the outcome that Washington
seeks. It could bring U.S. and
South Korean troops up to
the border, where they would
command the gateway to
China’s industrial heartland
and routes to the capital.
Thus, Mr. Xi would be surrendering the impressive
gains he has made in his
first term in a geopolitical
contest with the U.S. for influence in East Asia.
Bending to U.S. pressure
on North Korea is politically
unacceptable. Mr. Xi’s “China
Dream,” after all, is about restoring Chinese pride after a
century of foreign humiliations.
There are even perverse
benefits to Beijing from Mr.
Kim’s nuclear brinkmanship:
It keeps the U.S. military
pinned down in Northeast
Asia, and to the extent that
it casts doubt on Washington’s resolve to defend South
Korea and Japan, it drives a
wedge between the U.S. and
its two key Asian allies.
F
urthermore, letting
North Korea go would
give encouragement to
political forces in China that
Mr. Xi spent his first term
ruthlessly crushing—dissidents, human-rights activists
and others who might read
in Mr. Kim’s demise a message about the vulnerabilities of their own socialist
leaders.
The upshot is that Mr. Xi,
on the brink of his greatest
political triumph, looks impotent in the face of Mr. Kim’s
increasing provocations.
During his first five years
in office, President Xi proved
to be a master of control.
His Asia policy has followed a pattern: ratcheting
up tensions with U.S. friends
and allies—Japan, Vietnam,
the Philippines—then de-escalating. By switching on and
off the threat of force, Mr. Xi
enhanced Beijing’s position.
However, in the countdown
to the 19th Party Congress,
Mr. Xi requires stability more
than adventure to safeguard
the legacy he’s built and secure his dominance.
Now, Mr. Kim threatens to
unleash chaos. The crisis
calls for Chinese action. The
irony is that the most activist
Chinese leader on the global
stage since Mao is paralyzed
by domestic politics at a moment when his intervention is
urgently required. Mr. Xi
risks a coronation with the
region in flames.
Syrian Military Advances, Ramping Up Pressure on ISIS
Militant Resources
Some of Syria's most significant oil infrastructure is located in Deir
Ezzour province, where populated areas along the Euphrates River
are largely controlled by Islamic State.
50 miles
TURKEY
50 km
M e d. S ea
Aleppo
By Maria Abi-Habib
in Beirut and Nour
Alakraa in Berlin
Euphrates
River
Raqqa
SYRIA
LEBANON
IRAQ
Deir Ezzour
Mayadeen
Tartus
Homs
The Syrian army broke a
three-year Islamic State siege
in the eastern city of Deir Ezzour on Tuesday, handing the
extremist group a significant
setback in one of its most important remaining strongholds.
Palmyra
DEIR EZZOUR
PROVINCE
al-Omar
al-Tanak
al-Ward
Boukamal
Damascus
Oil and natural-gas
pipelines
JORDAN
Source: U.S. Energy Information Administration
Oil fields
THE WALL STREET JOURNAL.
The regime’s advance adds
to the pressure on Islamic
State fighters in surrounding
Deir Ezzour province, which
many of the group’s leaders
fled to as it came under attack
and lost territory across Syria
and Iraq over the past year.
The Syrian military has
been moving toward the city of
Deir Ezzour for weeks. The U.S.
and Russia, Syria’s main ally,
agreed recently on a plan to
avoid clashes between the regime and the U.S.-led coalition
fighting Islamic State, which is
currently battling the extremists in the neighboring prov-
ince of Raqqa to the north.
As Islamic State is forced
into a shrinking patch of territory in Syria, the regime of Syrian President Bashar al-Assad
and its allies find themselves
fighting in increasingly close
proximity to U.S.-backed forces.
The advance by Syrian
forces was met with fierce resistance by Islamic State, according to activists opposed to
both the regime and Islamic
State. Syrian military units
moved in from the western
side of Deir Ezzour province
and linked up with another
brigade inside one of two government-held enclaves inside
the provincial capital, according to Syrian state-run media.
“Army units, which have
been advancing from the west
side of [Deir Ezzour] province,
have met with the garrison of
the 137th Regiment this afternoon, breaking the siege imposed on the city for more
than three years,” said statecontrolled Syrian Arab News
Agency, or SANA.
Much of Islamic State’s leadership, prisoners and most-valued military gear is now believed to be in Mayadeen,
about 30 miles southeast of the
city of Deir Ezzour. Islamic
State still controls Syria’s most
important oil fields, which are
spread throughout the province and which the group uses
to fund its operations.
Despite long being at odds
with the Assad regime and supporting opposition groups,
Washington has opened the
door to an expanded role for
the Syrian military in fighting
Islamic State. “We are here to
fight ISIS as a coalition, but if
others want to fight ISIS and
defeat them, then we absolutely
have no problem with that,”
Col. Ryan Dillon, spokesman for
the U.S.-led coalition, said in
June. “We as a coalition are not
in the land-grab business. We’re
in the killing ISIS business.”
—Raja Abdulrahim in Beirut
contributed to this article.
bers of the Security Council.
Diplomats who had knowledge
of the content said it was
“very ambitious” in scope and
timetable.
The U.S., along with its European and Asian allies, wants
to target sectors of North Korea’s economy to pressure the
regime while avoiding civilian
suffering, diplomats said. Oil
trade that benefits the government is a priority, diplomats
said.
The U.S. would have to convince China and Russia to support a resolution. While neither has openly said it would
veto added sanctions, both
have urged talks and said
sanctions aren’t effective. Russia’s ambassador on Tuesday
cast doubt on whether the
council would be prepared to
vote by Monday, as Ms. Haley
requested.
U.N.
Secretary-General
António Guterres urged the
council to come up with a single, united strategy against
North Korea. Mr. Guterres said
he stood ready to mediate a
solution.
Earlier Tuesday, Adm. Scott
Swift, commander of the U.S.
Pacific Fleet, said Pyongyang’s
recent string of missile and nuclear tests has brought the U.S.
closer to its allies in Tokyo and
Seoul, rather than dividing
them, as North Korean leader
Kim Jong Un had hoped.
Adm. Swift’s comments followed warnings that North Korea appeared to be planning to
test-launch another intercontinental ballistic missile as it advances its aim of developing a
nuclear-tipped missile that can
threaten the U.S. mainland.
The rapid advance in North
Korea’s military capabilities has
exposed differences between
Seoul’s more dovish approach
and Washington’s harder-line
strategy on Pyongyang.
Haley
Proposes
New Path
On Iran
BY FELICIA SCHWARTZ
WASHINGTON—U.S. Ambassador to the United Nations
Nikki Haley on Tuesday laid
out a path for the White
House to declare that Iran
isn’t complying with the 2015
nuclear deal—but leave it to
Congress to decide what to do.
Although the U.S. has said
Tehran is technically abiding
by its commitments, Ms. Haley
raised critical questions about
the deal, in an effort to give
President Donald Trump support should he choose not to
certify Iranian compliance.
Mr. Trump has called the accord between Iran and six
world powers “the worst deal
ever,” but some of his advisers
in recent months have been
looking for ways to let the president say Iran isn’t complying
without immediately killing it.
“What happens next is significantly in Congress’s hands,”
Ms. Haley said in a speech at
the American Enterprise Institute, a conservative think tank
in Washington. “If the president chooses not to certify Iranian compliance, that does not
mean the United States is
withdrawing” from the accord.
Mr. Trump faces a deadline
in October when he must tell
Congress whether he believes
that Iran is meeting the terms
of the deal, which required
Iran to cut back its nuclear capabilities in exchange for
sanctions relief.
While Ms. Haley said she
didn’t know what Mr. Trump
will say, the president said in
an interview with The Wall
Street Journal in July that he
is likely to say Iran isn’t meeting its commitments.
In her speech, Ms. Haley
said Mr. Trump would be justified if he doesn’t certify Iran’s
compliance because the deal
itself is “very flawed and very
limited.” She said the accord
discourages countries from
confronting what the administration views as destabilizing
behavior, such as missile tests
and support for terrorist
groups.
Despite Mr. Trump’s misgivings about the deal, he has
twice told Congress that Iran
is living up to its terms.
THE WALL STREET JOURNAL.
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Wednesday, September 6, 2017 | A7
* * * * *
WORLD NEWS
Heilyn Rojas, a 21-year-old
Venezuelan student, left her
country last year, tired of the
crime and food shortages back
home. She fled to neighboring
Colombia in search of a better
life.
By Anatoly Kurmanaev
in Caracas, Venezuela,
and Francis X. Rocca
in Vatican City
Now, as Pope Francis embarks on a five-day visit to Colombia, she stands among
many Venezuelans, including
bishops and opposition leaders, who hope the pontiff will
chastise Venezuelan President
Nicolás Maduro for his role in
the nation’s economic collapse
and its deep political strife.
She wishes Pope Francis
“would care more about helping Venezuela, so that we
could go back, work and live
well, instead of dying of hunger,” Ms. Rojas said.
Venezuela—whose economy
has shrunk by a third since
2013, sparking a humanitarian
crisis—looms large as Pope
Francis arrives on Wednesday
in neighboring Colombia,
where tens of thousands of
Venezuelan migrants have fled.
Top Venezuelan bishops
plan to greet the pope in Colombia, hoping to convey in
person the gravity of the
country’s situation.
In a letter published last
week, the leader of Venezuela’s
opposition-controlled congress
urged the pope to demand that
Mr. Maduro allow humanitarian
aid, release political prisoners
and respect human rights. “Every day that passes costs another life,” wrote Speaker Julio
Borges. “We can’t wait.”
Vatican intervention in international political conflicts is
rare. Pope John Paul II, who was
Polish, was credited with helping to mobilize Poland’s Solidarity movement and give momentum to the fall of communism in
Central and Eastern Europe.
Pope Francis, an Argentine
who takes a keen interest in
Latin American affairs and has
issued forceful calls for leaders to respect human rights,
helped broker the December
2014 rapprochement between
the U.S. and Cuba.
But a Vatican spokesman
played down the likelihood that
the pope would speak publicly
about Venezuela during his trip
to Colombia. That trip is likely
to emphasize reconciliation and
human rights after that country’s recently ended civil war.
Many Venezuelans are angry
over the Vatican’s failed attempt
to broker a truce between the
opposition and Mr. Maduro’s
envoys during talks late last
year. The talks broke down after
his government failed to implement its promises. Just over
half of Venezuelans believe the
church is working to solve the
country’s problems, down from
62% before the talks, according
ANDREW MEDICHINI/ASSOCIATED PRESS
Venezuela Crisis
Looms Large on
Pope’s Latin Trip
Demonstrators in St. Peter’s Square in Rome recently held crosses with the names of people killed in protests against Venezuela’s government.
to a June poll from Caracasbased Consultores 21.
The opposition and some
clergy blamed the Vatican for
allowing Mr. Maduro to stall
for time, thus dissipating protests and ultimately tightening
his grip on the country.
“The Vatican’s diplomacy
sinned with naiveté. They
came unprepared,” said the
Rev. Francisco Virtuoso, rector
of Caracas’s Andrés Bello Catholic University and a prominent critic of Mr. Maduro’s
government. “The government
exploited this to the full.”
A senior Vatican official told
The Wall Street Journal that
the Vatican had been aware of
the risks involved in the negotiations, but believed the deepening strife in Venezuela justified its attempt to help.
“It was the government
that broke [the rules], not the
Vatican,” Cardinal Jorge Urosa
of Caracas, who has taken a
lead role in the standoff, told
the Journal.
Since then, Venezuela’s Catholic hierarchy, one of the country’s few remaining independent institutions, has stepped
up its public criticism of Mr.
Maduro, calling on his government to restore an independent
legislature and halt the killing
and imprisonment of protesters
and opposition leaders.
The bishops denounced a
July vote—widely condemned as
rigged—to approve a new, handpicked assembly that is sidelining the opposition-controlled
legislature and plans to grant
Mr. Maduro greater powers.
During the vote, the bishops’
conference tweeted a prayer to
the Virgin Mary to “free our
country from the clutches of
communism and socialism.”
Mr. Maduro accuses the local church hierarchy of joining
the political opposition to topple his government and claims
the pope supports him, disagreeing with critics including
Vatican Secretary of State Cardinal Pietro Parolin.
New Horizons
Venezuelans are increasingly
moving to Colombia as the crisis
worsens back home.
1,500 people a day
1,000
500
0
2013
’14
’15
’16
’17*
*Through June
Note: Arrivals include temporary visitors,
short-term stays and immigration
Source: Migración Colombia
THE WALL STREET JOURNAL.
European Central Bank Expected to Signal End of Stimulus
FRANKFURT—The European Central Bank is walking a
tightrope as it prepares for its
most momentous decision in
years: How to wind down its
giant bond-buying program
without derailing the eurozone’s economic recovery.
With the region’s economy
finally showing some vigor after years of painfully slow
growth and political tensions
there fading, ECB President Mario Draghi is expected
to signal as soon as Thursday’s policy meeting that the
bank will start winding down
its €2.3 trillion ($2.7 trillion)
stimulus program, known as
quantitative easing or QE.
It isn’t entirely clear yet
whether Mr. Draghi will send
that message on Thursday or
do so in October. Either way,
ECB officials have indicated
that the QE program would
continue for another few
months and be phased out by
On a Tear
The euro has surged since Emmanuel Macron
won the French presidency.
How many dollars €1 buys
$1.20
1.18
June 27
ECB signals it could
soon reduce QE
1.16
1.14
August 25
Draghi doesn’t
discuss the euro at
Jackson Hole,
leading traders to
buy it
1.12
1.10
1.08
1.06
May 2017
June
Source: WSJ Market Data Group
the middle of 2018.
Investors are on edge,
ready to unload eurozone government bonds and buy the
euro currency as soon as the
central bank clearly signals
the retreat is coming.
WORLD WATCH
GERMANY
Merkel Urges Action
On Turkey Be Unified
Chancellor Angela Merkel said
European Union leaders should
decide whether to suspend or
end membership talks with Turkey at its summit next month,
backtracking from her call to end
accession talks.
Speaking to the lower house
of parliament in the final debate
ahead of the Sept. 24 general
election, Ms. Merkel said the
bloc’s leaders should debate the
issue at the EU summit next
month, as any public disagreement would strengthen Turkish
President Recep Tayyip Erdogan
amid concerns about Turkey’s
crackdown on political dissent.
“Relations with Turkey are of
great importance. I will therefore
advocate for us to adopt decisive actions but that we act
jointly and talk with our European partners,” Ms. Merkel said.
—Andrea Thomas
BRAZIL
Ex-Leaders Accused
Of Embezzlement
Brazil’s attorney general on
Tuesday accused former presidents Luiz Inácio Lula da Silva
and Dilma Rousseff and some of
their political allies of embezzling
around $500 million between
2002 and 2016, a period encompassing all of the leftist party’s
13 years in power.
Attorney General Rodrigo
Janot said that during Mr. da
Silva’s and Ms. Rousseff’s terms,
the suspects, all members of the
Workers’ Party, or PT, used
state-run companies to pocket
taxpayer money.
Mr. Janot sent the charges to
the Supreme Court, which has
an undefined amount of time to
either accept or dismiss them
before any trial is launched.
A spokesman for Ms. Rousseff said she had no comment.
Mr. da Silva said in his Facebook page that the charges are a
groundless political action.
The PT said in a statement
the accusations are “lies.”
—Paulo Trevisani
BRAZIL
Police Raid Home
Of Olympics Chief
Federal police raided the home
of the country’s Olympic committee president, Carlos Arthur Nuzman, on Tuesday as part of an investigation into suspected bribery
that might have helped Rio de
Janeiro win its bid to host the
2016 Olympic Games.
The investigation started
about nine months ago and is
being conducted in cooperation
with French authorities, the police said in a statement.
Mr. Nuzman was scheduled
to speak with authorities on
Tuesday, a police spokeswoman
said. Mr. Nuzman’s attorney
wasn’t available to comment.
Brazil’s federal police suspect
that a vote-buying scheme favored Rio’s bid to host the
Games.
—Luciana Magalhaes
July
Aug.
Sept.
THE WALL STREET JOURNAL.
ECB officials have given no
fresh policy signals since late
June, when Mr. Draghi roiled
financial markets by suggesting in Sintra, Portugal, that
QE’s days might be numbered,
noting that less stimulus
would be needed as the economy accelerates.
The ECB’s stimulus policy
“does not fit at the moment
with the state of the economy,” said Claudia Broyer, an
economist with Allianz in
Frankfurt. She expects QE, currently running at €60 billion a
month, to come to an end by
the middle of next year.
The hypersensitivity of financial markets is making ECB
officials cautious, however,
and could delay their exit
plans. They are eager to avoid
repeating the policy error four
years ago of the Federal Reserve, which triggered a sharp
rise in U.S. government-bond
yields when it announced its
own withdrawal from QE.
Even before the ECB has
clearly signaled its intentions,
the euro has been surging, rising more than 12% against the
dollar over the past five
months. As growth has
strengthened, the prospect of
political upheaval in the euro-
zone has eased with the early
May victory in the French
presidential election of centrist
Emmanuel Macron over farright candidate Marine Le Pen.
A strong euro complicates
the ECB’s job because it makes
the region’s exports more expensive and reduces the price
of imports, weighing on economic growth and inflation.
ECB officials “have really
been wrong-footed” by the
euro’s recent rise, said Martin
Lück, chief German strategist
at BlackRock in Frankfurt.
Another headache is the Fed,
which holds its own policy
meeting in two weeks. The
euro’s rise against the dollar
partly reflects investors’ belief
that the Fed won’t raise interest
rates as aggressively as they
once thought. U.S. inflation has
softened unexpectedly, and
President Donald Trump seems
less likely to push through bold
spending plans that might require tighter monetary policy.
The ECB “clearly expected
the new U.S. government to do
more in terms of economic expansion, which would have
made the exchange rate less of
a worry,” Mr. Lück said.
Eurozone inflation remains
weak. It rose to 1.5% in August
from 1.3% in July, but is unlikely to move much higher
over the next two years, echoing weakness in the U.S. and
Japan. Some analysts think
the ECB shouldn’t move until
inflation is closer to its target
of just below 2%.
But pressure is building on
the ECB to shift course. In Germany, the ECB’s easy-money
policies are a hot topic in national elections, scheduled
for Sept. 24. Last month Germany’s top court indicated that
QE might violate German law,
although it ultimately kicked the
decision up to the EU’s highest
court, the European Court of
Justice in Luxembourg.
Heard: Spain is one way to
play the eurozone................. B16
Russia Unveils Images of Its Troubled Past
BY THOMAS GROVE
MOSCOW—As Confederate
statues come down in the U.S.,
Russia is resurrecting figures
from its own thorny past.
Soviet statues tumbled precipitously during the breakup
of the U.S.S.R. But under President Vladimir Putin and his
project to restore Russia’s status as a great power, monuments to the often painful Soviet and monarchic history
have been rising again.
On Tuesday, city leaders in
Kirov, about 500 miles east of
Moscow, unveiled a statue of
Felix Dzerzhinsky, a Bolshevik
revolutionary and the founder
of the Cheka, the dreaded Soviet secret police, later known
as the KGB.
In Mr. Putin’s Russia, memory is selective. Backers see
the statue as a tribute to a
man who helped build a formidable intelligence service. But
it has angered the descendants
of those persecuted: Dzerzhinsky oversaw the Red Terror,
the execution of hundreds of
thousands of citizens during
Russia’s 1917-1922 Civil War,
often without trial.
“Anyone who has experienced this dark chapter of our
country’s history can’t be indifferent about someone who
created the Cheka,” said Ariadna Kozina, an activist who
was raised on her father’s stories of serving in a prison
camp. “The U.S. may be pulling down its statues, but this
is the glorification of all the
Citing Diversion,
Putin Cautions U.S.
Not to Arm Ukraine
DAVID MONTELEONE FOR THE WALL STREET JOURNAL
BY TOM FAIRLESS
MOSCOW—President
Vladimir Putin said that any
delivery of weapons by the
Trump administration to
Ukraine’s government could inflame hostilities and cause
Russia-supported separatists
to expand the conflict.
“If American weapons
reach the conflict zone, it’s
hard to say how the declared
republics will react,” Mr. Putin
told reporters on a visit to
China. “Perhaps [the separatists] will send the weapons
they have to other zones of
the conflict.”
Kiev has fought a threeyear war against a separatist
movement in eastern Ukraine
that Russian and Western officials say is fomented and directed by Moscow. Russia
says the separatists are independent actors and denies its
military supports them.
—James Marson
A statue of Bolshevik secret-police chief Felix Dzerzhinsky.
wrong parts of the past.”
While embracing the Soviet
era, Mr. Putin and others have
adopted a sometimes ambivalent approach to figures like
dictator Joseph Stalin, acknowledging their crimes but
leaving room to honor them.
The Russian leader argued in
the case of a massive Dzerzhin-
sky statue brought down in
Moscow that maintaining such
monuments was “about respect
for every period of our history.”
The country has found
space in exile for some of
them. The refurbished Dzerzhinsky statue, known as “Iron
Felix,” is in a Moscow park
once known as the Park of the
Fallen Heroes.
A 50-foot statue of Prince
Vladimir, the 10th-century
monarch credited with bringing Christianity to Russia, was
erected across from the Kremlin last year. At the opening
ceremony, Mr. Putin praised
the prince’s embrace of traditional values.
THE WALL STREET JOURNAL.
A8 | Wednesday, September 6, 2017
BATS
Continued from Page One
Mexican farmers have harvested their blue agave—tequila’s raw material—before
they blossom, because they die
when they flower.
But the lesser long-nosed bat
loves the blossoms and was vital to pollinating blue agave before humans took over, Dr. Medellín says. So tequila only
exists, he argues, because of
what some Mexicans call “the
tequila bat.”
And now more than ever, he
says, bat and agave need each
other for the greater good.
Bats pollinate other flowering species, so blue-agave blossoms will help sustain the
broader plant kingdom, he says.
And bat-pollinated agave, he
says, will produce seeds of varieties that are more genetically
diverse than what now dominate tequila production.
The bats, meanwhile, are
suffering from human encroachment and would benefit
from more tequila-agave nectar, says the 59-year-old Dr.
Medellín, a researcher at National Autonomous University
of Mexico.
Dr. Medellín, known in his
field as “The Batman of Mexico,” has persuaded three tequila makers to set aside 5% of
their blue-agave crops to flower
in some fields, through an initiative launched by his university and Tequila Interchange
Project, a group that advocates
for sustainable and traditional
production techniques.
For their pains, they get to
call tequila from those fields
“bat friendly” and slap on the
bottles a hologram Dr. Medellín
provides with an image of a bat
near an agave flower.
One of the distillers, Tequila
Tapatío, produced a bat-friendly
version of its Tequila Ocho that
its owner, Carlos Camarena,
found “to present traces of pep-
MARCO TSCHAPKA
IN DEPTH
A lesser long-nosed bat.
per and pineapple as well as orange blossom aromas.” He allows that those characteristics
have nothing to do with bats
but stem from “terroir.”
The sight of flowering agaves in Mr. Camarena’s fields is
so uncommon that nearby
farmers come to ask incredulously why the agave plants are
being allowed to blossom. “In
this project, you are basically
turning tens of thousands of
dollars worth of agave into bat
feed,” Mr. Camarena says.
“But this is a love story.”
Americans can share the
love at bars like San Antonio’s
Esquire Tavern, which offers a
bat-friendly-tequila cocktail
dubbed “Batman of Mexico.”
The spicy $12 drink includes
fresh corn syrup, a blend of
chilies and lime, and batfriendly tequila.
Dr. Medellín has spent decades in hot caverns studying
bats. For much of that time, he
was trying to convince tequila
makers that bats are good for
business. He finally convinced
the three tequila makers three
years ago.
He and a team of students
now moonlight sometimes as
bat-friendliness compliance officers. Near midnight recently,
they paced one of Mr. Camarena’s fields inspecting agave
crops that qualify for batfriendly status.
“Bats remember,” Dr. Medellín said, feeding sugary water to an exhausted bat. “After
150 years, they are now back
pollinating.”
Since the late 19th century,
farmers have propagated agave
fields, mostly in western Jalisco
state, using clonal shoots rather
than seeds. The bats have had
to content themselves with
flowering agaves in ditches or
the wild. As a result, Dr. Medellín says, many of Mexico’s
blue agave plants aren’t very
genetically diverse. That could
make them susceptible to disease, he says, and bat pollination could help change that.
Tequila companies and the
industry’s trade group have
made huge investments to fight
disease, says Carlos Humberto
Suárez, head of institutional relations at José Cuervo, the
world’s best-selling tequila
maker. “There’s a strict control
of production methods to avoid
risks. Blue agave isn’t a wild
plant, and its cultivation is
closely supervised.”
Tequila Patrón, a major distiller, has commissioned a study
with Mexico’s National Center
for Genetic Resources to ana-
lyze the genetics of agave
shoots and to check into Dr.
Medellín’s claims they lack diversity. “We want to do the
right thing,” says Francisco
Soltero, head of strategic planning at Patrón, “but we feel
that we need more information
about it.”
Having turned several distilleries batty, Dr. Medellín has
had to pitch bat-friendly booze
to bars. He’s taken American
bartenders to fields in Mexico
to show them bats at work at
night. “They ended up wanting
to have their pictures taken
with bats.”
A visit last year to a field
made a believer of Joaquín
Meza, owner of El Rancho
Grande restaurant in Providence, R.I. Before, “I wasn’t
that friendly to bats,” he says.
Now he is offering the batfriendly spirit to clients. “Many
customers don’t like such
creepy creatures,” he says, “so
they get really intrigued when
they try bat-friendly tequila.”
Continued from Page One
overlooked in the anxiety
about the job-destroying potential of robots, artificial intelligence and other forms of
automation. Throughout history, automation commonly
creates more, and better-paying, jobs than it destroys. The
reason: Companies don’t use
automation simply to produce
the same thing more cheaply.
Instead, they find ways to offer entirely new, improved
products. As customers flock
to these new offerings, companies have to hire more people.
“Robot apocalypse” is a
modern expression, but the underlying anxiety goes back centuries. In 1589 Queen Elizabeth
I refused to grant the inventor
of a mechanical knitting machine a patent for fear of putting manual knitters out of
work. In 1930 the British economist John Maynard Keynes
warned of “technological unemployment…due to our discovery
of means of economizing the
use of labor outrunning the
pace at which we can find new
uses for labor.”
Those fears have repeatedly
proven baseless. James Bessen,
an economist at Boston University School of Law, has found in
numerous episodes when technology was supposed to annihilate jobs, the opposite occurred.
After the first automated tellers were installed in the 1970s,
an executive at Wells, Fargo &
Co. predicted ATMs would lead
to fewer branches with even
fewer staff. And indeed, the average branch used one-third
fewer workers in 2004 than in
1988. But, Mr. Bessen found,
ATMs made it much cheaper to
operate a branch so banks
opened more: Total branches
rose 43% over that time.
Today, banks employ more
tellers than in 1980 and their
duties have expanded to things
ATMs can’t do such as “relationship banking.”
Mr. Bessen witnessed this
sort of transformation personally. In 1983 he created an early
desktop publishing program,
which made typesetting and
graphical design vastly simpler
and cheaper. Shortly after
Sears purchased his program in
1989, its catalog operation laid
off 100 employees, he recalls,
and he worried, “are we shafting a bunch of people with this
product?”
But some customers used his
software to increase the number and variety of their publications. The supermarket chain
A&P used Mr. Bessen’s software
to publish 30 or 40 versions of
its weekly circular for Atlanta,
with different promotions
aimed at different neighborhoods. Mr. Bessen found that
typesetting and compositor
jobs fell about 100,000 over the
1980s, but from 1979 to 2007
the number of designers more
than quadrupled to 800,000,
making up for the loss many
times over.
The process is still disruptive, of course: The people
thrown out of work by automation are seldom the same people employed in the new industries that automation makes
possible. But over time, the net
effect is consistently positive.
Retail is easily the largest
U.S. industry now facing digital
disruption and yet there is
strong evidence e-commerce
hasn’t reduced overall employment and has likely added to it.
It is true that thousands of
stores have closed. Between
the end of 2007 and the middle
of 2017, brick-and-mortar retailers lost the equivalent of
140,000 full-time jobs, accord-
ADAM GLANZMAN FOR THE WALL STREET JOURNAL
JOBS
Workers operate automated packing machinery inside Amazon’s fulfillment center in Fall River, Mass., which employs around 2,000 people.
ing to a forthcoming report by
Michael Mandel, chief economic strategist at the Progressive Policy Institute, a think
tank. Electronic shopping jobs
rose by only 126,000 in the
same period.
Important questions
But, Mr. Mandel notes,
that excludes many jobs at fulfillment centers such as Fall
River, which the federal Bureau
of Labor Statistics tends to
count in warehousing and storage. He notes that Kentucky
had just 3,213 e-commerce
workers in 2016 according to
the BLS, yet Amazon employs
more than 12,000 there. Warehousing has added 274,000
jobs nationwide since 2007.
Mr. Mandel argues all of those
are attributable to fulfillment
centers and that thus total ecommerce employment has
grown 401,000, nearly three
times the brick-and-mortar
drop. Mr. Mandel finds that fulfillment centers pay on average
31% better than brick and mortar stores in the same county.
All this raises important
‘Robot apocalypse’ is
a modern expression,
but the anxiety goes
back centuries.
questions. If online retailers,
based on sales per employee,
are much more productive than
regular retailers, how can they
on net add to total retail employment? And how can they
both pay more and keep prices
low?
The answer is complicated.
In fact, total retail employment
might have grown faster absent
e-commerce. In a highly critical
report of Amazon last fall, the
nonprofit Institute for Local
Self-Reliance argued that the
firm’s higher productivity
meant retail employment is
149,000 lower than if it had
never come along.
But the main reason is that
e-commerce doesn’t simply sell
the same product as a store at
a lower price. It enables customers to peruse a vast array
of products and select precisely
the one they want and have it
delivered in a day or two, saving the time, cost and inconvenience of visiting multiple
stores. Mr. Mandel estimates ecommerce has saved the average adult 15 minutes a week.
Just as Uber and Lyft uncovered hidden demand for rides,
e-commerce has uncovered hidden demand for shopping from
home. These features don’t
necessarily add to the price,
any more than improvements
to cars and appliances do.
Nonetheless, e-commerce results in people consuming more
retail services, once you adjust
for this improved quality, than
in the pre-online era.
To spur demand, e-commerce companies use their
greater efficiency to absorb
more of the delivery costs. Amazon uses the margin it earns
on goods to build and operate
the logistics needed to profitably serve customers.
The breadth of that investment becomes apparent on a
visit to the Fall River center,
which handles large, irregularly
shaped items such as appliances, bicycles, tires and even a
boat anchor.
When a crate of frying pans
arrives, employees don’t stack
them in a designated shelf for
frying pans. Rather, they stow
each pan individually wherever
it fits. Each pan’s location is
scanned into Amazon’s inventory and becomes instantly
available to any customer on
the internet. When a customer
orders the frying pan, Amazon’s software searches across
the company’s more than 70
fulfillment centers for the one
that can be delivered most
cheaply, or most quickly. If it is
located at the top of one of the
34-foot tall storage racks in a
particular aisle of this center,
the order shows up on the
scanning gun of the nearest
“picker.” The picker’s forklift,
guided by sensors communicating with wires in the floor, will
lift him or her to the precise
bin where the object is located.
Pickers transport those
items in metal cages to the
packing area, where computers
tell packers precisely which
size box to use, or transmits its
dimensions to other devices
that cut boxes out to customized size. Once packed by Ms.
Duperre and her colleagues, a
box flies down a conveyor belt,
over a scale that double checks
its weight and contents, then
under a scanner that prints and
affixes a delivery label. Several
hundred feet and a few seconds
later, the boxes are automatically nudged off the conveyor
E-commerce Taketh Away and Giveth
The e-commerce sector has created more jobs since the
end of 2007 than brick-and-mortar retailers have lost.
E-commerce
Brick-and-mortar
400 thousand
200
0
–200
–400
–600
–800
–1,000
–1,200
2008 ’09
’10
’11
’12
’13
’14
’15
’16
’17
Note: Full-time equivalent employment, three-month average. E-commerce
includes electronic shopping and mail-order houses; and warehousing and storage.
Source: Michael Mandel, Progressive Policy Institute
belt in front of the truck destined for the customer’s town.
Humans are used throughout the process in what are often physically demanding activities, but Amazon’s technology
vastly multiplies how many
items each can pick, pack and
ship, all of which shaves minutes and costs off delivery. Incremental improvements and a
growing network of fulfillment
centers filter through to customers such as the ability to
order as late as 11:59 p.m. and
still qualify for two-day delivery.
Pay boost
It isn’t skilled work, and the
wages reflect that. The starting
salary at Fall River is $13.05 to
$13.55 per hour. But including
overtime, the Amazon shares
every new employee receives,
and benefits such as tuition aid,
annual compensation is comparable to what local textile mills
once paid, according to Kenneth Fiola, executive vice president of the city’s economic development office. It is also
more than traditional retail,
which typically pays the state
minimum wage of $11.
“The vast majority of our
workforce never had experience
in a warehouse, never had any
THE WALL STREET JOURNAL.
experience driving a forklift or
powered industrial equipment,
and we provide them that skill
and training, we teach them the
new retail,” says Andrew
Sweatman, general manager at
the fulfillment center.
Like Ms. Duperre, Tarrah
Tripp also used to work in retail, as a cake decorator at a
family-run grocery. At Amazon,
she operates custom box-cutting machinery for awkwardly
shaped items. It isn’t high-tech,
but it uses more technology
than her last job, she says, “unless you think cutting bread is
technology intensive.” The pay
is a bit better and she gets a
full week’s worth of hours in
four days, which gives her
three days off every week. She
doesn’t intend to spend her career here, and soon plans to
train as a veterinary technician,
for which Amazon will help pay
the tuition.
For Fall River, Amazon’s arrival is bittersweet. While
courting infamy—Lizzie Borden
was accused of murdering her
father and stepmother here—
the city became a bustling center for textile manufacturing.
The mills were a magnet to uneducated immigrants from
France, Portugal and Poland
and their children.
As recently as 1991, the city
boasted 20,000 manufacturing
jobs. But by 2015, that had
fallen below 4,000, according to
Mr. Fiola, as jobs were outsourced to the south and then
overseas, or were automated.
Unemployment is above 6%,
higher than both the national
and state average. Though Hillary Clinton beat Donald Trump
in surrounding Bristol County
by 9 percentage points last fall,
that was one her worst showings in the solidly blue state
and less than half Barack
Obama’s winning margin four
years earlier.
City leaders rolled out the
red carpet for Amazon with
generous tax incentives and a
prime location on Innovation
Way. Its arrival was the single
biggest job creation event anyone could remember.
“We had people with a skill
set that was nontransferable,”
says Jasiel F. Correia II, Fall
River’s 25-year-old mayor and a
first-generation child of immigrants from the former Portuguese territory of Cape Verde.
“Where does a person who
sewed textiles for 20 years go if
they’re laid off? Places such as
Amazon fill that gap,” he says.
“They got a chance to work for
a Fortune 500 company. This
community doesn’t get those
chances very often.”
While the e-commerce job
boom is real, the question is
whether it will last. Amazon
and its ilk continue to seek
ways to automate fulfillment.
The company is exploring using
drones, rather than people, to
deliver packages, and is studying driverless vehicle technology. In 2012 Amazon bought
robot manufacturer Kiva Systems, and it is working on robots to replace pickers.
Yet the day when Amazon
needs fewer humans still appears far off. Its volume is
growing so quickly it is adding
employees. Thus far, the key
benefit of robots deployed in
Amazon’s fulfillment center in
Baltimore is to reduce the demand for space, not labor: Inventory can be stored more
closely together since robots
now take items to where the
pickers are, instead of pickers
walking the aisles.
The Baltimore center employs more than 3,500, up from
2,500 when it opened in 2015.
At a one-day nationwide jobs
fair last month, Amazon accepted 100,000 applications
and has already made 40,000
job offers.
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | A8A
NY
* *
GREATER NEW YORK
NJ Transit Payments to Amtrak in Dispute
Rail operators to hold
talks on the impasse,
which is related to
problems on tracks
The “summer of hell” may
be over, but a dispute between
Amtrak and NJ Transit is just
heating up.
NJ Transit has fallen so far
behind on payments to Amtrak
for use of the Northeast Corridor rail line that the bill
stands at $90 million.
New Jersey Gov. Chris
Christie directed NJ Transit to
stop making certain payments
to Amtrak in April, after one
NJ Transit train derailed and a
second was sideswiped by a
derailed Amtrak train in the
space of two weeks at New
York Penn Station.
Amtrak, which owns and
operates the station, says NJ
Transit’s tab is rising at a rate
of about $10 million a month.
Amtrak’s co-CEO Wick
Moorman said he is hopeful
that the dispute can be resolved this month when the
BYRON SMITH FOR THE WALL STREET JOURNAL
BY PAUL BERGER
Regular service returned to New York Penn Station on Tuesday.
leaders of Amtrak and NJ Transit meet to discuss the issue.
But Mr. Moorman added
that if talks fail, Amtrak won’t
back down. “I hope it doesn’t
end up in the courts because
that would be expensive and
time-consuming,”
he
said Tuesday.
A spokeswoman for NJ
Transit, Lisa Torbic, said the
agency looked forward to discussing the issue with Amtrak.
She pointed out that NJ
Transit’s passengers had “endured a summer’s worth of
costly, unplanned Amtrak
emergency repair work, coupled with several derailments
this spring and summer due to
failing infrastructure.”
NJ Transit and the Long Is-
land Rail Road make payments
to Amtrak toward the cost of
operating and maintaining the
infrastructure they use along
the Northeast Corridor, which
runs from Boston to Washington, D.C.
During the past decade,
Amtrak has shouldered about
70% of costs in the area
around Penn Station, while
‘Great Comet’ Packs Up After 10-Month Broadway Run
running about 20% of trains
through there, Mr. Moorman
said.
The formula for how much
each railroad pays was recalculated several years ago by a
commission established by
Congress.
During the past 15 years, NJ
Transit has almost doubled
the number of weekday trains
it runs into Penn Station.
Under the new payment
structure, NJ Transit’s annual
obligations more than doubled.
Its obligations for the 2016
and 2017 fiscal years rose to
$175 million and $176 million,
respectively, compared with
$76.8 million and $54.5 million
in 2014 and 2015, according to
figures provided by Amtrak.
“They’ve been getting a
good deal for a long time,” Mr.
Moorman said.
By comparison, the LIRR’s
use of Penn Station has grown
only slightly. Its annual obligations rose to $40.7 million and
$45.1 million in fiscal years
2016 and 2017, respectively,
from $36.5 million and $33.9
million in 2014 and 2015.
Amtrak closed several plat-
Governor, Mayor
Take Their Feud
To the Ballot Box
BYRON SMITH FOR THE WALL STREET JOURNAL
BY MIKE VILENSKY
SHOW’S OVER: A chandelier set piece from ‘Natasha, Pierre and the Great Comet of 1812’ was taken down Tuesday at the Imperial Theatre
after the last performance Sunday. In its final week, the musical took in $1.1 million at the box office, according to the Broadway League.
Ex-Honduran Leader’s Son Sentenced
BY CORINNE RAMEY
The son of a former Honduran president was sentenced
to 24 years in prison Tuesday
for conspiring to import cocaine into the U.S.
Fabio Porfirio Lobo, 46
years old, pleaded guilty in
Manhattan federal court in
May 2016. His father, Porfirio
Lobo, was president of Honduras from 2010 to 2014.
In court on Tuesday, U.S.
District Judge Lorna Schofield
said Fabio Lobo had abused his
position to further his crime.
“You were the son of the sitting president of Honduras,
and you used your connec-
tions, your reputation and your
political network,” she said.
In addition to the prison
term, the judge ordered Mr.
Lobo to pay more than $300,000
in fines and forfeiture. He had
faced up to life in prison.
Prosecutors said a stiff sentence was necessary to deter
others, particularly in positions of power, from future
drug crimes. Mr. Lobo’s attorney requested leniency, saying
his client had taken responsibility for his actions.
Mr. Lobo, speaking through
tears, apologized to the U.S.,
Honduras, his wife and three
daughters. “I have suffered, I
have reflected and I am repen-
tant of everything that has
happened,” he said in Spanish.
Prosecutors said Mr. Lobo
began participating in drug
trafficking as early as 2009,
when leaders of a trafficking organization paid him in exchange
for political protection from
Honduran law enforcement and
for help getting government
contracts in his country.
In 2012, Mr. Lobo helped
escort loads of cocaine and
brought members of the Honduran military with him for
protection, according to prosecutors. They said he received
cash, an armored vehicle and a
machine gun in exchange for
his participation.
Mr. Lobo was arrested in
Haiti in May 2015, where he
went to accept payment for
helping people he believed to be
Mexican drug traffickers. The
traffickers actually were confidential sources working for the
U.S. Drug Enforcement Administration, prosecutors said.
At the end of the court proceeding, Judge Schofield addressed Mr. Lobo’s wife, saying
her husband wasn’t a bad man
but had made a terrible mistake. “The drug problem in this
country has been a terrible
scourge for so many people, and
it is the obligation of many of
us in this courtroom to uphold
and enforce the drug laws.”
forms at Penn Station this
summer to complete extensive
repair work to tracks and
switches following the two derailments.
New York Gov. Andrew
Cuomo warned that commuters faced a “summer of hell,”
as thousands of workers were
diverted to other train stations and onto buses, cars and
ferries.
NJ Transit and the Metropolitan Transportation Authority, which runs the LIRR,
spent tens of millions of dollars subsidizing reduced fares
for diverted passengers and
cross-honoring ticket holders
on subways, buses and ferries.
Mr. Cuomo has said that
Amtrak should reimburse the
MTA for the cost of its mitigation plan, which the MTA estimates at $58 million.
A spokeswoman for Amtrak
said the LIRR is about $3.7
million behind on its payments.
An MTA spokesman, Aaron
Donovan, said: “Amtrak and
the MTA regularly make payments to each other, and we
do not believe we are behind
on any payments.”
New York’s top two Democrats, Mayor Bill de Blasio and
Gov. Andrew Cuomo, aren’t
lending each other a hand in
their re-election bids.
Mr. de Blasio’s mayoral primary is Sept. 12, and the general election is in November.
Mr. Cuomo has said he is running for a third term in 2018.
The two men have been
locked in a yearslong public
feud, but even warring incumbents from the same party typically back one another come
election season.
Mr. Cuomo, at a parade on
Monday, said he has no endorsement in the 2017 mayoral
primary because, as a resident
of Westchester, he can’t vote in
a New York City contest.
“I am not voting in this
election,” the governor told reporters, “so I don’t have any
primary endorsement at this
time.”
Mr. Cuomo has endorsed
many in this year’s New York
City Council primaries, which
he also can’t vote in.
Mr. de Blasio is the frontrunner in his primary and has
been endorsed by top city and
state Democrats.
It isn’t clear if Mr. Cuomo
will endorse Mr. de Blasio in
November, when the mayor is
expected to face off with Republican Assemblywoman Nicole Malliotakis.
Mr. de Blasio returned the
favor in an interview with New
York magazine about his reelection published on Tuesday.
“I’m talking about this year,”
Mr. de Blasio said, when asked
if he would support a 2018
challenger to Mr. Cuomo’s left.
Several Democrats are considering a run against Mr.
Cuomo next year, including a
de Blasio ally, actress Cynthia
Nixon. Republicans are in the
process of fielding their 2018
gubernatorial candidate.
Mr. de Blasio backed Mr.
Cuomo in 2014 over the governor’s liberal challenger, law
professor Zephyr Teachout, despite the tensions between the
two men at that time.
The mayor also helped broker a deal between the Working Families Party and Mr.
Cuomo in 2014 that led the
left-wing group to endorse Mr.
Cuomo over Ms. Teachout.
With Republicans now in
control of the White House and
Congress, Messrs. de Blasio
and Cuomo have had momen-
Endorsements aren’t
forthcoming between
Cuomo and de Blasio,
both Democrats.
tary détentes for the sake of
party unity, appearing together
recently to back Democratic
congressional candidates.
But tensions remain as the
two push competing plans to
help fix public transit and
close Riker’s Island.
In the New York magazine
interview, Mr. de Blasio blamed
their feud on a “rich mixture”
of ideological differences and
the structural tensions between the city and state.
Democrats, accustomed to
tensions between the two politicians, responded to their mutual non-endorsements with
sighs.
“There’s a long history of
mayors and governors not getting along,” said Bob Liff, a
veteran New York Democratic
strategist. “This one may be a
little more colorful.”
BY CHARLES PASSY
Berklee, a music education
program, is taking over a legendary New York recording
studio, bolstered by $6 million
in city funding.
The recording industry has
been shrinking globally in recent years. City officials said
they made the investment to
help keep Avatar, the studio on
Manhattan’s West Side where
artists ranging from Bruce
Springsteen to Lady Gaga have
recorded, in business.
Berklee trustee Pete Muller
has acquired the studio, which
will be called BerkleeNYC, for
slightly under $20 million, according to Roger H. Brown,
president of Berklee, which has
campuses in Boston and Spain.
In turn, Mr. Muller will lease
the facility to Berklee, which
will operate it as both a studio
and an educational facility that
could host performances, lectures, rehearsals, workshops
and teacher training.
Transforming and running
the space will require an initial
investment of $25 million, according to Mr. Brown. Berklee
has raised about $19 million
and the remaining money
would come from the city.
New York’s recording industry has struggled in recent
years, with a number of studios closing. Industry insiders
say the change is reflective of
the broader financial challenges the music industry is
facing in the era of streaming
services.
Still, Avatar (now BerkleeNYC) is considered something of an exception to the
rule in that it is one of the few
studios in the city large
enough to take on projects that
demand the space, such as
Broadway cast recordings.
It also has a history that
builds on itself: Artists want to
record there because other
performers have recorded
there. “It’s the Yankee Stadium
of music,” said Joel Hamilton,
one of the owners of Studio G,
a newer recording facility in
Brooklyn.
The plan isn’t being universally embraced. Some critics
contend it sets a costly precedent by using taxpayer money
to back another entertainment
enterprise, much as New York
state supports film production
with millions of dollars in tax
credits.
Proponents of such incentives say they help keep companies, if not entire industries,
from doing business elsewhere.
But Nicole Gelinas, a senior
fellow at the Manhattan Institute, a New York-based freemarket think tank, says certain
companies benefit, while others don’t, depending on how
officials allocate funds. “It’s
better for companies to compete on a fair playing field,”
she said.
City officials also contend
that considering the booming
real-estate market, there was
concern that Avatar might give
way to another residential development.
JACK VARTOOGIAN/GETTY IMAGES
City and Studio Team Up to Keep Music Industry Humming
Dan Coleman conducted an orchestra at Avatar in 2012. Berklee,
with the city’s help, is taking over the Manhattan recording studio.
A8B | Wednesday, September 6, 2017
NY
THE WALL STREET JOURNAL.
* *
GREATER NEW YORK
METRO MONEY | By Anne Kadet
Nearly every day, New
York City
Council candidate Tamika
Mapp treks
door-to-door seeking campaign donations. Her district—which includes East
Harlem and the South
Bronx—is poor. So she usu-
ally requests a tiny contribution, just $10.
It’s worth the trouble, she
says, because the city’s Campaign Finance Program kicks
in $6 for every eligible dollar
collected.
New York City is unique
with this almost insanely
generous match, which septuples qualifying donations
of up to $175.
Few know the program,
launched in 1989, exists. Ms.
Mapp says she has to explain
it to just about everyone
who comes to the door. But
the incentive often persuades potential donors.
“Once I tell them their donation turns into $60, I can
get their money,” she says.
Ms. Mapp, a Democrat,
isn’t alone in going after
small donors. Candidates say
the program gives them a
big incentive to court the little guy.
Liam McCabe, a Republican running for City Council
in a district that includes the
Bay Ridge neighborhood of
Brooklyn, has raised contributions from 476 donors
who gave an average of $129.
Mr. McCabe says he focused all summer on “low dollar” fundraising events. The
most recent was a pay-whatyou-want barbecue at his fiancée’s mother’s house. The 100odd attendees donated $20 on
average, he says.
But with the match, those
little donations add up.
While he’s so far raised
$61,458 in private contributions, he’s on track to receive $100,100 in matching
funds—the maximum available for a City Council primary candidate.
The program also shapes
the efforts of candidates for
citywide office.
Democrat mayoral contender Sal Albanese says his
GWENDA KACZOR FOR THE WALL STREET JOURNAL
Campaign Program Boosts Small-Donor Clout
fundraisers typically host 50
to 60 donors in the back
room of a pub, offering finger food and drinks. These
affairs sometimes raise
about as much as they cost:
perhaps $3,000, he says. But
with the matching-funds
program, $3,000 swells to as
much as $21,000.
There’s a catch. To qualify
for matching funds, candidates must accept strict
spending limits, which vary
by office. They also must
raise a minimum number
and amount of qualifying donations. Mayoral candidates,
for example, must raise at
least $250,000 from at least
1,000 residents.
“It’s a real pain,” says Mr.
Albanese, who has so far
raised $58,764 in matchable
donations. “I don’t think it’s
fair for grass roots candidates. A good threshold
would be $150,000.”
The program, which began
28 years ago with a 1:1
match, seems to be having
its intended effect. The percentage of contributions
from small donors has grown
significantly and is much
higher than that found in
Candidates say the
program gives them a
big incentive to court
the little guy.
other jurisdictions, says Michael Malbin, co-founder and
Executive Director of the
Campaign Finance Institute.
The program also has increased contributions from
minorities and low-income
neighborhoods, he notes.
The initiative has its crit-
ics. Bo Dietl, a retired NYPD
detective running for mayor
as an Independent, says the
program—which cost $38 million in the last citywide election—forces taxpayers to subsidize candidates they don’t
like. He isn’t participating.
Some note the potential
for fraud, while criticizing
what they see as unnecessarily burdensome reporting requirements. “It is a major
hassle,” says Rob Ryan, a Republican political consultant
working for GOP mayoral
candidate Nicole Malliotakis.
Campaign Finance Board
spokesman Matt Sollars says
the office seeks feedback after
every election cycle and uses
that input to propose changes
that would improve the program “for all New Yorkers.”
One of the program’s vocal
supporters is Mayor Bill de
Blasio, a Democrat who has so
far received $2.65 million in
public matching funds for his
re-election campaign. This
may make the program sound
like a dubious use of taxpayer
dollars, given what looks like
his almost certain victory in
November.
But the program has a way
of producing upsets. Remember the 2013 election, when
Mr. de Blasio initially faced
long odds? asks his campaign
spokesman Dan Levitan: “The
mayor has often said, if it
wasn’t for this system, he
wouldn’t be mayor.”
anne.kadet@wsj.com
BY CORINNE RAMEY
Starbucks Corp. and a
Brooklyn cafe settled a trademark-infringement lawsuit involving unicorn-themed drinks,
according to court documents.
In May, Montauk Juice Factory Inc., parent company of
alexa
OUT TODAY
cafe The End Brooklyn in the
Williamsburg neighborhood,
sued Starbucks, alleging the
coffee chain infringed on its
trademark and confused its
customers with a drink called
the Unicorn Frappuccino. Starbucks denied its beverage was
inspired by the cafe’s similarly
named one, the Unicorn Latte.
Montauk Juice had asked for
$10 million in damages in the
lawsuit. Court documents didn’t
specify a settlement amount.
The suit was dismissed with
prejudice, meaning the cafe is
barred from suing Starbucks
over the drink in the future,
said documents filed in federal
court in the Eastern District of
New York.
In a statement, Starbucks
said: “The action has been amicably resolved on confidential
terms.” A lawyer for Montauk
Juice said “we are pleased to
be able to move on.”
The End said it began selling its Unicorn Latte in December. In legal documents,
Montauk Juice said the $9
drink accounted for 25% of
The End’s revenue.
Starbucks’s beverage, which
it sold for several days in
April, is no longer available in
its stores. The Unicorn Latte is
still on the menu at The End.
MOHAMMAD KHURSHEED/REUTERS
Unicorn-Drink Lawsuit Is Settled
The Unicorn Frappuccino is no
longer for sale at Starbucks.
GREATER NEW
YORK WATCH
CONNECTICUT
FREE INSIDE THE
Two Men Are Killed
In Motorcycle Crashes
Police are investigating a pair
of motorcycle crashes that left
two men dead.
The men, both from New Haven, were killed in separate
crashes in Hamden and North
Haven on Monday, police said.
Hamden police said a 38-yearold man was killed around 4 p.m.
when a vehicle turned in front of
him and hit him. North Haven
police said a 48-year-old man
died after a collision with a utility pole around 6:20 p.m.
—Associated Press
NEW JERSEY
Murder Suspect
Caught Out of State
3NYP101
FASHION WEEK
SPECIAL
STARRING LAKE BELL
TICKETS ON
SALE NOW
USOPEN.OR
G
A suspected member of the
violent gang MS-13 who is
wanted in connection with a homicide in New Jersey has been
captured in Massachusetts.
Boston police said 20-year-old
Francisco Carlos Ramires was
arrested on Sunday. He was also
wanted in connection with several assaults in Boston, where
he used the alias Carlos Campos-Cutone.
Police said Mr. Ramires is a
suspect in an Aug. 25 killing in
Perth Amboy, N.J. It couldn’t be
determined whether Mr. Ramires
has a lawyer.
—Associated Press
TRENTON
Body Is Discovered
Inside a Plastic Bag
AUG 28 – SEPT 10
New Jersey police said a
body was discovered in a plastic
trash bag Monday night.
A witness alerted authorities
about the bag in Trenton around
4:45 p.m. Monday. Police confirmed there was a body and
alerted homicide detectives.
—Associated Press
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | A9
* * * *
IAN CHENG/PILAR CORRIAS/STANDARD, OSLO (2); PRESLEY ANN/PMC
LIFE&ARTS
ART
Go Inside the Mind of a Videogame
BY KELLY CROW
WHAT IF a videogame could play
itself? New York artist—and cognitive scientist—Ian Cheng has
riddled out an answer that is winning over researchers and art lovers alike.
Mr. Cheng, whose first museum
solo show, “Ian Cheng: Emissaries,” is on view at New York’s
MoMA PS1 through Sept. 24, has
spent the past three years developing software that simulates animated games—with backdrops that
include an ancient village nestled
against a rumbling volcano, a
teeming wildflower field and a
spare, sandy atoll. The key distinction is that he has populated his
scenes with foliage and figures
who twitch and fight and feed
each other in real time with no
predetermined outcomes, an endless unspooling of artificial intelligence in beta mode.
At one point during the volcano simulation, Mr. Cheng said
that he watched a group of villagers gang up on an outlier, kill
him, drag his body into the center
of town and urinate on him.
“There was no algorithm for
that,” he said. “It was horrifying,
but it felt like a revelation since
they had not been told to do anything like that.” In another simulation, he watched a pack of dogs
encircle a man and repeatedly lick
him, a man’s-best-friend response
that was also unscripted.
The Museum of Modern Art
said it was so impressed by Mr.
Cheng’s work that it bought the
trio of his simulations before the
last one was even finished. Major
collectors of video art like
Dusseldorf’s Julia Stoschek have
also bought early editions. This
Two scenes from a show at New
York’s MoMA PS1 by the artist and
cognitive scientist Ian Cheng, above.
week, the artist signed with powerhouse New York dealer Barbara
Gladstone.
Starting Sept. 22, Pittsburgh’s
Carnegie Museum of Art will show
his latest simulation, “Emissary
Sunsets The Self.” In a fresh twist,
curator Eric Crosby said that the
Carnegie gallery’s overhead lights
will be synced to match the dayor-night scenario unfolding on the
piece’s 13-foot-long LED screen.
“A lot of artists are working in
response to a digital landscape,
but he’s innovating in that space,”
Mr. Crosby said. “He’s invented an
entirely new art form with its own
rules and norms.”
Fans of HBO’s rebelling-robots
show “Westworld” will relate to
the anything-goes uncertainty that
pervades Mr. Cheng’s works, but
the artist said he isn’t striving for
a hyper-realistic setting. Instead,
his programming allows characters
to convulse and collide in mutations that look like software
glitches. In the lush-garden game,
he once watched an old-fashioned
red telephone glom onto a nearby
palm tree, a combination he calls a
“self-made sculpture.”
Growing up in Los Angeles as
the son of graphic designers, the
33-year-old artist said he always
wanted to work within the nexus
of cognitive science and art. He
earned a dual degree at the University of California at Berkeley
and worked afterward at George
Lucas’s visual-effects and animation studio, Industrial Light &
Magic. Instead of fawning over
“Star Wars” characters, he gravitated to the company’s research
and development division, where
he said researchers were toying
with new ways to simulate natural
phenomenons like whirlpools.
Later, after art school at Columbia in New York and jobs with established artists like Paul Chan
and Pierre Huyghe, he began experimenting, creating the volcano
scenario in early 2015. The only
narrative direction he gave was to
create a trembling threat in the
volcano, a shaman-leader who is
coded to ignore it and the shaman’s daughter who is tasked with
alerting her father to the impending eruption—but who often gets
distracted by fellow villagers offer-
ing her food or a place to sleep or
whatever daily-ritual the others
want to enact in the moment. Mr.
Cheng said he relished the godlike
control he initially had over these
characters and the surprising
pride he felt once he let randomness intervene.
“Art is my way of playing with
people’s nervous systems, to seduce them but also unsettle them,”
he said.
Peter Eleey, chief curator at
MoMA PS1, said the work also
raises intriguing questions for museums or collectors who want to
store or study Mr. Cheng’s work
for the long term. Since his pieces
operate like a computer program
instead of a film, there is nothing
to archive—only software to start
up or update as the artist sees fit.
“At night, we turn the projectors
off, but the piece itself keeps running,” Mr. Eleey said. “When we
come in each morning, the Petrie
dish is transformed.”
MUSIC
Fewer than 3% of
tickets sold via
Verified Fan for
Bruce Springsteen’s
show have hit the
secondary market.
TICKETMASTER ASKS:
ARE YOU A BIG ENOUGH FAN?
DON ARNOLD/WIREIMAGE/GETTY IMAGES
BY ANNE STEELE
AFTER MISSING OUT when tickets went
on sale for Taylor Swift’s 2015 concert tour,
Kelley Johnson couldn’t afford the sky-high
prices scalpers were asking. Her final gambit, calling into radio stations in her hometown of Lenoir, N.C., was also unsuccessful
and she never saw the tour.
“It killed me knowing there were seats
open,” she said. “But I couldn’t get them because they were $1,000.”
When the pop star’s next tour kicks off,
Ms. Johnson, 30, hopes things will work out
differently for her, thanks to a new system
called Verified Fan.
It’s Ticketmaster’s latest attempt to ensure that actual fans, rather than scalpers,
get first crack at tickets to hot events, including Ms. Swift’s “Reputation” tour and
Bruce Springsteen’s upcoming run of solo
shows on Broadway. For at least a decade,
the ticketing giant has waged war against
professional resellers and the software
“bots” they use to harvest tickets the in-
stant they’re available.
“Instead of fighting an arms race, we decided we could take advantage of a deep database of info on ticket buyers and identify
the behaviors that real fans exhibit,” said
David Marcus, head of music at Ticketmaster, a unit of Live Nation Entertainment Inc.
The system asks users to register weeks
before tickets go on sale, providing their
name, email and phone number. Ticketmaster doesn’t disclose the exact details of
how the program works. But according to
people who have worked on tours that
used Verified Fan, the ticketing giant
mines its own sales records, along with
publicly available data such as social-media
history, to verify would-be buyers’ identities. Those deemed legitimate are sent
codes that let them access tickets.
Verified Fan has generated controversy in
its first several months. Unsuccessful fans
are livid, feeling snubbed by software that
purports to quantify their enthusiasm for a
given artist. Ticket brokers—the term resellers prefer to scalpers—say the process interPlease see FANS page A11
THE WALL STREET JOURNAL.
A10 | Wednesday, September 6, 2017
LIFE & ARTS
MY RIDE | By A.J. Baime
Ralph Hough, 74, the deputy
mayor of Oro-Medonte, Ontario, on
his microcars, as told to A.J.
Baime.
The week before I married my
wife Wendy in 1962, we bought
our first microcar, a Messerschmitt. We lived in England at
the time and we went on our honeymoon in this car. Later we
toured Europe in it, and in 1964
visited the Messerschmitt factory
in Regensburg, Germany, right
around the time the company
stopped producing these vehicles.
Back then, microcars were called
bubble cars, and they were quite
popular, most notably the Messerschmitt (like ours) and the BMW
Isetta. These vehicles first appeared in the early 1950s, not long
after World War II, when resources
like steel and fuel were scarce.
(Messerschmitt built fleets of German military planes during the
war.) Bubble cars made sense. They
were efficient, did not use a lot of
raw materials, and unlike scooters,
protected riders from the weather.
Today, we have six Messer-
JENNIFER ROBERTS FOR THE WALL STREET JOURNAL
Big Love for a
Tiny, Tiny Car
Ralph Hough, above, and with his wife, Wendy, above left, with their 1955 Messerschmitt KR175 in Ontario, more than
a half-century after they took their first Messerschmitt on their honeymoon.
schmitts and one BMW Isetta,
and we host a festival on our
property called Micro North every June. We get 40 to 50 oddball
cars from all over the northern
States and Canada.
This year’s party was extra special because it was the 25th year. It
also marked the 55th year since my
wife and I bought our first microcar, and our 55th wedding anniversary. We collect these cars because
of the sentimentality, because we
had such memorable adventures in
them when we were young.
The red car you see pictured
here is a three-wheeled 1955 Messerschmitt KR175. It has a 175-cc
motor that is bolted right to the
car’s frame with no rubber engine
mounts, so the vehicle is a real
boneshaker. It is kind of a hybrid
between a car and a scooter, in
that it has handlebars and a mo-
torcycle-style gear shifter, plus
carlike foot pedals. It cruises
comfortably at about 50 mph. At
a constant speed of 30 mph, it
could probably get close to 100
miles per gallon.
I bought this Messerschmitt
from an owner in Montreal approximately 20 years ago, and it
was a real basket case. I used
parts from five other Messerschmitts in the restoration. I have
no idea how much the vehicle cost
because I have purposely avoided
adding up the bills.
My wife and I have had wonderful adventures in microcars with
other microcar fans. We like to do
our part to keep these vehicles on
the road so future generations can
enjoy them too.
Contact A.J. Baime at
Facebook.com/ajbaime.
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THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | A11
* * * *
GRAHAM MACINDOE
LIFE & ARTS
The National: Scott Devendorf, Bryce Dessner, Matt Berninger, Bryan Devendorf and Aaron Dessner; the band’s ‘Sleep Well Beast’ is out on Friday.
ERUDITE AND HIGHLY capable
musicians, the members of the National dedicated the years since
their 2013 album, “Trouble Will
Find Me,” to a range of independent projects: EL VY, singer-composer Matt Berninger’s delightful
pop collaboration with Brent Knopf
of Ramona Falls; the twin brothers
Aaron and Bryce Dessner’s broody
score for the crime-thriller film
“Transpecos”; the full band’s musical contributions to “Day of the
Dead,” a 59-track multi-artist tribute to the Grateful Dead co-produced by the Dessners and Josh
Kaufman; and Bryce’s classically
minded compositions performed by
the Copenhagen Philharmonic,
Eighth Blackbird, Kronos Quartet
and Sō Percussion; among many
other ventures.
Inspired by their adventures,
when they reconvened to write
and record, they found that they
were eager to alter their familiar
sound of traditional organic rock
in support of Mr. Berninger’s baritone and his lyrical storytelling.
Mr. Berninger said the quintet had
realized they had been working
with “a limited palette.” “We had
been more in a corner than we
thought,” he added when we
spoke by phone last week.
The resulting “Sleep Well
Beast” (4AD), out on Friday, is unlike any of the National’s previous
six albums and is well removed
from indie rock’s orthodoxy. Its
foundation is propulsive electronic music composed by the
Dessners, who previewed some of
the new sounds at an October
2016 festival in Berlin in which
MUSIC REVIEW | By Jim Fusilli
was responding to the music that
was presented to him. “I can tell
when Aaron is sad,” he confided.
Aaron agrees that the band can
be “gloomy,” as he put it, without
trying to be. “I like to make music
that is meditative and cathartic,”
he said, adding that if the early
drafts of the compositions have
an emotional weight to them, Mr.
Berninger responds accordingly.
Here, the narrator is often isolated. “I try to save it for a rainy
day. It’s raining all the time,” Mr.
Berninger sings in “Walk It
Back.” In “Empire Line,” he sings,
“I’ve been talking about you to
myself because there’s nobody
else.” He summarizes his state of
mind in “I’ll Still Destroy You”: “I
have no positions, no point of
view or vision / I’m just trying to
stay in touch with anything I’m
still in touch with.” In several
songs, characters are in motion,
seemingly only for the sake of
being so.
The presence of Mr. Berninger
will be a comfort to longtime
fans of the National: His voice
and lyrics ensure “Sleep Well
Beast” is in the continuum of its
body of work. For those who follow the band members’ external
explorations, the experimental
nature of the music is a welcome
variation that reflects the musicians’ capabilities. Thus, the album doubly satisfies. And at its
best it exhilarates.
Breaking From
Indie Rock Orthodoxy
On its new album, the National returns with electronic-tinged
experiments that still rock hard
about 80 eclectic musicians collaborated on spontaneous and often experimental performances.
The presence of Mr. Berninger’s
voice, snarling electric guitars,
supple bass and pounding drums
in conjunction with the complex
electronica places the album at an
intersection of the new and familiar. “It feels more reckless,” Aaron
told me when I called him at
home in Copenhagen. “We were
interested in melting away some
of the barriers between genres.”
Most tracks on “Sleep Well
Beast” utilize a synthesized substructure from start to end. “I’ll
Still Destroy You” rises from a
simple beat created on Aaron’s
laptop; when it recedes, a folk
guitar and what sounds like a
marimba slide under Mr.
Berninger’s voice. “Empire Line”
also opens with an electronic
pulse that’s joined by drummer
Bryan Devendorf, who excels
throughout the album, and lush
strings sweep in as Mr. Berninger
shifts easily between singing and
speaking the tale. A lovely take
on a 1950s-style stroll, “Dark Side
of the Gym” features synthetic
sounds flitting about the midrange; after a deft modulation,
orchestral strings appear to provide a thrilling exit.
The National rocks hard on the
album, even within the electronic
context. In the rumbling “The
System Only Dreams in Total
Darkness,” a stinging repeated
guitar riff suggests the instrument will be used as decoration
only, but there is a blistering solo
that elevates the track. “Turtleneck” is booming rock in which
Scott Devendorf’s bass locks in
with his younger brother’s kick
drum and toms.
The National composed the
new disc as it had past recordings—with the Dessners recording
instrumental sketches and submitting them to the full group for development. Working on his own or
with the aid of his wife, Carin—
the National is nothing if not a
family affair—Mr. Berninger
crafted melodies in the digital audio workstation GarageBand. Lyrics emerge through free association or “mumblings,” as Mr.
Berninger called them. The darker
colors of his baritone, that here is
of a school with Nick Cave, Bryan
Ferry and Leonard Cohen, well
suit the somber mood that permeates “Sleep Well Beast.” In writing
the lyrics, Mr. Berninger said he
Mr. Fusilli is the Journal’s rock
and pop music critic. Email him at
jfusilli@wsj.com and follow him on
Twitter @wsjrock.
Continued from page A9
feres with free-market dynamics.
But many in the concert industry hail it as the best solution yet
to an age-old problem.
Mr. Marcus said for typical highdemand shows, Ticketmaster expects 30% to 50% of tickets to be
snapped up by scalpers and their
bots. With Verified Fan, which
some 50 artists have used since it
rolled out late last year, fewer than
5% end up being offered for resale
on services such as StubHub or
through brokers’ own websites.
So far, Ticketmaster says fewer
than 3% of the tickets sold via Verified Fan last week for Bruce Springsteen’s 79-show run on Broadway
have hit the secondary market.
Diane Wilkes, a Springsteen fanpage administrator who’s seen him
150 times, wasn’t among the lucky
few to secure a ticket code for one
of the Broadway shows, which run
from Oct. 3 to Feb. 3 at the 960seat Walter Kerr Theatre. Luckily,
her husband did, and secured a
pair for $600 apiece.
“I think this made it less horrible,”
she said, adding that no ticketing
system could solve the basic problem
that there simply aren’t enough tickets for everyone who wants one.
Not all fans are convinced. Edward Morris, a die-hard Springsteen
fan, took the day off work last
Wednesday to wait for a code that
never came. He’s used to tough times
when it comes to securing tickets.
“When Springsteen goes on sale
the computers crash—that’s almost
tradition,” he said. But at least he
had a shot in those cases. “I’m
wondering if the fairest way isn’t
just to camp out like the old days.”
Representatives for Mr. Springsteen declined to comment.
In Ms. Swift’s case, fans are be-
GETTY IMAGES (2)
FANS
Taylor Swift fans have
had mixed reactions to
Ticketmaster’s Verified
Fan program for her
upcoming concert tour.
ing prioritized for tickets before tour dates
are even announced.
Preference is based on
how aggressively fans
display their fervor, including by spending
money on her products.
A registered user
can earn a “medium
boost” by watching one
of Ms. Swift’s videos
on her site or posting a
photo on Twitter showing a UPS truck emblazoned with
an ad for her upcoming album,
“Reputation;” UPS is a sponsor of
her tour. They can earn a “high
boost” for ordering merchandise
including T-shirts ($47 to $50),
rings ($60) or “Reputation,” for
$15, plus $45 for “expedited” ship-
ping—via UPS—to ensure it arrives
on its release date, Nov. 10.
Mr. Marcus said the system rewards fans for things they already
do. “Nobody is forced to buy anything,” he said. “Taylor’s fan base is
hyper-engaged. They are collectors
of her music, avid buyers of her merchandise, rabid viewers of her videos
and listeners of her singles.”
Ms. Swift’s publicist said scalpers won’t take the time to engage
in legitimate fan activity.
“This is a program that rewards
fans for being fans and makes sure
they get great tickets at face
value,” she said. “If these same
tickets were offered on the open
market, scalpers would snatch
them up and fans would be paying
thousands of dollars for them.”
Ram Silverman, operations director for Golden Tickets, a broker
based in Plano, Texas, dismissed
Verified Fan as a gimmick.
“It is good marketing but in the
end it’s very deceiving,” he said.
“You don’t know where you’re going to be in line or what kind of
tickets you might get.”
“The whole idea behind a secondary market is giving people a
chance to go see a show
they want to see. You
can decide what you
want and what you’re
willing to pay,” he said.
Managers and agents
whose clients have used
Verified Fan said even
though artists are reluctant to ask their fans to
do any extra work, their
experiences were generally positive and they’d
use the service again.
Ms. Johnson, the
Swift fan, plays the videos nonstop, while she’s
cooking, cleaning and
even at work.
“I’m hoping it pays off
because it’s a lot of work
to play videos 40 times a day,” she
said. “It has basically consumed
my life and will continue to until I
hopefully get tickets.”
THE WALL STREET JOURNAL.
A12 | Wednesday, September 6, 2017
SPORTS
U.S. OPEN | By Jason Gay
Roger vs. Rafa in NY?
It’s Oh So Close
GETTY IMAGES (2)
Third-seeded Roger
Federer and No. 1 seed
Rafael Nadal each need
to win one more match
to secure a historic
showdown in the U.S.
Open men’s singles semifinals on
Friday.
And that’s about as boring and
neutral as I can be about this development, folks, because
WOOOOOO, BABY! ROGER VS.
RAFA IN NEW YORK!? I CAN’T BELIEVE THIS BAD BOY IS ON THE
VERGE OF HAPPENING!! IF YOU
HAVE TO SELL A CAR OR A CHILD
TO GET A TICKET, DO IT!
Yes, right, I know, I know: the respectful and superstitious thing
would be to refrain from talking
about any Roger vs. Rafa meet-up,
because Nadal and Federer still
have to get through Andrey Rublev
and Juan Martin del Potro on
Wednesday, respectively, and neither Rublev or del Potro is a slouch.
Del Potro basically died and
crawled out of the grave to win a
match in five sets Monday night.
The dude’s amazing. And he’s
spoiled Federer and Nadal before
to win an Open.
You: See? Settle down. We’ve
been here before. Nothing in tennis
is guaranteed. Remember Serena
trying to win the calendar Grand
Slam in 2015?
Me: I CAN’T SETTLE DOWN! I
SPENT ALL LAST NIGHT FOLDING
NEON BANDANAS!
How can anyone be restrained
about Roger vs. Rafa? Tennis history is knock, knock, knocking. To
heck with respect and superstition.
Let black cats walk under ladders!
I don’t care.
Roger & Rafa! Rafa & Roger! Is it
finally going to happen at the U.S.
Open? The game’s greatest stardust at the planet’s loudest Slam?
I think it might!
You: You’re jinxing it, you moron.
Me: I am sort of jinxing it,
sorry.
They’ve never met here, incredibly. Federer and Nadal have plenty
of history at Wimbledon, Australia
and even Roland Garros, but not
once have they looked at each
other across the net in Arthur
Ashe Stadium.
It’s bizarre. It’s like finding out
Elvis never played Vegas. How
have the tennis gods missed this
one?
To be fair, both men are partly
to blame. Nadal missed finals with
a waiting Federer when he lost in
the semifinals to Andy Murray in
2008 and to del Potro in 2009.
Federer broke off finals with a
waiting Nadal when he lost backto-back semi heartbreakers to Novak Djokovic in 2010 and 2011 (Fed
had two match points in each.)
Federer also missed a potential
quarterfinal showdown with Nadal
James Harden is the centerpiece of a Houston franchise that brought a
record price. The deal could prompt other owners to gauge the market.
NBA
(L-R) GETTY ; AFP/GETTY
ROCKETS FETCH
$2.2 BILLION
BY BEN COHEN
THE OWNER of the Houston
Rockets agreed to sell the team
on Tuesday to the local billionaire Tilman Fertitta for $2.2 billion, according to a person familiar with the matter, setting a
new record for the sale of an
NBA team at a time when
the league’s valuations
are soaring.
Fertitta (shown
at right) is the CEO
of the Houstonbased hospitality
group Landry’s
Inc., which owns
restaurants, hotels,
aquariums and the
Golden Nugget casino
in addition to its namesake seafood chain.
Born and raised in Texas, Fertitta already has an outsize presence in the city. He was previously an advisory director to the
Rockets and minority owner of
the NFL’s Houston Texans. He’s
the chairman of the University of
Houston’s board of regents and a
major booster for the school’s
football team. And like Dallas
Mavericks owner Mark Cuban,
Fertitta is featured on a business
reality show. It’s called “Billion
Dollar Buyer.”
The sale, which would break
the record $2 billion that former
Microsoft Corp. executive Steve
Ballmer paid to buy the Los Angeles Clippers in 2014, reflects
the ascending cultural status of
the NBA, a league that has seen
the value of its franchise skyrocket in the last five years. Leslie Alexander decided to sell the
team in July with the understanding that he would see an
enormous return on his original
investment: He bought the Rock-
Nadal, left, and Federer must win one more match each to set up a showdown.
quarters, the men’s side suffered
with pre-tournament withdrawals
of Novak Djokovic, Stan Wawrinka
and No. 2 seed Andy Murray.
Murray’s late departure especially tormented the men’s
bracket. Prior Open winners Nadal,
Federer and del Potro are still
alive in the top half of their draw
along with Rublev, but in the bottom half, a first-time Slam finalist
will come from the remaining
foursome of Sam Querrey, Kevin
Anderson, Pablo Carreno Busta,
and Diego Schwartzman.
In a proper sports universe,
Rafa and Roger would have the opportunity to meet for a final. A
semifinal will have to do. Hopefully ESPN has Friday free and
isn’t committed to showing the
Northern Vermont Scooby-Doo
High School Kickoff Classic.
What a year it’s already been for
Nadal and Federer. A year ago, Fed
skipped the U.S. Open to recover
from injuries. Nadal pulled out of
the French, missed Wimbledon and
got bounced from New York in the
fourth round by Lucas Pouille.
This season is an utterly different tale. Federer and Nadal kicked
off 2017 with a five-set epic in
Australia, followed by matches in
Indian Wells and Miami. Nadal
went on to win the French.
Federer took Wimbledon. It’s like
old times.
Except this. This would be new.
This would be history—and the
dream.
Rafa Versus Roger. One more
win each, then Friday night at the
U.S. Open.
It’s all happening.
in 2013 when he lost to Tommy
Robredo in the fourth round.
They’ve had chances, close
enough to touch. And it’s never
happened. In an all-time rivalry of
rivalries, it’s one of the few things
that’s left.
For a minute, it looked like we
wouldn’t get here this year, either.
Both men looked a little wobbly
kicking off this year’s Open. Especially Federer, who pulled out of a
Cincinnati tournament two weeks
before with back issues, and struggled uncharacteristically in back-toback five-set victories in the first
and second rounds. Both Frances
Tiafoe and Mikhail Youzhny had
chances for career-making upsets.
Nadal didn’t struggle the same
way, but both Taro Daniel and Leonardo Meyer swiped a first set off
him.
Here’s the good news: It looks
like both men are now clicking. On
Monday, both Nadal and Federer
rolled to straight-sets victories—
Nadal making short work of Alexandr Dolgopolov, and Federer with
a relative breeze over Philipp
Kohlschreiber.
If this was an NFL show, you
know what the middle aged guys
in suits and ties would say:
They’re peaking at the right time!
Nadal looks like Nadal, and
Federer appears fluid, unworried
about his tricky back.
Thank goodness for it, too.
While the minus-Serena women’s
draw at the Open has been an intriguing surprise, with four U.S.
women—Venus Williams, Coco
Vandeweghe, Madison Keys and
Sloane Stephens—advancing to the
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.
V
Vancouver
0s
Calgary
Por
P
d
Portland
Billings
i
Boise
80s
Bismarckk
70s
90s
Reno
Sacramento
n Francisco
San
70s
70s CCheyenne
h y
100s
San Diego
40s
50s
60s
A
h g
Anchorage
h
Omaha
p g d
Springfield
Colorad
C
Colorado
p g
Springs
Topeka
Buffalo
Cleve
d
Cleveland
Pittsburgh
Pitts
b h
l t
Charleston
d
p li Ch
Indianapolis
Kansas
City
70s
70s
70s
U.S. Forecasts
70s
30s
40s
22
90s
100+
h
d
Richmond
Rain
T-storms
Stationary
Snow
Showers
Flurries
Ice
Today
Tomorrow
City
Hi Lo W Hi Lo W
Omaha
71 48 s
78 57 s
Orlando
89 74 t
89 75 t
Philadelphia
72 60 r
74 58 pc
Phoenix
108 84 pc 105 81 s
Pittsburgh
69 50 pc 65 51 pc
Portland, Maine 71 61 r
73 52 r
Portland, Ore.
88 64 pc 80 62 pc
Sacramento
87 63 pc 77 59 s
St. Louis
71 53 s
75 56 s
Salt Lake City
96 69 s
94 69 s
San Francisco
77 65 pc 74 63 pc
Santa Fe
83 55 pc 80 55 t
Seattle
86 62 pc 77 63 pc
Sioux Falls
68 46 pc 76 50 s
Wash., D.C.
69 59 r
74 57 pc
International
City
Amsterdam
Athens
Baghdad
Bangkok
Beijing
Berlin
Brussels
Buenos Aires
Dubai
Dublin
Edinburgh
Today
Tomorrow
Hi Lo W Hi Lo W
64 55 c
64 56 pc
84 70 s
85 70 s
116 83 s
111 81 s
92 80 t
93 80 t
89 61 s
91 63 s
68 52 t
63 53 pc
64 52 c
64 56 pc
64 52 pc 67 50 pc
106 89 s 105 89 s
62 52 pc 61 51 r
61 48 pc 59 48 r
City
Frankfurt
Geneva
Havana
Hong Kong
Istanbul
Jakarta
Jerusalem
Johannesburg
London
Madrid
Manila
Melbourne
Mexico City
Milan
Moscow
Mumbai
Paris
Rio de Janeiro
Riyadh
Rome
San Juan
Seoul
Shanghai
Singapore
Sydney
Taipei
Tokyo
Toronto
Vancouver
Warsaw
Zurich
Hi
70
72
90
92
78
90
83
79
64
89
90
56
69
85
62
87
67
83
107
80
86
73
91
88
68
98
79
68
81
59
71
23
Today
Tomorrow
Lo W Hi Lo W
49 pc 66 53 pc
50 t
69 49 pc
74 pc 89 75 pc
79 c
89 79 sh
65 r
80 67 s
77 c
92 77 c
64 s
83 65 s
52 s
81 57 s
51 pc 66 55 pc
60 s
88 58 s
78 t
93 78 t
46 sh 60 43 sh
57 t
67 56 pc
63 pc 84 64 pc
53 c
63 50 pc
79 c
88 77 pc
54 c
67 55 pc
66 s
80 66 s
73 s 106 78 s
66 pc 80 63 t
79 r
87 80 r
66 r
81 68 pc
74 r
82 73 r
79 t
88 78 t
51 s
69 51 s
78 s
93 79 c
73 r
84 71 sh
49 pc 65 48 pc
62 pc 74 60 c
54 sh 59 50 r
50 t
66 49 pc
7
8
9
32
10
11
14
33
34
38
25
29
30
35
39
43
45
52
46
50
59
64
65
69
54
60
61
66
56
57
62
67
68
70
71
SAND BOX | By Jim Page
Across
1 With 9-Across,
high-rise feature
9 High school
dept.
46 TV premiere of
Oct. 11, 1975
49 Sales team
member
51 Music’s Mahler
53 Franklin’s belief
55 Cologne divider
56 Heartsick one
52 Recited
14 Industrious
58 “Starpeace”
artist
17 With 57-Down,
drift
59 Potpie
veggies
20 Record
37 Like some
communities
41 Goes downhill
44 Big house
11 Puts up with
54 Consumes
conspicuously
15 Tubes in a
studio
39 Lindy’s hop?
12 With 32-Down,
it’s used in a
rebound shot
31 Park place?
13 Blockhead
12 Very near
8 Tree exudation
32 Skyping need
35 With 45-Across,
hurricane-prone
area, and a clue
to this puzzle’s
edges
9 See 1-Across
7 “Beetle Bailey”
dog
10 Golf’s “Big Easy”
72
32 See 12-Down
36 Puny pup
6 Beach shades
55
30 “La Classe de
Danse” artist
34 Temporary
suspensions
5 Bordeaux
bestie
47
51
53
63
42
29 Katharine
Hepburn’s acting
gamut, according
to Dorothy
Parker
33 Firefly features
4 Traveling
through
37
41
49
3 Stein and
Hemingway in
Paris, e.g.
27
31
40
Down
1 Christensen
of TV’s
“Parenthood”
2 Luxuriates
21
26
36
44
17
20
24
28
58
Cold
6
16
48
Warm
5
19
60s
80s
4
15
18
70s
3
13
50s
t
Boston
rtford
Hartford
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New
Yorkk
h
on
n D.C.
D.C
DC
Washington
90s
20s
2
12
57 See 17-Down
60 Resort near Park
City
61 Pass over
23 DDE’s 1942
command
64 Dernier ___
63 Drug
trafficker
24 Soundly defeat
65 Above, in odes
26 Decline
67 Extraction target
27 Way around
London
68 Disco guy on
“The Simpsons”
42 It’s brought to
order
66 1994 Italian
film nominated
for the Best
Picture Oscar
19 It makes the bed
43 Barbershop item
69 Foal’s father
21 “Boola Boola”
singer
45 See 35-Across
70 Go back to
square one
16 Town on
Long Island’s
southern shore
18 Cherokee
Landing State
Pk. location
38 Pizza chain,
informally
40 Phony
47 “The Racer’s
Edge”
62 Tibia’s place
25 Hole in the head
48 Shaman, e.g.
71 With 72-Across,
roll to one side,
e.g.
28 Valued strings
50 Jellyfish delivery
72 See 71-Across
22 Hung in there
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
59 49 r
58 49 c
Atlanta
74 55 t
76 55 s
Austin
87 56 s
86 57 s
Baltimore
70 57 r
74 54 pc
Boise
98 66 s
93 67 s
Boston
75 65 r
75 58 r
Burlington
69 55 sh 68 52 sh
Charlotte
72 53 t
76 53 s
Chicago
65 52 pc 68 55 pc
Cleveland
68 52 pc 66 54 sh
Dallas
86 62 s
86 64 s
Denver
81 53 s
86 56 s
Detroit
67 51 pc 66 52 sh
Honolulu
88 76 pc 88 75 s
Houston
86 61 pc 85 61 s
Indianapolis
68 50 pc 71 54 pc
Kansas City
71 50 s
76 58 s
Las Vegas
102 80 pc 100 76 s
Little Rock
77 54 s
78 56 s
Los Angeles
86 67 pc 83 66 pc
Miami
92 80 t
92 81 t
Milwaukee
65 51 sh 68 56 pc
Minneapolis
65 51 pc 74 52 pc
Nashville
73 51 s
74 52 s
New Orleans
83 68 t
84 69 s
New York City
72 60 r
74 58 sh
Oklahoma City
79 55 s
82 63 s
hit
Wichita
A
t
Augusta
Philadel
P
hil d lph
h
hi
Philadelphia
St.. Louis Lou
LLouisville
ill
aleigh
i
Raleigh
h ill
Nashville
Santaa Fe
Charlotte
70s Memphis
70s
hi
70s
C l b
Columbia
Ph
i
Phoenix
Oklahoma
kl ma Cit
City
C y
q q
Albuquerque
70s Alb
LLittlee Rockk Birmingham A
Atlanta
Tuc
Tucson
ll
Dallas
Jack
Jackson
Ft. Worth D
El Paso
80s
JJacksonville
k
b
Mobile
80s
A
ti
Austin
ew Orleans
t New
Houston
l d
Orlando
Ta
p
Tampa
80s
an Antonio
A
San
90s
Honolulu
l l
Miami
Las
Ve
g
Vegas
Los A
Ange
l
Angeles
Ab y
T
t Albany
Toronto
k
Milwaukee
t
Detroit
C
h
Chicago
es Moines
Des
Denver
90s
70s
Ottawa
Montreal
oux FFalls
ll
Pierre Sioux
Lake
Salt Lak
L ke City
Cit
C
70s
70s
60s
Pau
Mpls./St.. Paul
90s
10s
60s
ip
Winnipeg
l
Helena
100s
g
Eugene
50s
80s
ttl
Seattle
1
<0
70s
d
t
Edmonton
60s
70s
ets in 1993 for $85 million.
The high price might convince
other NBA owners to feel out the
market. One indication that it
earned some attention across the
league was that shares of Madison Square Garden Co., owner of
the New York Knicks, climbed almost 7% after the Rockets deal
was announced.
But it’s unlikely that
many NBA teams would
be worth more than
Houston—a stable
team with a savvy
front office in a
major city with attractive demographics and international appeal. As
the team that
drafted Yao Ming, the
Rockets are one of the
NBA’s most popular teams in
China. They’re expected to contend for a title in what would be
Fertitta’s first season with stars
James Harden and Chris Paul.
The deal, which is pending
league approval, would cap a
two-month sales process in
which Houston was devastated
by Hurricane Harvey. The Rockets said the sale’s timing was
“truly unfortunate.”
There was speculation when
the team hit the market that the
Rockets would attract interest
from Chinese ownership groups
and maybe even the world’s most
famous Houston native: Beyonce.
But there is no one else involved in the deal, the Rockets
said, and Fertitta was the most
likely buyer all along. He tweeted
Monday to say happy birthday to
Beyonce, whom he called “Houston’s all-time greatest,” sharing a
photograph of her wearing Paul’s
Rockets jersey. His next tweet on
Tuesday was to announce that
he’d bought the team.
Previous Puzzle’s Solution
G
O
L
F
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S
E
R
T
H
E
O
S
A
R
G
A
A B S
B L A S
O F N O
N R A
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THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | A13
OPINION
The Case for Nonvoting Stock
By Dorothy Shapiro Lund They view it as the key benefit. is unlikely to move the com- though, the opportunity to pur-
S
&P Dow Jones Indices
will no longer include
companies that go public
with multiple classes of shares
on its major U.S. stock indexes, it announced in July. A
few days earlier, FTSE Russell
said it would bar dual-class
companies from its indexes
unless public shareholders
hold at least 5% of the voting
rights.
These policy changes were
made in response to a recent
surge in dual-class initial public offerings, in which company insiders raise cash by
selling nonvoting or low-voting stock to the public while
retaining voting control over
the company. Such structures
were historically favored by
family-owned companies seeking to preserve control but
have recently gained popularity among successful technology companies, including
Google, Facebook and, more
recently, Snap Inc.
The conventional view is
that dual-class structures insulate company insiders from investor influence and accountability. When a problem arises
at a company, the shareholders
most affected have few tools to
take action. Separating control
from ownership therefore
weakens the insiders’ incentives to maximize shareholder
welfare. When the insiders
slack or skim off the top, they
reap all of the benefits but bear
only a fraction of the costs.
Dual-class issuers do not
deny that low-vote stock
shields insiders from influence.
That is because the dual-class
structure can allow insiders to
operate without interference
from outside shareholders who
seek short-term gains at the
expense of the company’s longterm vision.
Both sides of the debate
overlook an important and unrecognized benefit of dual-class
structures: A corporation that
offers two classes of stock to
Having two classes
of shares leaves
decisions to those
who are informed.
the public is able to allocate
voting power between shareholders who are informed
about the company and its performance and those who are
not.
Put differently, there may
be companies that are made
worse off when all shareholders vote. Some shareholders,
including many retail investors, have no interest in learning about the company and
prefer to free-ride off informed
investors. Other passive shareholders, such as index funds,
may lack financial incentives
to vote intelligently because of
their investment strategy. Index funds seek to match the
performance of the market,
not beat it, so any investment
in informed voting would drive
up the fund’s costs with little
to no benefit.
Index-fund voting, therefore,
pany in the right direction. Yet
as index funds own more of the
market, uninformed shareholders are likelier to be the ultimate arbiter of shareholder
elections.
This is where nonvoting
stock could be especially useful: If a company issued nonvoting shares for uninformed
investors to buy, all shareholders would be better off. Consolidating voting power in the
hands of informed investors
would make the company
more attractive to those investors, who would get greater influence at a lower cost, and
also to uninformed investors,
who would save on costs associated with voting.
Moreover, because nonvoting stock generally trades at a
discount, voter sorting should
occur without legal intervention. Uninformed voters
should want to purchase discounted nonvoting shares,
while informed voters would
likely pay a premium for the
right to vote.
But there are reasons to believe that such sorting won’t
always occur. Most prominently, the institutional investors that primarily invest in index funds haven’t yet embraced
nonvoting stock. Quite the opposite—they have been leading
the effort to bar dual-class
companies from stock indexes.
These largely passive institutional investors explain that
because their indexing strategy
requires them to buy and hold
company stock under all conditions, they need a voice in
company affairs. In time,
chase stock at a discount and
avoid costs associated with
voting would likely push uninformed investors, including
many index funds, toward nonvoting shares. And when this
happens, the company that issued them would be more valuable, not less.
It’s also true that so far the
effect of issuing nonvoting
stock has been to keep control
with company insiders.
But over time, the growing
concentration of wealth in the
hands of index funds and exchange-traded funds should
increase the attractiveness of
company structures that concentrate voting power with informed investors—that is, so
long as companies are not
prohibited from using those
structures.
The decisions by the major
U.S. stock indexes, however,
serve as a powerful deterrent
to future dual-class offerings.
Those indexes are major drivers of demand for U.S. stocks,
and so their decisions are
likely to eliminate dual-class
IPOs in the U.S. Rather than
celebrate the elimination of an
entrenching corporate governance practice, Americans
should pause and consider
what unintended consequences
arise from blanket prohibitions
on corporate structuring in
competitive markets.
Ms. Lund is a teaching fellow at the University of Chicago Law School.
Holman W. Jenkins, Jr. is
away.
How Trump Can Achieve Inclusive Growth
With Labor
Day just behind us, now
is a fitting
time to review
the condition
POLITICS of American
workers and
& IDEAS
their families.
By William
During
the
A. Galston
past
few
months, median household incomes finally
have regained the ground lost
during the 2007-09 recession—closing in on the alltime high reached in 1999. Yet
for average Americans almost
two decades have passed without significant improvement in
their standard of living. For
many, it has been far worse.
On average, high-school educated white men working full
time earned 4% less in 2014
than they did in 1996, according to a Sentier Research
study.
Statistical aggregates often
conceal as much as they reveal. All else equal, when experienced workers retire and
younger workers are hired in
their place, median income
will decline. This is no cause
for concern. The real issue is
what happens to individuals
over the course of their working lives. This reality, the Sentier study shows, was far
worse than the aggregate
numbers suggest. The cohort
of high-school educated white
men who were 25 years old in
1996 and 43 years old in 2014
experienced a 9% decline in
annual earnings, on average,
between 1996 and 2014.
The losses were concentrated among the oldest workers in this group. For example,
individuals ages 37 to 38
earned an average of $44,209
in 1996. In 2014, when they
were in their mid-50s, these
individuals on average earned
only $32,298—a decline of
27%.
During this same period, by
contrast, white men with college degrees were gaining
ground. Overall, as college-educated men who were 25 in
’96 and 43 in 2014 experienced average earnings gains
of 23% between 1996 and
2014. Those beginning their
careers fared even better. College-educated men ages 25
and 26 earned an average of
$40,487 in 1996. Eighteen
years later, these men on average earned $94,252, a gain
of 133%.
In one sense, this is nothing new. A cohort analysis for
white men between 1978 and
1996 tells much the same
story. Overall, high school-educated men ages 25 to 44 in
1978 had annual earnings of
$49,414. By 1996, when these
men were ages 43 to 62, the
average stood at $44,108, a
decline of 11%. By contrast,
college-educated men in this
age cohort saw average earnings gains of 30%.
But there is a key difference between these two 18year chunks of recent history. Between ’78 and ’96,
women at all educational levels surged into the paid
workforce, and two-earner
families became the norm.
Overall incomes in households with high school-educated men could rise even
when men’s earnings did not.
But female labor-force participation peaked in 1999 and
declined thereafter, eliminating a key counterbalance to
declining earnings for lesseducated men.
Focus on ‘middle skill’
jobs, which require
some training but not
a bachelor’s degree.
For four decades, American
society has left less-educated
workers to fend for themselves as unions weakened
and the forces of globalization
and technological change intensified. And now there are
two Americas divided by education. One moves forward,
the other falls behind. One is
optimistic, the other pessimistic. One is comfortable with
change, the other fears it.
This divide is dangerous and
has been ignored for far too
long.
For the next generation,
the pole star must be not
only overall growth, but inclusive growth that gives
Americans at different levels
of formal education a chance
to succeed. Although the details remain up for debate,
consensus broadly exists on
how to achieve this. To increase aggregate growth, the
U.S. must focus on higher
rates of labor-force participation and productivity-enhancing capital investments. As
long as global forces hold inflation in check, U.S. monetary policy can tilt toward
growth.
To achieve inclusive growth,
Congress and the president
should emphasize middle-skill
jobs, which require more than a
high school education but less
than a bachelor’s degree. Studies have identified pools of
these jobs that are of high
value for businesses, provide
pathways to higher wages over
careers, and have proved persistently difficult to fill. There
are gaps between what non
college-educated workers are
bringing to the job market and
what employers are seeking.
A systematic program to
close this gap would begin by
expanding modern skills training in high schools and local
community colleges. It would
increase the availability of apprenticeships. And as a Harvard Business Review study
puts it, because no deus ex
machina will produce workers
with the right skills who are
ready to contribute from day
one, employers must “take
ownership for fixing the skills
gap,” and they “must be willing to make the investments
necessary” to close it. The alternative is to continue sitting
on the sidelines complaining
about the American educational system.
It’s time for employers to
get back into the game. The
country will benefit, and over
time they will too.
Congress Can Help Prevent Election Hacking
By Michael Chertoff
A
merican voters received
yet another rude awakening last month. Chicago’s Board of Elections reported that names, addresses,
birth dates and other sensitive
information about the city’s 1.8
million registered voters had
been exposed on an Amazon
cloud server for an unknown
period. Worse, it appears hackers might have gained access
to employees’ personal accounts at Election Systems &
Software, a major election
technology vendor—info that
could be used to hack a future
U.S. election.
Earlier, the Department of
Homeland Security reported
that foreign agents targeted
voting systems in 21 states in
the 2016 election, and
Bloomberg News reported that
hackers had successfully compromised various electiontechnology companies.
In an age of unprecedented
cyber risks, these dangers
aren’t surprising. But lawmakers and election officials’ lackadaisical response is both
staggering and distressing.
American elections are an
increasingly easy target because our election technologies are antiquated, and we
Protecting our voting
systems should be an
easy bipartisan win.
have few federal level cybersecurity standards. An estimated 43 states rely on electronic voting or tabulation
systems that are at least 10
years old. A survey of 274 election administrators in 28
states found most said their
systems need upgrades.
This is a matter of national
security, and Congress should
treat it as such. Given that
we’re still dealing with the unfunded mandates of 2002’s
Help America Vote Act, there’s
a clear need for action to upgrade security systems and create meaningful standards.
This summer more than 100
experts on election administration, computer science and national security released a plan
for Congress to safeguard the
vote. The experts include Republicans and Democrats,
united in the view that our current patchwork of voting-security measures is insufficient for
the emerging threats.
Some in Congress are now
finally paying attention. A bipartisan amendment to the National Defense Authorization
Act from Sens. Lindsey Graham
(R., S.C.) and Amy Klobuchar
(D., Minn.) would address the
challenge in a way that’s fiscally responsible, respectful of
states’ policy-making powers,
and proactive in dealing with
the most pressing vulnerabilities. It would limit access to
election systems to qualified
vendors, secure voter registration logs, help ensure proper
audits of elections, create
more-secure information sharing about threats, and establish proper standards for
transparency.
This should be an easy bipartisan win. While many
Democrats have been concerned about Russian hacking,
President Trump has himself
been a leading advocate for
the most important security
reform: a return to paper ballots as the record of voter intent. As the president said in
an interview the morning of
the election: “There’s something really nice about the old
paper ballot system. You don’t
worry about hacking.”
The Chicago episode should
be yet another wake-up call.
We know what it takes to
strengthen election cybersecurity. But we need to start taking the issue seriously.
Mr. Chertoff served as secretary of homeland security,
2005-09. He sits on the advisory board of the Alliance for
Securing Democracy.
BOOKSHELF | By James Traub
The Hazards
Of Giving Shelter
Refuge
By Alexander Betts and Paul Collier
(Oxford, 268 pages, $18.95)
A
refugee crisis is what happens when large numbers of
people fleeing poor, violent countries seek asylum in
rich, peaceful countries, raising agonizing moral and
political questions. This of course is what occurred in 2015,
when a million refugees from Syria and elsewhere poured
across Europe’s borders, provoking a backlash that brought
nationalist parties to the verge of power and threatened
the Continent’s liberal order. The refugees were the cause,
rather than the victims, of the crisis in question.
What happened in Europe two years ago was profoundly
important for Europe but insignificant for most refugees.
Sixty-five million people have been displaced from their
homes by violence; about a
third of those have fled
abroad. The plight of
displaced people generally
is not so much a crisis as a
global phenomenon, like
climate change, that requires
a global solution. Unlike
climate change, however,
which affects all of us,
displacement chiefly afflicts
the displaced themselves, and
their immediate neighbors, and
so provokes little sense of
urgency among the world’s
political leaders—except when
the problem laps against the
distant shores of Europe.
In “Refuge: Rethinking Refugee Policy in
a Changing World,” Alexander Betts and Paul
Collier note that the current regime of laws and norms that
govern states’ responsibilities toward refugees was devised
in the years after World War II, with the Nazis’ mass
violence fresh in memory and the Soviet Union menacing
Europe. Individuals with a “well-founded fear of being
persecuted” were given a right to asylum. But it is not
“persecution” that provokes millions to flee Syria or
Afghanistan or the Democratic Republic of Congo; it is,
rather, the chaos engendered by frail and failing states. And
yet the system has barely changed since 1951.
The current refugee ordeal thus points to a systemic
failure, one that cries out for rigorous thinking. This is the
specialty of Paul Collier, an Oxford economist who has
proposed solutions to extreme poverty (in 2007’s “The
Bottom Billion”) and to the “resource curse” (in 2010’s
“The Plundered Planet”). His co-author, Alexander Betts,
also of Oxford, is a professor of Forced Migration and
International Affairs, about as finely tailored an expertise
as you can have for the subject in question.
Activists often fail to draw a line between
refugees and economic migrants. The result
can be catastrophic for host countries.
The authors argue that we must both expand and
confine our definition of a refugee. They would include
anyone who has no recourse except flight to avoid the
threat of “serious physical harm” but not someone who
wishes only to flee desperate conditions. Presumably, then,
they would have states offer protection to a young couple
in Afghanistan who would be killed for eloping but deny it
to, say, Afghan farmers whose village has been wrecked by
decades of fighting.
That distinction may sound arbitrary, or at least morally
flimsy. But what’s a better line? In two years of writing
about the refugee crisis, I have met innumerable activists
who refuse to draw a sharp line between refugees and
economic migrants. That the failure to draw such a line can
be catastrophic for host countries—and might bring to
power leaders who would bar the door to all refugees—
seems irrelevant to many refugee advocates. Europe,
apparently, has an obligation to commit suicide in the name
of principle. Messrs. Collier and Betts, by contrast, insist
that the rich have rights, too.
Even those who do have a right to refuge, the authors
argue, do not have a right to pick a country. They have a
right to shelter but not to maximal prosperity or comfort.
It is to the benefit of all, and not just nervous Europeans,
the authors say, that refugees remain close to home
whenever possible, since their country will need them once
hostilities end. Messrs. Betts and Collier argue that all
nations have a duty of “solidarity” toward those in flight.
For some nations, that will mean providing temporary, and
at times permanent, refuge; for others, it will mean paying
for other nations to do so.
Critically, the authors argue, the duty of care is not
limited to physical protection but must include
opportunities for a decent life, something that Messrs.
Collier and Betts summarize as “autonomy.” They extol the
example of Uganda, which offers refugees vacant land to
farm and allows urbanized refugees to work. And they
describe the Jordan Compact, which brought together the
U.K., the European Union, the World Bank and the
government of Jordan to create employment opportunities
for refugees in Jordan as well as aid and investment.
If you’re in the business of selling global solutions, you
can’t be expected to call too much attention to snags in the
fabric. Messrs. Betts and Collier do not address the danger
that “special economic zones” and the like across the
border from a civil war would hasten the pace of flight.
Indeed, a recent study of the Jordan Compact concluded
that special economic zones have probably done more harm
than good and that the overall program may not have done
much to achieve its goals. The authors also over-argue their
case by claiming that, among other things, inculcating
autonomy among refugees will help them serve as a force
for progress once they return home, about which one can
only conclude that it would be wonderful if true.
That said, by steering a path between panicked
repudiation and blithe embrace, Messrs. Betts and Collier
offer pragmatic insights to an intensely polemicized issue
and compel us to confront hard questions. Given the forces
driving conflict in Africa and the Middle East, the
staggering number of the displaced is not about to diminish
any time soon. Until now, the authors say, the response has
oscillated between the “heartless head” and the “headless
heart.” They have performed a precious service by
reasoning with their heart and feeling with their head.
Mr. Traub is currently writing a book on the evolution of
liberalism.
THE WALL STREET JOURNAL.
A14 | Wednesday, September 6, 2017
OPINION
P
REVIEW & OUTLOOK
LETTERS TO THE EDITOR
The Dreamer Debacle
Journal Was Too Polite in Describing Antifa
resident Trump is taking flak from all or so undocumented immigrants and stretched
sides for ending his predecessor’s De- far beyond any reasonable definition of prosecuferred Action for Childhood Arrivals torial discretion.
(DACA) policy, thus putting
In 2015 the Fifth Circuit
Cynical politics by both Court of Appeals stayed DAPA,
some 800,000 young immigrants—so-called Dreamers—
that the order usurped
parties puts thousands holding
in legal limbo. Though the
congressional authority. The
of adults in jeopardy.
President and Barack Obama
Supreme Court left the injuncshare responsibility for instition in place last year. Mr. Sesgating the crisis, Mr. Trump
sions is probably right that
and Congress now have an obligation to fix it DACA “is vulnerable to the same legal and conand spare these productive young adults from stitutional challenges that the courts recognized
harm they don’t deserve.
with respect to the DAPA program.”
i
i
i
But DACA presents distinct humanitarian and
Mr. Trump was at his worst during the cam- economic concerns—as well as a government
paign when he assailed DACA as an “unconstitu- promise that carries a moral if not legal obligational executive amnesty,” though to his credit tion. Unlike DAPA, which was never implehe later evinced a change of heart toward these mented, some 800,000 Dreamers have used
immigrants who were brought to the U.S. ille- DACA to reorder their lives.
gally as children. The White House continued
The Obama Administration invited Dreamers
DACA despite legal misgivings. But in June, 10 out of the shadows and asked them to submit
GOP state Attorneys General presented an ulti- personal identification and records that could
matum: Kill DACA or we’ll sue.
now allow the feds to track them down. These
They could make this threat because Presi- young immigrants have committed no crime and
dent Obama unilaterally issued the policy in trusted the federal government to protect them.
June 2012 putatively because Congress failed to A study last year by the Immigrant Legal Rereform immigration, but the end-run was timed source Center found that 87% of DACA benefito galvanize his base before the election. He also ciaries are employed.
knew that Dreamers have widespread public
They would no longer be able to work legally
sympathy, including among Republicans who once their DACA permits expire. And if they
otherwise support strict immigration enforce- forge work documents, they would become a dement. He figured Republicans would harm them- portation priority. Dreamers could be forced to
selves politically by opposing the compassionate return to a country where they have no family
policy and that a GOP successor couldn’t roll it and may not even speak the language. Is deportback without a public backlash.
ing these people really how Republicans want
This was Mr. Obama at his most cynical, and to define themselves?
i
i
i
it takes gall for him to scold Mr. Trump as he did
The White House seems to understand the
Tuesday for making a “political decision” about
“a moral question” and “basic decency.” Mr. terrible political optics, which is why it has
Obama’s “political decision” to act as his own tossed the issue to Congress. It plans what it
legislature teed up this moral crisis and created calls “an orderly wind-down of DACA” rather
than wait for a potentially disruptive court inthe legal jeopardy.
DACA allows undocumented immigrants un- junction. Current Dreamers whose permits exder age 36 to apply for legal status and work pire over the next six months will be allowed to
permits, which can be renewed every two years. apply for renewals by Oct. 5, though no new apApplicants cannot have a serious criminal con- plications will be accepted.
This gives Congress at least some time to enviction. They must attend school, have a job, or
act the current Dreamer legalization process in
serve in the military.
As America’s problems go, these young adults a statute that is the proper legal path under the
shouldn’t even be on the list. And it shows the Re- Constitution’s separation of powers. Mr. Trump
publican Party at its worst that the state AGs and signaled his willingness to sign such a bill on
Attorney General Jeff Sessions want to make this Tuesday when he tweeted, “Congress, get ready
an urgent priority, rather than let Congress take to do your job—DACA!” We hope he means it.
This will be a test of the sincerity of both Reit up when it has a less crowded schedule. They
are pandering to the restrictionist right that is publicans and Democrats in Congress. Some Republicans like Iowa Rep. Steve King will oppose
a minority even within the GOP.
But as a legal matter, they are right that Mr. any DACA legalization as “amnesty,” and will
Obama’s DACA diktat presents legal problems. want to load up a bill with poison pills that modThe Constitution gives Congress the power to erates and Democrats can’t abide. Many Demowrite immigration law, and issuing work permits crats may also be more than happy to block legconfers a right that is the purview of the legisla- islation and use the Dreamers as a cudgel
against Republicans next year.
tive branch.
An obvious bipartisan solution would trade
The GOP AGs led by Texas’s Ken Paxton
threatened to amend their lawsuit against the authorizing DACA in return for additional borDeferred Action for Parents of Americans and der enforcement. But Republicans should also
Lawful Permanent Residents (DAPA), which Mr. be prepared to send Mr. Trump a clean authoriObama issued in November 2014. That sweeping zation to make good on the government’s moral
order granted legal protections to four million obligation to these young people.
W
The Godfather of Missile Defense
hen President Ronald Reagan asked fense systems never relented. To his credit, and
physicist George A. Keyworth II to the country’s good fortune, Jay Keyworth was
start thinking about how to shoot tireless in publicly supporting the effort as scidown an enemy’s ballistic misentifically achievable. It evenJay Keyworth endured tually gave us systems like
siles, few imagined a world in
which a chubby dictator’s miswhich can effectively
liberal derision but was Thaad,
siles and bombs would pose a
intercept short- and mediumvindicated by history. range ballistic missiles and is
threat to the U.S.
Jay Keyworth, who died on
now deployed on the Korean
Aug. 23, became Reagan’s sciPeninsula.
ence adviser in 1981. Reagan believed that the
In a remembrance posted last week on the
Cold War needed to end, and part of his strat- website of the Institute of Electrical and Elecegy for ending it was developing a technology tronics Engineers, Tekla Perry recalled a reto shoot down ballistic missiles in flight. It is markably prescient comment of Keyworth’s
hard to overstate the derision that greeted Rea- about the original rationale for SDI. “We have
gan’s Strategic Defense Initiative in 1983. The got a second-class nation,” Keyworth said, referday after Reagan announced SDI, Sen. Ted Ken- ring then to the Soviet Union, “virtually a develnedy mocked the President’s “reckless Star oping nation, threatening the existence of the
Wars schemes.”
United States, threatening the entire free world
Used relentlessly by the press to describe . . . I think it is a pretty frightening set of circumSDI, the Star Wars name stuck, and Jay Key- stances, and the more I look forward into the fuworth’s job was to convince skeptics that Rea- ture, the more unstable I see it.”
gan’s idea of shooting down missiles in flight
To the extent the North Korean nuclear
wasn’t Hollywood science fiction.
threat is at all containable, we have Jay KeyThe opposition to building antimissile de- worth to thank for it.
T
Making Canada Great Again
hroughout his presidential campaign, standards and reduced wages. This in turn
Donald Trump liked to bang on about means that when it comes to attracting busihow Mexicans are stealing American ness, these U.S. states enjoy an unfair advanjobs, and he called the North
tage over the higher-cost CaOttawa out-Trumps
American Free Trade Agreenadians. The Canadians say
ment “maybe the worst trade
they only want to level the
Trump on Nafta
deal ever signed anywhere but
playing field.
and trade.
certainly ever signed in this
In other words, the Canadicountry.” Now someone on the
ans are arguing that the U.S.
other side of the U.S. border is
is doing to its markets what
finally agreeing with him.
Mr. Trump accuses Mexico of doing to ours:
But it isn’t Mexico. It’s Canada. And this is stealing jobs through lower-cost labor. The
probably not what Mr. Trump expected when leader of Canada’s largest trade union, Jerry
he forced Nafta’s trading partners back to the Dias, out-Trumped Mr. Trump in his bluntness:
negotiating table. As part of this renegotiation, “Canada’s got two problems,” he says. “The
the Canadians are now complaining that U.S. low-wage rates in Mexico and the right-to-work
labor laws are unfair to Canada. Specifically, states in the United States.”
the Globe and Mail reports that Canadian negoIt’s easy to laugh over someone turning Mr.
tiators spent Sunday’s talks in Mexico City try- Trump’s trade argument against him, especially
ing to persuade their U.S. counterparts to pass when there’s zero chance of doing away with
a federal law negating the right-to-work laws U.S. right-to-work protection. But there’s a serithat now prevail in 28 U.S. states.
ous point amid the absurdity: A reminder that
The Canadians argue that these laws, by re- sometimes when people complain about unfair
ducing the power of unions to compel dues trading practices, what they’re really objecting
from workers, mean weaker unions, lower labor to is old-fashioned competition.
Your editorial analysis of Antifa is
timely and on target (“Behind the
Bedlam in Berkeley,” Aug. 29). Some
media cavalierly refer to Antifa actors
as “demonstrators” or “participants”
or “protesters” when it is becoming
apparent that Antifa wants to violently shut down legitimate protests
and demonstrations. The “comrades”
who claim to be antifascist are actually anti-everything.
Violence is Antifa’s primary tactic
to stifle free speech and shut down
conservative or midstream speech,
whether Republican or Democratic.
You stop short of identifying Antifa as a major terrorist threat to
America, evidence of which is growing. Both political parties, college
presidents, campus leaders and the
media must denounce Antifa for
its nihilistic suppression of free
speech and its violent opposition
to any exchange of ideas. They
must also demonstrate a solidarity
against anarchy and Antifa’s intrinsic violence.
JOSEPH E. COFFEY
West Roxbury, Mass.
As anarchists, Antifa thugs are
by definition a law unto themselves.
They despise authority, particularly
law enforcement. So far this year
Antifa has used Molotov cocktails,
rocks, bricks, marbles, bottles of
urine, balloons filled with feces and
unknown chemicals, red-stained
tampons, fireworks and pepper
spray to attack police in Berkeley,
Boston, Phoenix, Portland, Ore., and
Olympia, Wash.
When a black police officer recently intervened to stop Antifa
from vandalizing an Atlanta park
statue, the demonstrators chanted:
“Blue lives splatter.” Antifascists
interviewed by the Atlanta JournalConstitution said they “view police
as a tool of an establishment they
want to dismantle.”
Eventually Antifa will kill someone
unless law enforcement clamps down
soon, perhaps using a no-tolerance
“broken-windows policy” to arrest
those who hurl projectiles, vandalize
property, commit assaults or even
jaywalk. Unmask them, jail them, publish their names and force them to attend free-speech training.
CHARLES D. EDEN
Atlanta
The fact is that leaders on the
right have vigorously denounced
white supremacists and Nazis. Further, it is a fact that leaders on the
left such as President Obama and
Harry Reid have defended and encouraged leftist malefactors such as
Occupy Wall Street and Black Lives
Matter. I believe that the more they
condone this sort of behavior, the
more mainstream voters will incline
to Republican candidates in future
elections. Shooting themselves in the
foot has been a recent hallmark of the
Democrats.
RICK ELLIS
New Orleans
What we really need to know is
who is paying the bill for all those
black suits, masks, shoes and weapons. The views of the guy who is paying the bills are what the group
stands for.
JUDITH EVANGELISTA
Medford Lakes, N.J.
The similarities among Antifa, the
Sturmabteilung (Nazi Brownshirts)
and Stalin’s thugs is chilling. Have we
learned nothing from the 20th century?
JAMES SCHAEFER
Paso Robles, Calif.
These groups routinely show up at
otherwise peaceful rallies armed and
ready for battle. They come clad in
black, hooded and masked to disrupt
and attack anyone that might put
forth ideas or positions that differ
with their beliefs. This ignores the
right of others to freely express opposing ideas and concepts. This is unAmerican and must be stopped.
I suggest that as soon as Antifa or
any others appear in masks they be
immediately arrested, unmasked and
photographed. It is obvious by their
dependence on these masks that they
are cowards and are most afraid of
being identified and associated publicly with these hate groups. This
might not solve all problems but
would greatly reduce participation in
these groups.
JOHN R. ASHBURN JR.
Carrollton, Va.
It’s the antifada.
ROBERT HERNDON
Brandon, Miss.
Ben’s List of Virtues Continues to Stimulate
Regarding “What Would Ben
Franklin Say?” (Life & Arts, Aug.
22): Readers might be interested to
know that Franklin’s original Junto
is still alive and well in Philadelphia. In his autobiography Franklin
describes how the members of his
discussion group would often need
recourse to their books to settle arguments. An initial plan for members to bring all their books together in one place failed when
books were borrowed and not returned. Franklin improved on the
idea by encouraging the members of
the Junto and their friends to form
a new kind of library company,
which required members to pay a
deposit upon joining. If a member
Censorship Is a Slippery
Slope, Dangerous to the Free
In his cogent defense of the traditionally liberal view concerning the
necessity of free speech (“The Assault on Free Speech,” Politics &
Ideas, Aug. 23), William Galston
notes that today “many scholars
want to censor speech that reinforces social imbalances, believing
that it enhances the ability of the
powerful to subordinate the powerless.” He quotes K-Sue Park, a Critical Race Studies Fellow (of course) at
UCLA, writing in the New York
Times, who urges the ACLU to
change its defense of all free-speech
policy to that effect without the
slightest awareness that if authorities are given that censorship power,
her own free-speech rights could be
suppressed by a government hostile
to her views.
Once again, the observation that
George Orwell made in conversation
is proved accurate: “Some ideas are
so stupid that only intellectuals
could believe them.”
BOB FOYS
Chicago
CORRECTION
failed to return a book, the cost was
taken out of his deposit. The pooled
funds were also used to buy new
books, chosen by the members.
This venture was called the Library Company of Philadelphia, and
286 years after its founding it is
still going strong. It was the first
lending library in what would become the U.S., arguably the first
anywhere. Franklin was especially
proud of it and of the level of education it brought to the people of
the colonies.
The spirit of shared learning and
mutual improvement lives on in the
work of scholars who use our collections to learn about our nation’s
earliest days, and who share with
one another and with our members
and shareholders their discoveries.
MICHAEL BARSANTI
Library Company of Philadelphia
Philadelphia
Ms. Yellen is Right, We’re
Forgetting Costly Lessons
Janet Yellen’s faith in Dodd-Frank
would be amusing if it weren’t so
dangerous (“Our Political Central
Bankers,” Review & Outlook, Aug.
29). Dodd-Frank’s main accomplishment has been to increase compliance costs, which of course are
passed on to businesses and consumers. The banks that were bailed
out in 2008 are now bigger. Required down payments on houses
are once again ridiculously low, resulting in too much leverage. Cashout refis are now back in vogue.
“Already, for some, memories of
this experience may be fading,” says
Ms. Yellen of the financial crisis. No
kidding.
CHARLIE POLITI
Peoria, Ariz.
Pepper ...
And Salt
THE WALL STREET JOURNAL
Rep. Ben Ray Luján is from New
Mexico, and Michael New is a professor at Ave Maria University. Mr. Luján’s state and Mr. New’s affiliation
were misstated in the Aug. 31 op-ed
“Democrats Inch Right on Abortion.”
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.
“Who hired this clown?”
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | A15
OPINION
By Robert B. Zoellick
D
onald Trump’s trade policy is speeding toward a
shipwreck. Under the
Constitution, Congress
has principal authority
over trade, although it has delegated
considerable powers to the executive.
Congress needs to reassert control to
block Mr. Trump’s crack-up.
The president threatened last
week to abandon the U.S.-Korea Free
Trade Agreement. The immediate result would be to increase barriers to
American exporters, especially farmers, ranchers, manufacturers and
His fight with Seoul would
leave the U.S. a loser.
Congress needs to assert
its authority to stop him.
service industries. Without the FTA,
Korea’s average tariff could be
boosted to almost 14%, quadruple
the average U.S. tariff. The European
Union will retain free access to Korea through its trade deal.
Mr. Trump’s impulses are strategically incoherent. China has been
squeezing Korean companies because Seoul has been installing missile defenses against North Korean
rockets. When Mr. Trump seeks to
cut off South Korea’s trade with the
U.S., Seoul’s logical course is to accommodate Beijing to protect ties
with its largest trading partner.
Combined with his withdrawal
from the Trans-Pacific Partnership,
the president’s attack on the Korean
FTA signals America’s unreliability
as an economic partner. Asian countries will inevitably question whether
America’s economic retreat is consistent with U.S. security commitments
across the Pacific. No one will understand why Mr. Trump would fracture
ties with Seoul—and provoke public
hostility in South Korea—at a moment when North Korea’s threats necessitate tight cooperation and trust
to thwart Pyongyang. North Korea’s
Kim Jong Un will proclaim that he is
Korea’s true national patriot, having
shown his countrymen that America
is selfishly thrashing the “running
dogs” in Seoul.
The recently appointed South Korean trade minister, Kim Hyun
Chong, is the same man who negotiated the FTA with the George W.
Bush administration, who patiently
renegotiated with Barack Obama,
and who worked with Congress during both terms to forge closer links.
South Korea’s economic and democratic development has been an incredible success story; Korea grew
to become America’s sixth-largest
trading partner for goods even without an FTA. But Mr. Kim wanted to
lock in an alliance with America in
the 21st-century competition for
power in the Indo-Pacific. Especially
in Asia, where respect and reliability
in personal relations are valued
highly, Mr. Trump’s shocking slap to
America’s Korean friends will be
noted and long remembered.
Mr. Trump’s tirade about South
Korea is part of a much larger problem. He has repeatedly threatened
to terminate the North American
Free Trade Agreement, too. Conventional wisdom has treated these
trade tantrums as passing storms,
but the rationalizers have misread
his purposes. Mr. Trump wants to
reverse bilateral trade deficits,
which he views as “losing.” In reality, trade deficits with other countries reflect a mix of relative growth
BRENDAN SMIALOWSKI/AFP/GETTY IMAGES
Trump’s Looming Trade Crack-Up
South Korea’s President Moon Jae-in visiting the Oval Office, July 30.
rates, differential production advantages, supply chains, savings and investment, and currency exchange
rates. The U.S. has a trade surplus
with Australia, which has a surplus
with China, which has a surplus with
the U.S.—each reflecting comparative advantages. I have a “deficit”
with my local supermarket, but I offset what I owe by earning money
elsewhere, not by stocking shelves at
night to pay for my groceries.
The U.S. cannot reverse trade deficits through new agreements. Mr.
Trump’s negotiators will try to fix
outcomes by having governments set
market shares or through arrangements similar to barter, like the Soviet Union’s old Council for Mutual
Economic Assistance. Neither Mexico, Canada, South Korea nor any
other market economy partner will
agree to a central-planning trade
model. Even if they tried, bilateral
trade patterns would still reflect
global comparative advantages.
Some 60% of America’s imports are
for intermediate goods that contribute to U.S. competitiveness. Mexico’s
trade surplus with the U.S. primarily
reflects integrated auto production,
which helps U.S. companies and
workers to compete globally.
The administration’s Nafta proposals reveal its own contradictions.
The U.S. demands more-open markets for American goods, pressing
for provisions from the TPP that Mr.
Trump denounced. But the U.S. also
wants the ability to ignore its commitments. The administration, for
example, wants to abolish neutral
panels that apply agreed rules to resolve disputes about subsidies or
selling goods below cost. The U.S.
also wants to be able to raise new
barriers when interest groups demand “temporary protection.” And
the administration wants to ignore
rules on treating investors fairly.
Mr. Trump’s abandonment of investment protections could prove especially self-defeating if a new Mexican government reverses President
Enrique Peña Nieto’s move to open
Mexico’s energy markets.
Mr. Trump appears oblivious to
these realities. His real aim may be
to forge a domestic political realignment around matters such as trade
protectionism, hostility to immigration and walling off Mexico. As he is
unable to achieve simple solutions in
North Korea, Afghanistan and the
Middle East—and as his frustrations
build with Congress and investigations—the danger is that he will lash
out. Because his trade policy will not
reverse bilateral trade deficits, the
president will want to scrap “bad
deals” that he can blame on others.
He will destroy agreements to keep
faith with his own false arguments—
and to save himself.
Those in Congress who still want
to give Mr. Trump the benefit of the
doubt should ask how he plans to
enact his new deals. Nafta’s passage
in 1993 required a huge effort by
President Clinton and relied heavily
on Republican support. Mr. Trump is
inept with Congress and will never
fight for any Nafta. Democratic lawmakers will happily embrace Mr.
Trump’s economic isolationism to
reclaim voters they lost.
This trade policy will unravel vital ties across the Asia-Pacific region, hurt an ally facing a security
crisis, destroy a North American
partnership that should be the
foundation for U.S. global power
projection, and subvert confidence
in the U.S. around the world. Congress can no longer wait for Mr.
Trump to speak and act sensibly. It
needs to assert its constitutional
powers over trade to stop this president’s destruction.
Mr. Zoellick is a former World
Bank president, U.S. trade representative and deputy secretary of state.
Congress’s Chance to Do Its Job and Solve the Dreamers’ Dilemma
Republicans have
spent the past five
years
grumbling
about how President Obama used
executive power to
give
temporary
UPWARD
MOBILITY work permits to
people brought to
By Jason L.
the U.S. illegally as
Riley
children. Now GOP
lawmakers have a
chance to put up or shut up.
Attorney General Jeff Sessions announced Tuesday that the Trump administration is ending this program,
called Deferred Action for Childhood
Arrivals, but with a six-month delay
intended to give Congress time to do
its job and address the issue with
legislation. Mr. Trump made a campaign pledge to rescind all executive
actions taken by President Obama,
who often acted unilaterally when
Congress wouldn’t bend to his will.
But Mr. Trump’s view of DACA recipients, also known as “Dreamers,” has
been more complicated.
The president believes that his
calls for a border wall and his tough
rhetoric on immigrant gangs and
sanctuary cities helped him get
elected, and perhaps it did. He also
understands, though, that all illegal
immigration doesn’t warrant the
same response. “We love the Dreamers,” he said last week from the Oval
Office. “We think the Dreamers are
terrific.” At the same time, the administration has continued to insist
that DACA is unlawful and can’t withstand legal challenge. In a Tuesday
statement explaining why he rescinded the program, Mr. Trump
said: “The legislative branch, not the
executive branch, writes these laws—
this is the bedrock of our constitutional system, which I took a solemn
oath to preserve, protect, and defend.”
A Pew survey taken in 2012,
shortly after Mr. Obama issued his
DACA order, put its support at only
46%. Yet 70% of the respondents—including 53% of Republicans—said illegal immigrants in the U.S. “should
have a way to stay in the country legally.” In other words, a bipartisan
majority supported Mr. Obama’s goal
but not necessarily his method. Process matters, and Republicans now
have an opportunity to get it right.
Finding a way to avoid deporting
about 800,000 DACA recipients
would seem to be a no-brainer politically. In an NBC News/SurveyMonkey
poll last week, 64% of Americans said
they supported DACA, and 71% said
that “most undocumented immigrants working in the United States”
A bipartisan majority
supported Obama’s DACA
goal, but not necessarily
his unilateral action.
should be “offered a chance to apply
for legal status.” For comparison, Mr.
Trump’s approval rating was 39%. An
amnesty for DACA recipients
wouldn’t be popular with the president’s base, but Dreamers are still far
more popular than Mr. Trump.
Republican governors such as Rick
Scott of Florida, an outspoken supporter of the president, have come to
the defense of DACA immigrants. So
have business groups and GOP leaders
on Capitol Hill like Sen. Orrin Hatch of
Utah and Speaker Paul Ryan, who’s
convinced that a legislative fix is
possible. Measures already in the
works include a bill co-sponsored by
Sens. Lindsey Graham, a Republican
from South Carolina, and Dick
Durbin, a Democrat from Illinois. To
earn legal status under their plan,
modeled on DACA, you’d have to pass
a background check, pay a fee, be
employed or enlisted in the military,
and speak English, among other requirements.
The big unknown is what Mr.
Trump, who says he’s providing “a
window of opportunity for Congress to
finally act,” will demand in return for
protecting Dreamers. Will the “really
big fixes” he called for Tuesday include funding for a border wall and
more detention facilities, or new EVerify requirements on businesses?
One demand may be significant reductions in legal immigration, which Republicans would be wise to resist.
Mr. Trump praised the Raise Act,
introduced earlier this year by GOP
Sens. Tom Cotton of Arkansas and
David Perdue of Georgia, which purports to put U.S. immigration policy
on path to a merit-based system like
Canada’s or Australia’s. In practice
however, the bill wouldn’t boost
skilled immigration and would cut legal immigration overall by about 50%
over the next decade, according to an
analysis by the Cato Institute.
An entry system that served
America well 100 years ago may not
be suited for a 21st-century economy,
and fixing immigration involves more
than fixing the border. But the two
are of a piece, and making it difficult
to come to the U.S. legally is the best
way to encourage unlawful entries.
Moving the U.S. away from a system
that heavily favors family ties and toward one based more on skills might
well be the way to go, but not at the
expense of an overall reduction to
immigration.
Some 10,000 baby boomers reach
retirement age every day, and we’re
hearing much more lately about labor
shortages than job shortages, even in
industries—agriculture, construction,
manufacturing—where higher wages
are being offered. Now is probably
not the time to drastically limit employers’ access to labor. Reducing legal immigration is where Republicans
in Congress should draw the line.
Who’s the Real Internet Censor: Comcast or Facebook?
By Mark Epstein
A
pple has at last broken its silence
on net neutrality. Last week the
company sent a letter to the Federal Communications Commission endorsing “strong, enforceable open internet protections” and opposing the
FCC’s planned deregulation. “Consumers must be allowed to access the lawful internet content, applications, and
services of their choice,” wrote Cynthia
C. Hogan, Apple’s vice president of
public policy for the Americas. “Broadband providers should not block, throttle, or otherwise discriminate against
lawful websites and services.”
Apple’s comments are directly in
line with the larger progressive narrative, which presents net neutrality as
a bulwark against corporate censorship. If the FCC’s deregulation went
through, a senior policy analyst for
the American Civil Liberties Union
worried in July, “corporations like
Comcast, Verizon, and AT&T will have
the power to distort the flow of data
and the marketplace of ideas online.”
Facebook’s Mark Zuckerberg wrote
that the FCC plan would let internet
providers “block you from seeing certain content.” A public policy manager
at Twitter said “free expression”
would be threatened because cable
companies could “block content they
don’t like.”
One problem: No one has presented a single credible case of any
major internet provider censoring
web content based on political beliefs. But you know who does? The
very companies calling for net neutrality. Apple, Facebook, Twitter,
Google, PayPal and other tech firms
are engaged in increasingly strict political censorship through vague and
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subjective prohibitions on “hate
speech” and “fake news.”
Twitter outright banned the conservative provocateurs Milo Yiannopoulos and Anthony Cumia. Although
these men could be caustic online—
Mr. Yiannopoulos has embraced the
label “troll”—social-media companies
also blocked controversial but sober
political arguments. Twitter allows
paying users to “promote” their
tweets, but last month it refused
posts from the Center for Immigration Studies, including one that argued “illegal immigrants are a large
net fiscal drain.”
Facebook reportedly removed a
post last year that merely argued
“what Trump is trying to say is that
Homeland Security can not differentiate which muslim is radical wanting
to cause harm and which is a harmless refugee.” Google’s YouTube restricted access last year to dozens of
videos from PragerU, a project of conservative talk-radio host Dennis
Prager, including lectures by prominent experts on subjects such as “Israel: The World’s Most Moral Army.”
PayPal canceled service this summer
to dozens of accounts labeled as “hate
groups” by the left-wing Southern
Poverty Law Center. Apple Pay soon
followed suit, and CEO Tim Cook announced his company would donate
$1 million each to the SPLC and the
Anti-Defamation League.
Proponents of net neutrality say
this comparison is apples and oranges.
Since most people have only one or
two options for high-speed internet,
and because cable companies must invest billions of dollars in infrastructure, the argument is that competition
Silicon Valley firms claim
net neutrality will protect
free speech—and then they
take down your ‘hate.’
won’t effectively check censorship. On
the other hand, we’re told to think of
“platform monopolies” like Facebook
as competing newspapers that would
be beaten in the marketplace if they
began to censor.
But this ignores that social media
is the textbook example of a service
with “network effects.” The more users they have, the more valuable they
Notable & Quotable: ‘A Socialist Impulse’
New York magazine interviewing
Mayor Bill de Blasio, Sept. 4:
In 2013, you ran on reducing income inequality. Where has it been
hardest to make progress? Wages,
housing, schools?
What’s been hardest is the way
our legal system is structured to favor private property. I think people
all over this city, of every background, would like to have the city
government be able to determine
which building goes where, how high
it will be, who gets to live in it, what
the rent will be. I think there’s a socialistic impulse, which I hear every
day, in every kind of community, that
they would like things to be planned
in accordance to their needs. And I
would, too. Unfortunately, what
stands in the way of that is hundreds
of years of history that have elevated
property rights and wealth to the
point that that’s the reality that calls
the tune on a lot of development.
become. The point of social media is
communicating with others on social
media. You could start a free-speech
competitor to Facebook or Twitter, but
it would not provide remotely the
same service until it attracted hundreds of millions of users.
Moreover, social media companies
present themselves as open forums.
“Free expression is part of our company DNA,” the Twitter public policy
manager wrote in July. “We are the
platform that lets users see what’s
happening and to see all sides.” The
Supreme Court apparently agrees. In
Packingham v. North Carolina, an
opinion issued in June, the justices
described social media as the “modern public square.”
For years, Facebook denied it was
a media company in any sense of the
term. Then in December, when it began restricting fake news, Mr. Zuckerberg claimed it was “not a traditional media company.” The legal
difference here is important. Traditional media companies like newspapers can be held liable for the content they publish. But online
platforms are given a safe harbor under law to avoid liability for their users’ content. The statute setting up
this immunity explicitly states that
Congress believes “the Internet and
other interactive computer services
offer a forum for a true diversity of
political discourse.”
This is not to say that social media
companies should be subject to the
First Amendment or “common carrier” regulations, as some have recently begun to advocate. But if Apple, Facebook and Google want to
prevent big corporations from suppressing free speech online, then:
physician heal thyself.
Mr. Epstein is an attorney and
freelance writer.
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Verizon Makes It Personal
Wireless carrier offers
rewards to customers,
but also wants to see
their browser histories
BY RYAN KNUTSON
A new Verizon Communications Inc. rewards program
provides credits that wireless
subscribers can use for concert tickets, movie premieres
and phone upgrades.
But the program, known as
Verizon Up, comes with a
catch: Customers must give
the carrier access to their
web-browsing history, app usage and location data, which
Verizon says it uses to personalize the rewards and deliver
targeted advertising as its customers browse the web.
The trade-off is part of Verizon’s effort to build a digital
advertising business to compete with web giants Facebook Inc. and Alphabet Inc.’s
Google, which often already
possess much of the same customer information.
Even though the U.S. Congress earlier this year dismantled tough privacy regulations
on telecommunications providers, Verizon still wants customers to opt in to its most
comprehensive advertising
program, called Verizon Selects. Data collected under the
program is shared with Oath,
the digital-media unit Verizon
created when it bought AOL
and Yahoo.
Since access to data from
customers could make it easier to tailor ads to their liking,
Verizon hopes the information
will help it gain advertising
revenue to offset sluggish
growth in its cellular business.
While it added more than
Black Swan Down
Cumulative return of tail-risk funds since December 2007
40%
600,000 wireless subscribers
in the latest quarter, the gains
came during a period of intense competition that forced
it to revive unlimited-data offerings and sacrifice the revenue it generated from pricier
plans and overage fees.
Verizon’s core wireless
business generated $89 billion
in revenue in 2016—a 2.7%
drop from 2015. Meanwhile, its
digital advertising unit brings
in roughly $7 billion a year.
Verizon has about 4% of the
U.S. digital advertising market
this year, compared with 41%
Please see DATA page B4
20
0
–20
–40
–60
2008 2009 2010
2011
2012
Source: CBOE Eurekahedge Tail Risk Hedge Fund Index
XINHUA/ZUMA PRESS
BY JON SINDREU
AND LAURENCE FLETCHER
Great Wall Motors’ global push is being
spurred by some tricky realities in China’s
auto market. B3
Wall Building
...and has been one of the country’s most profitable auto makers,
but profits have slipped in 2017.
Car sales
In millions of vehicles
Exports
As a percentage of sales
Revenue
In billions of yuan
Net profit
In billions of yuan
1.0
50%
100
10
All
cars
SUVs
Full
year
First
half
40
80
0.6
30
60
6
0.4
20
40
4
0.2
10
20
2
0.8
0
2007
0
’10
’15
’17*
2007
’10
’15
’17*
0
2007
’10
8
’15
’17
Full
year
First
half
0
2007
’10
’15
’17
THE WALL STREET JOURNAL.
Note: 10 billion yuan = $1.51 billion *First half Source: Great Wall Motor
In the wake of the global financial crisis, fear of such
“black-swan” events drove
some investors into hedge
funds that offered protection
should markets plunge. But
the swans have yet to return,
and such strategies have fallen
out of favor.
The patience of many investors has run out after losing
money during the intervening
years of mainly benign market
conditions. According to data
by CBOE Eurekahedge, those
who invested in these tail-risk
funds—which are designed to
reap benefits from sudden
slumps—when their performance peaked in September
2011 would have by now lost
55% of their money.
Some big names in asset
management have been hit,
leaving only a handful of funds
that promise outsize returns
should markets go into a tailspin.
Those left say that a decade
after the financial crisis began, people have forgotten its
lessons just as market risks
are building. Market volatility
is near record lows and stock
As gasoline prices at the
pump hit a fresh two-year
high Tuesday, the futures market signaled the supply crunch
for fuel created by Hurricane
Harvey will soon ease.
The average price for a gallon of gasoline rose another 1.1
cents Tuesday to $2.65 a gallon, up 24.8 cents from last
week. Prices rose 27 cents in
the week ended Monday—the
largest weekly increase since
Hurricane Katrina hit the Gulf
Coast in 2005 and the national
average soared 49 cents in a
week, according to GasBuddy,
which tracks fuel prices.
Gasoline futures on Tuesday fell 2.8% to $1.6991 a gallon on the New York Mercantile Exchange on news that the
nation’s fuel infrastructure
was coming back online.
Five Gulf Coast refineries
were in the process of restarting Tuesday afternoon and at
least seven more were operating at reduced rates, according
to the U.S. Department of Energy. Colonial Pipeline Co.
said it has resumed gasoline
shipments from Houston
through a pipeline that supplies much of the Southeast
and Northeast. On Sunday and
Monday, Explorer Pipeline restarted pipelines that take fuel
from Houston to Tulsa, Okla.,
and on to Chicago.
Still, for consumers, costs
might stay elevated for some
time amid global competition
for fuel as refiners and pipelines gradually ramp up and
depleted inventories are slowly
replenished. Analysts at AAA
expect retail gasoline prices
could increase another five to
2014
2015
2016
2017
THE WALL STREET JOURNAL.
markets remain resilient, but
entering September, typically
the weakest month for the U.S.
stock market, many investors
and traders are looking over
their shoulders.
The term black swan was
popularized by writer and academic Nassim Nicholas Taleb
to describe extreme events
that are difficult to predict
and more likely to happen
than forecast.
Historically high stock valuations, increased consumer leverage and extraordinary central-bank stimulus are among
the factors that some money
managers believe make a
black-swan event more likely
than at any time since the financial crisis, which sent
stock, credit and commodity
markets plummeting.
However, critics point to
evidence suggesting that buying insurance is always a losing strategy in financial markets.
As the crisis peaked in
2008, Universa Investments
LP made returns of above
100% for its clients.
Nine years later, “I don’t
see anyone out there doing
what I do,” said founder Mark
Please see SWAN page B2
INSIDE
Gasoline Jumps as Refineries Restart
BY ALISON SIDER
2013
Years After Crisis,
Hunt Is Ending
For ‘Black Swans’
Jeep’s Chinese Suitor Faces Roadblocks at Home
Great Wall has become an SUV specialist focused almost
entirely on the China market...
See more at WSJMarkets.com
10 cents in the next week.
“Everybody’s breathing this
big sigh of relief that the shortage of gasoline is over, but
we’re still several weeks away
from what we would call back to
normal,” said James Burr, vice
president of energy products
at broker INTL FCStone. With
several major refineries still
down, “that’s a lot of gasoline
not being produced,” he said.
Harvey hit Texas as a Category Four hurricane and lingered over the region for days,
dousing the Gulf Coast and
Please see FUEL page B2
RADIOSHACK
READIES PLAN
FOR SURVIVAL
SENT ABROAD?
PLAN YOUR
RETURN NOW
RETAIL, B4
MANAGEMENT, B8
HEARD ON THE STREET | By Charley Grant
Boeing Questions
Suppliers’ Merger This News Should Get Blood Pumping
BY DOUG CAMERON
AND THOMAS GRYTA
Boeing Co. on Tuesday
raised concerns about United
Technologies Corp.’s proposed
takeover of Rockwell Collins
Inc., threatening to cancel
some contracts with the suppliers if the combination undermines competition in the
aerospace supply chain.
A day after the $23 billion
deal was made public, Boeing
said it was skeptical the transaction would benefit its airline
customers or the broader industry. “We would intend to exercise our contractual rights
and pursue the appropriate
regulatory options to protect
our interests,” the aircraft
maker said in a statement.
In buying Rockwell, United
Technologies is betting it can
foster the industry’s creation
of the fully digital airplane.
Aerospace companies are investing heavily to connect everything from engines and
brakes, and even coffee pots,
using sensors to guide them on
when to schedule maintenance
or replacements.
Such repairs have long been
the most profitable part of the
aircraft industry, prompting
efforts by Boeing, Airbus SE
and others to secure a larger
slice of the business, moves
potentially threatened by
United Technologies’ move on
Rockwell Collins.
“It gives us the opportunity
to do things that we wouldn’t
be able to do on our own,” said
United Technologies Chief Executive Greg Hayes on a Tuesday conference call. The combination with Rockwell Collins,
he said, will make it easier to
Please see UTC page B2
A major
clinical breakthrough at
two pharmaceutical companies didn’t
get much attention from
Wall Street. That means opportunity for investors.
Xarelto, the clot-prevention drug jointly owned by
Bayer and Johnson & Johnson, was shown to significantly cut the risk of stroke,
heart attack, amputation or
death for patients with severe atherosclerosis, or
blockage in the arteries. Patients who took Xarelto in
combination with aspirin experienced a 24% decline in
those serious events, compared with patients who
took just aspirin. The trial
was halted early due to
Xarelto’s efficacy.
The data, which were pre-
sented last month at a medical conference, are “about as
good as it gets,” said Dr. Pete
DiBattiste, head of cardiovascular research and development at J&J. Yet neither
Bayer nor J&J shares have
rallied since the data were
unveiled.
Xarelto is already a blockbuster drug. Analysts expect
$4 billion in sales at Bayer
and $2.4 billion at J&J from
the drug in 2017, according
to FactSet. And the companies will need regulatory approval to convert the data
into expanded sales opportunities, which will take time.
And Wall Street does expect
significant growth in Xarelto
sales, to about $9 billion in
total by 2020.
Still, there is a strong
chance that Xarelto could
sell better than most expect
as the latest data signifi-
Health Kick
Annual Xarelto sales for Bayer ( )
and Johnson & Johnson ( )
$6 billion
Analyst
forecasts
5
4
3
2
1
0
2015 ’16
’17
’18
’19
’20
Source: FactSet
THE WALL STREET JOURNAL.
cantly expand its market potential. Bayer said on a conference call with analysts
that as many as 30 million
new people may become eligible for the treatment, and
this is a treatment that goes
on indefinitely. The number
of patients could further ex-
pand when more data come
out next year.
The drug is likely to be
profitable because Bayer and
J&J aren’t likely to need a
major investment in sales
forces. And, because Xarelto
would be an add-on to an existing aspirin regimen, new
patients won’t need to
switch from another drug.
Johnson & Johnson and
Bayer trade at 17 and 14
times forward earnings, respectively. Those valuations
are in line with recent history, but analysts expect
earnings growth on the order of 7% annually for the
next three years for both
companies.
Stock markets are mostly
efficient. But every now and
then, a major development
happens without much fanfare. Investors should take
notice.
B2 | Wednesday, September 6, 2017
THE WALL STREET JOURNAL.
* ***
INDEX TO BUSINESSES
BUSINESS & FINANCE
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
B
Ballard Spahr..............B3
Banco Bilbao Vizcaya
Argentaria...............B16
Banco Santander ...... B16
Bank of America.......B15
Barry Callebaut GroupB3
Bayer...........................B1
Beacon Roofing Supply
...................................B16
BlackRock..................B15
Blackstone Group ....... B6
Boeing ......................... B1
Bond Dickinson...........B3
Brockton Capital.........B6
BRW Electronics.........B4
C
Capula Investment
Management.............B2
Carnival ..................... B16
Chadbourne & Parke...B3
China Investment.......B6
Citigroup....................B14
Clearbell Property
Partners....................B6
Colonial Pipeline.........B1
Everest Re Group
........................... B15,B16
eVestment.................B15
Explorer Pipeline.........B1
Exxon Mobil................B2
F-G
Facebook................B1,B4
Fiat Chrysler
Automobiles ............. B3
General Motors...........B3
GGP..............................B6
Goldman Sachs Group
...................................B15
Great Wall Motors ..... B3
H
Helical..........................B7
Heritage Insurance
Holdings..................B16
Hersha Hospitality Trust
.....................................B7
Home Depot..............B16
J
J.C. Penney..................B6
Johnson & Johnson....B1
L
LaSalle Investment
Management.............B7
L'Oreal.........................B8
Lowe's.......................B16
LyondellBasell
Industries..................B5
M
Macy's.........................B6
Man Group .................. B2
Mansfield Oil .............. B2
Mattel .........................A1
Merck...........................B3
S
Schneider Electric.......B2
Sears Holdings............B6
Shanghai Automotive
Industry.....................B3
Simon Property GroupB6
Sotherly Hotels .......... B7
Supercell....................B15
T
Takeda Pharmaceutical
.....................................B5
Tencent Holdings......B15
Toyota Motor..............B3
Travelers............B15,B16
A Schneider operation in India. The two European companies attempted a similar deal in 2015.
U
UBS Group.................B14
Unibail-Rodamco.........B6
United Technologies
...................... B1,B15,B16
Universa Investments B1
Universal Insurance
Holdings..................B16
V
Validus Holdings.......B16
Vantic........................B14
Verizon Communications
.....................................B1
Volkswagen.................B3
W
D-E
N-R
Warner Bros................B9
Wells Fargo...............B14
Womble Carlyle .......... B3
Diamondrock Hospitality
.....................................B7
Nasdaq ...................... B15
New Line Cinema ....... B9
XL Group............B15,B16
X
INDEX TO PEOPLE
A
I
Prew, Mike..................B6
Adam, Larry..............B15
Akerkar, Sanket..........B8
Idema, Matt................B4
Ironside, David............B6
Ivory, Trevor................B7
Quirijns, Rogier...........B6
B
Black, Stewart............B8
Blavatnik, Leonard......B5
Bonk, Jacob.................B8
C
Cox, Jack ..................... B6
D
DeHaan, Patrick..........B2
Dudley, William ........ B15
G
K
Kotak, Hemant............B6
L
Levin, Adam................B4
Levin, Barry.................B3
Lewis, Janet................B3
M
Mattes, Daniel............B5
Minnick, Jim ............. B15
Q
R
Razzaghipour, Marla.B14
Razzaghipour, Reza..B14
Rose, Tom ................... B7
S
Scotti, Diego...............B4
Shirazi, Emanuel.......B14
Sibbern, Bjørn...........B15
Smith, Daniel R..........B8
Spitznagel, Mark ........ B1
Sutton, Chris...............B7
Garijo, Belén...............B3
N
H
Nelson, Bill................B16
W
Hed, Kaj.....................B15
Hed, Niklas................B15
Huber, Lars..................B7
P
Weber, Christophe......B5
Perry, Fred...................B7
Perry, Stephen............B2
Zhang, Yale.................B3
UTC
Z
Schneider, Aveva Merge
Industrial-Software Work
BY BEN DUMMETT
AND NICK KOSTOV
Schneider Electric SE of
France has agreed to take control of British engineering software provider Aveva Group
PLC, the latest move by an industrial giant toward writing
the software that will run the
factories and machines of the
future.
Under the deal, announced
jointly on Tuesday, Schneider
will fold its software assets
into Aveva’s operations and
pay the U.K. company more
than £550 million ($710 million) in exchange for a 60%
stake in the combined entity, in
a so-called reverse takeover.
Aveva would also distribute
£100 million to shareholders
following the deal’s completion.
Fearing disruption from tech
startups and Silicon Valley giants, the companies are combining their software operations to add heft as
manufacturing adopts more automation. Other companies, including General Electric Co.
and Robert Bosch GmbH, have
been working on digitizing
their manufacturing processes,
The Sum of Many Parts
Continued from the prior page
meet demand for digital offerings and integrate aircraft systems, with benefits like reducing overall weight.
United Technologies is already the world’s largest aerospace supplier, with almost
$30 billion in sales this year
split evenly between engine
maker Pratt & Whitney and
UTC Aerospace Systems, which
makes everything from landing
gear to the motors that control
wing flaps.
Rockwell Collins would add
another $9 billion in annual
sales derived from its business
of cockpit controls and communication equipment and this
year’s purchase of B/E Aerospace, the biggest provider of
aircraft seats. Rockwell also
makes the sensors and communication systems that allows for real-time tracking of
those products’ performance
and the need for maintenance.
Shares of Rockwell Collins
rose slightly on Tuesday to
$131, well below United Technologies’ $140 offer and Rockwell’s recent highs. Customer
opposition and the potential of
antitrust action given the
sheer scale of the proposed
deal—rather than product
overlap—still leaves some
question marks, analysts said.
The deal is expected to close
by the third quarter of 2018,
after regulatory and competitive concerns are reviewed.
Shares of United Technologies
fell 5.7% to $111.21.
Mr. Hayes said the companies will have to work with
customers that have changein-control clauses in their contracts, but played down the
Driving Higher
Retail gasoline prices have
continued to climb in the wake
of Hurricane Harvey.
$2.65 a gallon
2.60
2.55
2.50
2.45
2.40
2.35
Aug. 24
SWAN
RadioShack..................B4
RLJ Lodging Trust ...... B7
Rockwell Collins
...................... B1,B15,B16
Rovio EntertainmentB15
Royal Caribbean Cruises
...................................B16
AMIT DAVE/REUTERS
A
Activision Blizzard....B15
Allstate ..................... B16
Alphabet .............. B1,B15
AQR Capital
Management.............B2
Ashford Hospitality
Prime.........................B7
Aspen Insurance
Holdings..................B16
AT&T............................B4
Aveva Group ............... B2
Sept.
Source: Oil Price Information Service
THE WALL STREET JOURNAL.
United Technologies' acquisition of Rockwell Collins is a big bet on taking
the digitally connected aircraft
aircraaft one step closer to reality.
Cabin
Aircraft
systems
Aerospace
employees
Cockpit
Propulsion
United Technologies
Rockwell Collins
Cockpit
Pilot controls
Pitot tubes
(sensors)
Avionics
Communication
Navigation Flight controls
Head-up displays
Propulsion
Engines
Nacelles
(streamlined
housing)
Engine sensors
Engine controls
Pylons
(connect the
engines)
Lighting
Seats
Auxiliary
power
Cargo
handling
Exterior
lighting
Fire systems
Ice detection
Actuation
(motors)
Wheels/brakes
Landing gear
Cabin
Aircraft
systems
Aerospace
employees
152,000
Source: the companies
risks. “We don’t see anything
that will stop this transaction
from happening,” he said.
Credit Suisse analysts gave
the deal an 80% chance of
closing, mostly because of the
lack of major overlaps, even
with Boeing pushing against
the takeover.
FUEL
Continued from the prior page
causing floods. Ports where
shipments of crude oil come in
and out were closed. Fuelmaking plants slowed or
stopped, either to avoid dangerous emergency shutdowns
or because they were no longer able to get the crude oil
they turn into gasoline, diesel
and jet fuel. At one point,
around 25% of U.S. refining capacity was closed. That choked
None
Lighting
Seats
Galleys
Lavatories
Broadband
None
30,000
THE WALL STREET JOURNAL.
Both Airbus and Boeing privately lobbied last year against
plans by Honeywell International Inc. to buy United Technologies, according to people
familiar with the situation.
However, Honeywell’s $15 billion aerospace unit had far
more product overlap with
off supplies to pipelines that
connect the Gulf Coast to markets in the Midwest, the
Southeast and the Northeast.
As a result, gasoline has
been in shorter supply and
prices have jumped in places
such as Atlanta and Raleigh,
N.C. Analysts at Mansfield Oil
Co., fuel wholesalers based in
Gainesville, Ga., said Sunday
that trucks were waiting in
line for six to eight hours to
get fuel to distribute to filling
stations. Major oil companies
have cut allocations even to
customers that sell branded
and developing software platforms and automation tools to
sell to other industrial players.
Schneider targeted U.K. software companies in the past to
bolster its industrial-software
business. In 2013, it agreed to
acquire Invensys PLC for £3.31
billion to better compete
against rivals such as Siemens
AG, Mitsubishi Electric Corp.
and Rockwell Automation Inc.
The planned transaction is
similar to the structure of an
attempt by the companies to
merge their industrial-software
businesses in July 2015. Then,
Schneider had agreed to combine its software assets with
those of Aveva and pay £550
million in exchange for a 53.5%
stake in the enlarged group.
However, the deal collapsed after the two sides couldn’t agree
on final terms.
Spun out of the University
of Cambridge in 1967, Aveva
provides engineering software
to owners, operators and engineering contractors that operate in the power, oil-and-gas,
marine and paper and pulp sectors, among others. It employs
more than 1,700 people across
30 countries.
The deal comes at a time
United Technologies.
Rockwell Collins CEO Kelly
Ortberg would become head of
a new United Technologies
unit, Collins Aerospace systems, with annual sales of $23
billion, heft that some believe
will unsettle Airbus and Boeing.
“This may greatly concern
aircraft [makers] such as Airbus and Boeing as they confront an ever increasing proportion of their supply chain
controlled by a single supplier,” said Stephen Perry,
managing director at Janes
Capital Partners, a boutique
aerospace investment bank.
On Tuesday, Mr. Hayes was
already working to ease such
worries. He noted the lack of
overlapping products in the
combination and said it would
help cut costs for customers.
The projected cost savings
from the takeover is net of any
concessions made to customers, Mr. Hayes said. “We have
factored in the fact that the
customers will be looking for
cost reduction.”
An Airbus spokesman said
the aircraft maker hopes “this
M&A will not distract UTC
from their top operational priority,” which is delivering a
new generation of Pratt &
Whitney engines.
United Technologies’ Pratt &
Whitney division has struggled
with its new geared turbofan
jet engine that powers Airbus
A320neo single-aisle planes.
Efforts to fix the shortcomings
have encountered repeated delays, and some analysts warned
that the demands of integrating Rockwell Collins could aggravate the problem. United
Technologies officials have said
they expect the problems to be
resolved this year.
—Robert Wall
contributed to this article.
fuel—usually the last to feel
the pinch, traders said.
“The biggest [price] increases are behind us,” said
Patrick DeHaan, senior petroleum analyst at GasBuddy.
But some refineries likely
will be offline for several weeks.
The U.S.’s largest refinery,
Motiva, in Port Arthur, Texas,
said Tuesday it is in the initial
phases of restarting. Exxon
Mobil Corp. said Tuesday its
Baytown refinery, the secondlargest U.S. refinery, is taking
care of facility assessments
and restart activities.
Aveva is trying to reduce it reliance on the slowing oil-andgas and marine markets. For
the year ended March 31, Aveva
boosted revenue by 7% to
£215.8 million from the prior
year, benefiting in part from
currency moves. Discounting
that, revenue was down 3.8%.
Schneider’s software is used
to help manage manufacturing
processes, design tools, and
train plant crews. It services industries ranging from transportation to its largest market of
food and beverages and pharmaceuticals, which generates
about 16% of the company’s annual software revenue.
The combination will give
Aveva greater access to the U.S.
market, where Schneider’s
software business generates almost half of its annual sales.
Aveva generates the bulk of its
revenue in Europe, the Middle
East and Asia.
“Aveva will significantly expand its scale and product
portfolio, increase its capabilities in the owner operator market, diversify its end user markets
and
increase
its
geographic exposure to the
North American market,” said
Aveva Chairman Philip Aiken.
Continued from the prior page
Spitznagel, who defined what
he does as “sort of like gold on
steroids.”
There is no set definition
for how far markets must fall
before the drop can be labeled
as a black-swan event.
Markets
have
mainly
climbed as central banks continue to flood them with funds
and the global economy expands. The CBOE Volatility Index, known as Wall Street’s
“fear gauge,” fell to its lowest
intraday level ever in July and
remains near historic lows.
The S&P 500 has been on a
smooth road higher since
early 2009, while the bull run
in bonds continues.
Tail-risk funds are down
6.3% this year through July,
according to data group eVestment, and have lost money in
four of the five preceding
years.
London hedge fund Man
Group PLC launched the AHL
Tail Protect Fund in 2009 and
has lost 45% since then, according to Man Group. Capula
Investment
Management
LLP’s Tail Risk Fund, with $3.7
billion under management, is
down 6.7% this year, according
to an investor letter reviewed
by The Wall Street Journal.
The fund made 11% in 2011 but
lost 14% the following year
and ran up further losses in
three of the four years following. Representatives of Man
Group and Capula declined to
comment.
AQR Capital Management
LLC calculates that black-swan
events need to happen, on average, at least once every decade for tail-risk strategies to
break even. The fund defines
such an event as a 20% drop in
the S&P 500 in one day.
But the last time the stock
market suffered such a plunge
was nearly 30 years ago, on
Black Monday, Oct. 19, 1987.
Mr. Spitznagel said the
problem is that most funds
just aren’t bold enough to lose
a lot of money when markets
are calm, which is the price to
pay for these strategies to offer gigantic returns when another Black Monday happens.
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THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B3
* *
BUSINESS NEWS
Jeep’s Suitor Struck Potholes in China
Great Wall Motor
looks to grow abroad
as it loses traction
in its home market
SHANGHAI—Great Wall Motor Co.’s push to go global by
acquiring Jeep is being spurred
by some tricky realities closer
to home, where the Chinese
auto maker faces sliding profit
and red-hot competition in its
core segment.
As the once-freewheeling
China market becomes more
competitive and growth slows,
Great Wall is signaling through
its acquisition plans that foreign expansion could soon be
the best way to increase profit
amid rising domestic pressures.
Acquiring Jeep wouldn’t
only give Great Wall a worldleading brand, but it would also
provide instant access to foreign markets, including the
U.S., where the Chinese auto
maker has little or no presence,
and with it new avenues for
growth.
“An overseas acquisition
would be very helpful to Great
Wall,” said Janet Lewis, managing director of equity research
at Macquarie Capital Securities.
ANDY WONG/ASOCIATED PRESS
BY TREFOR MOSS
Great Wall’s Haval SUVs under assembly in China. Haval has slipped to No. 4 among top-selling Chinese auto brands, from No. 2.
Like other analysts, Ms. Lewis
says that Great Wall’s strong financials make it a credible
suitor for Jeep despite its relatively small size.
There is less consensus on
whether Great Wall could secure Jeep without agreeing to
buy all of its parent, Fiat
Chrysler Automobiles NV, as
some say the latter might insist. That would dwarf any deal
previously attempted by a Chinese auto maker.
Great Wall said in August it
is considering a possible acqui-
sition of Jeep, and possibly all
of Fiat Chrysler. It declined to
comment for this article.
Based in China’s Hebei province, Great Wall is still a minnow by global standards. The
world’s biggest car companies—General Motors Co., Toyota Motor Corp. and Volkswagen AG—each produced 10
times more vehicles than Great
Wall last year.
China’s top producer, Shanghai Automotive Industry
Corp., also eclipsed its local rival, building 6.5 million cars,
though most of those were copies of foreign autos built via
joint ventures with GM and
Volkswagen.
Unlike state-run auto makers
such as Shanghai Auto, Great
Wall has focused solely on
building its own brand.
Founded in 1984 as a pickup
and later sedan maker, it has
transformed itself over the past
few years into a sport-utilityvehicle specialist. The company’s Haval marque accounted
for 87% of the company’s 2016
unit sales, up from 25% in 2009.
In recent years Great Wall
also began focusing on the
China market. Exports last year
were just 1.5% of total sales, off
from 43% a decade earlier,
when the company exported in
relatively small volumes to developing markets such as Africa
and the Middle East.
Last year, Great Wall’s sales
topped one million cars for the
first time. In a country where
most domestic auto brands
struggle to make money, the
company reported a record $1.6
billion profit on $15 billion in
sales. But that was likely the
high-water mark in terms of
China auto-sector growth: Car
sales increased 16%, but are unlikely to top 5% growth from
2017 onward, officials predict.
For Great Wall, this year’s
slowdown coincided with stiffer
competition in the SUV market
from foreign and domestic rivals, resulting in flat unit sales
in the first half of 2017, and
halved profits. Haval slipped to
No. 4 among the top-selling
Chinese auto brands, according
to researcher LMC Automotive,
off from second previously.
The company has fought
back by launching a new premium brand called Wey in April
designed to boost profitability,
and unveiling a second generation of its flagship H6 SUV,
which accounted for 54% of all
Great Wall sales last year. It remains China’s best-selling SUV,
but its lead has been eroded by
an increasingly strong lineup of
competitors.
With China market saturation expected, Great Wall and
other domestic auto makers
must give foreign markets new
attention, said Yale Zhang,
managing director of consulting
firm Automotive Foresight. A
foreign acquisition, like Great
Wall’s pitch for Jeep, would be
the quickest way.
Germany’s Merck Looks to Sell Its Consumer-Health Unit
BY DENISE ROLAND
Merck KGaA put its consumer-health unit on the block
Tuesday in a move that will
focus its health-care activities
on the riskier business of developing prescription medicines.
Darmstadt, Germany-based
Merck is considering options
for its consumer-health operations, including a full or partial sale, or strategic partnership, the company said. A final
decision hasn’t been made.
The move is a bet on
Merck’s growing pipeline of
prescription drugs for diseases
such as cancer and multiple
sclerosis.
Merck has struggled to
launch lucrative new drugs in
recent years, though it has
confidence in its current development pipeline, forecasting new drugs could generate
over €2 billion ($2.38 billion)
in yearly revenue by 2022.
“We have continued to
transform Merck…over the last
years into a leading science
and technology company,”
Chief Executive Stefan Oschmann said in a written
statement.
Merck’s consumer-health
unit manufactures over-the-
counter drugs and generated
sales of €860 million in 2016
from a portfolio of 10 core
brands that serve more than
40 markets.
Citi analyst Peter Verdult
estimated the business could
fetch a price of €1.8 billion to
€2.7 billion from a full sale.
Drugmakers face pressure
to scale up consumer-health
businesses amid a wave of
consolidation in the segment.
In 2015, GlaxoSmithKline PLC
and Novartis AG pooled their
consumer-health businesses
into a Glaxo-controlled joint
venture.
France’s Sanofi SA swal-
lowed Boehringer Ingelheim
GmbH’s consumer-health unit
last year.
Belén Garijo, who heads
Merck’s health-care business,
said in the statement that the
company lacked the financial
firepower to build its growing
consumer-health unit to the
“required scale.”
For companies like Glaxo
and Sanofi, reliable revenue
from big consumer-health
businesses help smooth out
the more unpredictable sales
of prescription drugs, which
succeed or fail on the outcomes of costly and risky clinical trials and whose sales
drop sharply after patent expiration.
A sale of the consumerhealth unit would focus
Merck’s health-care arm
purely on prescription medicines.
Earlier this year, Merck sold
its biosimilars business, which
developed generic versions of
biologically made drugs, to
Fresenius SE in a deal worth
up to €670 million.
Merck’s other operations—
which sell laboratory supplies
and high-tech materials for
items
like
smartphone
screens—could cushion the
German company from the ups
and downs of developing new
drugs. Merck has bulked up
both of these businesses
through acquisitions in recent
years.
“We view this as a sensible
capital-allocation decision, reflecting both increasing confidence in the pharma pipeline
and prioritization of investment elsewhere across group,”
said Citi’s Mr. Verdult in a
note to clients.
Merck said that proceeds
from any transaction would be
used to help meet the company’s financial targets.
The company isn’t affiliated
with U.S.-based Merck & Co.
Chocolate Maker Adds a New Sweet: ‘Ruby’
BOUYGUES
FIRST-HALF 2017
RESULTS
SHARP IMPROVEMENT
IN GROUP
PROFITABILITY
BARRY CALLEBAUT
• BACKLOG FOR THE CONSTRUCTION
BUSINESSES AT A RECORD LEVEL
• GROWTH IN COMMERCIAL AND FINANCIAL
RESULTS AT BOUYGUES TELECOM
• OUTLOOK FOR CONFIRMED
ZURICH—There is milk chocolate, dark chocolate and white
chocolate. Now a Swiss chocolate maker is adding “ruby” to
the mix.
Barry Callebaut Group said
Tuesday it has produced a type
of chocolate extracted from the
Ruby cocoa bean, resulting in a
chocolate that is reddish, a hue
usually associated with lipstick,
not chocolate.
“Ruby chocolate has an intense taste and characteristic
reddish color,” the company said
in a news release.
The new type of chocolate,
launched Tuesday in China, was
created at the company’s research and development centers
in Belgium and France as well as
Jacobs University in Germany.
The company described the
taste as “not bitter, milky or
sweet, but a tension between
berry-fruitiness and luscious
smoothness.”
No berries, berry flavor or colors are added.
The announcement comes
amid technological changes to
the chocolate industry, which is
being forced to adjust to changing tastes and more health-conscious consumers.
—Brian Blackstone
Law Firms Seek Mergers to Grow
BY SARA RANDAZZO
As law firms feel continued
pressure to expand or risk
perishing, more law firm tieups are coming together.
Chicago-based Arnstein &
Lehr LLP is merging with East
Coast-based Saul Ewing LLP, the
two firms announced Tuesday,
forming a more-than-400-attorney operation with strengths in
bankruptcy, litigation, finance
and real-estate work.
Philadelphia-based Ballard
Spahr LLP, with more than 500
lawyers, also said Tuesday it
plans to take on 110 lawyers
from Lindquist & Vennum LLP, a
Minneapolis-based firm specializing in midmarket private-equity and mergers-and-acquisitions work.
The deals are among the
largest in the legal industry this
year. In June, 250-lawyer New
York-based firm Chadbourne &
Parke LLP combined with international firm Norton Rose Ful-
bright. Five hundred-thirty-attorney U.S. firm Womble
Carlyle is set to merge with
slightly larger U.K. firm Bond
Dickinson in the fourth quarter.
In the face of stagnant demand for legal services, many
firms have turned to mergers
to boost market share and
stay competitive.
There were 52 combinations
announced in the U.S. in the
first half of the year, according
to legal consultancy Altman
Weil, exceeding previous midyear highs. Many of the deals
this year have included one international firm, and the majority involve acquisitions of
firms with 20 or fewer attorneys. The latest deals are domestic.
Arnstein & Lehr brings offices in Illinois and Florida,
joining with 11 Saul Ewing offices predominantly in the
Northeast. The new firm will
be branded as Saul Ewing Arnstein & Lehr.
Some of the firms’ clients
include advisory firm Willis
Towers Watson, engineering
firm Thornton Tomasetti and
commercial real-estate company ShopCore Properties.
The merger results from six
months of talks between firm
leaders.
Saul Ewing managing partner Barry Levin, who will lead
the combined firm, said market forces have made it increasingly necessary to have a
bigger footprint.
Ten years ago, he said, having 275 lawyers “was right in
the bull’s-eye of the definition
of a midsize law firm,” but today it hardly qualifies as such.
Demand for large law firms’
services was up 1.4% in the
first half of the year, according
to a survey from Wells Fargo
Private Bank’s Legal Specialty
Group. Revenue was up 5.6%,
according to Wells, with the
largest and most profitable
firms driving up the average.
There was a sharp improvement in Group profitability in the
first half of 2017.
The current operating margin increased, driven by good
performances at Bouygues Telecom and TF1. Net profit
attributable to the Group also improved. Excluding
exceptional items, it was up €171 million.
Furthermore, commercial momentum continued in all the
Group’s business activities.
- The backlog in the construction businesses reached a
record €31.2 billion at end-June 2017, up 5% year-on-year.
On August 31, 2017, Colas announced the signature of an
agreement to acquire the Miller and McAsphalt group,
a major road construction player in Ontario and a leader
in bitumen distribution in Canada. This acquisition will
enable Colas Canada to expand its geographical coverage
by increasing its presence in Ontario and considerably
increasing its bitumen storage and distribution capacity
across Canada.
- Bouygues Telecom had 13.6 million mobile customers
at end-June 2017, representing 645,000 new adds
since end-December 2016. In addition, 133,000 new
fixed customers joined Bouygues Telecom in the first
half of 2017, taking the total number of customers to
3.2 million. FTTH contributed close to two-thirds of net
growth in the second quarter of 2017.
OUTLOOK
First-half results confirmed the target of an improvement in
Group profitability in 2017:
- The current operating margin in the construction
businesses should continue to improve.
- Bouygues Telecom expects to reach an EBITDA margin
slightly above 25%. Furthermore, the rate of transfer of
towers to Cellnex will speed up in the second half of 2017
(around €220 million of non-current income related to
Cellnex expected in 2017).
CONSOLIDATED
KEY FIGURES
SALES
€m
15,162 +3%
CURRENT
OPERATING PROFIT
€m
385 +€179m
NET PROFIT
ATTRIBUTABLE
TO THE GROUP
€m
240 +€268m
NET DEBT1
€m
4,265 -€89m
(1) At June 30, 2017
For 2018 and beyond:
- TF1 expects to hold the annual average cost of programs a
for its five freeview channels at €980 million over the
2017–2019 period and achieve €25–30 million of recurrent
savings b. TF1 should also improve its profitability, with a
double-digit current operating margin target in 2019.
- Bouygues Telecom confirms its target of €300 million in
free cash flow in three years’ time.
(a) Excluding sporting events (b) Excluding cost of programs
Consult the full press release and results presentation on bouygues.com
Investor Relations: investors@bouygues.com
@GroupeBouygues
Photo credits: Augustin Détienne/Capa Pictures. Architect: RPBW
B4 | Wednesday, September 6, 2017
* *
THE WALL STREET JOURNAL.
TECHNOLOGY
WSJ.com/Tech
Store-front presence
likely to depend on
the persistence of
small-time retailers
BY PEG BRICKLEY
The first time RadioShack
went bankrupt, independent
dealers struggled to get answers about the future of a
brand that was integral to
their businesses.
With some 4,400 companyowned stores to restructure
in 2015, RadioShack’s leaders
and advisers seemed to take
scant notice of the shopkeepers who were representing
the electronics brand in
places too small or remote to
warrant much attention from
the corporation.
As the end of the company’s second bankruptcy
draws near, hope of keeping
the RadioShack name attached to a brick-and-mortar
operation hangs largely on retailers such as Ira Brezinsky
and his BRW Electronics,
with two stores, one in Northampton, Mass., the other in
Brattleboro, Vt.
“There are loads of people
that still love RadioShack,
that recognize the name,” Mr.
Brezinsky said.
Fewer than 100 RadioShack-owned stores remain open. Very few if any
would remain under the company’s plan to exit bankruptcy. So if you are walking
down a street in the near future and the familiar RadioShack logo catches your
eye, chances are it will be a
sign in the window of a store
like BRW Electronics.
Back in 2015, RadioShack’s
small-town independents organized and hired a lawyer to
look out for them in the first
chapter 11 bankruptcy, which
was supposed to launch a
streamlined, reinvigorated
chain of stores. Instead, RadioShack returned to bankruptcy in March, its revival in
ruins.
This week, RadioShack will
ASSOCIATED PRESS
RadioShack
Readies Plan
For Survival
A RadioShack salesman, at right, demonstrated the company’s hardware at a computer show in Boston in 1977.
ask a judge to let it undertake
a new reorganization, more
modest in scope and aspiration than the 2015 restructuring, which featured an alliance with Sprint Corp. The
Sprint connection, which was
supposed to bring shoppers
into
RadioShack
stores,
soured badly.
In a lawsuit filed at the
end of June, creditors accused Sprint, “the ugly duckling of the U.S. wireless business,” of sacrificing its
commitment to the new RadioShack to cut costs. In recent court papers, one credi-
tor said the lawsuit seeks
damages of as much as $500
million, and as such represents the chief hope of recovery for vendors, landlords and
other unsecured creditors
Sprint couldn’t be reached
Tuesday to comment on the
lawsuit.
Details of the reorganized
RadioShack business operation are missing from chapter
11 plan papers, and will be
filled in later.
The dealer network, with
its entrepreneurial spirit, will
have a place in a reorganized
company, as will the e-com-
merce business, said people
familiar with the process.
RadioShack’s connection to
the independent store owners
isn’t what it once was, Mr. Brezinsky said. He started out
in 1980 as a manager of a RadioShack, then opened his
own business, with the RadioShack brand a major component.
He left the dealer network
for a time, then returned to
test the waters in what is
“just a buy-sell arrangement,”
with dealers ordering product
for their stores from the beleaguered company.
Product isn’t always easy
to get, he said. But the rules
are looser. With thousands of
company-owned stores wiped
from the map, it no longer
matters where an independent dealership is located or
how large a population it
serves.
“It’s been a difficult road,”
Mr. Brezinsky said. His stores
are doing fine, adapting to a
changing marketplace by offering classes to the do-ityourself crowd, and services
such as smartphone-screen
repair, which are tied to product sales, he said.
Facebook Sees WhatsApp Charging Businesses a Fee
BY DEEPA SEETHARAMAN
Facebook Inc. is getting
ready to earn back some of the
$22 billion it spent to buy the
messaging service WhatsApp
three years ago.
WhatsApp will eventually
charge companies to use some
features in the two free business tools it started testing this
summer, WhatsApp’s chief operating officer, Matt Idema, said
in an interview.
The new tools, which help
businesses from local bakeries
to global airlines talk to customers over the app, reflect a different approach to monetization
compared with other Facebook
products, which rely on advertising.
“We want to put a basic
foundation in place to allow
people to message businesses
and for them to get the responses that they want,” Mr.
Idema said. “We do intend on
charging businesses in the future.”
The free WhatsApp Business
app allows small businesses to
field customer questions or
send them updates. Larger companies can do the same with another free tool that lets them
plug directly into the WhatsApp
platform. WhatsApp is also rolling out verified profiles for
businesses so its one billion
daily users can distinguish between a person and a business.
Companies in Brazil, Europe,
India and Indonesia are testing
the free services, including KLM
Royal Dutch Airlines. Users
must “opt in” to be contacted by
a business, a WhatsApp spokes-
woman said.
Mr. Idema declined to describe the paid features or say
when they would make their debut. “We don’t have the details
of monetization figured out,” he
said.
The business tools being
tested, detailed in a blog post
Tuesday, are another sign of
Facebook’s intention to cash in
on messaging as it grapples
with a slowdown in revenue
growth from its core service,
news feed.
Facebook owns two of the
DATA
He saw the moon as
just the beginning.
Continued from page B1
for Google and 20% for Facebook, according to eMarketer.
Wireless competitor AT&T
Inc. faces similar challenges as
it also tries building an ad-targeting program around its new
video services.
Verizon—the U.S.’s largest
carrier, with more than 114
million subscribers—has been
experimenting with targetedadvertising programs for at
least five years. Verizon Up,
launched in August, is the latest incarnation of its rewards
program. Verizon doesn’t say
how many people have en-
world’s most popular messaging
apps, WhatsApp and Facebook
Messenger, and Chief Executive
Mark Zuckerberg predicts that
messaging could yield dividends
for the company within five
years.
In July, Facebook started
showing advertisements inside
Messenger, sandwiched between users’ conversations
when they open the app. The
strategy is similar to how Facebook monetizes the news feed
and Instagram, the photo- and
video-sharing app it bought for
$1 billion in 2012.
Mr. Idema didn’t rule out that
WhatsApp could show ads to users at some point but said the
focus was now on connecting
businesses and users. Last year,
WhatsApp started sharing its
user data with Facebook, a step
to improve Facebook’s ad targeting and friend suggestions.
Regions where WhatsApp is
popular, such as India, haven’t
been as lucrative for Facebook’s
advertising business.
—Newley Purnell
contributed to this article.
rolled in Up or Selects.
For every $300 customers
spend on their Verizon bills,
they receive one Up credit,
which can be used for rewards
such as Uber rides, four free
months of Apple Music or
chances to win tickets to see
performers such as Lady Gaga.
Verizon makes it clear during the sign-up process what
data consumers are giving up:
information about their demographics and interests, what
websites they visit, what apps
and features they use and
their location.
The disclaimer quickly drew
criticism in the tech world:
Adam Levin, a consumer advocate and founder of data-security firm CyberScout, warned
in a column on HuffPost that
the “hidden cost of Verizon’s
‘free’ rewards program is your
data.” In an interview, he
asked: “When you think about
it, do you really want somebody to know that much about
your life?”
Deli Meeks, a 26-year-old
forklift operator in Atlanta,
said he doesn’t mind Verizon
accessing his data. A lot of
companies track information,
and it helps make advertising
more useful, he said. Mr.
Meeks used his first reward to
secure tickets to a preseason
National Football League game
between the Baltimore Ravens
and Buffalo Bills.
Google, Facebook and other
internet firms possess similar
data about their users and disclose it in their privacy policies. But Verizon must walk a
more delicate line.
Telecom companies are required by federal law to take
precautions when it comes to
customer data.
“Some of our competitors,
they have exactly the same
thing, it’s just buried in the
terms and conditions of the
service,” Diego Scotti, Verizon’s chief marketing officer,
said of the information tech
companies collect. “We are not
hiding anything.”
Google and Facebook declined to comment.
Verizon’s program allows
customers to opt out of datasharing after they have signed
up for Verizon Up, but the
company can keep the data for
three years.
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THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B5
* *
BUSINESS NEWS
Takeda Tries to Soothe Debt-Load Fears
BY PREETIKA RANA
TOKYO—Takeda Pharmaceutical Co. Chief Executive
Christophe Weber said another multibillion-dollar acquisition is unlikely soon, allaying fears Japan’s largest
drugmaker is building up too
much debt after paying nearly
$5 billion for a U.S. company
in January.
The deal for Ariad Pharmaceuticals, Mr. Weber’s first
major acquisition since taking
the reins at Takeda three
years ago, drew concern from
credit-ratings firms, with
some lowering their outlook
for Takeda debt. Takeda paid a
75% premium over Ariad’s
closing price before the deal
was announced.
In an interview, Mr. Weber
said Takeda was following a
disciplined approach and the
rewards of the Ariad purchase
outweighed the risks. In April,
Ariad won regulatory approval
in the U.S. for a lung-cancer
therapy that Takeda says
could generate as much as $1
billion in sales a year.
After borrowing money to
buy Ariad, Takeda’s gross debt
as of March 31 stood at nearly
four times the company’s
earnings before interest, taxes,
depreciation and amortization,
or Ebitda. That ratio was up
from two times a year earlier.
Banks use the ratio to assess a
company’s ability to service its
debt. The higher the ratio, the
lower the chance lenders advance loans, constraining the
company’s ability to borrow
cash. “We don’t want to be
overstretched. We want to be
between two to three times
Ebitda,” Mr. Weber said.
While Takeda will continue
to closely monitor promising
startups, Mr. Weber said to investors: “Don’t expect an announcement very often. We
are very risk-aware.”
Takeda is faced with a
shrinking pool of patent-protected products, much like its
Western counterparts. Actos,
the company’s blockbuster diabetes drug, lost patent protection in 2012. Acid-reflux
medication Dexilant is expected to lose exclusivity in
2020, paving the way for lesscostly generic copies.
The Big Shift at Work
It used to be that workers in the U.S. could expect a 9-to-5 schedule, retirement
benefits and generous health insurance. Today's workers have more control over
how and where they do their jobs, but many of the fringe benefits of full-time
jobs have vanished.
HEALTH INSURANCE*
SHAREHOLDER CAPITALISM
Share of workers at large companies with
employer-sponsored health insurance
The biggest share of companies’
output still goes to workers, but
that share is shrinking as
companies spend less on both
employee compensation and
business investment.
97%
1980
2016
61
... with single coverage paying no premium
Workers
Other
72
1980
5
2016
5.3%
8.3%
... with family coverage paying no premium
62.4%
51
1980
2016
Capital costs
Profits
1
1984
24%
RETIREMENT
Percentage of private-sector workers with pension plans
38
1979
13
2014
15.6%
57.8%
... with a 401(k)
8.6%
17
1979
45
2014
2014
WORK-LIFE BALANCE
Percentage of full-time workers with paid family leave
1995
2016
18%
2
16
Note: Numbers might not equal 100
due to rounding.
... with paid sick leave
56
1979
76
2016
*1980 data: Bureau of Labor Statistics;
includes full-time workers. 2016 data: Kaiser
Family Foundation; includes part-time and
full-time workers.
Sources: Bureau of Labor Statistics (health insurance, work-life balance); Kaiser Family Foundation (health insurance); Employee Benefits
Research Institute (retirement); Simcha Barkai (shareholder capitalism)
THE WALL STREET JOURNAL.
The company has forged
more than 50 partnerships in
the past three years, and on
Monday it said it would join a
Japanese biotechnology startup to co-develop a cancer
therapy of the type known as
CAR-T, which involves modifying patients’ immune cells so
they are programmed to attack tumors. Novartis AG last
week won approval for the
world’s first CAR-T therapy.
Despite the patent expirations, Mr. Weber said Takeda
is poised for solid growth over
the next few years on the back
of recently introduced products including Ninlaro, a multiple myeloma treatment
poised to become the company’s best-selling cancer
product. The drug came from
Takeda’s $8.8 billion acquisition of Millennium Pharma-
ceuticals Inc. in 2008. Takeda
later spent roughly $14 billion
to purchase Nycomed A/S of
Switzerland.
A former GlaxoSmithKline
PLC executive, Mr. Weber is
the first non-Japanese CEO at
236-year-old Takeda and one
of the few foreigners leading a
large Japanese company.
He has named non-Japanese executives to many of
Takeda’s top posts.
His appointment initially
annoyed longtime shareholders. Shortly after he was hired
in 2014, a group of shareholders said the ascension of a
Frenchman was akin to “a hijacking by foreign capital.”
One of those shareholders,
Yujiro Hara, said things have
turned out better than he expected. Mr. Weber “listens to
others well,” said Mr. Hara.
“The mood seems to have improved,” he added.
Mr. Weber has shed noncore businesses, and reduced
Takeda’s focus to a small
group of diseases. The company consolidated research
into two main sites—in Boston
and Shonan, south of Tokyo—
and said it expects annual savings of $164 million once the
restructuring concludes next
year.
Its stock price has risen
26% over the past year.
Mr. Weber said he was conducting town halls, roundtables and lunches to better understand employee concerns
amid the restructuring. “We
have passed this phase of huge
uncertainty,” he said. “Now it’s
time for us to stabilize.”
—Chieko Tsuneoka
contributed to this article.
Jumio Estate Sues Ex-Chiefs
Over Financial Statements
BY TOM CORRIGAN
The bankruptcy estate of
former Silicon Valley startup
Jumio Inc. is suing its prior
leaders for allegedly misrepresenting the company’s financial health and presenting
investors with “dramatically
incorrect” revenue statements.
In a complaint filed in U.S.
Bankruptcy Court in Wilmington, Del., the former Jumio said its founder and onetime chief executive, Daniel
Mattes, worked with other
executives to orchestrate a
covert plan to inflate revenue
figures by more than 90%,
enticing high-profile investors to open their wallets.
“These investments gave
Jumio an appearance of legitimacy which in turn allowed
Jumio to attract more investors,” lawyers for the former
Jumio said in court papers.
The suit, which names Mr.
Mattes as well as Jumio’s former chief operating officer
and former general counsel,
is seeking unspecified damages, lost interest and attorneys’ fees.
Mr. Mattes, who founded
the identity-verification company in 2010 and now resides
in Austria, denied any wrongdoing and said he will do
whatever is necessary to
fight the lawsuit.
“I’m extremely surprised
by this complaint,” he said in
an interview Tuesday. “I
think I’m being blamed for
DAVID PAUL MORRIS/BLOOMBERG NEWS
CEO says drugmaker
will show discipline
in its spending after
recent big acquisition
Daniel Mattes, the startup’s founder, is accused of inflating revenue.
something that is wrong and
has no merit.”
Jumio’s products help
businesses verify credentials
such as driver’s licenses and
passports.
The company says its services speed up checkout time,
cut down on users’ data-entry errors, increase transaction-completion rates and reduce fraud.
According to the complaint, Mr. Mattes reported
the full amount of each
credit-card transaction Jumio
helped process instead of the
small fee it actually collected.
At the time, the former Jumio’s financial statements
showed revenue growing exponentially, exceeding $100
million in 2013.
Mr. Mattes said the discrepancy in reported revenue
resulted from differences in
U.S. and European practices.
He said an outside accounting
firm in Austria prepared the
reports and that its accounting practices were transparent and clearly explained.
Jumio’s operations were
sold off to New York privateequity firm Centana Growth
Partners for $850,000 following an auction last year, despite being valued at $100
million only a year earlier,
court papers show.
The Centana sale included
Jumio’s name, and the business continues to operate under the Jumio brand. The corporate shell of the former
Jumio remains in bankruptcy
and was left to figure out how
to repay creditors and whether
to pursue litigation against
former officers and directors.
Judge Tosses Out LyondellBasell Creditors’ Clawback Lawsuit
BY PATRICK FITZGERALD
A bankruptcy judge in New
York Tuesday tossed a lawsuit
filed by creditors of LyondellBasell Industries AF to claw
back more than $5.9 billion
that the chemical company’s
shareholders received from a
failed 2007 leveraged buyout.
Judge Martin Glenn of the
U.S. Bankruptcy Court in New
York in a brief, three-page or-
der dismissed with prejudice
a lawsuit brought by a trustee
on behalf of creditors of LyondellBasell’s bankruptcy.
The creditors were seeking
to claw back the billions in
cash from hundreds of former
shareholders—pension and
mutual funds, Wall Street
banks, hedge funds and retail
investors—of Lyondell Chemical Co. The creditors had also
sued billionaire deal maker
Leonard Blavatnik over the
2007 merger of Lyondell
Chemical and Basell AF that
created what was then one of
the largest chemical companies in the world.
Mr. Blavatnik’s Basell paid
$48 a share for Lyondell, what
the creditors called a “blowout price” in court filings,
which allowed the Houstonbased chemical company’s
shareholders to collect bil-
lions from the merger.
Representatives for the
trustee and the shareholders
weren’t available for comment.
The boom-era deal loaded
the company up with more
than $20 billion in debt just
before global commodity markets tumbled amid the global
financial crisis. A little more
than a year after the merger,
LyondellBasell filed for bank-
ruptcy.
Unhappy creditors sued to
claw back the cash from
shareholders, arguing the
merger amounted to what was
a fraudulent transfer that left
Lyondell insolvent. Mr. Blavatnik denied that he thought
the deal would fail and
blamed the global recession
for the company’s financial
troubles.
In April, Judge Glenn ruled
in a separate-but-related lawsuit involving Mr. Blavatnik
that the trustee had failed to
prove that the merger left Lyondell insolvent, or unable to
pay its debts.
LyondellBasell
emerged
from bankruptcy in 2010 after
eliminating about $5 billion
from its debt load with Mr.
Blavatnik’s holding company,
Access Industries, as a significant backer.
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THE WALL STREET JOURNAL.
B6 | Wednesday, September 6, 2017
THE PROPERTY REPORT
European Mall Operators Upbeat
Demographics, design
and relative scarcity
have helped Continent
weather downturns
Online
RetailLifts
Logistics
Properties
BY THERESA AGOVINO
As in the U.S., the retail
world in Europe has been
turned upside down by the
brave new world of shopping
that enables you to buy practically anything while sitting in
your pajamas at the computer
or waiting in line with your
phone.
But the pain to European
retail landlords has been less
severe.
Shares of listed European
retail real-estate companies
have fallen but not as far as
their U.S. counterparts. Values
of European malls and shopping centers continue to rise
in some European markets
while they are falling throughout the U.S.
The U.S. landscape is pockmarked in many regions by
empty and near-empty shopping centers. In Europe, there
are fewer such “dead malls,”
analysts say.
The main reason that analysts cite is that Europe didn’t
experience the retail-development boom that the U.S. did in
the 30 years leading up to the
2008 crash.
In the U.S., there are 24
square feet of retail space for
every man, woman and child
in the country compared with
five square feet in the U.K.,
four in France, and three in
Spain and Italy, according to
data from the International
Council of Shopping Centers.
“It’s a completely different
scale,” said David Ironside,
chief investment officer of LaSalle Investment Management’s continental European
business. LaSalle’s private-equity group owns 242 retail assets in U.K. and continental
Europe. “You don’t get into a
distressed zone that quickly in
Europe.”
But there are other reasons
besides moderate supply that
explain why European landlords have been more sheltered from the retail storm.
These reasons are now being
studied closely by retail investors, developers and lenders
as they look for opportunities
and risks on both sides of the
Atlantic.
One factor buffering European landlords is mall layout.
Shopping centers in Europe
While European retail landlords are concerned about the
growth of online shopping,
another group of landlords
and investors are loving it:
those that own warehouses
and distribution centers.
Consider Blackstone Group
LP, the world’s largest commercial-property owner: Earlier this year, it cut a deal to
sell Logicor, the European
warehouse business it started
in 2012 to sovereign-wealth
fund China Investment Corp.
That deal is expected to
close later this year. But
Blackstone already has jumped
back into the European logistics space pool.
Last month, it agreed to
purchase a portfolio of 129 logistics buildings with 7.8 million square feet in the U.K.
from Brockton Capital for
about £57 million ($74.3 million). Earlier, Blackstone
bought a 1.6-million-squarefoot logistics portfolio in the
U.K. from Clearbell Property
Partners.
“I have never seen so much
money trying to get into the
sector,” said Jack Cox, head of
European logistics capital
markets for CBRE Group Inc.
The European industrial
space market, like its counterpart in the U.S., is benefiting
from surging demand from online retailers that are scooping
up distribution space closer
and closer to population centers to get orders to customers quicker.
Online sales accounted for
8% of the retail sales in Eu-
PAU BARRENA/BLOOMBERG NEWS
BY ESTHER FUNG
The Arenas shopping center in Barcelona. Retail-property investors have favored politically stable countries with growing economies.
are typically anchored by a
grocery store, rather than a
department store, which tends
to be the norm in the U.S. Grocery stores bring in a lot of
foot traffic. Department stores
have been among the biggest
victims of online shopping.
U.S. malls and shopping
centers also are being hit
harder by a recent spate of retailer contractions and failures. Department stores such
as Macy’s, J.C. Penney and
Sears have announced closures of more than 400 stores
across the U.S. since August
2016, hurting many secondary
malls that are struggling to
find replacement tenants.
Retailers in Europe currently are healthier, in part
because many of the weaker
ones failed during the financial upheaval between 2008
and 2009 and between 2011
and 2013, said Hemant Kotak,
analyst at Green Street Advisors.
“We had a cleansing process in the last downturn and
what survived were the better
concepts and the ones with
the better financial positions,”
said London-based Mr. Kotak.
One of the retailers that
filed for bankruptcy in 2012 is
fashion chain Peacocks, which
was subsequently sold to another retail group that has
since expanded Peacocks’
stores.
Not every European landlord is doing better than those
in the U.S. Some top U.S. mall
companies, such as Simon
Property Group and GGP Inc.,
are popular with retailers and
are recording rent growth and
low vacancy rates comparable
to the numbers being chalked
up by leading European landlords.
Some trends in Europe
aren’t as promising as in the
U.S. For example, Europe’s
population growth has been
lackluster, which doesn’t bode
well for future increases in retail sales.
Still, investors are keenly
aware of the advantages of Europe. In the 12-month period
ended in July, the FSTE NAREIT Equity Regional Malls Index, which tracks seven mall
REITs in the U.S., skidded 32%.
During that same period,
the Stoxx Europe Total Market
Retail REITs, which tracks net
returns of seven mall landlords in the region, declined a
more-modest 11%.
Sales of U.S. shopping centers also have fallen sharply.
Volume totaled 670 million
square feet between 2015 and
the end of this June, according
to an analysis of deals in excess of $10 million by data
firm Real Capital Analytics. By
comparison, some 790 million
square feet traded hands between 2012 and 2014, Real
Capital said.
In Europe, deal activity increased to 627 million square
feet in the 18 months period
ended in July, up from 559
million square feet in the previous period, Real Capital said.
Investors are particularly
hungry for shopping centers in
Germany, Spain, Italy and the
Netherlands, which are politically stable and whose economies are still growing.
In March, U.K.-based Intu
Properties PLC acquired Xanadu shopping center in Madrid
and its management company
for €530 million ($630 mil-
lion).
Klépierre SA, the secondlargest pan-European REIT
and the largest to specialize in
shopping centers, acquired a
shopping mall in Spain’s Murcia area for €233 million, and
is redeveloping Hoog Catharijne, a mall in Utrecht, the
Netherlands. In April, Klépierre opened 16,000 square
meters (172,250 square feet)
of new shops and restaurants
in Hoog Catharijne and is
scheduled to deliver more
space in subsequent phases in
November, March and 2019.
Supply has been kept in
check in Europe partly because city planners have protected downtown shopping areas
from
suburban
competition. In many places,
people prefer to take public
transportation, bike or walk,
weakening demand for malls
with large parking lots.
The one exception in Europe that faces a cloudier outlook is the U.K., which has
more online shopping than
countries on the Continent
and faces uncertainties from
Brexit.
Large Landlord Has a Plan to Fight the Web
At Unibail-Rodamco SE,
Europe’s largest listed commercial-property owner, autumn is the season for thinning its shopping-center herd.
Every October and November, senior management at Europe’s largest mall company
take a tough look at their farflung properties to see how
they are fitting into their vision for bricks-and-mortar
shopping in a world of growing competition from online
shopping. That vision is all
about concentrating on quality
locations and store design instead of quantity.
“This is when we make the
decisions: They’re big enough,
or let’s grow them or they
don’t meet our requirements
and therefore we put them on
the disposal list,” said Christophe Cuvillier, Unibail-Rodamco’s chief executive, in an
interview with The Wall Street
Journal.
Like other big retail landlords in Europe, Unibail is faring better these days than its
embattled U.S. counterparts in
terms of stock-market performance. Part of this is due to
structural differences in Europe, such as the fact that the
U.S. is “over-stored,” with six
times more retail space per
capita than Europe and that
European shopping centers
rely less on department stores
and more on supermarkets.
But European retail landlords also are fighting headwinds with operations like Unibail’s annual cull of weak
performers.
The company, which currently owns 71 shopping centers in almost a dozen European countries, has disposed
of more than €3 billion ($3.6
billion) of retail assets in the
NICOLAS MESSYASZ/SIPA/ASSOCIATED PRESS
BY PETER GRANT
A Unibail-Rodamco shopping center in France. The landlord rotates 10% of its mall tenants yearly.
past four years, reflecting its
“cutthroat” approach to getting its portfolio right, said
Mike Prew, a Jefferies analyst,
in a report earlier this year.
The company also is focused on getting its retailer
mix right and rotates at least
10% of its tenants in its shopping centers each year. This
can be expensive in countries
such as France, where tenants
have more rights and often
have to be bought out by landlords.
But the cost is worth it, analysts say. “The bigger is better streamlined portfolio is
outperforming competitor and
national metrics,” Mr. Prew
wrote. “The eviction costs of
decanting tenants to bring in
superior retailers [are] paying
off.”
To be sure, some investor
caution about European retail
landlords is merited. The full
impact of online retail is far
from clear. For example, a relatively new risk facing Unibail
and other European landlords
is the growing volume of food
being sold online, a threat to
their supermarket tenants.
Europe also faces more political uncertainty than the
U.S., as demonstrated by the
recent terrorist attack in a
popular Barcelona shopping
district.
But Unibail’s financial results this year have been solid.
The company’s shopping centers are about 95% occupied.
Their revenue in the first half
of 2017 was €670 million, up
4.1% from the same period last
year, according to the company.
Unibail’s retail tenants saw
sales growth of 2.7% this year
through May, more than double the rise of national sales
indexes in the countries where
the company’s centers are located.
Unibail also has tried to
stay in front of changes in the
retail and technologies sector.
It hosted the first Apple store
in Continental Europe close to
a decade ago and, more recently, leased space to Tesla
outlets in its shopping centers
in Sweden and France.
Unibail malls have updated
Wi-Fi and charging stations
and provide retailers a steady
stream of information on
shopping activities of visitors.
“Customers are walking bar
codes,” wrote Mr. Prew in the
Jefferies report.
At the helm is Mr. Cuvillier,
who was brought in as chief
operating officer six years ago
by the company, which took on
its current form in 2007 when
Unibail Holding SA of France
purchased Rodamco Europe
NV of Holland.
Mr. Cuvillier had been one
of France’s online-commerce
pioneers particularly as the
chief executive of FNAC, a retail unit of PPR Group.
Mr. Cuvillier said he sees a
bright future for what he calls
“experience shopping,” an activity that combines shopping
with dining and entertainment.
Online shopping will never
substitute for the social and
consumer experience of visiting a store, especially one that
is well designed, he said.
“The size of your brand on
an iPad or computer is exactly
the size of any other brand,”
he pointed out. “Therefore it’s
very difficult as a brand to differentiate yourself because
you’re mixed with everybody
else.”
Stores also have other advantages: Retailers can interact with customers face to face
and get immediate responses
to new products. Consumers
returning items they bought
online are more likely to make
additional purchases, something they can’t do dropping a
package in the mail, he said.
But the cost of designing,
building and maintaining an
experience store is high. As a
result, retailers are becoming
increasingly selective about locations, Mr. Cuvillier said.
That is why Unibail has been
jettisoning mediocre properties and concentrating on a
few locations “where the
brands have to be,” he said.
That is also why Unibail has
an €8.1 billion pipeline of future projects, including expansions and renovations of existing shopping centers and new
ones such as an 80,000square-meter (861,100-squarefoot) mall in Wroclaw, Poland,
that is scheduled to open later
this year. It is already 97%
preleased
$74.3
Sum, in millions, Blackstone
agreed to pay for a U.K. portfolio
rope last year, up from 7% in
2015, according to Green
Street Advisors. They are expected to hit 9% by the end of
this year. The U.K. has the
most developed market with
e-commerce accounting for
16.8% of total sales last year,
an amount projected to increase to 17.8 % by December.
Expecting the trend to continue, investors have been bidding up prices. For example,
yields of logistics properties in
France have fallen to 5%, compared with 5.5% in 2016 and
7.15% in 2011, according to
CBRE. Yields generally fall as
values rise.
Between 2011 and 2017,
yields fell from 6.5% to 4.75%
in Germany; from 7.75% to
5.85% in Spain; from 7.6% to
6% in Italy and from 8% to
5.5% in the Czech Republic,
said CBRE.
Mr. Cox said the value of logistics deals last year hit €25
billion ($29.7 billion.)
He predicted volume will
surpass €30 billion this year.
“It feels like a sustainable
proposition.”
Investors in industrial real
estate have gotten burned in
the past. A wide range of
forces, including political instability, could put a damper
on demand.
There is a big difference in
rent growth between countries. It has been particularly
strong in the U.K. where online retail is growing the most
quickly. In the five-year period
ended in 2016, logistics space
rents jumped 20%, according
to CBRE. In Germany, rents
rose only 4% in the same period. Rents in Poland, Belgium,
Italy and the Netherlands were
largely flat, CBRE said.
“There is a distinction between the United Kingdom and
the Continent,” said Rogier
Quirijns, a senior vice president at Cohen & Steers. “We
haven’t seen a lot of rental
growth on the Continent and
we don’t expect that to
change.”
The lack of available land
and restrictive development
regulations combine to make
building new warehouses in
the U.K. challenging so rents
are increasing at a quicker
pace there. “There is just a lot
of red tape in the U.K.,” said
Mr. Quirijns.
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B7
THE PROPERTY REPORT
MORTGAGES
Market for Backed
Securities Heats Up
Banks and other underwriters
of commercial mortgage-backed
securities are on track to issue
more notes in September than
any other month this year, according to a trade publication
that tracks the business.
Close to $16 billion of deals
are in the pipeline for September,
according to Commercial Mortgage Alert. So far this year, the
top month was June, when $10.7
billion of new securities were issued, the newsletter said.
—Peter Grant
RETAIL PROPERTY
Mall Business Model
In Need of a Rethink
The business model driving
the U.S. mall industry needs an
overhaul, according to a new report. Malls need to shift away
from department stores and toward retailers less susceptible to
e-commerce, according to a report from CBRE Research.
On average, department
stores occupy about 50% of the
gross leasable area of malls in
the U.S., while beleaguered apparel and accessory retailers
take an additional 29%, said the
CBRE report.
—Esther Fung
HOTEL REITS
Storm Bears Down
On Florida Properties
A number of hotel owners
with exposure to Florida and the
Caribbean islands could be affected by Hurricane Irma.
Sotherly Hotels Inc., Ashford
Hospitality Prime Inc., Hersha
Hospitality Trust, DiamondRock
Hospitality Co. and RLJ Lodging
Trust have more than 10% of
their rooms in areas that could
be affected by the storm, according to Wells Fargo Securities
analysts.
—Esther Fung
‘Town Center First’ Buoys Retail
BY EMILY NONKO
In May, LaSalle Investment
Management paid £55 million
($71 million) for a historic
shopping center in Cardiff,
Wales, that includes the former David Morgan department
store, which opened in 1879,
as well as two Victorian shopping arcades that date to 1858.
The appeal of the 381,000square-foot property also included a modern feature:
Downtown Cardiff is protected
from new suburban competition by “town center first”
regulations in the U.K. These
rules have helped so-called
high street retail areas in
downtowns flourish, unlike
those in many U.S. cities that
have been decimated by bigbox retailers and shopping
centers on the outskirts.
“Cardiff is highly protective
of its city center and therefore
restricted the type of retail
that can be developed outside
of the city center,” said Tom
Rose, a LaSalle fund manager.
“Given the limited supply…we
felt that Morgan Arcade would
be excellently placed to benefit from this investment
through significantly greater
footfall and a more diverse
shopper base.”
Regulations protecting European downtowns are among
the reasons why retailers in
many areas there are faring
better than some of their U.S.
counterparts against online
shopping competition and
other pressures. Similar regulations have been passed in
other European countries, according to a report by Ken
Baar for the Institute for
Transportation and Development Policy, a nonprofit that
focuses on sustainable development.
“Regulation of the location
of new major shopping facilities in order to achieve environmental, social and commercial objectives is standard,”
the report said. “Great Britain,
LASALLE INVESTMENT MANAGEMENT
PLOTS & PLOYS
Downtown Cardiff is protected from new suburban competition by U.K. zoning regulations.
France, Germany, Netherlands,
Ireland, Denmark, Sweden,
Norway, and Belgium have adopted legislation which directs
the construction of new hypermarkets and shopping malls
into central city areas.”
Yields of prime “high
street” retail fell or were flat
in the second quarter of 2017
compared with a year earlier
in all 25 downtown areas of
Western Europe tracked by
CBRE Group Inc.
Generally when commercial
real-estate yields, or capitalization rates, fall, that means
values are rising.
Meanwhile, high street cap
rates generally increased in
the U.S. from the second half
of 2016 to the first half of this
year, CBRE said.
To be sure, downtown retail
is hot in many major U.S. cities such as New York, San
Francisco, Chicago and Boston
that are enjoying building
booms and an influx of young
workers. Also, one of the reasons high street values are
falling now in these hot U.S.
markets is because they rose
so much in recent years.
But retail areas in many
smaller U.S. cities about the
size of Cardiff, which has a
population of about 345,000,
have been struggling for decades. Some have turned into
virtual ghost towns with
boarded up stores that
couldn’t compete against bigger suburban stores with more
variety and lower prices.
The Cardiff shopping district, known as the Morgan
Quarter, had undergone a multiyear redevelopment by its
former owner, investment firm
Helical PLC.
“We know retail in Europe
and the States has been affected by the internet, but we
are still believers in what we
call experiential retail, which
we think has got room for future growth,” Mr. Rose said.
The glass-domed arcades—
protected as landmarks by
Cardiff—are lined with cafes,
fashion boutiques and other
shops. The adjacent David
Morgan department store was
outfitted with offices and
apartments on the upper
floors. “The arcades are a bit
quirky,” said Chris Sutton, lead
director of the Cardiff office of
commercial real-estate firm
JLL. “But they really have a vibrancy, with winding streets
and a range of local shops.”
Other big investors also
have a growing appetite for
European high street retail.
Houston-based Hines, for example, was hired in 2015 by
German pension fund BVK to
execute a €1.3 billion ($1.55
billion) program targeting
prime high street retail assets
across Europe.
Lars Huber, the chief executive of Hines Europe, said European high streets differ from
U.S. commercial corridors as
they have much more foot
traffic and hold smaller retail
units in older buildings. But
this raises challenges in outfitting older properties for new
tenants, who often require
larger floor plans than those
available in city centers that
often date back centuries.
“Our goal has been to find
assets where we can convert
and reposition them for bigger
and better units,” said Mr. Huber. “The flagship stores and
big brands who want to have
prime spots in the European
prime cities aren’t really willing to compromise in terms of
their unit size or location.”
Earlier this year, Hines purchased a six-story bank headquarters in Barcelona’s city
center. Bank buildings, according to Mr. Huber, have proven
to be appealing assets that can
be converted to flagship retail
stores.
In Leeds, British development firm Hammerson PLC
connected the historic Victoria
Quarter shopping arcade to a
new high-end shopping center
that opened last year. The new
structure is anchored by a
John Lewis department store.
The number of visitors to
Cardiff’s city center rose by
36% between 2010 and 2016,
according to the Cardiff Council. Retailers at the Morgan
Arcade include brands such as
Fred Perry, Urban Outfitters
and Spiller’s, one of the
world’s oldest record stores.
The “town center first” policy was put in place in the U.K.
more than 20 years ago. In
England and Wales, retail
planning must pass a so-called
sequential test, according to
Trevor Ivory, a partner at
global law firm DLA Piper.
Under the test, new retail
development should be located
within town centers and, if
that isn’t feasible, as close to
town centers as possible. Suburban locations should only be
considered if there are no
other suitable sites.
ADVERTISEMENT
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THE WALL STREET JOURNAL.
B8 | Wednesday, September 6, 2017
MANAGEMENT
When It Is OK
To Be a Workaholic
For those who love what they
do, being a workaholic isn’t all
that unhealthy, new research
suggests.
Workaholism by its very
name suggests detriment to
one’s physical and mental health,
and the American psychologist
Wayne Oates, who coined the
term nearly 50 years ago, likened
it to substance abuse. Yet research on workaholism has been
inconclusive so far, in part because it is hard to distinguish
the consequences of merely
working long hours from actual
work addiction.
A study published in the current issue of Academy of Management Discoveries not only
finds health differences among
people who work long hours and
those who compulsively work to
excess. Researchers also found
differences between workaholics
who enjoyed their work and
those who didn’t.
In the study, employees at an
international financial-consulting
firm were asked to fill out questionnaires on their work hours,
relationships at home and work,
as well as their sense of well-being and any stress-related complaints, such as trouble sleeping
or headaches.
They also had to score such
statements as “It is hard for me
to relax when I am not working
on something” and “At my job, I
feel strong and vigorous.” Afterward, 763 employees took part in
medical screenings for risk factors
for more serious problems, such
as heart disease and diabetes.
Researchers found no indication that simply working long
hours led to stress-related ailments or more serious risk factors, such as high blood pressure.
And while the results showed
a link between workaholism and
stress-related physical complaints, only workaholics who described themselves as unengaged or feeling trapped in their
work appeared at risk for more
serious health disorders.
—Vanessa Fuhrmans
Sent Abroad? Plan Your Return Now
A hard landing can await an expatriate manager headed home; some firms help soften the re-entry
BY JOANN S. LUBLIN
Taking an overseas assignment can vault your management career into the next
level and test your skills in
unfamiliar territory. But coming home can be the hardest
part.
Companies typically provide expatriates with local
housing subsidies, cross-cultural training and other perks.
Few employers, though, address what
YOUR
happens when
EXECUTIVE that expat is
CAREER
ready to return—a fact
that partly explains why one-quarter of returning executives jump ship
within two years, recruiters
and researchers estimate.
People who have successfully made the return trip
credit advance planning, disciplined networking and sponsors back home. To better
manage the transition, some
companies work to plan managers’ return roles even before they leave. But some experts warn it’s still largely up
to the individual.
“So much depends on the
executive in question taking
ownership for their repatriation,” says Daniel R. Smith, a
managing director of recruiters Raines International Inc.
Cosmetics giant L’Oréal SA
invites repatriated U.S. staffers to go through orientation
and integration programs as if
they were brand-new hires.
The idea is “to feel reintegrated into the company,”
says Jacob Bonk, a human-resources executive for its U.S.
unit in New York.
Upon returning from four
years in China, Mr. Bonk went
through the first-day orientation last year alongside about
25 new staffers. Joining the
new hires felt “a bit funny,”
ANNIE TRITT FOR THE WALL STREET JOURNAL
WORKAROUNDS
‘You’re basically a new employee again.’
Jacob Bonk, a human-resources executive for L’Oréal in New York
Mr. Bonk recalls, but after living outside the U.S. for so
long, “you’re basically a new
employee again.”
Mr. Bonk’s new boss also
urged him to spend time rebuilding his U.S. network; in
his first month back, he met
face-to-face with 50 colleagues.
Both companies and individuals are advised to give extra thought to their return
roles before they fly overseas.
“Begin with the end in
mind,” says Stewart Black, a
professor of management
practice at Insead business
school and veteran expatriate
researcher.
For instance, Mr. Black suggests finding out which leadership skills your employer
wants you to develop during a
foreign stint. “If your company does not know how they
will utilize you or your hardwon international experience
before you leave, the odds
they will miraculously discover the answer just before
your return are not good,” he
says.
To ensure that Monsanto
Co. will benefit from skills developed abroad, the seed and
pesticide maker identifies potential return positions before
people move overseas, according to Bridget Walsh, a global
talent mobility manager.
Monsanto says its ap-
proach has lowered attrition;
some 7% of repatriates leave
within two years, down from
approximately 13.5% a decade
ago, according to the company.
When British drugmaker
GlaxoSmithKline PLC hired
Marc Speichert in January as
global chief digital officer,
working in Warren, N.J., interviewers told him to expect a
three-year foreign assignment
and described possible opportunities after his subsequent
return to the U.S. He will relocate to the U.K. in 2018.
Sanket Akerkar, a Microsoft Corp. vice president and
onetime expatriate, says he
worked hard to keep his U.S.
network strong while running
its India unit for nearly three
years. During his business
trips to the U.S., Mr. Akerkar
stayed an extra day to meet
with important colleagues and
discuss what he was learning
abroad. He returned to the
U.S. in 2013.
Other U.S. executives dispatched abroad get assigned a
high-level colleague to champion their careers back at
headquarters.
A pair of home-country
sponsors boosted prospects
for Amit Sood, now head of
product and technology for a
unit of Asurion LLC, a provider of insurance and support for 300 million phones,
electronics and appliances.
Mr. Sood says he worried
about repatriation when Tennessee-based Asurion asked
the California middle manager
to relocate to Hong Kong in
2013. Before his departure, a
prior boss and a senior vice
president promised to try to
find him a suitable Asurion
role upon his return. Asurion
brought Mr. Sood back to the
U.S. in 2015—and promoted
him into his first executive
role.
ADVERTISEMENT
Business Real Estate & Auctions
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CALIFORNIA
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NOTABLECOMMERCIALPROPERTIES
(800) 366-3975
sales.realestate@wsj.com
For more information visit: wsj.com/classifieds
© 2017 Dow Jones & Company, Inc. All Rights Reserved.
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#$!
%& %!
' &
() !!" #$ %& # ' ( THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B9
NY
BUSINESS NEWS
BY BEN FRITZ
Coming off its worst summer in more than a decade,
Hollywood is looking to a
movie with scarily good buzz
to shake off its slump.
“It,” a new adaptation of
Stephen King’s 1986 horror
novel, makes its debut Friday
and is expected to set records.
Prerelease surveys indicate it
could make $70 million or more
during its opening weekend in
the U.S., people who have seen
the data said. The prior record
for an opening in September,
typically the slowest month of
the year at the box office, was
$48.5 million for the animated
“Hotel Transylvania 2” in 2015.
Fandango reports “It” is
generating the highest presales ever on the online-ticketing service for a horror film or
a September release.
Movie studios and cinema
chains are eager for a hit after a
summer that included several
big-budget flops, including “The
Mummy,” “Transformers: The
Last Knight” and an adaptation
of Mr. King’s “The Dark Tower.”
Total box-office receipts in
the U.S. and Canada were $3.84
billion between May and Labor
Day, the lowest total since
2006, according to comScore, a
media-analytics company.
Based on the average price
of $8.90, the actual number of
tickets sold was 431 million,
the lowest total since 1992.
Summer ended on a particularly dismal note, as studios
didn’t release any new movies
nationwide over Labor Day
weekend for the first time
since 1998.
Some in Hollywood thought
a turnaround might not come
until November’s “Justice
League” or December’s “Star
Wars: The Last Jedi.”
Few suspected a turnaround
would start this week with
“It,” a story about seven children who are terrorized by a
supernatural clown who carries a red balloon.
The movie has a long history at Time Warner Inc.’s
Warner Bros., which started
development in 2009. After an
early draft that attempted to
compress the 1,000-plus-page
book into one script was
deemed overly ambitious, the
studio put the project on hold.
Then in 2012, Warner hired
Cary Fukunaga, best known for
HBO’s “True Detective” and
Netflix Inc.’s “Beasts of No Na-
tion,” to co-write and direct. He
divided “It” into two films, the
first of which would feature its
main characters as children.
Mr. Fukunaga was so enthusiastic that in 2014 he had an actor
dress up as a clown to deliver his
draft of the script to top executives at the studio, with fake
blood on the cover and a red balloon attached, people with
knowledge of the matter said.
But just three weeks before
he was to start shooting in
2015, executives at Warner’s
New Line Cinema division
shut down production on “It”
because of creative differences
with Mr. Fukunaga. The studio
wrote off about $4 million it
had spent on preproduction,
according to a person with
knowledge of the matter.
Within two months, New
Line hired Andy Muschietti,
who made the horror film
“Mama,” to direct. The film
was shot in 2016 with no bigname stars and a budget of $35
million, reflecting the studio’s
relatively modest expectations.
The first signs that “It”
would be a breakout came in
March, when a trailer set a record with 197 million global
views on its first day online.
Warner’s advertising campaign
since then—including a longer
trailer, footage at Comic-Con
and a “haunted house” in Los
Angeles—has emphasized the
scares but shown only
glimpses of its evil clown.
The movie appears to be
benefiting from a widely recognized title, which many
know from a 1990 television
miniseries also produced by
Warner Bros., combined with
its distinctiveness from the
bigger-budget franchise films
of the summer. Some people
close to the picture also think
it is getting a boost from similarities to last year’s Netflix
hit “Stranger Things,” which
was itself inspired by “It.”
Confident the movie will be
a success, New Line already
has a writer working on a follow-up that adapts the rest of
the book in which the main
characters are adults.
“It” might not be the only
hit this month. Prerelease surveys also indicate interest is
robust for two movies opening
on Sept. 22: action sequel
“Kingsman: The Golden Circle”
from 21st Century Fox Inc.’s
Twentieth Century Fox, and
Warner’s animated “The Lego
Ninjago Movie.”
BROOKE PALMER/WARNER BROS./ASSOCIATED PRESS
An Evil Clown
Is Poised
As ‘It’ Movie
For Summer
The clown in ‘It,’ which debuts Friday. The movie could set a U.S. box-office record for an opening weekend in September.
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B10 | Wednesday, September 6, 2017
THE WALL STREET JOURNAL.
NY
NEW HIGHS AND LOWS
WSJ.com/newhighs
The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSE MKT and
Nasdaq Stock Market stocks that hit a new 52-week intraday high or low in the latest session.
% CHG-Daily percentage change from the previous trading session.
Stock
Tuesday, September 5, 2017
Stock
52-Wk %
Sym Hi/Lo Chg Stock
NYSE highs - 114
AerojetRocket
AJRD
Allete
ALE
AmerVanguard AVD
Anthem
ANTM
Atento
ATTO
BHPBilliton
BHP
BHPBilliton
BBL
BancoBradescoPf BBD
BancoBradesco BBDO
BanColombia
CIB
BiohavenPharm BHVN
BlkRkUtility
BUI
BroadridgeFinl
BR
CPFLEnergia
CPL
CabotOil
COG
CamdenProperty CPT
CarMax
KMX
Catalent
CTLT
Caterpillar
CAT
Centene
CNC
Cigna
CI
CommunityHlthcr CHCT
ConstBrands A STZ
CoreLogic
CLGX
CousinsProperties CUZ
CryoLife
CRY
DCT Industrial
DCT
DTE Energy
DTE
DellTechnologies DVMT
DelphiAutomotive DLPH
EaglePointNts27 ECCY
EastGroup
EGP
EastmanChem EMN
EntergyMS Bds EMP
EquityLife
ELS
EsteeLauder
EL
FibriaCelulose
FBR
FirstIndRlty
FR
Fortis
FTS
Franco-Nevada FNV
FullerHB
FUL
GOLLinhas
GOL
GabelliConv
GCV
GabelliMultimedia GGTpB
GasLogPtrsPfdA GLOPpA
GettyRealty
GTY
GoDaddy
GDDY
Graco
GGG
GrubHub
GRUB
HFF
HF
Haemonetic
HAE
HalyardHealth
HYH
HudbayMinerals HBM
Humana
HUM
IONGeophysical IO
IamGold
IAG
IronMountain
IRM
30.06 -2.8
78.06
0.4
21.00 -1.5
198.98 -0.1
12.10 -1.3
44.53 -0.2
39.06 -0.1
11.04 -0.6
10.53 -2.7
48.43
0.1
38.37 -1.2
21.50
0.7
78.44
0.4
17.40
1.0
27.14
0.3
91.80
1.2
69.12
1.3
41.67
1.7
119.13
...
89.23
...
185.51
1.2
26.90 -0.6
201.20
0.4
47.49 -0.7
9.45 -0.9
22.85
1.6
58.97 -0.1
112.80
0.6
75.10
0.1
98.27 -1.1
25.80
0.5
90.24 -0.2
87.54 -2.3
25.05 -0.4
90.31
0.4
108.35
...
13.87
1.4
31.34
0.1
36.99
...
83.95
2.1
55.21
2.5
19.98
9.2
6.47
0.2
27.18
1.2
26.70
0.3
27.81
...
45.33
0.5
117.54 -1.9
57.29
0.4
38.81 -1.2
43.77 -0.6
45.61
...
9.25
0.6
259.47 -0.5
8.50
9.8
6.93
3.3
39.99
52-Wk %
Sym Hi/Lo Chg Stock
Kemet
KEM
KinrossGold
KGC
KirklandLakeGold KL
KnightTransport KNX
KoninklijkePhil
PHG
LatAmDiscv
LDF
LibertyProperty LPT
LionsGate B
LGF/B
LumberLiqu
LL
MadisonSquGarden MSG
Meritor
MTOR
MonmouthRealEst MNR
NewGermanyFund GF
NYComBncpPfdA NYCBpA
NextEraEnergy NEP
NortelInversora NTL
NorthwestNatGas NWN
NovoNordisk
NVO
NuvCoreEqAlpha JCE
NuvMtgOppTermFd2 JMT
OrbitalATK
OA
OwensCorning
OC
Owens-Illinois
OI
PGT Innovations PGTI
PSBusinessParks PSB
Prologis
PLD
QwestNts2057 CTDD
Raytheon
RTN
SabineRoyalty
SBR
SafeBulkers
SB
Salesforce.com CRM
SOQUIMICH
SQM
SolarisOilfield
SOI
SoCopper
SCCO
SpiritAeroSys
SPR
StellusCap5.75Nt22 SCA
STMicroelec
STM
SummitMaterials SUM
SwiftTransport SWFT
Ternium
TX
TPG RE Fin
TRTX
TaiwanSemi
TSM
TelecomArgentina TEO
TelefonicaBras
VIV
TerrenoRealty
TRNO
Textainer
TGH
TravelportWorldwd TVPT
TremorVideo
TRMR
TritonIntl
TRTN
Tronox
TROX
UnitedMicro
UMC
UnitedHealth
UNH
ValleyNatlPfdB VLYpB
W.P.Carey
WPC
WarriorMetCoal HCC
WestlakeChem WLK
Xylem
XYL
24.64
... AIG Wt
ATUS
AIG/WS
17.57 -4.0
4.72
4.5 Amerigas
APU
42.00 -2.4
13.71
2.3 AspenIns
AHL
41.05 -9.4
41.10
1.6 AvonProducts
AVP
38.98
2.1 Barnes&NobleEduc BNED
11.90
0.2 BrinkerIntl
2.40
0.4
5.03 -5.3
EAT
30.18 -2.2
42.95 -0.1 DowDuPont
DWDP
64.98 -3.3
29.37
0.9 elfBeauty
ELF
19.11 -2.5
39.49
4.2 Greenhill
GHL
14.05 -6.0
6.9 HarleyDavidson
HOG
45.53 -3.0
226.69
20.57
0.4 HeritageInsurance HRTG
9.03 -17.0
16.34 -0.6 HormelFoods
HRL
30.50 -0.7
17.70 -0.6 Mosaic
MOS
19.42 -3.2
30.39
OFG
8.57 -9.4
42.65
0.6 Omnicom
OMC
71.63 -0.3
38.63
4.6 PacificDrilling
PACD
0.38 -6.7
67.25
1.1 PatriotNational
PN
1.33 -10.6
48.00 -0.6 RLI
RLI
51.04 -4.4
15.50 -0.8 StewartInfo
STC
35.01 -1.2
25.00 -0.2 SturmRuger
RGR
45.20 -1.1
TCAP
13.14 -1.2
UVE
17.50 -14.6
25.04 -1.7 Validus
VR
45.41 -8.8
14.35
WFCpJ
25.45
... OFGBancorp
112.03 -0.8 TriangleCap
75.20
0.6 UnivInsurance
4.9 WellsFargoPfdJ
137.34 -1.2
64.30 -0.4
25.83
...
184.17
0.9
41.50
0.9
3.65 -6.0
96.49
0.2
49.04 -0.1
14.99
2.2
42.00 -1.5
74.86
...
25.22
17.89
30.40
29.49
32.17
20.70
37.40
31.73
15.78
36.82
18.35
15.38
3.60
38.19
21.22
2.73
200.44
27.00
69.63
27.62
78.17
62.49
-0.3
1.7
-0.1
1.6
-1.0
0.4
-1.0
3.9
1.0
0.4
...
0.7
2.9
-1.5
-0.3
1.5
-0.2
...
-0.1
-1.3
-1.4
-0.1
NYSE lows - 25
0.3 AlticeUSA
52-Wk %
Sym Hi/Lo Chg
29.83 -1.6
...
NYSE Arca highs - 70
52-Wk %
Sym Hi/Lo Chg Stock
iShLatinAmerica40 ILF
iShMSCIAllPeruCap EPU
iShMSCIBrazilCap EWZ
iShMSCIColombia ICOL
KraneBoseraChinaA KBA
KraneEFdChina KCNY
MadronaIntl
FWDI
MSMrkVecRnmnbi CNY
PwrShCNYDimSum DSUM
ProShDJBrkGlIn TOLZ
REXGoldHdgS&P500 GHS
SPDRBloomBarEMLoBd EBND
SPDRBloomBarcSTTr SST
SPDRFactSetInnTech XITK
SPDRS&PGlbNatRes GNR
SPDRS&PInternetETF XWEB
SPDREmMktSmlCp EWX
SprottPhysPlatinum SPPP
USGlbGOGold
GOAU
USCopperIndex CPER
VanEckBrazilSC BRF
VanEckCSI300 PEK
VanEckSMEChiNxt CNXT
VanEckJPMEMLCBd EMLC
VanEckNatRscs HAP
VanEckOilRefin CRAK
VanEckPoland
PLND
VanEckRareEarth REMX
VelocityShLIBOR DLBR
VirtusLifeSciBio BBC
WBITacticalIncome WBII
WisdTrEM LocDebt ELD
WisdTrBrazilReal BZF
WisdTrChineseYuan CYB
WisdTrEmgCurr CEW
WisdTrEM SC
DGS
WisdTrGlbxUSREFd DRW
31.12 -0.9
ALPSMedBreak SBIO
29.72 -0.4
BuzzUSSentLdrs BUZ
32.07 0.6
CSOPChinaCSI300AH HAHA
17.37 0.8
CSOPFTSEChinaA50 AFTY
CambriaGlbMomentum GMOM 26.51 -1.0
28.23
...
ColumbiaEMCoreXCh XCEM
80.26 0.4
CurrShAUD
FXA
79.95
...
CurrShCAD
FXC
74.85
... DirexCSI300CnA CHAD
CurrShCNY
FXCH
30.00 0.6 DirexGoldMinBr3 DUST
DeutscheXHarCSI300 ASHR
36.82 0.9 DirexGoldBear1 MELT
DeutscheXCSI500ChA ASHS
27.48 1.1 DirexJrGoldMinBr3 JDST
DirexCSI300CnABl2 CHAU
36.31 -2.7 ProShUltShtAUD CROC
DirexLatinAmBl3 LBJ
14.98 4.8 ProShUltShGold GLL
E-TRACS CMCI UCI
8.77 0.1 ProShUltShGoldMin GDXS
ElemntsRogrMtls RJZ
94.79 -1.7 ProShrUSHlthCr RXD
ETFS PlldmShr PALL
31.09 -0.2 ProShrUltraBrazil BZQ
FlexGlbUpstmNatRsc GUNR
17.38 3.0
GlbXBrazilConsumer BRAQ
11.44 3.4
GlbX BrazilMC
BRAZ
27.29 -1.0
GlbXCopperMiners COPX
AberdLatAmEq LAQ
10.63 0.5
GlbXMSCIColombia GXG
AltisourceAsset AAMC
GlbX MSCINorway NORW 13.20 0.1
AmericasSilver USAS
25.53 -0.2
GlbXSciBetaAsiaXJ SCIX
BancorpNJ
BKJ
141.07 1.3
GraniteGold
BAR
Electromed
ELMD
28.45 -0.1
GuggChinaRE
TAO
EnviroStar
EVI
28.29 -0.4
GuggChinaSC
HAO
TasekoMines
TGB
27.58 0.2
IQRealReturn
CPI
36.09 0.1
iPathBloomCopperTR JJC
29.10 -1.0
iPathBlmIndMetalTR JJM
14.90 -1.1 ImmunoCellWt IMUC/WS
iPathBloomNickelTR JJN
INUV
34.63 0.9 Inuvo
iPathPBCopper CUPM
20.20 3.5 NorthernOil&Gas NOG
iPathPBNickel
NINI
SVT
48.84 0.5 Servotronics
iShJPM EM LC Bd LEMB
52-Wk %
Sym Hi/Lo Chg Stock
35.40 -0.6 TransAtlPetrol
TAT
38.10
0.4 Versar
VSR
41.57
0.9
15.11
0.8
33.87
34.97
29.43
0.68 -2.8 iShGlbTimber
WOOD
0.71 -4.5 iShMSCIBrazilSC EWZS
Nasdaq highs - 118
0.3 AbeonaTherapWt ABEOW
0.1 AbeonaTherap
ABEO
0.1 AdamasPharm
ADMS
10.00 -5.1
15.25
2.9
46.90 -0.7 AdvAcceltrApp
23.66 0.5 AeroVironment
22.58
3.2
AAAP
51.87
7.5
44.09 -0.3 AkceaTherap
32.58 1.3 AlexionPharm
AVAV
50.63
2.1
AKCA
23.22 17.6
30.18
31.78
0.2 AlignTech
0.2 Appian
ALXN
149.34
0.4
ALGN
179.96
1.7
6.3
APPN
23.80
75.09 -0.1 AtlasAir
45.16 -0.3 AxoGen
AAWW
68.25 -2.4
AXGN
18.13 -0.6
71.35
BEAT
38.25
0.4
WIFI
21.28
3.7
2.8 BioTelemetry
50.28 -0.1 BoingoWireless
9.05 -1.2 CBOE Holdings
102.32
CBOE
1.2
13.74
1.3 CSW Industrials CSWI
42.10 -1.7
20.28
0.4 Calyxt
CLXT
19.26 10.3
24.81
46.79
2.0 CambiumLearning ABCD
CELG
0.6 Celgene
140.31
...
35.04
1.4 CelsiusHldg
CELH
5.96
8.9
26.78
1.7
6.35
LRGE
0.4 ClearBrLCGrw
34.49 -0.2 CommerceHub A CHUBA
CORT
26.22 -1.9 CorceptTherap
19.45
0.2 CovenantTranspt CVTI
CYRXW
24.20 -0.9 CryoPortWt
CYRX
26.34 2.1 CryoPort
21.17
28.06 -0.3 Cutera
25.69
0.4
39.19
...
19.10
1.1
25.95
0.5
19.21
0.1
49.64 -0.1
31.54 -0.2
NYSE Arca lows - 9
32.75 -0.6
19.68 -5.9
23.20 -2.7
42.31 -9.4
43.87 -0.4
64.96 -2.2
12.33 -4.0
32.50 -4.7
9.37 -1.9
NYSE American highs - 7
28.75
0.8
99.00
6.5
4.73
8.3
18.30
0.5
7.73
3.6
36.00 -2.2
2.03 -4.5
NYSE American lows - 6
0.01 -43.5
0.94 -5.0
0.76 -5.6
8.55 -4.4
52-Wk %
Sym Hi/Lo Chg Stock
CUTR
2.2
22.63 -0.3
17.24
1.5
25.21
0.9
4.69
4.0
8.44
2.4
39.05 -2.2
63.97 1.5
CyrusOne
CONE
1.69 2.5
DasekeWt
DSKEW
13.55 1.5
Daseke
DSKE
24.15 3.0
EldoradoResorts ERI
31.52 5.3
FNBBancorp
FNBG
51.72 -0.1
FS Bancorp
FSBW
76.87 10.3
FarmersBancp
FMAO
14.46 -5.4
Ferroglobe
GSM
29.35 7.3
FirstGuarBcshs FGBI
33.35 -2.7
FirstInternetBncp INBK
17.60 2.5
FTBrazilAlphaDEX FBZ
27.49 -0.3
FT ChinaAlphaDEX FCA
40.48
...
FT DevMktsXUS FDTS
43.56 0.8
FT EM SC Alpha FEMS
46.59 -0.5
FT GerAlpha
FGM
31.43 0.7
FT MegaCap
FMK
22.59 6.2
G1Therapeutics GTHX
95.67 2.6
Galapagos
GLPG
39.32 -0.5
Gaming&Leisure GLPI
14.28 2.4
Gogo
GOGO
11.46 9.0
HimaxTechs
HIMX
17.50 0.1
Hortonworks
HDP
115.09 0.5
IAC/InterActive IAC
114.81 -1.5
Icon
ICLR
12.45 0.9
Ignyta
RXDX
207.73
...
Illumina
ILMN
9.83 0.2
IndustreaAcqnA INDU
98.71 0.5
Inogen
INGN
29.52 119.6
Insmed
INSM
58.99 -0.4
Insulet
PODD
6.94 2.3
IntecPharma
NTEC
22.49 1.0
IntelliaTherap
NTLA
18.92 -0.6
IntlMultiAssetDiv YDIV
IntuitiveSurgical ISRG 1026.08 1.5
48.82 0.9
iRhythmTechs
IRTC
JohnsonOutdoors JOUT
Joint
JYNT
KaiserAlum
KALU
KeyTechnology KTEC
KratosDefense KTOS
LandstarSystem LSTR
LeMaitreVascular LMAT
LendingTree
TREE
LibertySirius B LSXMB
LigandPharm
LGND
MarlinBusSvcs MRLN
MatchGroup
MTCH
MelroseBancorp MELR
MonarchCasino MCRI
MonsterBeverage MNST
NationalBeverage FIZZ
NatlResearch A NRCIA
Neogen
NEOG
NeoGenomics
NEO
Neurocrine
NBIX
Novanta
NOVT
Omnicell
OMCL
Orbotech
ORBK
OrthofixIntl
OFIX
Overstock
OSTK
pdvWireless
PDVW
PennNational
PENN
PetIQ
PETQ
PwrShDWA EM PIE
PwrShDWAMom DWLV
PwrShDWANasdMom DWAQ
PwrShIntlDivAch PID
PwrShS&PSC Util PSCU
Pro-Dex
PDEX
QAD B
QADB
Qualys
QLYS
RBC Bearings
ROLL
REGENXBIO
RGNX
Retrophin
RTRX
RoyalGold
RGLD
SandersonFarms SAFM
ShenandoahTel SHEN
Sientra
SIEN
SpectrumPharm SPPI
SupernusPharms SUPN
TiGenix
TIG
TymeTechs
TYME
US Concrete
USCR
Veritone
VERI
WestportFuelSys WPRT
WisdTrChinaxSOE CXSE
XOMA
XOMA
Yandex
YNDX
ZK Intl
ZKIN
ZealandPharma ZEAL
64.14 -0.3 AppliedGenetic
AGTC
17.06
2.3 AquaMetals
AQMS
66.53
2.4 BJsRestaurants
BJRI
7.9 BisonCapAcqn
BCACU
5.07
99.70
0.4
17.36
9.8
13.89
3.1
95.35
0.4
37.90
1.6
238.25 -1.3
46.18
5.1
132.49
1.5
27.55
3.2
23.50
4.7
18.50
2.5
35.82
1.4
56.46
0.5
122.19
2.2
33.45
0.5
70.46
0.1
10.60
1.8
58.13
1.8
39.85 -0.5
52.70 -1.2
40.77
1.0
50.40
0.2
24.95 -3.3
31.25
2.6
22.92
1.0
27.27
5.4
19.12 -0.4
29.15
1.1
95.82 -1.1
15.98 -0.9
54.93 -0.4
7.10 -1.1
28.75 -0.4
48.95
0.7
113.62 -1.3
25.00
9.5
25.11 -0.6
94.29
1.5
152.45 -1.3
37.90
0.4
11.95 -0.4
10.08
0.2
47.75 -0.7
23.23
2.0
7.50 32.0
83.85 -4.4
17.72
4.5
2.84 -1.1
76.17 -0.5
16.40 44.2
32.88
0.4
9.65 12.2
20.33
1.7
Nasdaq lows - 43
Aceto
Ambarella
AmericanNatlIns
AmerOutdoor
AmTrustFinSvcs
ACET
10.44 -1.6
AMBA
40.57 -3.9
ANAT
110.43 -2.5
AOBC
16.00 -1.3
AFSI
11.48 -7.6
ADVERTISEMENT
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ehedrick@pcrmc.com
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BuffWildWngs BWLD
Chanticleer
HOTR
Cheesecake
CAKE
ChickenSoupEntA CSSE
Chuy's
CHUY
ContraVirPharm CTRV
DianaContainer DCIX
DiscoveryComm A DISCA
52-Wk %
Sym Hi/Lo Chg Stock
4.45 -4.3 DiscoveryComm C DISCK
6.36 -9.2 Enteromedics
ETRM
29.35 -2.6 FederatedNatl
FNHC
10.05 -0.2 Forterra
FRTA
53.69 -5.9 HabitRestaurants HABT
98.15 -1.8 ImmuronWt
IMRNW
2.09 -3.5 LM Funding
LMFA
40.21 -1.9 Lands'End
LE
8.60 -10.7 MaidenHoldings MHLD
18.33 -1.9 MidatechPharma MTP
0.45
... NatlGeneral
NGHC
0.43 -13.0 OHAInvestment OHAI
21.49 -2.4 OncobiologicsWtB ONSIZ
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M & A BUSINESS BROKERS
Sell & Show Businesses
Six Figure Commissions
As Independent Contractor
Work From Home / Outside Sales
Leads Furnished § Training § Since 1985
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United States § Canada § Europe
8
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-1.1
-27.8
-17.9
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-3.0
-18.0
6.40 -8.3
OBAS
Optibase
OxbridgeRe
Precipio
Qualcomm
RexEnergy
SpiritAirlines
Stericycle
TOP Ships
Viacom B
Vivus
VS3XInvrsGold
WaysideTech
4.10 -14.3
OXBR
2.15
PRPO
1.4
49.83 -3.9
QCOM
REXX
2.10 -0.9
SAVE
32.45 -4.5
SRCL
70.04 -2.0
TOPS
0.44 -15.2
VIAB
27.22 -3.8
VVUS
0.86 -2.0
DGLD
39.91 -3.3
WSTG
13.61 -5.1
Exchange-Traded Portfolios | WSJ.com/ETFresearch
Largest 100 exchange-traded funds, latest session
ETF
Tuesday, September 5, 2017
Closing Chg YTD
Symbol Price (%) (%)
AlerianMLPETF
CnsmrDiscSelSector
CnsStapleSelSector
DBGoldDoubleLgETN
DBGoldDoubleShrt
DeutscheXMSCIEAFE
EnSelectSectorSPDR
FinSelSectorSPDR
GuggS&P500EW
HealthCareSelSect
IndSelSectorSPDR
iShIntermCredBd
iSh1-3YCreditBond
iSh3-7YTreasuryBd
iShCoreMSCIEAFEETF
iShCoreMSCIEmgMk
iShCoreMSCITotInt
iShCoreS&P500ETF
iShCoreS&PMdCp
iShCoreS&PSmCpETF
iShS&PTotlUSStkMkt
iShCoreUSAggBd
iShSelectDividend
iShEdgeMSCIMinEAFE
iShEdgeMSCIMinUSA
iShGoldTr
iShiBoxx$InvGrCpBd
iShiBoxx$HYCpBd
iShJPMUSDEmgBd
iShMBSETF
iShMSCIACWIETF
iShMSCI EAFE
iShMSCIEAFESC
iShMSCIEmgMarkets
iShMSCIEurozoneETF
iShMSCIJapanETF
iShNasdaqBiotech
iShNatlMuniBdETF
iShRussell1000Gwth
iShRussell1000ETF
iShRussell1000Val
iShRussell2000Gwth
iShRussell2000ETF
iShRussell2000Val
iShRussell3000ETF
iShRussellMid-Cap
iShRussellMCValue
iShS&PMC400Growth
iShS&P500Growth
AMLP
XLY
XLP
DGP
DZZ
DBEF
XLE
XLF
RSP
XLV
XLI
CIU
CSJ
IEI
IEFA
IEMG
IXUS
IVV
IJH
IJR
ITOT
AGG
DVY
EFAV
USMV
IAU
LQD
HYG
EMB
MBB
ACWI
EFA
SCZ
EEM
EZU
EWJ
IBB
MUB
IWF
IWB
IWD
IWO
IWM
IWN
IWV
IWR
IWS
IJK
IVW
11.18
89.70
55.05
26.67
5.06
29.86
63.93
24.24
92.96
80.88
67.83
110.60
105.51
124.81
62.40
53.74
59.56
247.78
171.60
68.84
56.25
110.42
92.05
70.59
50.05
12.89
121.56
88.12
116.92
107.65
67.19
66.54
59.96
44.57
41.63
54.25
333.04
111.49
123.25
136.86
115.15
169.57
139.17
115.45
145.58
191.95
82.75
195.04
141.64
–0.62 –11.3
–0.41 10.2
6.5
0.15
2.62 32.6
–2.44 –26.2
6.4
–1.39
0.55 –15.1
4.3
–2.14
7.3
–0.68
–0.43 17.3
9.0
–1.01
2.2
0.34
0.5
0.09
1.9
0.42
–0.62 16.4
–1.20 26.6
–0.80 18.0
–0.72 10.1
3.8
–1.08
0.1
–1.04
9.7
–0.79
2.2
0.41
3.9
–0.41
–0.55 15.3
–0.42 10.7
1.10 16.3
3.7
0.62
1.8
–0.23
6.1
0.33
1.2
0.30
–0.77 13.6
–0.67 15.3
–0.63 20.3
–1.31 27.3
–0.72 20.3
–0.44 11.0
–0.83 25.5
3.1
0.22
–0.63 17.5
–0.80 10.0
2.8
–0.94
–0.67 10.2
3.2
–0.96
–1.27 –2.9
9.5
–0.75
7.3
–0.79
2.9
–0.98
7.0
–0.84
–0.58 16.3
Closing Chg YTD
Symbol Price (%) (%)
ETF
iShS&P500ValueETF
iShUSPfdStk
iShTIPSBondETF
iSh1-3YTreasuryBd
iSh7-10YTreasuryBd
iSh20+YTreasuryBd
iShRussellMCGrowth
PIMCOEnhShMaturity
PwrShQQQ 1
PwrShS&P500LoVol
PwrShSrLoanPtf
SPDRBloomBarcHYBd
SPDR Gold
SchwabIntEquity
SchwabUS BrdMkt
SchwabUS LC
SPDR DJIA Tr
SPDR S&PMdCpTr
SPDR S&P 500
SPDR S&P Div
TechSelectSector
UtilitiesSelSector
VanEckGoldMiner
VangdInfoTech
VangdSC Val
VangdDivApp
VangdFTSEDevMk
VangdFTSE EM
VangdFTSE Europe
VangdFTSEAWxUS
VangdGrowth
VangdHlthCr
VangdHiDiv
VangdIntermBd
VangdIntrCorpBd
VangdLC
VangdMC
VangdMC Val
VangdREIT
VangdS&P500
VangdST Bond
VangdSTCpBd
VangdSC
VangdTotalBd
VangdTotIntlBd
VangdTotIntlStk
VangdTotalStk
VangdTotlWrld
VangdValue
WisdTrEuropeHdg
WisdTrJapanHdg
IVE
PFF
TIP
SHY
IEF
TLT
IWP
MINT
QQQ
SPLV
BKLN
JNK
GLD
SCHF
SCHB
SCHX
DIA
MDY
SPY
SDY
XLK
XLU
GDX
VGT
VBR
VIG
VEA
VWO
VGK
VEU
VUG
VHT
VYM
BIV
VCIT
VV
VO
VOE
VNQ
VOO
BSV
VCSH
VB
BND
BNDX
VXUS
VTI
VT
VTV
HEDJ
DXJ
104.58
38.82
114.86
84.67
108.51
128.76
110.02
101.73
144.69
45.21
23.07
37.06
127.46
32.48
59.39
58.77
217.67
313.33
246.06
88.97
58.26
54.94
25.31
149.83
121.48
92.36
42.29
44.28
56.52
51.78
131.24
150.45
78.91
85.62
88.59
113.06
143.62
102.74
84.10
226.01
80.12
80.26
135.15
82.55
54.92
53.75
126.29
69.35
96.92
61.55
51.17
–0.90
–0.03
0.65
0.09
0.70
1.59
–0.64
0.05
–0.90
–0.64
–0.22
–0.13
1.11
–0.67
–0.79
–0.78
–1.02
–1.10
–0.72
–0.57
–0.88
0.26
2.14
–0.85
–1.30
–0.70
–0.73
–0.76
–0.58
–0.80
–0.54
–0.46
–0.74
0.49
0.50
–0.72
–0.84
–1.18
–0.27
–0.74
0.11
0.15
–0.93
0.41
0.26
–0.76
–0.77
–0.67
–0.98
–0.90
–1.82
3.2
4.3
1.5
0.3
3.5
8.1
13.0
0.4
22.1
8.7
–1.2
1.7
16.3
17.3
9.6
10.3
10.2
3.8
10.1
4.0
20.5
13.1
21.0
23.3
0.4
8.4
15.7
23.8
17.9
17.2
17.7
18.7
4.1
3.1
3.4
10.4
9.1
5.7
1.9
10.1
0.8
1.1
4.8
2.2
1.2
17.2
9.5
13.7
4.2
7.2
3.3
BANKRATE.COM® MMA, Savings and CDs
Average Yields of Major Banks
Type
Tuesday, September 05, 2017
MMA
1-MO
2-MO
3-MO
6-MO
1-YR
2-YR
2.5YR
5YR
0.10
0.21
0.07
0.07
0.07
0.07
0.13
0.14
0.20
0.22
0.35
0.39
0.47
0.52
0.46
0.48
0.91
0.96
0.00
0.02
0.01
0.00
0.00
0.00
0.01
0.01
0.01
0.01
0.02
0.03
0.01
0.01
-0.01
-0.02
0.00
0.01
National average
Savings
Jumbos
Weekly change
Savings
Jumbos
Consumer Savings Rates
Explanation of ratings: Safe Sound SM, (855) 733-0700, evaluates the financial condition of federally insured institutions and assigns a rank of 1,2,3,4 or 5 based on data from the fourth quarter
of 2015 from federal regulators. 5: most desirable performance; NR: institution is too new to rate,
not an indication of financial strength or weakness. Information is believed to be reliable, but not
guaranteed.
High yield savings
Bank/rank
Phone number
Minimum
Yield
(%)
Money market and savings account
$1
1.40
$1
1.30
$100
1.30
VirtualBank /4
$10,000
(877) 998-2265
AloStar Bank of Commerce /4 $1,000
(877) 738-6391
Mount McKinley Bank /4 $5,000
(907) 452-1751
0.15
DollarSavingsDirect /4
(866) 395-8693
BankPurely /4
(844) 878-7359
CIT Bank /4
(855) 462-2652
One-month CD
0.10
0.10
Two-month CD
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Bank/rank
Phone number
Yield
Minimum
(%)
Six-month CD
VirtualBank /4
$10,000
(877) 998-2265
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
Pacific National Bank /4
$1,000
(305) 539-7500
1.36
1.32
1.25
One-year CD
Pacific National Bank /4
$1,000
(305) 539-7500
EverBank /3
$5,000
(855) 228-6755
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
1.60
1.60
1.57
Two-year CD
$10,000
0.15
$1,000
0.05
Three-month CD
" 20.28
1.72
12.74
3.02
12.60
0.64
2.60
11.20
6.55
2.17
16.39
0.94
0.02
52-Wk %
Sym Hi/Lo Chg
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
TAB Bank /4
$1,000
(800) 837-4136
Luana Savings Bank /4
$1,000
(800) 666-2012
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
VirtualBank /4
$10,000
(877) 998-2265
EverBank /3
$5,000
(855) 228-6755
1.81
1.81
1.81
Five-year CD
1.00
0.95
0.95
Goldman Sachs Bank USA /5
$500
(855) 730-7283
Synchrony Bank /5
$25,000
(800) 903-8154
First Internet Bank of Indiana /4 $1,000
(888) 873-3424
2.40
2.35
2.30
High yield jumbos - Minimum is $100,000
Money market and savings account
BBVA Compass /3
(800) COMPASS
Discover Bank /5
(877) 505-4051
First Internet Bank of Indiana /4
(888) 873-3424
1.25
1.01
0.90
One-month CD
USAA /5
(800) 583-8295
VirtualBank /4
(877) 998-2265
AloStar Bank of Commerce /4
(877) 738-6391
0.15
0.10
1.45
1.36
1.32
TriState Capital Bank /4
(866) 680-8722
EverBank /3
(855) 228-6755
First Internet Bank of Indiana /4
(888) 873-3424
1.60
1.60
1.57
Two-year CD
0.15
0.05
0.01
Three-month CD
TriState Capital Bank /4
(866) 680-8722
Luana Savings Bank /4
(800) 666-2012
First Internet Bank of Indiana /4
(888) 873-3424
TriState Capital Bank /4
(866) 680-8722
VirtualBank /4
(877) 998-2265
First Internet Bank of Indiana /4
(888) 873-3424
One-year CD
0.22
Two-month CD
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Citizens Trust Bank /4
(404) 659-5959
Six-month CD
First Internet Bank of Indiana /4
(888) 873-3424
VirtualBank /4
(877) 998-2265
My e-BAnC by BAC Florida Bank /4
(855) 512-0989
1.81
1.81
1.81
Five-year CD
1.30
1.10
1.00
Synchrony Bank /5
(800) 903-8154
First Internet Bank of Indiana /4
(888) 873-3424
EverBank /3
(855) 228-6755
2.35
2.30
2.30
Notes: Accounts are federally insured up to $250,000 per person effective Oct. 3, 2008. Yields
are based on method of compounding and rate stated for the lowest required opening deposit to
earn interest. CD figures are for fixed rates only. MMA: Allows six (6) third-party transfers per
month, three (3) of which may be checks. Rates are subject to change.
Source: Bankrate.com, a publication of Bankrate, Inc., North Palm Beach, FL 33408
Internet: www.bankrate.com
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B11
BIGGEST 1,000 STOCKS
WSJ.com/stocks
How to Read the Stock Tables
The following explanations apply to NYSE,
NYSE Arca, NYSE MKT and Nasdaq Stock
Market listed securities. Prices are composite
quotations that include primary market trades
as well as trades reported by Nasdaq OMX
BXSM (formerly Boston), Chicago Stock
Exchange, CBOE, National Stock Exchange, ISE
and BATS.
The list comprises the 1,000 largest
companies based on market capitalization.
Underlined quotations are those stocks with
large changes in volume compared with the
issue’s average trading volume.
Boldfaced quotations highlight those issues
whose price changed by 5% or more if their
previous closing price was $2 or higher.
Footnotes:
s-New 52-week high.
t-New 52-week low.
dd-Indicates loss in the most recent
four quarters.
FD-First day of trading.
h-Does not meet continued listing
standards
lf-Late filing
q-Temporary exemption from Nasdaq
requirements.
t-NYSE bankruptcy
v-Trading halted on primary market.
vj-In bankruptcy or receivership or
being reorganized under the
Bankruptcy Code, or securities
assumed by such companies.
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, September 5, 2017
Stock
Net
Sym Close Chg
NYSE
ABB
ABB 23.57 0.31
AES
AES 11.09 -0.03
Aflac
AFL 81.52 -1.38
AT&T
T
37.09 -0.39
AbbottLabs ABT 51.03 -0.15
AbbVie
ABBV 75.25 -0.17
Accenture ACN 129.77 -0.33
AcuityBrands AYI 176.56 -0.40
Adient
ADNT 72.25 0.07
AdvanceAuto AAP 96.73 -1.33
AdvSemiEngg ASX 6.10 -0.03
Aegon
AEG 5.53 -0.20
AerCap
AER 49.53 -0.86
Aetna
AET 158.26 0.07
AffiliatedMgrs AMG 174.41 -2.70
AgilentTechs A
64.29 -0.09
AgnicoEagle AEM 51.43 0.20
Agrium
AGU 97.16 -1.19
AirProducts APD 144.47 -1.18
AlaskaAir ALK 73.05 -2.10
Albemarle ALB 116.67 -1.96
Alcoa
AA 44.42 -0.62
AlexandriaRealEst ARE 120.45 -0.85
Alibaba
BABA 169.92 -1.12
Alleghany Y
543.61-19.57
Allegion
ALLE 79.40 0.25
Allergan
AGN 223.78 -3.95
AllianceData ADS 219.50 -5.68
AllianceBernstein AB 23.35 -0.25
AlliantEnergy LNT 42.91 0.34
Allstate
ALL 86.49 -3.29
AllyFinancial ALLY 22.42 -0.32
t AlticeUSA ATUS 30.01 -0.49
Altria
MO 62.87 -0.67
AlumofChina ACH 18.56 -0.74
Ambev
ABEV 6.29 0.05
Ameren
AEE 59.86 0.06
AmericaMovil AMX 18.25 -0.33
AmericaMovil A AMOV 18.16 -0.40
AmCampus ACC 48.41 0.49
AEP
AEP 74.09 0.55
AmericanExpress AXP 85.31 -0.83
AmericanFin AFG 97.57 -4.71
AmerHomes4Rent AMH 22.01 -0.24
AIG
AIG 59.65 -1.05
AmerTowerREIT AMT 146.94 1.17
AmerWaterWorks AWK 80.82 -0.01
t Amerigas APU 42.09 -1.05
Ameriprise AMP 135.67 -4.15
AmerisourceBrgn ABC 79.69 -0.55
Ametek
AME 63.01 -0.22
Amphenol APH 80.35 -0.52
AnadarkoPetrol APC 41.48 -0.01
Andeavor ANDV 99.41 -2.80
AB InBev BUD 118.84 0.21
AnnalyCap NLY 12.33 -0.13
AnteroMidstream AM 33.57 0.02
AnteroResources AR 19.90 0.02
s Anthem
ANTM 197.18 -0.25
Aon
AON 140.35 1.49
Apache
APA 39.42 -0.06
ApartmtInv AIV 45.32 0.10
ApolloGlobalMgmt APO 28.61 -0.85
AquaAmerica WTR 33.51 -0.02
Aramark
ARMK 40.31 -0.44
ArcelorMittal MT 26.63 -0.72
ArcherDaniels ADM 41.94 -0.26
Arconic
ARNC 24.39 -1.12
AristaNetworks ANET 175.23 -2.26
ArrowElec ARW 77.32 -1.82
AstraZeneca AZN 30.07 -0.04
Athene
ATH 52.76 -1.58
AtmosEnergy ATO 88.02 -0.14
Autohome ATHM 65.01 -0.32
Autoliv
ALV 109.35 0.08
AutoZone AZO 540.00 1.23
Avalonbay AVB 186.68 -1.32
Avangrid
AGR 48.32 -0.29
AveryDennison AVY 94.80 -0.21
AxaltaCoating AXTA 29.13 -0.34
BB&T
BBT 45.38 -0.91
BCE
BCE 47.49 -0.26
s BHPBilliton BHP 44.07 -0.09
s BHPBilliton BBL 38.70 -0.05
BP
BP 34.95 0.18
BRF
BRFS 14.17 0.40
BT Group BT 18.89 -0.05
BakerHughes BHGE 34.97 0.67
Ball
BLL 39.99 -0.16
BancoBilbaoViz BBVA 8.59 -0.28
BancodeChile BCH 88.48 -0.33
BancoMacro BMA 107.47 1.05
BcoSantChile BSAC 29.02 -0.15
BancoSantander SAN 6.33 -0.18
s BanColombia CIB 47.47 0.03
BankofAmerica BAC 23.31 -0.78
BankofMontreal BMO 71.93 -0.32
BankNY Mellon BK 51.20 -1.13
BkNovaScotia BNS 61.91 -0.79
Barclays
BCS 9.71 -0.23
Bard CR
BCR 321.51 1.47
BarrickGold ABX 18.22 0.11
BaxterIntl BAX 62.18 -0.05
BectonDickinson BDX 200.07 0.92
Berkley
WRB 63.46 -2.82
Stock
Net
Sym Close Chg
BerkHathwy A BRK/A 265744-5317.80
BerkHathwy B BRK/B 176.98 -3.75
BerryGlobal BERY 56.27 -0.58
BestBuy
BBY 55.26 0.78
Bio-RadLab A BIO 215.98 -3.05
BlackKnightFin BKFS 42.75 -0.60
BlackRock BLK 413.65 -8.13
BlackstoneGroup BX 32.04 -0.67
BlockHR
HRB 26.39 -0.38
BoardwalkPipe BWP 14.95 -0.12
Boeing
BA 237.00 -3.33
BorgWarner BWA 45.96 -0.70
BostonProperties BXP 120.37 -0.93
BostonScientific BSX 27.57 0.07
Braskem
BAK 24.84 0.43
Bristol-Myers BMY 59.81 -0.09
BritishAmTob BTI 62.15 -0.52
BrixmorProp BRX 18.86 -0.09
s BroadridgeFinl BR 78.30 0.29
BrookfieldMgt BAM 38.66 -0.66
BrookfieldInfr BIP 43.12 -0.28
Brown&Brown BRO 45.48 0.43
Brown-Forman A BF/A 55.60
...
Brown-Forman B BF/B 53.56 0.18
BuckeyePtrs BPL 56.29 -0.82
Bunge
BG 75.68 -0.52
BurlingtonStores BURL 87.91 0.13
CBD Pao
CBD 22.87 0.03
CBRE Group CBG 35.99 -0.35
CBS A
CBS/A 64.02 -0.65
CBS B
CBS 63.64 -0.70
CF Industries CF 29.08 -0.90
CGI Group GIB 51.18 -0.25
CIT Group CIT 44.28 -0.96
CMS Energy CMS 48.43 0.01
CNA Fin
CNA 47.60 -1.40
CNOOC
CEO 122.23 0.42
s CPFLEnergia CPL 17.35 0.18
CRH
CRH 34.91 -0.56
CVS Health CVS 78.69 0.77
s CabotOil
COG 26.96 0.09
s CamdenProperty CPT 91.51 1.10
CampbellSoup CPB 46.67 1.27
CIBC
CM 84.09 -0.51
CanNtlRlwy CNI 80.25 -0.97
CanNaturalRes CNQ 31.72 0.48
CanPacRlwy CP 156.41 0.12
Canon
CAJ 34.60 -0.27
CapitalOne COF 78.66 -1.65
CardinalHealth CAH 67.52 -0.30
Carlisle
CSL 94.15 -0.57
s CarMax
KMX 69.02 0.90
Carnival
CCL 66.97 -2.16
Carnival
CUK 67.72 -2.12
s Caterpillar CAT 118.30 0.02
Celanese A CE 96.72 -1.33
Cemex
CX
9.15 -0.32
CenovusEnergy CVE 8.29 0.27
s Centene
CNC 88.63 0.01
CenterPointEner CNP 29.62 -0.01
CentraisElBras EBR 6.00 0.39
CenturyLink CTL 19.52 -0.52
Chemours CC 48.20 -1.79
Chevron
CVX 109.44 0.68
ChinaEastrnAir CEA 26.46 -0.83
ChinaLifeIns LFC 15.74 -0.33
ChinaMobile CHL 52.13 -0.87
ChinaPetrol SNP 77.44 -0.18
ChinaSoAirlines ZNH 38.06 -0.78
ChinaTelecom CHA 51.50 -0.71
ChinaUnicom CHU 14.39 -0.13
Chipotle
CMG 308.32-11.63
Chubb
CB 136.85 -3.64
ChunghwaTelecom CHT 34.59 -0.05
Church&Dwight CHD 50.39 0.18
s Cigna
CI 185.31 2.14
CimarexEnergy XEC 101.74 0.29
Citigroup
C
67.16 -1.42
CitizensFin CFG 32.65 -0.96
Clorox
CLX 138.33 0.35
Coach
COH 41.37 -0.60
Coca-Cola KO 45.92 0.14
Coca-Cola Euro CCE 43.67 -0.09
Coca-Cola Femsa KOF 80.12 -1.91
Colgate-Palmolive CL 71.11 -0.19
ColonyNorthStar CLNS 13.11 -0.08
Comerica
CMA 66.74 -2.56
SABESP
SBS 10.37 -0.09
ConagraBrands CAG 33.69 0.81
ConchoRscs CXO 113.53 1.74
ConocoPhillips COP 44.39 0.15
ConEd
ED 84.37 0.38
s ConstBrands A STZ 201.09 0.86
ContinentalRscs CLR 34.79 0.46
Cooper
COO 239.91 3.73
Corning
GLW 28.62 -0.29
Coty
COTY 16.38 -0.17
Credicorp
BAP 200.98 -3.80
CreditSuisse CS 14.45 -0.23
CrestwoodEquity CEQP 25.20 0.20
CrownCastle CCI 107.03 0.02
CrownHoldings CCK 58.61 -0.65
Cummins
CMI 159.07 -0.29
s DTE Energy DTE 112.77 0.65
DXC Tech DXC 84.44 -0.47
Danaher
DHR 83.06 -0.17
Darden
DRI 81.19 -0.73
DaVita
DVA 57.23 -0.65
Stock
Net
Sym Close Chg
Deere
DE 115.53 -0.61
s DellTechnologies DVMT 74.80 0.04
s DelphiAutomotive DLPH 96.59 -1.03
DeltaAir
DAL 45.84 -1.68
DeutscheBank DB 15.66 -0.40
DevonEnergy DVN 32.13 0.02
Diageo
DEO 134.62 -0.21
DigitalRealty DLR 119.18 1.47
DiscoverFinSvcs DFS 58.44 -1.15
Disney
DIS 101.60 0.10
DollarGeneral DG 74.36 1.82
DominionEner D
78.19 -0.14
Domino's
DPZ 182.50 -1.09
Donaldson DCI 46.39 -0.98
DouglasEmmett DEI 38.68 -0.44
Dover
DOV 85.00 -0.39
t DowDuPont DWDP 64.98 -2.20
DrPepperSnap DPS 91.82 0.10
DrReddy'sLab RDY 33.85 -0.82
DukeEnergy DUK 87.41 0.32
DukeRealty DRE 29.48 -0.05
ENI
E
31.92 0.18
EOG Rscs EOG 85.87 0.22
EQT
EQT 62.69 0.08
EQT Midstream EQM 75.95 -0.63
s EastmanChem EMN 85.27 -2.04
Eaton
ETN 71.10 -0.53
Ecolab
ECL 133.23 0.38
Ecopetrol
EC
9.33 0.05
EdisonInt
EIX 80.26 0.30
EdwardsLife EW 111.87 -1.44
EmersonElectric EMR 58.66 -0.15
EnbridgeEnPtrs EEP 15.14 -0.09
Enbridge
ENB 40.21 -0.24
Encana
ECA 9.33 -0.09
EnelAmericas ENIA 10.53 -0.04
EnelChile
ENIC 5.82 -0.10
EnelGenChile EOCC 25.50 0.16
EnergyTrfrEquity ETE 17.73 -0.03
EnergyTransfer ETP 19.17 -0.14
EnLinkMidPtrs ENLK 16.24 -0.10
Entergy
ETR 79.79 0.53
EnterpriseProd EPD 25.81 -0.28
EnvisionHlthcr EVHC 50.93 -1.38
Equifax
EFX 141.10 -0.49
s EquityLife ELS 90.11 0.32
EquityResdntl EQR 67.14 0.15
EssexProp ESS 266.09 0.32
s EsteeLauder EL 107.95 0.02
EverestRe RE 231.19-17.19
EversourceEner ES 62.95 0.38
Exelon
EXC 37.60 0.06
ExtraSpaceSt EXR 78.40 0.62
ExxonMobil XOM 77.18 0.61
FMC
FMC 85.62 -1.79
FactSet
FDS 157.51 -0.59
FederalRealty FRT 127.64 -0.56
FedEx
FDX 213.26 -1.79
Ferrari
RACE 116.16 -0.60
FiatChrysler FCAU 15.53 -0.33
s FibriaCelulose FBR 13.74 0.19
FidelityNatlFin FNF 46.41 -1.71
FNFV Group FNFV 16.20 -1.10
FidelityNtlInfo FIS 92.21 -0.13
58.com
WUBA 63.15 -0.79
FirstData
FDC 18.08 -0.46
FirstRepBank FRC 94.21 -3.17
FirstEnergy FE 32.52 0.10
FleetCorTech FLT 141.29 -2.63
FomentoEconMex FMX 96.95 -2.75
FordMotor F
11.36 0.01
ForestCIty A FCE/A 24.23 0.24
s Fortis
FTS 36.87 -0.01
Fortive
FTV 65.09 -0.01
FortBrandsHome FBHS 62.64 -0.33
s Franco-Nevada FNV 83.88 1.75
FranklinRscs BEN 41.73 -1.67
Freeport-McMoRan FCX 14.79 -0.28
FreseniusMed FMS 47.08 -0.09
GGP
GGP 20.94 -0.26
Gallagher AJG 57.71 -0.21
Gap
GPS 24.03 -0.22
Gartner
IT 120.22 -0.57
Gazit-Globe GZT 9.76 -0.01
GeneralDynamics GD 198.73 -1.27
GeneralElec GE 24.76 -0.38
GeneralMills GIS 53.72
...
GeneralMotors GM 37.23 -0.13
GenuineParts GPC 84.31 0.47
Gerdau
GGB 3.98 0.05
Gildan
GIL 31.08 -0.46
GlaxoSmithKline GSK 39.89 -0.31
GlobalPayments GPN 94.85 -0.67
s GoDaddy
GDDY 45.18 0.23
Goldcorp
GG 14.07 0.32
GoldmanSachs GS 217.78 -8.10
s Graco
GGG 114.47 -2.21
Grainger
GWW 161.36 -2.43
GreatPlainsEner GXP 30.72 -0.03
GpoAeroportuar PAC 107.83 -3.08
GpoAeroportSur ASR 199.93 -4.71
GpoAvalAcciones AVAL 9.10 -0.03
GpFinSantandMex BSMX 10.20 -0.17
GrupoTelevisa TV 24.94 -0.64
GuidewireSoftware GWRE 75.28 -0.52
HCA Healthcare HCA 78.31 -0.36
HCP
HCP 30.17 0.03
HDFC Bank HDB 94.10 -3.32
Mutual Funds | WSJ.com/fundresearch
Stock
HP
HPQ 19.24 -0.12
HSBC
HSBC 47.66 -0.84
Halliburton HAL 39.83 0.93
Hanesbrands HBI 24.68 -0.07
t HarleyDavidson HOG 45.93 -1.44
Harris
HRS 122.89 -0.26
HartfordFinl HIG 52.88 -1.17
HealthcareAmer HTA 31.21 0.10
Heico
HEI 85.47 -0.53
Heico A
HEI/A 72.95 -0.85
Herbalife
HLF 68.97 -0.43
Hershey
HSY 104.66 -0.95
Hess
HES 40.06 0.61
HewlettPackard HPE 14.04 -0.27
Hilton
HLT 63.60 -0.99
HollyFrontier HFC 30.63 -1.87
HomeDepot HD 152.93 2.15
HondaMotor HMC 28.05 -0.16
Honeywell HON 136.51 -1.12
t HormelFoods HRL 30.70 -0.22
DR Horton DHI 35.71 -0.53
HostHotels HST 17.62 -0.52
HuanengPower HNP 25.63 -0.72
Hubbell
HUBB 111.29 -1.50
s Humana
HUM 257.55 -1.20
HuntingtonIngalls HII 213.34 -1.69
Huntsman HUN 26.70 -0.19
HyattHotels H
58.64 -1.02
ICICI Bank IBN 9.19 -0.21
ING Groep ING 17.40 -0.44
Invesco
IVZ 32.26 -0.86
IDEX
IEX 117.24 -0.54
IllinoisToolWks ITW 136.45 -1.27
Infosys
INFY 14.65 -0.19
Ingersoll-Rand IR
84.78 -0.30
Ingredion
INGR 123.98 -0.69
ICE
ICE 64.95 -0.15
InterContinentl IHG 49.54 -0.80
IBM
IBM 143.04 -1.04
IntlFlavors IFF 139.26 1.32
IntlPaper
IP
54.79 -0.12
Interpublic IPG 20.21 0.02
InvitationHomes INVH 22.93 -0.33
s IronMountain IRM 39.56 0.12
IsraelChemicals ICL
4.34 -0.02
ItauUnibanco ITUB 13.10 0.03
JPMorganChase JPM 89.51 -2.19
Jabil
JBL 30.87 -0.47
JacobsEngineering JEC 54.38 -0.75
JamesHardie JHX 14.22 0.13
JanusHenderson JHG 33.42 -1.37
J&J
JNJ 129.90 -1.13
JohnsonControls JCI 40.00 0.11
JonesLangLaSalle JLL 120.24 -2.43
JuniperNetworks JNPR 27.17 -0.51
KAR Auction KAR 45.05 -0.42
KB Fin
KB 44.57 -5.01
KKR
KKR 18.36 -0.62
KT
KT 15.32 -0.90
KSCitySouthern KSU 102.72 -1.04
Kellogg
K
66.40 0.95
KeyCorp
KEY 16.79 -0.57
KeysightTechs KEYS 39.97 -0.58
KilroyRealty KRC 68.10 -1.13
KimberlyClark KMB 122.91 -0.30
KimcoRealty KIM 19.80 -0.01
KinderMorgan KMI 19.35 -0.01
s KinrossGold KGC 4.69 0.20
Kohl's
KSS 40.39 0.29
s KoninklijkePhil PHG 38.87 0.81
KoreaElcPwr KEP 18.55 -0.79
Kroger
KR 22.43 0.01
Kyocera
KYO 59.97 -0.07
LATAMAirlines LTM 12.87 0.09
L Brands
LB 36.68 -0.78
LG Display LPL 14.24 0.39
LINE
LN 35.12 0.22
L3 Tech
LLL 182.85 0.65
LabCpAm LH 157.00 -0.61
LambWeston LW 45.74 -0.25
LasVegasSands LVS 62.66 -0.21
Lazard
LAZ 41.87 -1.19
Lear
LEA 151.11 -0.50
Leggett&Platt LEG 45.72 -0.71
Leidos
LDOS 57.80 -0.94
Lennar A
LEN 51.04 -0.72
Lennar B
LEN/B 42.56 -0.67
LennoxIntl LII 166.14 0.18
LeucadiaNatl LUK 23.10 -0.85
Level3Comm LVLT 54.12 -0.73
s LibertyProperty LPT 42.73 -0.03
EliLilly
LLY 79.82 -0.26
LincolnNational LNC 66.85 -2.09
LionsGate A LGF/A 30.48 0.13
s LionsGate B LGF/B 29.23 0.27
LiveNationEnt LYV 40.24 0.14
LloydsBanking LYG 3.27 -0.05
LockheedMartin LMT 302.20 0.01
Loews
L
45.84 -1.07
Lowe's
LOW 75.68 1.03
LyondellBasell LYB 89.39 -0.86
M&T Bank MTB 145.45 -3.55
MGM Resorts MGM 33.14 -0.07
MPLX
MPLX 34.05 -0.52
MSCI
MSCI 113.13 -2.32
Macerich
MAC 53.35 0.06
MacquarieInfr MIC 73.50 -1.10
Macy's
M
21.01 -0.40
MagellanMid MMP 67.70 -0.22
MagnaIntl MGA 48.12 -0.99
Manpower MAN 111.56 -0.54
ManulifeFin MFC 19.39 -0.54
MarathonOil MRO 11.29 0.02
MarathonPetrol MPC 51.79 -2.49
Markel
MKL 1022.11-21.36
Marsh&McLennan MMC 78.09 0.22
MartinMarietta MLM 207.80 -3.76
Masco
MAS 36.65 -0.41
Mastercard MA 132.66 -0.58
McCormick MKC 96.27 0.13
McCormickVtg MKC/V 96.18 0.70
McDonalds MCD 159.10 -0.71
McKesson MCK 147.82 -1.59
Medtronic MDT 79.82 -0.23
Merck
MRK 63.62 -0.21
MetLife
MET 47.31 -0.49
MettlerToledo MTD 603.25 0.31
MichaelKors KORS 42.45 -0.36
MidAmApt MAA 106.49 0.27
MitsubishiUFJ MTU 6.04 -0.10
MizuhoFin MFG 3.41 -0.01
Fund
LrgCpStr
Explanatory Notes
Data provided by
Top 250 mutual-funds listings for Nasdaq-published share classes with net assets of
at least $500 million each. NAV is net asset value. Percentage performance figures
are total returns, assuming reinvestment of all distributions and after subtracting
annual expenses. Figures don’t reflect sales charges (“loads”) or redemption fees.
NET CHG is change in NAV from previous trading day. YTD%RET is year-to-date
return. 3-YR%RET is trailing three-year return annualized.
e-Ex-distribution. f-Previous day’s quotation. g-Footnotes x and s apply. j-Footnotes e
and s apply. k-Recalculated by Lipper, using updated data. p-Distribution costs apply,
12b-1. r-Redemption charge may apply. s-Stock split or dividend. t-Footnotes p and r
apply. v-Footnotes x and e apply. x-Ex-dividend. z-Footnote x, e and s apply. NA-Not
available due to incomplete price, performance or cost data. NE-Not released by Lipper;
data under review. NN-Fund not tracked. NS-Fund didn’t exist at start of period.
Fund
Tuesday, September 5, 2017
Net YTD
Net YTD
NAV Chg %Ret Fund
American Century Inv
Ultra
42.59 -0.30
American Funds Cl A
29.82 -0.17
AmcpA p
AMutlA p 39.54 -0.22
26.75 -0.07
BalA p
13.08 +0.06
BondA p
62.21 -0.15
CapIBA p
CapWGrA 49.91 -0.36
EupacA p
54.39 -0.35
60.31 -0.42
FdInvA p
48.57 -0.32
GwthA p
10.43
...
HI TrA p
39.15 -0.25
ICAA p
22.86 -0.07
IncoA p
42.88 -0.29
N PerA p
NEcoA p
44.23 -0.30
NwWrldA 63.61 -0.24
53.92 -0.32
SmCpA p
13.07 +0.01
TxExA p
43.29 -0.24
WshA p
Baird Funds
AggBdInst 11.01 +0.05
CorBdInst 11.35 +0.05
BlackRock Funds A
...
GlblAlloc p 20.02
BlackRock Funds Inst
21.90 -0.18
EqtyDivd
20.14
...
GlblAlloc
7.80 -0.01
HiYldBd
StratIncOpptyIns 9.94 -0.01
Bridge Builder Trust
10.30 +0.05
CoreBond
Del Invest Instl
20.21 -0.08
Value
Dimensional Fds
5GlbFxdInc 11.08 +0.03
EmgMktVa 30.19 -0.26
EmMktCorEq 21.99 -0.14
IntlCoreEq 13.65 -0.08
18.94 -0.13
IntlVal
20.74 -0.10
IntSmCo
22.62 -0.13
IntSmVa
US CoreEq1 20.82 -0.19
US CoreEq2 19.70 -0.21
US Small
33.64 -0.40
US SmCpVal 35.62 -0.55
US TgdVal 23.16 -0.36
36.84 -0.41
USLgVa
Dodge & Cox
Balanced 106.56 -0.55
13.50 -0.12
GblStock
Income
13.93 +0.04
Intl Stk
44.98 -0.33
NAV Chg %Ret Fund
192.93 -1.92 6.9
Stock
22.1 DoubleLine Funds
TotRetBdI 10.80 +0.04 4.2
11.1 TotRetBdN 10.79 +0.04 3.9
8.4 Edgewood Growth Instituti
9.1 EdgewoodGrInst 28.55 -0.17 28.5
4.1 Federated Instl
9.7 StraValDivIS 6.33 -0.01 9.7
15.2 Fidelity
23.1 500IdxInst 86.25 -0.66 11.3
12.6 500IdxInstPrem 86.26 -0.65 11.3
15.5 500IdxPrem 86.25 -0.66 11.3
5.4 ExtMktIdxPrem r 59.01 -0.62 7.5
8.9 IntlIdxPrem r 41.52 -0.14 17.6
7.0 TMktIdxF r 71.07 -0.58 10.6
21.4 TMktIdxPrem 71.06 -0.58 10.6
23.0 USBdIdxInstPrem 11.74 +0.05 3.9
23.6 Fidelity Advisor I
17.3 NwInsghtI 31.46 -0.25 17.8
4.7 Fidelity Freedom
9.3 FF2020
16.29 -0.06 10.4
14.06 -0.05 11.0
FF2025
4.6 FF2030
17.49 -0.10 12.6
4.8 FreedomK2020 14.91 -0.05 10.4
FreedomK2025 15.78 -0.06 11.2
10.1 FreedomK2030 16.26 -0.09 12.8
FreedomK2035 17.09 -0.12 13.8
6.8 FreedomK2040 17.11 -0.12 13.9
10.3 Fidelity Invest
6.1 Balanc
24.22 -0.08 10.8
3.4 BluCh
84.31 -0.67 25.2
119.13 -1.07 21.8
Contra
4.4 ContraK
119.11 -1.07 21.9
CpInc r
10.15 -0.03 8.4
3.6 DivIntl
39.82 -0.21 19.6
171.65 -1.51 25.5
GroCo
2.8 GrowCoK 171.58 -1.51 25.6
26.3 InvGB
8.00 +0.03 4.1
27.4 InvGrBd
11.40 +0.05 4.5
18.6 LowP r
54.33 -0.31 9.8
15.1 LowPriStkK r 54.31 -0.32 9.9
20.8 MagIn
99.14 -0.80 14.9
19.2 OTC
107.64 -0.79 29.2
8.9 Puritn
22.82 -0.11 11.7
6.6 SrsEmrgMktF NA
... NA
-0.1 SrsInvGrdF
NA
... NA
-4.5 TotalBond 10.79 +0.04 4.4
-3.0 Fidelity Selects
5.9 Biotech r
227.81 -1.96 30.9
First Eagle Funds
5.7 GlbA
58.79 -0.11 8.3
13.4 FPA Funds
4.0 FPACres
33.94 -0.28 5.3
18.1 FrankTemp/Frank Adv
Net YTD
NAV Chg %Ret
IncomeAdv 2.32 -0.01
FrankTemp/Franklin A
CA TF A p
7.53 +0.02
Fed TF A p 12.06 +0.02
2.34 -0.01
IncomeA p
RisDv A p 56.72 -0.32
FrankTemp/Franklin C
Income C t 2.37 -0.01
FrankTemp/Temp A
GlBond A p 12.07 -0.09
Growth A p 26.13 -0.20
FrankTemp/Temp Adv
GlBondAdv p 12.02 -0.10
Harbor Funds
CapApInst 71.04 -0.60
68.56 -0.24
IntlInst r
Harding Loevner
IntlEq
NA
...
Invesco Funds A
10.92 -0.08
EqIncA
John Hancock Class 1
15.58 -0.06
LSBalncd
16.51 -0.10
LSGwth
John Hancock Instl
DispValMCI 22.63 -0.27
JPMorgan Funds
MdCpVal L 38.46 -0.36
JPMorgan I Class
11.76 +0.05
CoreBond
JPMorgan R Class
11.77 +0.05
CoreBond
Lazard Instl
EmgMktEq 19.16 -0.16
Loomis Sayles Fds
14.29
...
LSBondI
Lord Abbett A
ShtDurIncmA p 4.30 +0.01
Lord Abbett F
...
ShtDurIncm 4.29
Metropolitan West
TotRetBd
10.77 +0.04
TotRetBdI 10.77 +0.04
TRBdPlan 10.14 +0.04
MFS Funds Class I
38.94 -0.32
ValueI
MFS Funds Instl
IntlEq
24.43 -0.02
Mutual Series
GlbDiscA
31.68 -0.24
32.32 -0.25
GlbDiscz
Oakmark Funds Invest
32.53 -0.16
EqtyInc r
79.67 -0.76
Oakmark
OakmrkInt 27.62 -0.01
Old Westbury Fds
5.4
5.7
3.7
5.3
8.4
5.2
2.5
10.9
2.6
25.4
17.4
NA
4.1
10.0
12.3
5.4
5.7
4.2
4.3
20.7
7.2
2.3
2.3
3.5
3.8
3.9
8.3
20.6
5.3
5.5
6.9
9.9
21.7
Net
Sym Close Chg
Stock
MobileTeleSys MBT 9.97
MohawkIndustries MHK 254.76
MolsonCoors B TAP 88.88
Monsanto MON 117.02
Moody's
MCO 133.06
MorganStanley MS 44.91
t Mosaic
MOS 19.46
MotorolaSolutions MSI 86.66
NRG Energy NRG 24.40
NTTDoCoMo DCM 23.00
NVR
NVR 2704.95
NationalGrid NGG 64.07
NatlOilwell NOV 31.33
NatlRetailProp NNN 41.98
NewOrientalEduc EDU 80.92
NY CmntyBcp NYCB 11.92
NewellBrands NWL 48.72
NewmontMining NEM 38.75
NextEraEnergy NEE 150.26
NielsenHoldings NLSN 38.81
Nike
NKE 53.01
NiSource
NI
26.87
NobleEnergy NBL 24.36
Nokia
NOK 6.10
NomuraHoldings NMR 5.42
Nordstrom JWN 46.20
NorfolkSouthern NSC 121.11
NorthropGrumman NOC 268.07
Novartis
NVS 83.80
s NovoNordisk NVO 46.98
Nucor
NUE 54.79
NuSTAREnergy NS 40.00
OGE Energy OGE 35.58
ONEOK
OKE 54.85
OccidentalPetrol OXY 60.72
Och-Ziff
OZM 2.91
OmegaHealthcare OHI 32.02
t Omnicom OMC 71.73
Oracle
ORCL 50.93
Orange
ORAN 16.63
s OrbitalATK OA 110.00
Orix
IX
79.81
Oshkosh
OSK 73.74
s OwensCorning OC 74.47
PG&E
PCG 69.84
PLDT
PHI 32.98
PNC Fin
PNC 123.79
POSCO
PKX 74.24
PPG Ind
PPG 103.44
PPL
PPL 39.17
PVH
PVH 128.50
PackagingCpAm PKG 111.89
PaloAltoNtwks PANW144.03
ParkHotels PK 26.19
ParkerHannifin PH 159.76
ParsleyEnergy PE 25.26
Pearson
PSO 7.72
PembinaPipeline PBA 32.50
Pentair
PNR 61.57
PepsiCo
PEP 115.87
PerkinElmer PKI 67.20
Perrigo
PRGO 78.06
PetroChina PTR 64.66
PetroleoBrasil PBR 9.54
PetroleoBrasilA PBR/A 9.22
Pfizer
PFE 33.80
PhilipMorris PM 117.67
Phillips66 PSX 83.24
PinnacleFoods PF 59.56
PinnacleWest PNW 89.69
PioneerNatRscs PXD 131.13
PlainsAllAmPipe PAA 21.79
PlainsGP
PAGP 22.68
PolarisIndustries PII 96.69
PostHoldings POST 85.77
Potash
POT 17.26
Praxair
PX 130.30
PrincipalFin PFG 61.82
Procter&Gamble PG 92.72
Progressive PGR 44.11
s Prologis
PLD 63.51
PrudentialFin PRU 100.74
Prudential PUK 45.94
PublicServiceEnt PEG 46.37
PublicStorage PSA 206.66
PulteGroup PHM 25.65
QuestDiag DGX 107.42
QuintilesIMS Q
96.95
RELX
RENX 21.16
RELX
RELX 22.15
RPM
RPM 48.83
RalphLauren RL 89.50
RaymondJames RJF 76.27
s Raytheon RTN 183.08
RealtyIncome O
58.32
RedHat
RHT 106.81
RegencyCtrs REG 64.52
RegionsFin RF 13.64
ReinsuranceGrp RGA 130.09
RenaissanceRe RNR 127.92
RepublicServices RSG 64.63
ResMed
RMD 76.60
RestaurantBrands QSR 60.69
RiceEnergy RICE 27.59
RioTinto
RIO 48.84
RobertHalf RHI 44.62
Rockwell
ROK 163.41
RockwellCollins COL 131.00
RogersComm B RCI 51.98
Rollins
ROL 44.32
RoperTech ROP 229.01
RoyalBkCanada RY 73.32
RoyalBkScotland RBS 6.49
RoyalCaribbean RCL 119.04
RoyalDutchA RDS/A 55.70
RoyalDutchB RDS/B 57.03
SAP
SAP 104.76
S&P Global SPGI 153.18
SINOPECShanghai SHI 60.51
SK Telecom SKM 23.97
SLGreenRealty SLG 95.73
s Salesforce.com CRM 96.18
Sanofi
SNY 48.81
Sasol
SSL 30.50
Scana
SCG 59.85
Schlumberger SLB 65.10
SchwabC
SCHW 38.77
ScottsMiracleGro SMG 93.96
SealedAir SEE 44.23
SempraEnergy SRE 117.64
SensataTech ST 45.23
Net YTD
NAV Chg %Ret Fund
14.40 -0.08
Oppenheimer Y
NA
...
DevMktY
41.29 -0.21
IntGrowY
Parnassus Fds
NA
...
ParnEqFd
PIMCO Fds Instl
NA
...
AllAsset
10.42 +0.07
TotRt
PIMCO Funds A
NA
...
IncomeFd
PIMCO Funds D
NA
...
IncomeFd
PIMCO Funds Instl
NA
...
IncomeFd
PIMCO Funds P
NA
...
IncomeP
Price Funds
91.08 -0.70
BlChip
29.03 -0.04
CapApp
33.04 -0.31
EqInc
66.24 -0.51
EqIndex
66.51 -0.47
Growth
73.74 +0.09
HelSci
36.96 -0.26
InstlCapG
IntlStk
18.60 -0.11
14.80 -0.10
IntlValEq
MCapGro
87.77 -0.48
29.95 -0.25
MCapVal
N Horiz
52.72 -0.08
9.59 +0.04
N Inc
OverS SF r 10.87 -0.06
22.62 -0.05
R2020
17.37 -0.06
R2025
25.49 -0.11
R2030
R2035
18.58 -0.09
26.63 -0.15
R2040
Value
36.71 -0.35
Principal Investors
DivIntlInst 13.36 -0.10
Prudential Cl Z & I
TRBdZ
14.66 +0.07
Schwab Funds
S&P Sel
38.31 -0.29
TIAA/CREF Funds
EqIdxInst
18.35 -0.15
IntlEqIdxInst 19.46 -0.10
Tweedy Browne Fds
27.61 -0.19
GblValue
VANGUARD ADMIRAL
500Adml 227.78 -1.73
BalAdml
33.27 -0.09
CAITAdml 11.90 +0.01
CapOpAdml r145.23 -1.61
36.77 -0.15
EMAdmr
EqIncAdml 72.66 -0.52
ExtndAdml 77.74 -0.82
GNMAAdml 10.59 +0.02
GrwthAdml 67.56 -0.38
HlthCareAdml r 89.01 -0.46
...
HYCorAdml r 5.97
26.16 +0.16
InfProAd
IntlGrAdml 89.57 -0.82
ITBondAdml 11.60 +0.06
ITIGradeAdml 9.92 +0.05
LTGradeAdml 10.71 +0.12
MidCpAdml 177.90 -1.51
MuHYAdml 11.44 +0.02
MuIntAdml 14.29 +0.01
MuLTAdml 11.74 +0.02
MuLtdAdml 11.04 +0.01
...
MuShtAdml 15.83
PrmcpAdml r125.64 -1.25
Net
Sym Close Chg
-0.02
-0.04
-1.15
-0.19
-0.70
-1.28
-0.65
-1.21
-0.41
0.05
-3.26
0.30
0.65
0.20
-3.20
-0.20
-0.19
0.09
0.10
-0.70
-0.35
0.01
0.14
-0.12
-0.13
-0.24
-0.05
-0.76
-0.01
-0.26
-0.71
-0.37
-0.18
0.22
0.97
0.03
-0.28
-0.21
0.31
-0.36
-0.86
-0.35
-1.16
0.47
-0.03
-0.46
-2.85
-3.38
-1.15
0.06
1.97
-1.56
-2.64
-0.70
-3.07
0.01
-0.08
-0.20
-0.91
0.03
0.21
-0.85
-0.48
0.25
0.29
-0.16
-0.16
-1.19
-0.64
-0.17
0.49
-0.05
0.13
1.98
-0.38
-0.21
-0.73
-1.49
0.19
-1.55
-0.27
-2.41
-1.29
-0.15
0.78
-0.22
-0.75
1.27
0.02
0.01
-0.41
0.18
-2.69
1.70
0.46
-0.65
-0.16
-0.59
-4.54
-9.83
-0.56
-0.99
-0.59
0.18
-0.69
-0.66
-0.95
0.39
-0.17
-0.12
-1.08
-1.01
-0.13
-5.20
0.35
0.32
-0.58
-0.54
-2.15
-0.88
-1.38
0.17
-0.50
0.08
-0.29
1.75
-1.39
-1.11
-0.72
-0.30
0.11
Net YTD
NAV Chg %Ret
12.2 REITAdml r 119.21 -0.33
SmCapAdml 64.75 -0.66
NA STBondAdml 10.51 +0.02
19.1 STIGradeAdml 10.74 +0.02
TotBdAdml 10.89 +0.05
NA TotIntBdIdxAdm 21.93 +0.05
TotIntlAdmIdx r 28.92 -0.16
NA TotStAdml 61.47 -0.49
13.60 -0.08
5.8 TxMIn r
37.81 -0.37
ValAdml
NA WdsrllAdml 65.71 -0.57
WellsIAdml 64.51 +0.03
NA WelltnAdml 71.47 -0.24
WndsrAdml 74.35 -0.79
NA VANGUARD FDS
25.50 -0.10
DivdGro
NA HlthCare r 211.01 -1.07
INSTTRF2020 21.98 -0.04
25.4 INSTTRF2025 22.14 -0.07
10.8 INSTTRF2030 22.24 -0.08
5.9 INSTTRF2035 22.34 -0.11
11.1 INSTTRF2040 22.43 -0.13
24.9 INSTTRF2045 22.53 -0.13
37.46 -0.23
24.8 IntlVal
31.92 -0.15
26.4 LifeGro
26.21 -0.07
21.6 LifeMod
PrmcpCor
25.08 -0.27
15.5
31.19 -0.37
SelValu
r
16.5
26.27 -0.08
3.1 STAR
10.74 +0.02
21.7 STIGrade
15.63 -0.01
TgtRe2015
4.2
30.83 -0.06
TgtRe2020
19.8
10.8 TgtRe2025 17.99 -0.06
TgtRe2030
32.38 -0.12
12.1
13.1 TgtRe2035 19.81 -0.09
14.1 TgtRe2040 33.98 -0.19
14.7 TgtRe2045 21.31 -0.13
9.1 TgtRe2050 34.28 -0.20
TgtRetInc
13.47 +0.01
21.5 TotIntBdIxInv 10.97 +0.03
26.63 +0.02
WellsI
41.38 -0.14
Welltn
6.2
37.03 -0.32
WndsrII
VANGUARD INDEX FDS
11.3
227.74 -1.73
500
ExtndIstPl 191.86 -2.02
10.6
SmValAdml 52.21 -0.69
17.6
10.85 +0.05
TotBd2
TotIntl
17.29 -0.10
10.3
61.44 -0.49
TotSt
VANGUARD INSTL FDS
11.3
BalInst
33.27 -0.10
8.0
DevMktsIndInst 13.62 -0.08
5.0
DevMktsInxInst 21.29 -0.13
16.9
77.74 -0.82
ExtndInst
24.5
GrwthInst 67.57 -0.37
7.7
InPrSeIn
10.65 +0.06
7.5
224.77 -1.71
InstIdx
2.2
InstPlus
224.79 -1.71
18.6
InstTStPlus 55.17 -0.45
17.4 MidCpInst 39.30 -0.33
6.1 MidCpIstPl 193.82 -1.65
2.9 SmCapInst 64.75 -0.66
33.0 STIGradeInst 10.74 +0.02
5.0 TotBdInst
10.89 +0.05
4.8 TotBdInst2 10.85 +0.05
9.4 TotBdInstPl 10.89 +0.05
9.9 TotIntBdIdxInst 32.91 +0.08
6.5 TotIntlInstIdx r115.67 -0.64
4.8 TotItlInstPlId r115.69 -0.64
5.6 TotStInst
61.48 -0.49
2.9 ValueInst
37.81 -0.37
1.4 Western Asset
15.4 CorePlusBdI
NA
...
3.7
5.4
1.8
2.5
3.9
1.9
19.1
10.6
17.7
5.6
6.5
6.0
7.3
8.3
10.5
17.4
9.1
10.1
10.9
11.7
12.5
12.8
18.0
11.7
9.6
13.1
8.4
11.7
2.4
7.7
9.1
10.0
10.9
11.7
12.5
12.8
12.8
6.0
1.9
6.0
7.3
6.4
11.2
7.5
1.2
3.9
19.0
10.5
7.9
17.7
17.7
7.5
18.6
2.9
11.3
11.3
10.6
9.9
9.9
5.4
2.5
3.9
3.9
3.9
1.9
19.1
19.1
10.6
5.6
NA
Stock
Net
Sym Close Chg
ServiceCorp SCI 35.24
ServiceMaster SERV 47.02
ServiceNow NOW 116.15
ShawComm B SJR 22.41
SherwinWilliams SHW 344.98
ShinhanFin SHG 42.59
Shopify
SHOP 110.67
SimonProperty SPG 156.88
SmithAO
AOS 55.54
Smith&Nephew SNN 36.28
Smucker
SJM 106.08
Snap
SNAP 14.49
SnapOn
SNA 144.67
s SOQUIMICH SQM 48.00
Sony
SNE 39.33
Southern
SO 49.16
s SoCopper SCCO 40.69
SouthwestAirlines LUV 51.14
SpectraEnerPtrs SEP 44.27
SpectrumBrands SPB 106.26
s SpiritAeroSys SPR 74.43
Sprint
S
8.18
Square
SQ 25.77
StanleyBlackDck SWK 141.70
StarwoodProp STWD 22.00
StateStreet STT 91.79
Statoil
STO 19.11
Steris
STE 87.09
s STMicroelec STM 17.77
Stryker
SYK 141.61
SumitomoMits SMFG 7.40
SunCommunities SUI 91.14
SunLifeFinancial SLF 38.18
SuncorEnergy SU 31.83
SunTrustBanks STI 53.84
SynchronyFin SYF 29.87
Syngenta SYT 92.01
Sysco
SYY 53.02
TAL Education TAL 30.71
TE Connectivity TEL 79.12
Telus
TU 36.22
s Ternium
TX 31.12
TIM Part
TSU 18.05
TJX
TJX 72.34
TableauSoftware DATA 71.98
s TaiwanSemi TSM 36.85
TargaResources TRGP 44.72
Target
TGT 57.35
TataMotors TTM 30.15
TechnipFMC FTI 26.57
TeckRscsB TECK 23.80
s TelecomArgentina TEO 31.66
TelecomItalia TI
9.34
TelecomItalia A TI/A 7.51
Teleflex
TFX 210.94
s TelefonicaBras VIV 15.66
Telefonica TEF 10.54
TelekmIndonesia TLK 34.85
Tenaris
TS 27.84
Teradyne
TER 35.45
TevaPharm TEVA 15.41
Textron
TXT 48.70
ThermoFisherSci TMO 186.02
ThomsonReuters TRI 44.85
ThorIndustries THO 110.74
3M
MMM 200.98
Tiffany
TIF 92.25
TimeWarner TWX 101.22
Toll Bros
TOL 38.54
Torchmark TMK 75.87
Toro
TTC 59.39
TorontoDomBk TD 54.07
Total
TOT 52.19
TotalSystem TSS 68.87
ToyotaMotor TM 113.62
TransCanada TRP 50.37
TransDigm TDG 254.10
TransUnion TRU 47.89
Travelers
TRV 115.43
TurkcellIletism TKC 9.40
TurquoiseHill TRQ 3.30
Twitter
TWTR 16.65
TylerTech TYL 170.56
TysonFoods TSN 64.47
-0.21
0.24
0.66
-0.12
1.36
-3.73
-0.19
-1.31
-0.25
-0.02
1.24
0.22
-1.34
-0.04
-0.39
0.90
-0.61
-1.05
-0.06
-3.34
-0.01
-0.09
-0.16
-0.94
-0.26
-1.39
0.14
0.21
0.30
0.52
-0.11
0.36
-0.70
-0.08
-1.64
-1.05
-0.12
0.05
-0.22
-0.62
-0.12
-0.31
0.19
-0.04
-0.68
-0.37
0.18
1.13
-0.39
0.25
-1.66
1.19
-0.19
-0.08
0.43
0.15
-0.22
-0.57
1.26
-0.34
-0.49
-0.53
0.02
-0.62
1.73
-2.58
-0.12
-0.38
-0.46
-1.65
-1.63
-0.43
0.15
-0.08
0.59
-0.48
-2.76
0.08
-4.47
-0.08
-0.06
-0.21
-0.95
-0.06
Net
Sym Close Chg
Stock
Stock
Net
Sym Close Chg
Abiomed
ABMD 150.51 -0.55
ActivisionBliz ATVI 65.05 -0.07
AdobeSystems ADBE 154.28 -0.78
AkamaiTech AKAM 46.17 -0.91
s AlexionPharm ALXN 144.72 0.64
s AlignTech ALGN 179.33 2.95
Alkermes ALKS 49.54 -0.18
AlnylamPharm ALNY 86.80 -2.11
Alphabet A GOOGL 941.48-10.51
Alphabet C GOOG 928.45 -8.89
Altaba
AABA 63.86 -0.19
Amazon.com AMZN 965.27-12.98
Amdocs
DOX 63.83 -1.11
Amerco
UHAL 377.32 0.62
AmericanAirlines AAL 43.92 -1.39
Amgen
AMGN 176.74 -1.97
AnalogDevices ADI 83.00 -1.38
Apple
AAPL 162.08 -1.97
AppliedMaterials AMAT 44.48 -0.62
ArchCapital ACGL 95.14 -2.50
AthenaHealth ATHN 139.29 -1.83
Atlassian
TEAM 34.90
...
Autodesk ADSK 113.77 0.06
ADP
ADP 106.43 -0.92
Baidu
BIDU 225.30 -7.34
BankofOzarks OZRK 41.72 -1.33
Biogen
BIIB 315.83 -5.18
BioMarinPharm BMRN 90.49 -0.18
Bioverativ BIVV 55.61 -0.35
bluebirdbio BLUE 125.45 -5.40
t BrighthouseFin BHF 54.08 -3.41
Broadcom AVGO 249.05 -3.68
CA
CA 33.02 -0.24
s CBOE Holdings CBOE 102.20 1.26
CDK Global CDK 63.92 -0.41
CDW
CDW 60.37 -1.70
CH Robinson CHRW 71.79 1.62
CME Group CME 125.46 -0.79
CSX
CSX 48.99 -0.79
CadenceDesign CDNS 38.24 -0.45
Carlyle
CG 20.65 -0.35
s Celgene
CELG 139.35 -0.03
Cerner
CERN 67.55 -0.73
CharterComms CHTR 393.32 0.84
CheckPointSftw CHKP 110.02 -0.87
ChinaLodging HTHT 113.75 -1.87
CincinnatiFin CINF 74.77 -2.19
Cintas
CTAS 133.29 -1.27
CiscoSystems CSCO 31.62 -0.68
CitrixSystems CTXS 76.99 -1.53
Cognex
CGNX 107.42 -0.91
CognizantTech CTSH 70.54 -0.29
Coherent
COHR 228.22 -4.71
Comcast A CMCSA 40.67 -0.39
CommerceBcshrs CBSH 53.74 -1.54
CommScope COMM 32.41 -0.56
Copart
CPRT 32.49 -0.15
CoStarGroup CSGP 282.19 -4.83
Costco
COST 159.14 0.90
Ctrip.com CTRP 50.30 -0.33
s CyrusOne CONE 63.87 0.92
DISH Network DISH 57.15 -1.32
DentsplySirona XRAY 56.49 -0.17
DexCom
DXCM 75.85 0.89
DiamondbackEner FANG 91.74 -0.18
t DiscoveryComm A DISCA 21.62 -0.54
t DiscoveryComm C DISCK 20.41 -0.51
DollarTree DLTR 82.49 1.43
E*TRADE ETFC 39.94 -1.05
EastWestBancorp EWBC 54.30 -1.76
eBay
EBAY 36.09 -0.26
EchoStar
SATS 58.50 -1.30
ElbitSystems ESLT 138.80 0.92
ElectronicArts EA 118.21 -1.10
Equinix
EQIX 463.49 -2.47
Ericsson
ERIC 5.75 -0.06
Exelixis
EXEL 28.22 -0.76
Expedia
EXPE 147.61 -0.62
ExpeditorsIntl EXPD 56.55 0.02
ExpressScripts ESRX 61.75 -0.41
F5Networks FFIV 116.45 -2.12
AGNC Invt AGNC 21.27 -0.18 Facebook
FB 170.72 -1.30
Ansys
ANSS 128.49 0.38 Fastenal
FAST 42.04 -0.44
ASML
ASML 154.81 -2.47 FifthThirdBncp FITB 25.79 -0.62
UBS Group UBS 16.16
UDR
UDR 39.07
UGI
UGI 49.04
US Foods USFD 27.44
UltraparPart UGP 23.34
UnderArmour A UAA 16.76
UnderArmour C UA 15.62
Unilever
UN 59.44
Unilever
UL 58.09
UnionPacific UNP 104.10
UnitedContinental UAL 61.10
s UnitedMicro UMC 2.70
UPS B
UPS 113.92
UnitedRentals URI 119.09
US Bancorp USB 50.87
US Steel
X
27.23
UnitedTech UTX 111.21
s UnitedHealth UNH 199.31
UniversalHealthB UHS 108.05
UnumGroup UNM 47.58
VEREIT
VER 8.59
VF
VFC 63.95
Visa
V
103.01
VailResorts MTN 226.35
Vale
VALE 11.38
ValeantPharm VRX 13.10
ValeroEnergy VLO 67.91
Vantiv
VNTV 70.47
VarianMed VAR 106.08
Vedanta
VEDL 19.84
VeevaSystems VEEV 58.72
Ventas
VTR 68.93
Verizon
VZ 47.36
VistraEnergy VST 17.75
VMware
VMW 107.08
VornadoRealty VNO 74.35
VoyaFinancial VOYA 37.57
VulcanMaterials VMC 118.14
WABCO
WBC 141.15
WEC Energy WEC 65.56
s W.P.Carey WPC 69.25
Wabtec
WAB 72.14
Wal-Mart WMT 79.80
WasteConnections WCN 66.05
WasteMgt WM 75.94
Waters
WAT 182.90
Wayfair
W 73.63
WellCareHealth WCG 176.01
WellsFargo WFC 50.10
Welltower HCN 74.06
WestPharmSvcs WST 87.53
WestarEnergy WR 50.65
WesternGasEquity WGP 39.87
WesternGasPtrs WES 51.11
WesternUnion WU 18.68
s WestlakeChem WLK 76.64
WestpacBanking WBK 24.89
WestRock WRK 56.84
Weyerhaeuser WY 32.30
WheatonPrecMetals WPM 20.94
Whirlpool WHR 172.14
Williams
WMB 30.15
WilliamsPartners WPZ 39.54
Wipro
WIT 5.92
WooriBank WF 44.49
Workday
WDAY 108.16
Wyndham WYN 98.60
XPO Logistics XPO 61.92
XcelEnergy XEL 49.65
Xerox
XRX 32.12
s Xylem
XYL 61.90
YPF
YPF 20.15
YumBrands YUM 76.32
YumChina YUMC 36.66
ZTO Express ZTO 13.54
ZayoGroup ZAYO 34.44
ZimmerBiomet ZBH 114.24
Zoetis
ZTS 63.17
-0.26
0.23
-0.17
-0.32
-0.14
0.39
0.23
-0.10
-0.20
-1.37
-1.33
0.04
-0.47
-1.47
-0.81
0.24
-6.71
-0.44
-1.05
-1.02
0.06
0.37
-0.89
-2.04
0.08
-0.23
-1.29
-0.34
0.77
-0.23
-1.00
0.15
-0.56
-0.09
-0.40
-0.64
-1.40
-3.06
-2.73
0.43
-0.09
0.08
1.43
-0.43
-1.25
-0.13
1.17
0.56
-0.87
0.39
0.04
-0.45
-0.63
0.10
-0.11
-1.06
-0.24
-1.09
0.23
-0.02
-1.15
0.09
-0.02
...
-5.04
-0.68
-1.65
-0.01
0.29
-0.44
-0.07
0.09
-0.31
0.86
-0.26
0.20
-0.09
0.30
NASDAQ
Stock
Net
Sym Close Chg
Fiserv
FISV 121.86 -1.14
Flex
FLEX 16.40 -0.14
Fortinet
FTNT 36.74 -1.56
s Gaming&Leisure GLPI 38.84 -0.21
Garmin
GRMN 51.46 -0.36
GileadSciences GILD 82.56 -1.19
Goodyear GT 30.41 -0.13
Grifols
GRFS 20.57 -0.04
HD Supply HDS 32.69 -0.33
Hasbro
HAS 95.52 -2.82
HenrySchein HSIC 172.35 -1.18
Hologic
HOLX 38.92 0.41
JBHunt
JBHT 98.61 -0.74
HuntingtonBcshs HBAN 12.38 -0.32
s IAC/InterActive IAC 113.19 0.56
IdexxLab
IDXX 155.81 0.83
IHSMarkit INFO 47.25 0.48
INC Research INCR 58.40 -0.65
IPG Photonics IPGP 171.92 -3.11
IRSA Prop IRCP 58.00 1.00
IcahnEnterprises IEP 52.07 -0.15
s Icon
ICLR 112.22 -1.72
s Illumina
ILMN 207.22 0.07
Incyte
INCY 135.34 -2.69
Intel
INTC 35.02 -0.07
InteractiveBrkrs IBKR 41.72 -0.95
Intuit
INTU 141.54 -0.36
s IntuitiveSurgical ISRG 1021.44 14.69
IonisPharma IONS 54.85 0.66
JD.com
JD 41.40 -0.59
JackHenry JKHY 101.81 -0.74
JazzPharma JAZZ 147.62 0.05
JetBlue
JBLU 19.16 -0.66
KLA Tencor KLAC 93.66 -0.42
KitePharma KITE177.98 -0.07
KraftHeinz KHC 81.15 0.30
LKQ
LKQ 34.89 0.17
LamResearch LRCX 164.10 -2.76
LamarAdvertising LAMR 65.10 -1.39
LibertyBroadbandA LBRDA 100.81 0.52
LibertyBroadbandC LBRDK 101.51 1.02
LibertyGlobal A LBTYA 33.81 -0.09
LibertyGlobal B LBTYB 33.60 -0.25
LibertyGlobal C LBTYK 32.84 -0.16
LibertyLiLAC A LILA 25.21 -1.20
LibertyLiLAC C LILAK 25.04 -0.90
LibertyQVC B QVCB 22.34 -0.31
LibertyQVC A QVCA 22.47 -0.25
LibertyVenturesA LVNTA 60.74 -0.23
LibertyFormOne A FWONA 37.29 -0.33
LibertyFormOne C FWONK 38.26 -0.66
LibertyBraves A BATRA 24.62 -0.03
LibertyBraves C BATRK 24.77
...
LibertySirius A LSXMA 43.21 -1.32
s LibertySirius B LSXMB 45.90 2.25
LibertySirius C LSXMK 43.15 -1.35
LincolnElectric LECO 86.14 -1.00
LogitechIntl LOGI 34.85 -0.20
LogMeIn
LOGM 113.50 -3.00
lululemon LULU 61.56 -0.13
MarketAxess MKTX 187.47 -1.51
Marriott
MAR 102.28 -1.52
MarvellTech MRVL 17.84 -0.01
s MatchGroup MTCH 23.40 1.05
Mattel
MAT 16.21 -0.27
MaximIntProducts MXIM 46.44 -0.55
MelcoResorts MLCO 22.20
...
MercadoLibre MELI 256.63 4.72
MicrochipTech MCHP 86.49 -1.36
MicronTech MU 32.07 -0.53
Microsemi MSCC 49.52 -1.06
Microsoft MSFT 73.61 -0.33
Middleby
MIDD 121.24 -2.27
Momo
MOMO 37.93 -0.27
Mondelez MDLZ 40.73 -0.15
s MonsterBeverage MNST 56.35 0.27
Mylan
MYL 31.59 0.02
NXP Semi NXPI 112.42 -0.48
Nasdaq
NDAQ 74.38 -0.99
NetApp
NTAP 37.98 -0.67
Netease
NTES 269.08 -0.81
Netflix
NFLX 174.52 -0.22
NewsCorp A NWSA 13.28 -0.17
NewsCorp B NWS 13.55 -0.25
Stock
Net
Sym Close Chg
Nordson
NDSN 109.15
NorthernTrust NTRS 86.51
NorwegianCruise NCLH 56.69
NVIDIA
NVDA 165.91
OReillyAuto ORLY 200.38
OldDomFreight ODFL 100.24
ON Semi
ON 16.80
OpenText OTEX 31.84
PTC
PTC 55.93
Paccar
PCAR 65.29
Paychex
PAYX 56.71
PayPal
PYPL 61.27
People'sUtdFin PBCT 16.40
PilgrimPride PPC 28.53
Priceline
PCLN 1842.89
Qiagen
QGEN 31.93
Qorvo
QRVO 73.38
t Qualcomm QCOM 50.03
RandgoldRscs GOLD 105.47
RegenPharm REGN 494.36
RossStores ROST 58.99
s RoyalGold RGLD 94.24
Ryanair
RYAAY 114.43
SBA Comm SBAC 151.16
SEI Investments SEIC 56.60
Sina
SINA 105.84
SS&C Tech SSNC 38.74
SVB Fin
SIVB 167.18
ScrippsNetworks SNI 85.21
Seagate
STX 32.75
SeattleGenetics SGEN 51.88
Shire
SHPG 152.47
SignatureBank SBNY 125.29
SiriusXM
SIRI 5.59
Skyworks SWKS 106.93
Splunk
SPLK 67.33
Staples
SPLS 10.25
Starbucks SBUX 55.13
SteelDynamics STLD 34.19
t Stericycle SRCL 70.34
Symantec SYMC 29.81
Synopsys SNPS 80.01
TD Ameritrade AMTD 42.50
TESARO
TSRO 134.33
T-MobileUS TMUS 63.64
TRowePrice TROW 82.78
TakeTwoSoftware TTWO 97.09
Tesla
TSLA 349.59
TexasInstruments TXN 81.85
TractorSupply TSCO 59.38
Trimble
TRMB 38.53
TripAdvisor TRIP 44.55
21stCenturyFoxA FOXA 26.58
21stCenturyFoxB FOX 26.09
UltaBeauty ULTA 223.90
UltimateSoftware ULTI 198.89
UnitedTherap UTHR 133.53
UniversalDisplay OLED 129.70
VCA
WOOF 92.96
VEON
VEON 4.13
VeriSign
VRSN 102.54
VeriskAnalytics VRSK 80.62
VertxPharm VRTX 159.07
Viacom A VIA 37.70
t Viacom B VIAB 27.43
Vodafone VOD 28.39
WPP
WPPGY 91.81
WalgreensBoots WBA 81.46
Weibo
WB 102.90
WesternDigital WDC 89.50
WillisTwrsWatson WLTW 147.47
WynnResorts WYNN 142.50
Xilinx
XLNX 64.51
s Yandex
YNDX 32.35
ZebraTech ZBRA 100.74
Zillow A
ZG 39.37
Zillow C
Z
39.04
ZionsBancorp ZION 42.76
-1.12
-2.45
-1.85
-4.55
3.39
0.04
-0.45
-0.52
0.03
-0.57
-0.36
-0.19
-0.45
-0.98
-7.93
-0.39
0.12
-2.02
2.60
-9.64
0.07
1.38
-0.45
0.26
-1.14
-0.82
0.04
-5.35
-0.44
0.95
-0.67
0.63
-3.34
-0.10
1.36
-0.07
0.03
0.20
-0.58
-1.40
-0.05
-0.40
-0.92
0.73
-0.52
-1.50
1.21
-5.81
-0.69
-0.16
-0.15
1.81
-0.91
-0.89
2.17
-0.92
0.18
2.75
-0.03
-0.06
-1.40
-0.36
-3.17
-0.65
-1.09
-0.46
0.11
0.24
-1.82
-0.91
-0.63
-0.92
-1.48
0.14
-3.44
-0.58
-0.63
-1.56
NYSE AMER
CheniereEnergy LNG
CheniereEnerPtrs CQP
CheniereEnHldgs CQH
ImperialOil IMO
43.70
27.70
25.20
30.14
0.04
-0.21
-0.22
-0.06
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© 2017 Dow Jones & Company, Inc.
All Rights Reserved.
THE WALL STREET JOURNAL.
B12 | Wednesday, September 6, 2017
MARKETS DIGEST
EQUITIES
S&P 500 Index
Dow Jones Industrial Average
Last Year ago
21753.31 t 234.25, or 1.07%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio 20.01 20.09
P/E estimate *
18.53 17.96
Dividend yield
2.34
2.53
All-time high 22118.42, 08/07/17
Nasdaq Composite Index
Last
2457.85 t 18.70, or 0.76%
High, low, open and close for each
trading day of the past three months.
Year ago
Trailing P/E ratio 23.86 24.71
P/E estimate *
18.85 18.57
Dividend yield
2.00
2.11
All-time high: 2480.91, 08/07/17
Last Year ago
6375.57 t 59.76, or 0.93%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio * 25.75
23.87
P/E estimate *
21.59
19.98
Dividend yield
1.11
1.23
All-time high: 6435.33, 09/01/17
Current divisor 0.14523396877348
Session high
t
DOWN
Session open
t
Close
65-day moving average
UP
Close
22400
2500
6500
22000
2475
6400
21600
2450
6300
21200
2425
6200
20800
2400
6100
Open
65-day moving average
20400
Session low
65-day moving average
2375
6000
Bars measure the point change from session's open
July
5900
2350
20000
June
June
Aug.
July
June
Aug.
July
Aug.
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
Transportation Avg
21921.09 21709.63 21753.31 -234.25
9336.01
9247.47
743.11
738.46
Utility Average
Total Stock Market
Barron's 400
742.81
17.3
10.1
8.3
7755.40
16.5
2.5
2.5
Most-active issues in late trading
748.16
625.44
9.1
12.6
9.3
25692.25 21514.15
661.93
521.59
12.3
15.2
9.2
6.5
6.6
5.9
52-Week
Low
% chg
6334.59
5890.25
2471.97
6375.57 -59.76
5932.73 -55.17
2446.55
22118.42 17888.28
-0.95
0.25
-0.81
-1.05
-0.93
6435.33
5988.60
-0.92
YTD
% chg
3-yr. ann.
3.5
9.0
10.2 -0.004
6.1
7.6
1156.89
11.7
3.1
6.2
-1.12
-1.08
1791.93
876.06
Other Indexes
Russell 2000
1414.55
1394.51
1399.66 -13.92
-0.98
1450.39
11898.12 11783.87 11827.15 -90.93
NYSE Arca Biotech
4235.99
4162.67
NYSE Arca Pharma
-0.76
2085.18
12000.02 10289.35
8.6
7.0
2.2
-0.86
533.62
455.65
5.6
1.6
0.7
4208.29 -24.61
-0.58
4232.90
2834.14
25.8
36.9
10.9
-0.55
549.20
463.78
0.3
9.2
-0.2
99.33
69.71
27.3
-0.4
8.4
17.2
-1.0
528.96
524.07
525.71
-2.91
93.11
91.17
-2.30
PHLX§ Gold/Silver
91.38
92.41
91.09
1.87
2.06
101.55
73.03
PHLX§ Oil Service
92.41
-9.0
125.72
123.75
125.13
2.67
2.18
192.66
117.79
-20.7
1116.73
14.06
1094.17
11.41
1138.25
22.51
20.73
768.37
9.36
37.1
1.7
1103.63 -15.71
2.10
12.23
-2.45
-1.40
Philadelphia Stock Exchange
Region/Country Index
Close
Volume
(000)
Micro Focus Intl ADR
MFGP 14,410.7
DJ Americas
593.00
Sao Paulo Bovespa 72150.88
S&P/TSX Comp
15090.15
S&P/BMV IPC
50301.39
Santiago IPSA
3899.38
Latest
% chg
YTD
% chg
0.07
12.0
13.2
17.0
–4.31 –0.72
0.03
22.05
–101.45 –0.67
–524.38 –1.03
–0.29
–11.22
9.7
19.8
–1.3
10.2
21.0
–11.19
–1.33
0.18
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
373.71
372.60
3883.69
5086.56
12123.71
1392.31
21737.69
515.46
1100.83
10179.80
554.97
8869.56
7372.92
–0.47
–0.63
–0.78
–17.41
21.50
1.76
–52.93
–0.81
9.00
–63.40
–1.12
5.10
–38.55
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
S&P/ASX 200
5706.20
Shanghai Composite 3384.32
Hang Seng
27741.35
S&P BSE Sensex
31809.55
Nikkei Stock Avg
19385.81
Straits Times
3251.26
Kospi
2326.62
Weighted
10617.84
4.20
4.73
1.09
107.30
–122.44
20.29
–3.03
47.97
Net chg
29.20
…
After Hours
% chg
High
unch.
29.05
SPY
9,488.2 246.21
0.15
CSCO
8,956.4
31.67
0.05
0.16
31.79
31.52
Franklin Resources
BEN
8,621.7
41.49
-0.24
-0.58
42.18
41.49
VanEck Vectors Gold Miner GDX
7,705.1
25.30
-0.01
-0.04
25.33
25.23
Cnsmr Staples Sel Sector XLP
4,203.5
55.05
…
unch.
55.10
55.03
Industrial Select Sector XLI
3,399.7
67.83
…
unch.
67.93
67.81
Halliburton
3,269.0
39.96
0.13
0.33
40.03
39.83
Electronics for Imaging EFII
50.5
38.80
3.55
10.07
39.90
35.25
Duluth Holdings Cl B
DLTH
48.1
21.48
1.73
8.76
23.33
19.75
Coupa Software
COUP
43.0
32.18
2.59
8.75
32.65
29.00
HealthEquity
HQY
17.0
45.00
3.05
7.27
45.84
41.91
Acacia Research
ACTG
11.8
3.55
0.20
5.97
3.70
3.35
HAL
0.06 247.96 245.75
Percentage gainers…
...And losers
TSCO
248.3
55.18
-4.20
-7.07
59.41
55.18
Kratos Defense Sec Sols KTOS
109.0
13.03
-0.78
-5.65
13.81
12.80
-31.9 -24.3
Dave Buster's Ent
PLAY
297.8
54.95
-3.19
-5.49
58.62
52.25
21.8
-12.9
AXIS Capital Holdings
AXS
10.4
52.95
-2.94
-5.26
56.77
52.95
6.1
9.87
-0.52
-5.00
10.39
9.87
Tractor Supply
19.2
0.4
Independence Realty Trust IRT
–0.39
–0.36
–0.13
–0.17
–0.02
–0.34
–0.24
–0.16
–0.62
–0.20
0.18
0.13
0.82
0.06
–0.52
0.07
0.14
0.004
0.34
–0.63
–0.13
0.63
0.45
3.4
6.4
7.7
4.6
5.6
–5.3
13.0
6.7
–4.5
8.9
3.8
7.9
3.2
0.7
9.0
26.1
19.5
1.4
12.9
14.8
14.7
Company
Symbol
Insmed
XOMA
FlexShopper
Tyme Technologies
Cadiz
INSM
Energous Corp.
NantHealth
Akcea Therapeutics
Rexahn Pharmaceuticals
Points International
WATT
Tidewater
Nathan's Famous
Reven Housing REIT
ZK International Group
Era Group
TDW
XOMA
FPAY
TYME
CDZI
NH
AKCA
RNN
PCOM
NATH
RVEN
ZKIN
ERA
52-Week
Low
% chg
High
26.99 14.70 119.61
16.12 4.94 44.19
5.85 1.55 36.08
7.50 1.82 32.04
12.75 3.05 31.44
29.52 10.21
16.40 3.96
8.00 3.10
7.50 1.01
16.25 6.70
97.2
34.2
...
66.7
73.2
12.45
3.14
22.74
2.74
9.68
2.33
0.48
3.40
0.40
1.35
23.02
18.05
17.58
17.09
16.21
20.55
15.80
23.22
7.10
10.79
8.91
2.60
8.10
1.27
6.28
-36.3
-74.8
...
9.2
13.5
27.31
64.35
5.76
9.49
10.03
3.71
7.40
0.65
1.04
1.07
15.72
12.99
12.74
12.25
11.94
29.14 20.37
71.95 46.83
6.09 4.21
9.65 5.00
17.73 6.92
...
27.5
2.9
...
38.3
Most Active Stocks
Company
Symbol
Bank of America
Finl Select Sector SPDR
SPDR S&P 500
iPath S&P 500 VIX ST Fut
VanEck Vectors Gold Miner
BAC
ProSharesUltVIXST
Advanced Micro Devices
iShares MSCI Emg Markets
Vale ADR
PwrShrs QQQ Tr Series 1
UVXY
XLF
SPY
VXX
GDX
AMD
EEM
VALE
QQQ
Volume % chg from Latest Session
(000) 65-day avg Close % chg
52-Week
High
Low
A consumer rate against its
benchmark over the past year
30-year mortgage, Rate
t
t
S O N D J F M A M J J AS
2016
2017
Aurora Financial
Vienna, VA
3.63%
877-887-1117
Citibank, N. A.
Long Island City, NY
3.63%
877-681-9315
HomePlus Mortgage
San Diego, CA
3.63%
855-391-3940
Tuesday
1
3 6
month(s)
Federal-funds rate target
1.00-1.25 1.00-1.25
Prime rate*
4.25
4.25
Libor, 3-month
1.32
1.32
Money market, annual yield
0.29
0.27
Five-year CD, annual yield
1.47
1.45
30-year mortgage, fixed†
3.82
3.80
15-year mortgage, fixed†
3.06
3.04
Jumbo mortgages, $424,100-plus† 4.29
4.33
Five-year adj mortgage (ARM)† 3.26
3.31
New-car loan, 48-month
2.90
3.01
HELOC, $30,000
4.65
4.66
3-yr chg
52-Week Range (%)
Low 0 2 4 6 8 High (pct pts)
0.25 l
l
3.50
0.83 l
0.24 l
1.17 l
l
3.44
l
2.70
l
4.22
l
3.13
l
2.85
l
4.57
1.25
4.25
1.32
0.36
1.47
4.33
3.50
4.88
4.03
3.36
5.22
1.00
1.00
1.08
-0.12
0.10
-0.38
-0.23
-0.29
-0.23
-0.21
0.28
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
Company
DRYS
XELB
ALBO
CSSE
CGG
29.20 17.50
-14.62
6.90 4.10
-14.30
4.61 1.09
-12.35
77.42 35.04
-12.27
-11.95 799680.00 0.98
-25.6
-4.0
45.5
-51.8
-100.0
35.75
3.05
22.66
8.70
5.35
-4.84
-0.40
-2.83
-1.04
-0.62
-11.92
-11.59
-11.10
-10.68
-10.39
Volume % chg from Latest Session
(000) 65-day avg Close % chg
5
Country/currency
US$vs,
YTDchg
Tues
in US$ per US$ (%)
Americas
Argentina peso
.0580 17.2400 8.6
Brazil real
.3208 3.1175 –4.2
Canada dollar
.8081 1.2375 –7.9
Chile peso
.001604 623.40 –6.9
Colombia peso
.0003414 2929.15 –2.4
Ecuador US dollar
1
1 unch
Mexico peso
.0559 17.8977 –13.7
Peru new sol
.3090 3.236 –3.5
Uruguay peso
.03470 28.8200 –1.8
Venezuela b. fuerte .099105 10.0904 1.0
Euro
Yen
–15
Asia-Pacific
2016
26.99 119.61
9.68 16.21
25.66 -20.26
16.12 44.19
38.12 -1.85
29.52 10.21
10.79 6.28
32.46 16.09
16.40 3.96
39.86 31.90
1522 139.75 -0.80
1426 27.31 0.52
4.80 -14.30
1423
1368 25.62 0.20
1239 10.06 10.19
144.35 116.86
27.45 23.86
6.90 4.10
25.73 23.52
13.50 2.30
U.S.-dollar foreign-exchange rates in late New York trading
WSJ Dollar index
30
5588
3917
3046
2439
1793
52-Week
High
Low
Currencies
Yen, euro vs. dollar; dollar vs.
major U.S. trading partners
–10
...
-37.0
77.7
...
-78.5
* Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least
5,000 shares =Has traded fewer than 65 days
Forex Race
10%
48.49 16.55
5.30 1.80
37.69 11.70
13.26 8.60
29.70 3.26
Ranked by change from 65-day average*
Symbol
2017
Corporate Borrowing Rates and Yields
Yield (%)
Last Week ago
52-Week
High
Low
Total Return (%)
52-wk
3-yr
1481.299
1.832
1.883
2.237
1.314 –1.588 2.967
10-yr Treasury, Ryan ALM 1770.614
DJ Corporate
380.540
Aggregate, Barclays Capital 1953.150
High Yield 100, Merrill Lynch
n.a.
Fixed-Rate MBS, Barclays 1994.150
Muni Master, Merrill
n.a.
2.072
2.879
2.400
n.a.
2.730
n.a.
2.134
2.912
2.430
5.202
2.720
1.752
2.609
3.390
2.790
n.a.
3.120
n.a.
1.539
2.497
1.920
n.a.
2.000
n.a.
2.008
1.538
0.885
n.a.
0.982
n.a.
3.106
4.246
2.886
n.a.
2.572
n.a.
n.a.
n.a.
5.416
n.a.
n.a.
n.a.
n.a.
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Australian dollar
.7996 1.2506
China yuan
.1529 6.5413
Hong Kong dollar
.1278 7.8260
India rupee
.01560 64.122
Indonesia rupiah .0000750 13331
Japan yen
.009190 108.81
Kazakhstan tenge .002938 340.40
Macau pataca
.1240 8.0660
Malaysia ringgit
.2347 4.2600
New Zealand dollar
.7236 1.3820
Pakistan rupee
.00949 105.335
Philippines peso
.0196 51.054
Singapore dollar
.7392 1.3529
South Korea won .0008830 1132.52
Sri Lanka rupee
.0065591 152.46
Taiwan dollar
.03326 30.070
Track the Markets
Compare the performance of selected global stock
indexes, bond ETFs, currencies and commodities at
WSJ.com/TrackTheMarkets
–9.9
–5.8
0.9
–5.6
–1.4
–7.0
2.0
1.9
–5.0
–4.3
0.9
2.9
–6.5
–6.2
2.7
–7.3
US$vs,
YTDchg
Tues
in US$ per US$ (%)
Country/currency
.03016 33.160 –7.4
.00004400 22729 –0.2
Thailand baht
Vietnam dong
Europe
Czech Rep. koruna
Denmark krone
Euro area euro
Hungary forint
Iceland krona
Norway krone
Poland zloty
Russia ruble
Sweden krona
Switzerland franc
Turkey lira
Ukraine hryvnia
UK pound
.04566 21.902 –14.7
.1602 6.2434 –11.7
1.1915 .8393 –11.7
.003892 256.94 –12.7
.009440 105.93 –6.2
.1286 7.7786 –10.0
.2815 3.5528 –15.1
.01740 57.487 –6.2
.1255 7.9701 –12.5
1.0468 .9553 –6.2
.2908 3.4390 –2.4
.0385 25.9500 –4.2
1.3033 .7673 –5.3
Middle East/Africa
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6521 .3771 –0.03
.0567 17.6390 –2.7
.2801 3.5706 –7.2
3.3170 .3015 –1.4
2.5972 .3850 0.02
.2712 3.687 1.3
.2667 3.7502 –0.01
.0775 12.9107 –5.7
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 85.30 –0.35–0.41 –8.22
Sources: Tullett Prebon, WSJ Market Data Group
Commodities
COMMODITIES
Tuesday
52-Week
Pricing trends on someClose
raw materials,
or commodities
Net chg % Chg
High
Low
DJ Commodity
Get real-time U.S. stock quotes and track most-active
stocks, new highs/lows and mutual funds. Plus,
deeper money-flows data and email delivery of key
stock-market data. Available free at WSJMarkets.com
MNK
-3.15
-0.80
-0.41
-5.05
-0.27
112
525
107
559
340
0.75
One year ago
0.00
EMBI Global, J.P. Morgan
RLJE
18.40
4.80
2.91
36.12
1.99
Guggenheim S&P Midcap 400RFG
PICB
PwrShs Intl Corp Bd Ptf
OXBR
Oxbridge Re Holdings
VanEck Vectors Intl HY Bd IHY
Cellect Biotechnology ADR APOP
0
Treasury, Ryan ALM
OXBR
522.00 28.20
15.65
5.66
45.18 33.94
11.70
4.86
146.59 113.45
–5
Close
BYSI
FNHC
-2.4
-4.5
-67.4
-34.4
-29.0
10.92
-2.05
-1.31
0.71
-0.90
1.50
Bond total return index
BeyondSpring
Xcel Brands
Albireo Pharma
Chicken Soup Soul Ent A
CGG ADR
HRTG
52-Week
Low
% chg
32.46 16.09
50.93 24.35
8.40 2.60
16.48 9.03
21.19 12.74
32.10
12.92
44.57
11.38
144.69
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Yield/Rate (%)
Last (l)Week ago
UVE
LMFA
High
-20.26
-20.01
-17.92
-16.96
-16.10
177.3
-35.0
-4.7
66.0
11.2
2.25
1 2 3 5 710
years
maturity
* 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.
-6.52
-7.74
-0.57
-1.91
-2.46
54,255
51,148
47,009
45,742
43,874
s
0.00
Residential Mortgage Services, Inc
3.50%
South Portland, ME
855-999-7014
NYSE Arca
25.66
30.94
2.61
9.35
12.82
27,136
1,715
3,715
1,806
5,978
3.75%
t
30-year fixed-rate 3.00
mortgage
2.00
10-year Treasury
note yield
1.00
Universal Insurance Hldgs
Oxbridge Re Holdings
RLJ Entertainment
Mallinckrodt
DryShips
HCI
INSM
Insmed
PCOM
Points International
CLLS
Cellectis ADR
XOMA
XOMA
Deutsche X MSCI Japan Hdg DBJP
3.00
Garden State Home Loans
3.50%
Cherry Hill, NJ
609-216-7912
CLLS
25.80 14.81
25.59 18.94
248.91 208.38
169.64 43.64
28.70 18.58
notes and bonds
t
4.00%
Cellectis ADR
HCI Group
LM Funding America
Heritage Insurance
Federated Natl Hldg
23.31 -3.24
24.24 -2.14
246.06 -0.72
48.69 5.46
25.31 2.14
* Volumes of 100,000 shares or more are rounded to the nearest thousand
3.80%
Bankrate.com avg†:
Nasdaq
Total volume*1,857,250,855 299,854,071
Adv. volume* 499,074,085 127,351,023
Decl. volume*1,334,802,956 172,377,532
Issues traded
3,074
1,300
Advances
934
396
Declines
2,003
886
Unchanged
137
18
New highs
118
70
New lows
43
9
Closing tick
261
1
Closing Arms†
1.25
0.62
Block trades*
6,824
1,558
Latest Session
Close Net chg % chg
53.9
61.2
27.1
225.3
32.8
s
Selected rates
Symbol
106,391
95,655
81,834
69,825
59,852
s
U.S. consumer rates
Company
Volume Movers
Benchmark
Yields
Treasury
yield
curve
andtoRates
Yield
maturity of current bills,
Consumer Rates and Returns to Investor
Total volume* 906,892,992 10,409,583
Adv. volume* 340,162,200 5,614,151
Decl. volume* 550,174,241 4,665,962
Issues traded
3,082
334
Advances
896
134
Declines
2,074
183
Unchanged
112
17
New highs
114
7
New lows
25
6
Closing tick
81
16
Closing Arms†
0.74
0.52
Block trades*
7,342
133
Percentage Losers
Latest Session
Close Net chg % chg
CREDIT MARKETS & CURRENCIES
WSJ
.COM
Low
29.35
SPDR S&P 500
Sources: SIX Financial Information; WSJ Market Data Group
Interest rate
Last
Cisco Systems
Percentage Gainers...
Net chg
2836.10
368.96
250.38
The Global Dow
DJ Global Index
DJ Global ex U.S.
Americas
Brazil
Canada
Mexico
Chile
Symbol
NYSE NYSE Amer.
Sources: SIX Financial Information; WSJ Market Data Group
International Stock Indexes
World
7.0
-4.48
514.40
KBW Bank
PHLX§ Semiconductor
CBOE Volatility
9.8
12.4
Company
11.6
13.2
1476.68
703.64
1718.34 -19.45
837.93 -9.12
512.21
18.4
22.0
2480.91
1711.90
835.02
518.88
20.8
22.8
-0.76
1738.72
847.48
Value Line
5046.37
4660.46
2457.85 -18.70
MidCap 400
SmallCap 600
NYSE Composite
Volume, Advancers, Decliners
9742.76
High
-1.07
1.86
25582.51 25303.97 25418.33 -206.34
646.97
637.80
640.63 -6.77
Nasdaq Stock Market
Nasdaq Composite
6426.51
Nasdaq 100
5980.91
Standard & Poor's
500 Index
9267.39 -88.63
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.
Dow Jones
Industrial Average
Late Trading
TR/CC CRB Index
Crude oil, $ per barrel
Natural gas, $/MMBtu
Gold, $ per troy oz.
585.99
3.49
182.34
48.66
2.972
1339.20
1.40
1.37
-0.098
14.70
0.60
589.81
515.05
0.77 195.14
54.45
2.90
3.93
-3.19
1.11 1349.40
166.50
42.53
2.56
1127.80
% Chg
13.77
YTD
% chg
3.30
0.80 -5.28
8.54 -9.42
9.39 -20.19
-0.76 16.45
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B13
COMMODITIES
Futures Contracts
Open
Metal & Petroleum Futures
Contract
Open
High hi lo
Low
Settle
Chg
Copper-High (CMX)-25,000 lbs.; $ per lb.
Sept
3.0985
3.1580 s
3.0930
3.1075 0.0095
Dec
3.1225
3.1785 s
3.1130
3.1280 0.0100
Gold (CMX)-100 troy oz.; $ per troy oz.
Sept
1335.20 1337.00 s
1328.60 1339.20 14.70
Oct
1338.00 1345.60 s
1327.40 1340.60 14.00
Dec
1339.70 1349.70 s
1331.10 1344.50 14.10
Feb'18
1340.20 1353.10 s
1337.00 1348.40 14.20
June
1350.50 1359.90 s
1346.80 1355.50 14.30
Dec
1360.20 1368.50 s
1360.10 1366.40 14.40
Palladium (NYM) - 50 troy oz.; $ per troy oz.
Sept
978.30
992.20 s
958.00
963.05 –18.10
Dec
978.80
997.50 s
952.00
957.00 –20.10
March'18 977.65 980.55 s
947.35
950.90 –17.80
Platinum (NYM)-50 troy oz.; $ per troy oz.
Sept
991.20 1006.90 s
991.20 1007.40
0.10
Oct
1012.00 1018.00
1002.50 1009.00
…
Silver (CMX)-5,000 troy oz.; $ per troy oz.
Sept
17.780
17.980
17.775
17.845 0.126
Dec
17.880
18.090
17.835
17.941 0.125
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl.
Oct
47.28
48.95
47.15
48.66
1.37
Nov
48.00
49.42
47.72
49.14
1.15
Dec
48.50
49.74
48.16
49.53
0.99
Jan'18
49.05
50.03
48.57
49.86
0.87
June
49.85
50.55
49.35
50.50
0.60
Dec
50.24
50.69
49.65
50.66
0.45
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal.
Oct
1.7530
1.7736
1.6974
1.7480 .0012
Nov
1.7361
1.7525
1.6829
1.7323 .0019
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal.
Oct
1.7509
1.7509
1.6579
1.6991 –.0488
Nov
1.6040
1.6040
1.5430
1.5886 –.0130
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
Oct
3.013
3.059
2.965
2.972 –.098
Nov
3.093
3.129
3.037
3.044 –.092
Dec
3.238
3.265
3.180
3.189 –.081
Jan'18
3.333
3.363
3.278
3.287 –.079
March
3.287
3.312
3.236
3.244 –.074
April
2.922
2.945
2.902
2.911 –.032
Open
interest
6,748
224,983
851
45,844
434,981
28,297
9,394
8,876
197
33,830
589
4
64,506
2,179
158,485
519,924
256,972
327,694
182,474
156,092
190,426
101,282
69,893
139,156
91,074
311,484
143,128
93,786
139,241
104,659
118,292
Contract
High hilo
Low
Settle
Open
interest
Chg
Corn (CBT)-5,000 bu.; cents per bu.
343.25
354.75
345.75
360.50
341.25
354.75
344.25
358.50
4.25
4,697
3.25 794,649
Oats (CBT)-5,000 bu.; cents per bu.
Dec
238.00
244.00
230.25
231.25 –5.00
4,765
March'18 243.00 248.00
238.50
239.00 –4.00
887
Soybeans (CBT)-5,000 bu.; cents per bu.
Sept
945.00
965.00
945.00
960.50 18.50
1,732
Nov
953.75
973.50
952.25
968.50 19.00 384,969
Soybean Meal (CBT)-100 tons; $ per ton.
Sept
294.70
303.10
294.70
302.80
9.60
3,109
Dec
300.00
308.30
299.60
308.00
9.20 187,209
Soybean Oil (CBT)-60,000 lbs.; cents per lb.
Sept
35.50
35.60
35.01
35.10
–.21
2,970
Dec
35.87
35.99
35.34
35.44
–.23 206,885
Rough Rice (CBT)-2,000 cwt.; $ per cwt.
Sept
...
...
... 1249.50 –17.00
136
Nov
1293.50 1294.50 s
1263.50 1277.50 –17.00
9,228
Wheat (CBT)-5,000 bu.; cents per bu.
Sept
428.25
433.50
427.75
430.50 10.00
476
Dec
441.25
446.75
439.50
443.00
4.25 269,257
Wheat (KC)-5,000 bu.; cents per bu.
Sept
416.50
419.00
416.50
419.50
7.00
720
Dec
440.50
447.00
439.75
445.00
6.25 149,705
Wheat (MPLS)-5,000 bu.; cents per bu.
Sept
609.75
609.75
609.75
609.75 –2.25
108
Dec
632.75
635.00
626.00
629.00 –2.75 42,770
Cattle-Feeder (CME)-50,000 lbs.; cents per lb.
Sept
142.725 144.300
141.750 142.050 –.675
7,996
Oct
143.325 144.925
142.050 142.500 –1.050 17,701
Cattle-Live (CME)-40,000 lbs.; cents per lb.
Oct
105.075 106.450
104.300 104.425 –.725 136,733
Dec
109.425 110.850
108.875 109.375 –.100 84,159
Hogs-Lean (CME)-40,000 lbs.; cents per lb.
Oct
62.075
64.450
61.875
63.750 2.300 94,261
Dec
58.550
60.750
58.350
60.175 2.125 65,780
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft.
Sept
389.80
398.30
389.60
396.40
9.60
790
Nov
375.80
384.20
375.70
384.20 10.00
3,157
Milk (CME)-200,000 lbs., cents per lb.
Sept
16.21
16.35
16.15
16.28
.13
5,641
Oct
16.37
16.46
16.28
16.36
…
3,980
Cash Prices | WSJ.com/commodities
Tuesday, September 05, 2017
These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace—
separate from the futures price on an exchange, which reflects what the commodity might be worth in future
months.
Tuesday
Tuesday
13520
Coins,wholesale $1,000 face-a
Energy
0.8178
0.9674
2.860
2.850
2.500
2.600
2.640
1.250
2.800
53.250
11.500
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
Other metals
LBMA Platinum Price PM
*1007.0
Platinum,Engelhard industrial
1009.0
Platinum,Engelhard fabricated
1109.0
Palladium,Engelhard industrial
988.0
Palladium,Engelhard fabricated
1088.0
Aluminum, LME, $ per metric ton
*2095.5
Copper,Comex spot
3.1075
Iron Ore, 62% Fe CFR China-s
77.5
Shredded Scrap, US Midwest-s,w
316
Steel, HRC USA, FOB Midwest Mill-s
622
Fibers and Textiles
Metals
Gold, per troy oz
1335.42
1435.58
1335.55
1482.46
*1334.60
*1333.10
1393.34
1406.74
1406.74
1623.34
1316.22
1406.74
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.
17.9500
21.5400
17.9300
22.4130
£13.7974
17.8800
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA spot price
(U.S.$ equivalent)
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
0.6050
0.7451
*81.90
n.a.
4.55
Grains and Feeds
Barley,top-quality Mnpls-u
Bran,wheat middlings, KC-u
Corn,No. 2 yellow,Cent IL-bp,u
Corn gluten feed,Midwest-u,w
Corn gluten meal,Midwest-u,w
Cottonseed meal-u,w
Hominy feed,Cent IL-u,w
Meat-bonemeal,50% pro Mnpls-u,w
Oats,No.2 milling,Mnpls-u
Rice, 5% Broken White, Thailand-l,w
Rice, Long Grain Milled, No. 2 AR-u,w
Sorghum,(Milo) No.2 Gulf-u
SoybeanMeal,Cent IL,rail,ton48%-u
4.70
64
3.2250
78.4
474.4
200
88
318
2.7575
370.00
23.75
7.6963
304.30
Tuesday
9.3700
7.1650
4.2400
3.6700
5.0500
Soybeans,No.1 yllw IL-bp,u
Wheat,Spring14%-pro Mnpls-u
Wheat,No.2 soft red,St.Louis-bp,u
Wheat - Hard - KC (USDA) $ per bu-u
Wheat,No.1soft white,Portld,OR-u
Beef,carcass equiv. index
choice 1-3,600-900 lbs.-u
select 1-3,600-900 lbs.-u
Broilers,dressed 'A'-u
Broilers, National comp wghtd-u,w
Butter,AA Chicago
Cheddar cheese,bbl,Chicago
Cheddar cheese,blk,Chicago
Milk,Nonfat dry,Chicago lb.
Cocoa,Ivory Coast-w
Coffee,Brazilian,Comp
Coffee,Colombian, NY
Eggs,large white,Chicago-u
Flour,hard winter KC
Hams,17-20 lbs,Mid-US fob-u
Hogs,Iowa-So. Minnesota-u
Pork bellies,12-14 lb MidUS-u
Pork loins,13-19 lb MidUS-u
Steers,Tex.-Okla. Choice-u
Steers,feeder,Okla. City-u,w
167.26
164.31
n.a.
0.8944
2.4375
155.75
159.75
85.50
n.a.
1.2506
1.4733
0.9050
14.80
n.a.
68.71
n.a.
0.9990
n.a.
n.a.
Fats and Oils
36.7500
0.3450
0.3450
0.3444
0.3450
0.3550
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
September 5, 2017
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a
guide to general levels but don’t always represent actual transactions.
July index
level
Chg From (%)
June '17 July '16
U.S. consumer price index
244.786
251.936
All items
Core
–0.07
–0.03
1.7
1.7
0.25
0.25
0.25
Treasury bill auction
Australia
1.50
1.50
1.50
1.50
4 weeks
13 weeks
26 weeks
Overnight repurchase
Latest
Prime rates
U.S.
Canada
Japan
4.25 4.25 4.25 3.50
2.95 2.95 2.95 2.70
1.475 1.475 1.475 1.475
Policy Rates
Euro zone
Switzerland
0.00
0.50
0.00
0.50
0.00
0.50
1.13
1.14
1.38
0.15
U.S. government rates
52-Week
High
Low
0.00
0.50
Discount
1.75
1.75
1.75
1.00
Federal funds
Low
1.0000 1.0500 1.1600 0.2000
Bid
1.1600 1.1600 1.1700 0.2800
Offer
1.1700 1.1700 1.1900 0.3000
52-Week
High
Low
1.16
0.35
1.11
1.13
1.18
1.10
1.14
1.16
1.11
1.15
1.18
0.37
0.43
0.50
1.15
1.21
1.26
1.18
1.22
1.25
1.18
1.22
1.26
0.43
0.57
0.66
Commercial paper
Discount window primary credit
1.75
1.75
1.00
Conventional mortgages
n.a.
n.a.
3.50
3.42
Treasury yields at constant
maturities
1-month
3-month
6-month
1-year
2-year
3-year
5-year
7-year
10-year
20-year
0.96
1.01
1.11
1.23
1.33
1.45
1.72
1.97
2.14
2.49
0.97
1.01
1.11
1.23
1.33
1.47
1.77
2.01
2.19
2.52
52-Week
High
Low
Treasury yields (secondary market)
1.16
1.75
Week Ended
Sep 1 Aug 25
1.00
1.13
1.15
1.24
1.41
1.64
2.08
2.37
2.55
2.91
0.13
0.24
0.43
0.57
0.75
0.87
1.13
1.40
1.58
1.91
1-month
3-month
6-month
0.95
1.00
1.09
0.95
0.99
1.09
0.98
1.11
1.13
0.12
0.24
0.43
0.14
0.32
0.38
0.69
0.74
0.18
0.37
0.43
0.73
0.77
0.29
0.49
0.63
0.97
0.97
-0.30
-0.16
0.02
0.41
0.44
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1.00
1.09
1.17
1.25
1.33
1.48
1.65
2.00
0.94
1.00
1.05
1.10
1.16
1.27
1.43
1.71
TIPS
5-year
7-year
10-year
20-year
Long-term avg
Interest rate swaps
1-year
2-year
3-year
4-year
5-year
7-year
10-year
30-year
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Corporate bonds, Moody's seasoned
Aaa
Baa
n.a.
n.a.
n.a.
n.a.
3.49
4.41
1,970
1,982
1,970
1,941
1,974
1,946
–13
118
–1 142,931
Sept
Dec
128.90
128.60
128.90
131.25
128.30
127.20
126.50
127.85
–1.25
373
–1.20 112,503
Oct
March'18
13.86
14.50
14.13
14.72
13.67
14.27
14.03
14.63
.28 364,488
.27 251,326
Nov
May'18
25.89
26.50
25.90
26.60
25.89
26.50
26.19
26.37
.29
.16
Coffee (ICE-US)-37,500 lbs.; cents per lb.
Sugar-World (ICE-US)-112,000 lbs.; cents per lb.
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb.
Cotton (ICE-US)-50,000 lbs.; cents per lb.
Oct
Dec
72.95
72.00
75.55
74.88
72.95
72.00
75.26
74.88
Sept
Nov
146.60
140.25
146.60
146.40
146.60
140.25
145.50
145.00
3,222
1,389
2.71
182
3.00 144,863
Orange Juice (ICE-US)-15,000 lbs.; cents per lb.
6.90
8.50
82
7,597
Interest Rate Futures
Sept
Dec
156-270 158-160
155-190 157-070
156-150
155-050
158-090
157-000
1-26.0 34,187
1-26.0 725,684
Treasury Notes (CBT)-$100,000; pts 32nds of 100%
Sept
Dec
127-055 127-230
126-295 127-150
127-005
126-240
127-215
127-135
23.0 151,140
24.0 3,276,777
118-245 119-030
118-167 118-270
118-230
118-135
119-025
118-262
13.5 97,634
14.5 3,085,548
108-110
108-075
3.5 42,122
4.0 1,437,807
98.845
98.775
… 85,747
.020 342,691
2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
Sept
Dec
108-090 108-110
108-050 108-077
108-085
108-042
30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg.
Sept
Jan'18
98.845
98.760
98.848
98.780
98.845
98.755
10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
Sept
Dec
103.250
103.531
104.188 s
103.875 s
103.250
103.531
98.7550
98.7550
104.156
103.844
.813
.813
32,921
229
98.7550
.0050
44
98.6825
98.5900
98.5550
98.4100
.0050
.0150
.0300
.0600
1,358,991
2,044,751
1,194,748
1,584,071
1 Month Libor (CME)-$3,000,000; pts of 100%
Nov
98.7550
Eurodollar (CME)-$1,000,000; pts of 100%
Sept
Dec
March'18
Dec
98.6800
98.5800
98.5350
98.3650
98.6825
98.5950
98.5600
98.4150
98.6750
98.5750
98.5300
98.3600
Settle
Chg
Open
interest
Currency Futures
Japanese Yen (CME)-¥12,500,000; $ per 100¥
Sept
Dec
.9119
.9162
.9212
.9251
.9102
.9142
.9210
.9250
.0133 196,199
.0134
6,629
Sept
Dec
.8065
.8069
.8108 s
.8112 s
.8049
.8054
.8081
.8086
.0009 193,326
.0009
7,149
Sept
Dec
1.2970
1.2996
1.3049
1.3087
1.2913
1.2953
1.3047
1.3085
.0086 213,682
.0086
5,221
Sept
Dec
1.0422
1.0481
1.0498
1.0558
1.0406
1.0468
1.0486
1.0548
.0113
.0114
.7954
.7963
.7950
.7901
.8028
.8024
.8017
.7925
.7941
.7940
.7932
.7901
.7996
.7994
.7987
.7978
Dec
.05512
.05535
.05474
.05493 –.00030
Sept
Dec
1.1890
1.1941
1.1949
1.2006
1.1876
1.1934
1.1927
1.1985
Canadian Dollar (CME)-CAD 100,000; $ per CAD
British Pound (CME)-£62,500; $ per £
Swiss Franc (CME)-CHF 125,000; $ per CHF
Australian Dollar (CME)-AUD 100,000; $ per AUD
Sept
Oct
Dec
March'18
Mexican Peso (CME)-MXN 500,000; $ per MXN
42,097
1,067
.0028 154,025
.0029
451
.0029
8,622
.0028
219
14,626
.0051 449,341
.0051 14,217
Index Futures
Mini DJ Industrial Average (CBT)-$5 x index
Sept
Dec
21885
21899
21948
21904
21703
21661
Sept
Dec
2463.00
2466.00
2471.00
2467.30
2446.00
2444.00
2459.70 –14.50
2457.90 –14.40
Sept
Dec
2461.25
2460.25
2471.25
2469.50
2445.50
2443.75
2459.75 –14.50 3,189,967
2458.00 –14.25 159,180
Sept
Dec
1728.30
1738.30
1743.20
1740.80 s
1710.70
1710.30
1717.50 –19.20
1717.20 –18.70
Sept
Dec
5956.5
5973.8
5984.8
5991.5
5889.5
5897.0
Sept
Dec
June'18
1418.00
1409.30
1410.00
1419.50
1417.80
1410.00
1393.50
1392.90
1409.00
1401.20 –10.90 547,099
1400.30 –10.70
1,847
1398.30 –10.70
2
Sept
Dec
1369.20
…
1369.80
…
1355.10
…
1364.40
1363.40
–7.60
–7.60
8,486
1
Sept
Dec
92.61
92.40
92.70
92.45
92.15
91.91
92.23
91.99
–.54
–.54
48,319
5,887
S&P 500 Index (CME)-$250 x index
5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
Sept
Dec
Contract
High hilo
Low
Open
Euro (CME)-€125,000; $ per €
Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
Mini S&P 500 (CME)-$50 x index
21764
21722
–216 150,731
–219
1,864
Mini S&P Midcap 400 (CME)-$100 x index
Mini Nasdaq 100 (CME)-$20 x index
Mini Russell 2000 (ICE-US)-$100 x index
Mini Russell 1000 (ICE-US)-$100 x index
U.S. Dollar Index (ICE-US)-$1,000 x index
5939.3
5946.5
69,104
448
86,203
16
–49.0 290,210
–48.8
4,062
Source: SIX Financial Information
Bonds | WSJ.com/bonds
Tracking Bond Benchmarks
Return on investment and spreads over Treasurys and/or yields paid to investors compared with 52-week
highs and lows for different types of bonds
YTD total
return (%)
Yield (%)
Latest Low High
Index
3.9 U.S. Aggregate
1953.15
Total
return
close
YTD total
return (%)
Yield (%)
Latest Low High
Index
Mortgage-Backed Bloomberg Barclays
Broad Market Bloomberg Barclays
2.400 1.920 2.790
U.S. Corporate Indexes Bloomberg Barclays
1994.15
2.7
Mortgage-Backed
1961.25
2.2
Ginnie Mae (GNMA) 2.700 1.920 3.090
2.730 2.000 3.120
3.030 2.780 3.520
1169.62
2.9
Fannie mae (FNMA) 2.740 2.030 3.120
2629.93
4.2 Intermediate
2.530 2.210 3.010
1801.07
2.9
Freddie Mac (FHLMC) 2.750 2.030 3.130
3832.87
9.0 Long term
4.120 4.000 4.710
n.a.
n.a.
Muni Master
n.a. n.a. n.a.
569.73
4.5 Double-A-rated
2.470 2.120 2.870
n.a.
n.a.
7-12 year
n.a. n.a. n.a.
3.340 3.180 3.870
n.a.
n.a.
12-22 year
n.a. n.a. n.a.
n.a.
n.a.
22-plus year
n.a. n.a. n.a.
2782.33
716.96
5.7
U.S. Corporate
6.1
Triple-B-rated
High Yield Bonds Merrill Lynch
n.a.
n.a.
High Yield Constrained n.a. n.a. n.a.
n.a.
n.a.
Triple-C-rated
n.a. n.a. n.a.
546.94
Global Government
1.310 0.870 1.560
n.a.
n.a.
High Yield 100
n.a. n.a. n.a.
756.28
0.4
Canada
1.970 1.240 2.120
n.a.
n.a.
Global High Yield Constrained n.a. n.a. n.a.
370.39
0.4
EMU§
1.078 0.520 1.363
Europe High Yield Constrained n.a. n.a. n.a.
U.S Agency Bloomberg Barclays
710.49
0.6
France
0.820 0.280 1.210
Germany
0.370 -0.100 0.620
Japan
0.360 0.150 0.460
Netherlands
0.530 0.030 0.760
U.K.
1.400 1.030 1.790
n.a.
n.a.
2.8
1650.62
1473.78
2464.62
Global Government J.P. Morgan†
511.79
U.S Agency
1.710 1.260 1.960
289.02
10-20 years
1.520 1.090 1.750
564.31
9.1 20-plus years
2.750 2.430 3.460
939.10
Yankee
2.630 2.350 3.090
n.a.
1.8
3412.16
5.1
1.9
-0.5
0.3
-0.3
2.8
n.a.
Emerging Markets **
*Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds
** EMBI Global Index
n.a. n.a. n.a.
† In local currency § Euro-zone bonds
Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan
n.a.
n.a.
3.06
2.83
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
0.50
0.93
1.30
0.50
0.91
1.28
Notes on data:
Federal-funds rate is an average for the seven days ended Wednesday, weighted according to rates
on broker trades; Commercial paper rates are discounted offer rates interpolated from sales by
discounted averages of dealer bid rates on nationally traded certificates of deposit; Discount window
primary credit rate is charged for discounts made and advances extended under the Federal
Reserve's primary credit discount window program; rate is average for seven days ended Wednesday;
Inflation-indexed long-term TIPS average is indexed and is based on the unweighted average bid
yields for all TIPS with remaining terms to maturity of 10 years or more; Swap rates are International
Swaps and Derivatives Association (ISDA(R)) mid-market par rates for a fixed-rate payer, who in
return receives three-month Libor, and are based on rates collected at 11:00 a.m. ET by Garban
Intercapital PLC; Source is Reuters; Moody's triple-AAA rates are averages of industrial bonds only;
Muni rates are Thursday quotes based on the Bond Buyer Index for general obligation, 20 years to
maturity, mixed quality debt; Mortgage rates are contract rates on commitments for fixed-rate first
mortgages
Sources: Federal Reserve; for additional information on these rate data and their derivation,
please see, www.federalreserve.gov/releases/h15/data.htm
Country/
Coupon (%) Maturity, in years
1.250
2.250
0.000
2.200
3.344 3.326 3.865 2.832
3.366 3.349 3.899 2.861
Week
Latest ago
52-Week
high
low
Call money
3.00
3.00
n.a.
1.23
3.00
1.23889
1.31778
1.46544
1.82761
0.51322
0.83356
1.23361
1.53922
-0.401
-0.373
-0.308
-0.210
-0.401
-0.373
-0.308
-0.208
-0.373
-0.319
-0.205
-0.071
-0.405
-0.378
-0.308
-0.210
Latest
Value
Traded
-0.366
-0.301
-0.197
-0.053
-0.375
-0.332
-0.274
-0.163
52-Week
High
Low
DTCC GCF Repo Index
Treasury
MBS
1.112 19.100 1.366 0.244
1.145 111.200 1.506 0.257
Open Implied
Settle Change Interest Rate
Treasury Sep
Treasury Oct
Treasury Nov
1.785
1.500
60.4
49.8
70.6
2.635
2.631
1.904
61.1
46.8
29.8
France 2 -0.540 t
10 0.647 t
l
-0.529
-0.473
-0.592
l
0.683
0.758
0.179
Germany 2 -0.779 t
10 0.340 t
l
-0.752
-0.682
-143.4
0.367
0.471
-0.640 -206.5
-0.046 -173.2
-209.8
l
-180.1
-165.2
Italy 2 -0.105 t
10 1.994 t
l
-0.088
-0.015
-0.078
-139.1
-143.4
-87.2
l
2.038
2.021
1.154
-7.9
-12.9
-45.2
0.100
Japan 2 -0.153 s
10 0.003 s
l
-0.158
-0.113
-0.189
-98.3
-0.003
0.064
-143.9
-0.019 -207.0
-150.4
l
-217.0
-162.5
1.450
Spain 2 -0.368 s
10 1.531 t
l
-0.370
-0.326
-0.154
-165.4
-171.6
-94.8
l
1.554
1.466
1.001
-54.2
-61.4
-60.5
0.186 s
1.014 t
l
0.177
0.255
0.140
-110.0
-116.9
-65.3
l
1.060
1.177
0.621
-105.9
-110.7
-98.5
1.750
U.K. 2
4.250
10
98.835 0.005 2600 1.165
98.775 0.005 2459 1.225
98.785 0.010 1203 1.215
Notes on data:
U.S. prime rate is the base rate on corporate
loans posted by at least 70% of the 10 largest
U.S. banks, and is effective June 15, 2017. Other
prime rates aren’t directly comparable; lending
practices vary widely by location; Discount rate
is effective June 15, 2017. DTCC GCF Repo Index
is Depository Trust & Clearing Corp.'s weighted
average for overnight trades in applicable
CUSIPs. Value traded is in billions of U.S. dollars.
Federal-funds rates are Tullett Prebon rates as
of 5:30 p.m. ET. Futures on the DTCC GCF Repo
Index are traded on NYSE Liffe US.
Sources: Federal Reserve; Bureau of Labor
Statistics; DTCC; SIX Financial Information;
General Electric Capital Corp.; Tullett Prebon
Information, Ltd.
-182.6
-142.5
-187.5
-138.6
-148.4
-142.7
Source: Tullett Prebon
Investment-grade spreads that tightened the most…
1.23889
1.31694
1.45167
1.71400
-0.372
-0.330
-0.273
-0.160
1.844
l
0.62
1.23111
1.31722
1.45500
1.71456
-0.372
-0.329
-0.274
-0.161
l
1.890 s
2.683 s
1.28
Euro interbank offered rate (Euribor)
One month
Three month
Six month
One year
0.794
1.606
Corporate Debt
Euro Libor
One month
Three month
Six month
One year
1.347
2.266
2.25
Libor
One month
Three month
Six month
One year
0.100
2.750
Other short-term rates
1.346
2.167
l
10
0.050
30 days
60 days
Year ago
Australia 2
1.000
Spread Under/Over U.S. Treasurys, in basis points
Latest
Prev
Year ago
Month ago
l
2.750
0.000
Yield (%)
Latest(l) 0 20 40 60 80 100 120 Previous
U.S. 2 1.286 t
10 2.073 t
2.750
0.500
DTCC GCF Repo Index Futures
Eurodollars
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
30-year mortgage yields
3.24
4.19
State and local bonds
1 month
3 month
6 month
1,970
1,947
Fannie Mae
90 days
Federal funds (effective)
Nonfinancial
1-month
2-month
3-month
Financial
1-month
2-month
3-month
1.300 0.960 1.300 0.160
1.020 1.020 1.180 0.250
1.115 1.115 1.140 0.420
Commercial paper (AA financial)
Data are annualized on a 360-day basis. Treasury yields are per annum,
on actively traded noninflation and inflation-indexed issues that are
adjusted to constant maturities. Data are from weekly Federal Reserve
release H.15.
1.16
—52-WEEK—
High Low
Secondary market
Effective rate 1.1700 1.1700 1.2000 0.3300
High
1.3125 1.3125 1.3125 0.5625
Key Interest Rates
Week Ended
Sep 1 Aug 25
Week
Latest ago
0.25
International rates
Week
ago
—52-WEEK—
High Low
Britain
U.S.
Open
interest
Chg
Global Government Bonds: Mapping Yields
Borrowing Benchmarks | WSJ.com/bonds
Money Rates
Week
Latest ago
Settle
Sept
Dec
Total
return
close
Food
KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; H=Hurley Brokerage; I=Natural Gas Intelligence;
L=livericeindex.com; M=midday; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=The Steel Index; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted.
*Data as of 9/1
Source: WSJ Market Data Group
Inflation
Contract
High hilo
Low
Open
Cocoa (ICE-US)-10 metric tons; $ per ton.
Agriculture Futures
Sept
Dec
WSJ.com/commodities
in that same company’s share price.
Issuer
Symbol Coupon (%)
Goldman Sachs
Citizens Bank NA
Entergy
Commonwealth Edison
GS
CFG
ETR
EXC
2.350
2.550
4.000
4.000
Nov. 15, ’21
May 13, ’21
July 15, ’22
Aug. 1, ’20
72
55
72
39
Citigroup
Rockwell Collins
John Deere Capital
Federal Realty Investment Trust
C
COL
DE
FRT
6.675 Sept. 13, ’43
3.200 March 15, ’24
2.375 July 14, ’20
3.000
Aug. 1, ’22
160
80
39
75
Maturity
Current
Spread*, in basis points
One-day change
Last week
–7
–5
–5
–5
–4
–4
–4
–4
Stock Performance
Close ($)
% chg
77
n.a.
n.a.
n.a.
217.78
…
79.79
…
–3.59
…
0.67
…
n.a.
n.a.
37
n.a.
67.16
131.00
…
127.64
–2.07
0.30
…
–0.44
n.a.
140
401
311
36.09
82.56
6.90
37.70
–0.72
–1.42
4.39
–1.69
59
n.a.
n.a.
249
169.92
8.15
87.41
37.09
–0.65
–0.73
0.37
–1.04
…And spreads that widened the most
eBay
Gilead Sciences
Nabors Industries
Viacom
EBAY
GILD
NBR
VIA
3.250 Oct. 15, ’20
4.750 March 1, ’46
4.625 Sept. 15, ’21
5.875 Feb. 28, ’57
75
142
402
322
Alibaba Group Holding
CBL & Associates
Duke Energy Progress
AT&T
BABA
CBL
DUK
T
2.500
4.600
3.700
5.300
71
340
94
255
Nov. 28, ’19
Oct. 15, ’24
Oct. 15, ’46
Aug. 14, ’58
14
13
12
12
11
10
9
9
High-yield issues with the biggest price increases…
Bond Price as % of face value
Current
One-day change
Issuer
Symbol
Rackspace Hosting
Noble Holding International
CenturyLink
Hertz
RAX
NE
CTL
HTZ
8.625 Nov. 15, ’24
7.750 Jan. 15, ’24
7.600 Sept. 15, ’39
6.250 Oct. 15, ’22
108.875
79.000
91.000
93.750
Kinross Gold
Ensco
Transocean Phoenix 2
Continental Resources
KCN
ESV
RIG
CLR
5.950 March 15, ’24
4.500
Oct. 1, ’24
7.750 Oct. 15, ’24
4.900
June 1, ’44
110.875
74.750
108.438
85.875
Coupon (%)
Maturity
2.50
Last week
Stock Performance
Close ($)
% chg
107.500
76.500
88.063
91.250
...
…
19.52
20.45
...
…
–2.59
–1.40
110.000
71.000
108.125
84.625
...
4.51
…
34.79
...
–0.44
…
1.34
97.063 –3.19
–2.10
98.116
–1.25
102.500
–1.01
99.000
96.750
n.a.
101.563
99.000
...
…
61.10
17.69
...
…
–2.13
–2.37
–1.00
–1.00
–0.91
–0.88
76.000
104.875
102.875
86.000
...
61.92
8.87
13.77
...
–0.02
–3.17
–0.43
1.50
1.38
1.25
0.88
0.75
0.69
0.63
…And with the biggest price decreases
Arch Merger Sub
Mississippi Power
United Continental Holdings
Tenet Healthcare
ARCHMS
SO
UAL
THC
Fresh Market
XPO Logistics
Dynegy
Frontier Communications
TFM
XPO
DYN
FTR
8.500 Sept. 15, ’25
4.250 March 15, ’42
5.000
Feb. 1, ’24
6.750 June 15, ’23
9.750
May 1, ’23
6.500 June 15, ’22
8.000 Jan. 15, ’25
11.000 Sept. 15, ’25
74.500
104.000
102.750
86.500
*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
THE WALL STREET JOURNAL.
B14 | Wednesday, September 6, 2017
BANKING & FINANCE
Private Equity Invests in Rehab Centers
Firms are scooping up
treatment facilities as
demand increases;
worries about quality
trade association. While a decade ago roughly 60% of the
clinics were nonprofits, today
nearly 60% are for-profit entities, he said.
Some nonprofit treatment
veterans look with skepticism
at the new profit-seeking investors.
“There are some very good
private, for-profit groups,”
said Dick Steinberg, president
of WestCare Foundation, a
nonprofit provider of addiction treatment and other services in 18 states. Others “are
going to invest in it, market it,
get people in, and I’m not sure
the quality of treatment will
last,” he said.
Mr. Steinberg said he has
turned down frequent inquiries from private-equity investors interested in buying
WestCare facilities. “When you
see these health crises happen
people see a dollar as opposed
to how to really help somebody,” he said.
Private-equity firms say
they are bringing capital to an
industry that badly needs investment, helping increase the
number of treatment facilities.
Nonprofits “don’t have the
capital to have the best compliance, services and marketing,” said Simon Bachleda,
managing partner of Revelstoke Capital Partners, which
owns a majority stake in an
BY JEANNE WHALEN
AND LAURA COOPER
Private-equity firms are piling into a new business opportunity: the opioid-addiction
crisis.
Drawn by soaring demand,
expanded insurance coverage
and the chance to consolidate
a highly fragmented market,
firms plowed $2.9 billion into
treatment facilities last year,
up from $11.4 million in 2011,
according to research firm
PitchBook Data Inc. The number of private-equity deals
rose to 45 from 25.
The firms are acquiring or
expanding clinics that provide
everything from detox and
residential care to outpatient
and methadone treatment. In
some cases, private-equity
firms have approached notfor-profit outfits in an attempt
to buy and convert them to
for-profit entities, say treatment-center executives.
Private equity has become
the “driving force” in growth
in methadone clinics over the
past 10 years, according to
Mark Parrino, head of a clinic
Charging In
Private-equity firms are boosting investment in U.S. addiction-treatment
facilities, drawn by soaring demand. Their spending has helped increase
the number of providers.
Total private-equity deal value
Number of providers
$3.0 billion
3,000
2.5
2,500
2.0
2,000
1.5
1,500
1.0
1,000
0.5
500
$11.4M
0
0
2011
’12
’13
’14
’15
’16
2011 ’12
Sources: PitchBook (deal value); IBISWorld (providers)
operator of two dozen methadone clinics—some acquired
and some built from scratch.
“Usually we enhance the service offering.”
Among recent deals are
Kohlberg & Co.’s $180 million
acquisition of the Meadows, a
rehab center in Wickenburg,
Ariz., best known for treating
Olympic swimmer Michael
Phelps after his 2014 DUI arrest. Investors including LLR
Partners, HealthInvest Equity Partners, NewSpring
Capital, Petra Capital Partners and SV Life Sciences
’13
’14
’15
’16
THE WALL STREET JOURNAL.
spent $34 million last year for
a stake in Sun Behavioral
Health, which runs free-standing psychiatric hospitals that
treat addiction and other conditions. Private-equity firm
Flexpoint Ford acquired and
expanded Summit Behavioral
Health and is now considering
a sale of the firm, which operates in 10 states.
The demand for treatment
is plain. Drug overdose deaths
have soared since the late
1990s and now cause more fatalities each year than traffic
accidents, according to the
BRIAN MOLYNEAUX FOR THE WALL STREET JOURNAL
BY EMILY GLAZER
BY BEN DUMMETT
The lawsuit is tied to the sales-practices scandal that has rocked the San Francisco-based lender.
political pressure as the scandal erupted. More than 5,300
employees were fired over a
five-year period for the behavior. The bank said last week
that up to 3.5 million customer accounts may have been
unauthorized.
The lawsuit alleges that Mr.
Razzaghipour reported one
type of employee fraud in 2013
and fired a “significant number of employees involved.”
The lawsuit also alleges that
Mrs. Razzaghipour, known to
some at work as Marla
Clemow, “reported the illegal
and unethical sales practices
Dividend Changes
Company
Dividend announcements from September 5.
Company
Symbol
Amount
Yld % New/Old Frq
Payable /
Record
Initial
Eaton Vance FR 2022
EFL
4.7
.0396
M
Sep29 /Sep15
.047
.114
.046
.065
.0575
.167
.38
.30
.12
.0516
.05
.0253
.0253
.0253
.0253
.0595
.065
.07
.0467
.078
.061
.0265
.062
.0545
.053
.0474
.1167
.0685
.022
.022
.022
.022
.0718
.07238
.0635
.065
.0615
.0696
.0166
.0166
.0166
.0166
.06
.11
.065
.1318
.121
.063
.0795
.031
.0735
.0395
.06
.061
.0675
.052
.0705
.0685
.0776
.0828
.041
.0583
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Funds and investment companies
AdvntClymr Convertible II
AdvntClymrFd
AllianzGI Conv & Inc 2024
AllianzGI Conv & Incm
AllianzGI Conv & Incm II
AllianzGI Div Incm
AllianzGI Equity & Conv
AllnzGI NFJ Div Interest
Avenue Incm Cr Strat Fd
BlackRck Rscs Comm Str Tr
BlackRock 2022 Glbl Incm
BlackRock CA Muni 2018
BlackRock CA Muni 2018
BlackRock CA Muni 2018
BlackRock CA Muni 2018
BlackRock CA Municipal Tr
Blackrock Core Bond Tr
BlackRock Corp Hi Yd Fd
BlackRock Enh Eq Div Tr
BlackRock Enh Gl Div Tr
BlackRock FR Incm Strat
BlackRock Income Trust
Blackrock Invest
BlackRock Long-Term Muni
BlackRock MA Tax-Exempt
BlackRock MD Muni
BlackRock Multi-Sector IT
BlackRock Mun
Blackrock Mun 2018 Term
Blackrock Mun 2018 Term
Blackrock Mun 2018 Term
Blackrock Mun 2018 Term
BlackRock Mun 2030 Target
BlackRock Mun Inco
BlackRock Muni
BlackRock Municipal Trust
BlackRock NJ Muni
BlackRock NJ Municipal Tr
BlackRock NY Muni 2018
BlackRock NY Muni 2018
BlackRock NY Muni 2018
BlackRock NY Muni 2018
BlackRock NY Municipal Tr
BlackRock Science & Tech
Blackrock Strategic Muni
BlackRock Taxable Mun Bd
BlackRock Utility & Infr
BlackRock VA Muni
BlackRockDurInco Tr
BlackRockFL Muni 2020
BlackRockMuni
BlackRockMuni 2020
BlackRockMuni Tr
BlackRockNY TrII
Blkrck MunHl NJ Qlty
BlkrckNYMuni Qlty
BlkRk Credit Alloc Incm
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BlkRk Engy Res Tr
BlkRk Enh Cap Inco
BlkRk Enhncd Govt Fd
Blkrk FltRt InTr
AGC
AVK
CBH
NCV
NCZ
ACV
NIE
NFJ
ACP
BCX
BGIO
BJZ
BJZ
BJZ
BJZ
BFZ
BHK
HYT
BDJ
BOE
FRA
BKT
BKN
BTA
MHE
BZM
BIT
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EGF
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11.2
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7.5
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9.9
7.1
6.0
2.0
2.0
2.0
2.0
4.9
5.5
7.5
6.4
7.1
5.2
5.0
4.8
5.4
4.5
4.0
7.6
5.4
1.8
1.8
1.8
1.8
3.8
5.8
4.7
5.3
4.9
5.3
1.3
1.3
1.3
1.3
4.7
5.5
5.3
6.7
6.8
4.1
6.0
2.5
5.7
3.0
4.8
4.7
5.5
4.6
6.3
7.1
7.3
6.5
3.6
5.1
these treatment centers,” said
Hunter Peterson, a partner at
Riverside Co., which recently
purchased Florida-based treatment provider Lakeview
Health LLC from another private-equity firm, Trinity Hunt
Partners, and plans to expand
it to Houston and other markets.
Lakeview, like many private-equity-backed treatment
providers, doesn’t accept Medicaid or Tricare, the taxpayerfinanced insurance programs
for low-income people and active-duty military members,
respectively. Those programs
offer reimbursement “below
our cost,” and the paperwork
can be excessive, says Roy
Serpa, Lakeview’s chief executive. Lakeview’s patients are
mostly covered by commercial
insurance, he said.
Medicaid is the largest
source of funding in the U.S.
for mental-health care, including substance-abuse treatment, according to the Robert
Wood Johnson Foundation.
Private equity’s move into
rehab “might not necessarily
ease access issues for those on
Medicaid,” says Michael Botticelli, executive director of Boston’s Grayken Center for Addiction Medicine, which like
many nonprofits does accept
Medicaid. “But it does help
overall access issues.”
Citigroup Targets
Payments Sector
With Services Unit
Former Wells Fargo Managers Sue the Bank
Two former managers have
sued Wells Fargo & Co.,
claiming they were unfairly
fired over the bank’s salespractices issues.
Reza Razzaghipour and
Marla Razzaghipour claimed
their dismissals were retaliation for them raising issues
with senior managers about
the questionable sales practices, such as falsification of
bank records, according to a
lawsuit filed Aug. 31 in Los
Angeles Superior Court.
The former managers, who
are husband and wife, were
fired in March 2017 from positions overseeing regions in
Southern California. Combined, the two managed about
3,500 people, The Wall Street
Journal previously reported.
A Wells Fargo spokesman
said Tuesday that the bank
“denies the allegations of
these two former regional
presidents. The termination
decisions were not retaliatory
as alleged in the complaint. The company terminated the employment of
these two individuals for legitimate and lawful reasons.”
Wells Fargo was ordered to
pay a $185 million fine last
year over its sales practices
and has since faced public and
Centers for Disease Control
and Prevention. Widespread
opioid addiction is largely to
blame for the surge, the CDC
says.
U.S. drug- and alcohol-addiction clinics generated $9.5
billion in revenue in 2016, up
from $7.5 billion in 2011, according to Los Angeles-based
data provider IBISWorld.
There were 2,902 enterprises
engaged in drug and alcohol
rehabilitation in 2016 compared with 2,435 in 2011, the
data firm said.
Investors say legislation has
also made the sector more attractive by extending insurance coverage to more Americans. The Mental Health Parity
and Addiction Equity Act of
2008 required insurers that
provide mental-health benefits
to cover them as favorably as
they do physical-health benefits.
The 2010 Affordable Care
Act also expanded coverage by
mandating that ACA insurance
plans sold to individuals cover
mental-health treatment. The
law also stipulated that children could be covered under
their parents’ insurance until
age 26.
“The Affordable Care Act
created more insured lives.
That, combined with the opioid crisis, has changed the
fabric of what we’re seeing in
at the highest levels multiple
times.”
Both former managers
“never fired or disciplined
anyone for failing to meet the
bank’s impossible and fraudulent sales goals,” the lawsuit
claimed.
But some current and former employees and managers
have told the Journal that Mr.
and Mrs. Razzaghipour pushed
them to engage in questionable sales tactics.
“My clients were fired in
retaliation for complaining of
illegal conduct at Wells Fargo,
including the bank’s improper
Symbol
BlkRk Health Sci
BlkRk Intl Grwth&Inco
BlkRk Muni Inter Dur
BlkRk Muni NY Inter Dur
BlkRk MuniAssets Fd
BlkRk Munienhanced
BlkRk MuniHldgs
BlkRk MuniHldgs CA Qlty
BlkRk MuniHldgs II
BlkRk MuniHldgs Inv
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BlkRk MuniHldgs Quality
BlkRk MuniVest
BlkRk MuniVest II
BlkRk MuniYield
BlkRk MuniYld Arizona
BlkRk MuniYld CA Fd
BlkRk MuniYld CA Quality
BlkRk MuniYld Ins Qlty
BlkRk MuniYld Inv
BlkRk MuniYld MI Qlty
BlkRk MuniYld NJ Fd
BlkRk MuniYld PA Quality
BlkRk MuniYld Qlty II
BlkRk MuniYld Quality
BlkRk NY Muni
BlRk MuHldg NY Qlty
BlRk Muyld NY Qlty
BlRkMunyldQltyIII
Calamos
Calamos Conv Hi Inco Fd
Calamos Dyn Conv & Incm
Calamos Glbl Dyn Inc
Calamos Global Tot Ret Fd
Calamos Strat Fd
Credit Suisse High Yld
Cushing Energy Incm Fd
Cushing Renaissance Fund
CushingMLPTotalReturnFd
DoubleLine Incm Solutions
Doubleline Oppor Credit
Eatn Vnc MI Muni
Eatn Vnc NJ Muni
Eatn Vnc NY Muni
Eatn Vnc OH Muni
Eatn Vnc PA Muni
Eaton CA Trust
Eaton MA Trust
Eaton MI Trust
Eaton NJ
Eaton NY Trust
Eaton OH Trsut
Eaton PA Trust
Eaton Vance BuyWrite Opp
Eaton Vance CA Mun Bd
Eaton Vance Eqty Inco Fd
Eaton Vance Eqty Inco II
Eaton Vance FR Incm Plus
Eaton Vance FR Incm Tr
Eaton Vance Hi Incm 2021
Eaton Vance Mun Bd Fd
Eaton Vance Mun Bd Fd II
Eaton Vance Mun Incm 2028
Eaton Vance Mun Income
Eaton Vance Sr Incm Tr
Eaton Vance Tax-Mng Div
Eaton Vance Tax-Mngd Opp
Eaton Vnce NY
Eaton Vnce CA2
Eaton Vnce Ins MA
EatonVance TxAdv Opport
BME
BGY
MUI
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MEN
MHD
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MUH
MFL
MUE
MUS
MVF
MVT
MYD
MZA
MYC
MCA
MFT
MYF
MIY
MYJ
MPA
MQT
MQY
BQH
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MYI
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MIW
EMJ
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EFF
EFT
EHT
EIM
EIV
ETX
EVN
EVF
ETY
ETW
ENX
EIA
MAB
ETO
Amount
Yld % New/Old Frq
6.6
7.1
4.2
3.8
4.5
5.5
5.5
4.9
5.6
5.7
5.4
5.5
5.6
5.5
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4.7
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5.0
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5.8
5.4
5.4
5.1
5.5
5.5
4.9
4.8
4.9
5.6
10.0
10.1
9.8
9.6
9.0
8.4
9.3
6.0
9.4
9.1
8.7
8.2
4.1
4.5
4.3
4.2
4.5
3.7
3.8
3.5
4.5
4.5
4.0
4.1
8.7
4.7
7.8
7.0
5.6
5.7
5.9
4.9
4.5
4.1
5.0
5.5
9.0
9.4
4.8
4.3
3.7
9.1
.20
.038
.0495
.0445
.0575
.0565
.081
.0615
.0745
.0715
.064
.0635
.046
.073
.072
.062
.062
.065
.067
.078
.064
.075
.0623
.062
.0725
.059
.058
.054
.068
.095
.10
.167
.07
.10
.0825
.022
.04
.1367
.0903
.15
.167
.0475
.0491
.0439
.0469
.0486
.0396
.0438
.0391
.0457
.05
.0451
.0421
.1108
.0487
.0864
.0875
.077
.069
.05
.0521
.048
.0709
.0541
.03
.0843
.091
.0515
.0442
.0434
.18
M
M
M
M
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Payable /
Record
Sep29 /Sep15
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Sep18 /Sep11
Sep29 /Sep22
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Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
sales practices,” said the managers’ lawyer, Emanuel Shirazi, of Los Angeles-based Shirazi Law Firm. “Despite
knowing this, Wells Fargo
chose to scapegoat Mr. & Mrs.
Razzaghipour.” The lawyer
didn’t comment specifically on
the employee allegations.
The Razzaghipours’ lawsuit
also names several retailbanking executives, some of
whom are still employed by
the bank and others who were
fired, as the real “bad actors.”
In the lawsuit, they ask for
damages of at least $50 million.
Company
Symbol
EatonVnc SrFltRate
Etn Vn TaxAdv Bd&Opt Strg
Etn Vnc Short Dur Fd
Etn Vnc Tax Mgd Buy-Write
EtnVnc TaxAdvDiv
EtnVncLtdFd
EtnVncRskMngd
EtnVncTxAdvGblDiv
EtnVncTxMngGlDvEqInc
EV National Municipal Opp
Global Self Storage
Guggenheim Credit All Fd
Guggenheim Enh Fd
Guggenheim Strat Opps Fd
Guggenheim Taxable Muni
HnckJohn TxAdv
Invesco Adv Mun Incm II
Invesco Bond Fund
Invesco CA Value Mun Incm
Invesco Credit Opps Fund
Invesco High Incm 2023
Invesco High Income Tr II
Invesco Inv Grade Muni
Invesco Inv Grade NY Muni
Invesco Mun Incm Opps Tr
Invesco Mun Opportunity
Invesco Municipal Trust
Invesco PA Value Mun Incm
Invesco Qlty Mun Inco
Invesco Senior Income Tr
Invesco Value Mun Incm Tr
iShares US Preferred
JHancock Pr Div
John Hancock Finl Opps Fd
John Hancock Glbl Shrhldr
John Hancock Income Secs
John Hancock Investors
John Hancock Pfd II
John Hancock Pfd Inc III
John Hancock Pfd Income
Madison Covered Call
Madison Strategic Sect
Mangd Durtn InvGr Mun Fd
MFS California Muni Fund
MFS Charter
MFS Govt Mkts Income Tr
MFS Hi Inc Muni
MFS Hi Yld Muni
MFS Inc Tr
MFS Intermed Hi Inc
MFS Invest Grade Muni
MFS Multimkt
MFS Munl Inco
MFS Special Value
Neuberger Berman HYS
NewAmFd
Nuv Float Rte Opp Fd
Nuv Inter Duration Qlty
Nuv NASDAQ 100 Dyn Over
Nuv S&P 500 Dyn Overwrite
Nuv Tax-Adv Div Gr
Nuveen AMT-Free Mun
Nuveen AMT-Free Mun Value
Nuveen AMT-Free Quality
Nuveen AZ Quality Muni
Nuveen Build Am Bd Fd
Nuveen Build Am Bd Opp Fd
Nuveen CA AMT-Free Qual
Nuveen CA Mun Value Fd 2
Nuveen CA Muni Value
Nuveen CA Quality Muni
EFR
EXD
EVG
ETB
EVT
EVV
ETJ
ETG
EXG
EOT
SELF
GGM
GPM
GOF
GBAB
HTD
VKI
VBF
VCV
VTA
IHIT
VLT
VGM
VTN
OIA
VMO
VKQ
VPV
IQI
VVR
IIM
PFF
PDT
BTO
HTY
JHS
JHI
HPF
HPS
HPI
MCN
MSP
MZF
CCA
MCR
MGF
CXE
CMU
MIN
CIF
CXH
MMT
MFM
MFV
NHS
HYB
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NIQ
QQQX
SPXX
JTD
NVG
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NAZ
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NBD
NKX
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NCA
NAC
Citigroup Inc. has created a
separate services group within
its investment-banking coverage of the industrials sector
and appointed two global coheads to oversee the new division amid a flurry of deal
making in the payments-processing sector in Europe and
the U.S.
Jean-Baptiste Petard is expected to join Citigroup in December as global co-head of
the independent services division, according to a memo announcing the new structure,
and work out of London.
Mr. Petard’s appointment
and his U.K. base underscore
the potential of lucrative advisory work for investment
banks amid a consolidation of
the payments sector that is
under pressure to cut costs
and invest in new technologies
to address the rise of mobile
payments.
A seasoned investment
banker, Mr. Petard was most
recently at UBS Group AG,
where he oversaw the Swiss
Amount
Yld % New/Old Frq
5.7
10.0
6.4
7.9
8.0
6.9
9.8
7.4
10.0
4.5
5.3
9.4
11.4
10.3
6.5
6.4
5.6
4.3
4.9
7.3
6.0
6.7
5.6
4.9
5.2
5.4
5.5
5.0
5.1
5.6
4.9
5.5
6.9
4.5
9.7
5.2
7.1
7.7
7.9
7.7
9.2
9.0
3.9
4.3
8.7
7.6
5.8
5.8
9.0
9.4
4.5
8.6
5.4
9.0
7.3
7.4
7.3
3.5
6.8
6.6
7.6
5.6
4.2
5.0
4.4
5.6
5.1
4.7
3.9
3.9
4.9
.07
.29
.0765
.108
.145
.0806
.076
.1025
.076
.0859
.065
.1813
.24
.1821
.12573
.138
.0547
.069
.0535
.071
.05
.084
.0636
.0571
.0344
.0599
.0591
.0521
.0546
.0205
.062
.17733
.0975
.3701
.22
.1934
.3294
.14
.1222
.14
.18
.26
.045
.044
.0624
.03143
.0255
.023
.03215
.0224
.039
.04468
.0325
.04985
.0725
.06
.0705
.039
.37
.2525
.31
.0725
.06
.058
.054
.103
.0955
.062
.059
.034
.062
bank’s investment-banking operations for business services,
transportation and logistics in
Europe, the Middle East and
Africa.
At Citigroup, he will be
based in London, focusing on
clients in the business and
payment-services sectors in
Europe, the Middle East and
Africa.
Mr. Petard will share global
co-head duties for the new
services division with Citigroup veteran Chad Hoeft,
who will continue his coverage
focus on the security, facilities-management and travelservices sectors.
Mr. Hoeft joined Citigroup
in 1998, and has spearheaded
its coverage of the services
sector in North America for
the past several years. He remains based in New York.
In one of the more recent
cross-border deals in the payments industry, Vantic Inc., a
big Ohio-based company, last
month agreed to acquire U.K.
payments processor Worldpay
Group PLC for £8 billion ($10.4
billion) in cash and stock.
M
Q
M
M
M
M
M
M
M
M
Q
M
Q
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
Q
Q
Q
Q
M
M
M
Q
Q
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
Q
Q
Q
M
M
M
M
M
M
M
M
M
M
Payable /
Record
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
Sep18 /Sep11
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep22
Sep29 /Sep18
Sep29 /Sep15
Sep29 /Sep15
Sep29 /Sep15
Sep29 /Sep15
Sep29 /Sep11
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep08 /Sep06
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep11
Sep29 /Sep15
Sep29 /Sep15
Sep29 /Sep15
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep13
Sep29 /Sep15
Sep29 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Company
Symbol
Nuveen Core Eq Alpha
Nuveen Credit Opps 2022
Nuveen Credit Strt Inc Fd
Nuveen CT Qual Muni
Nuveen Diversified Div
Nuveen Dow 30 Dynamic
Nuveen Enhncd Mun Val Fd
Nuveen GA Qual Muni
Nuveen Gl Hi Incm Fd
Nuveen Hi Incm 2020
Nuveen Hi Incm Nov 2021
Nuveen High Incm Dec18
Nuveen High Incm Dec19
Nuveen Ins CA
Nuveen Insured NY Select
Nuveen Intermed Dur Mun
Nuveen MA Qual Muni
Nuveen MD Qual Muni
Nuveen MI Qual Muni
Nuveen MN Qual Muni
Nuveen MO Qual Muni
Nuveen Mtg Opp Term Fd
Nuveen Mtg Opp Term Fd 2
Nuveen Multi-Market Incm
Nuveen Mun Credit Incm Fd
Nuveen Muni 2021 Target
Nuveen Muni Income Fund
Nuveen Muni Value Fund
Nuveen NC Qual Muni
Nuveen NJ Munl Value Fund
Nuveen NJ Qual Muni
Nuveen NY AMT-Free
Nuveen NY Mun Value 2
Nuveen NY Muni Value Fund
Nuveen NY Qual Muni
Nuveen OH Qual Muni
Nuveen PA Mun Value Fund
Nuveen PA Qual Muni
Nuveen Pfd & Incm 2022
Nuveen Pfd Incm Opps Fd
Nuveen Pfd Secs Incm Fd
Nuveen Preferred & Incm
Nuveen Qual Mun Incm Fd
Nuveen Real Est Incm Fd
Nuveen S&P 500 Buy-Write
Nuveen Sel 3
Nuveen Sel Tax Free
Nuveen Sel TF
Nuveen Select Maturities
Nuveen Senior Income Fund
Nuveen Shrt Dur Cr Opp Fd
Nuveen TX Qual Muni
Nuveen VA Qual Muni
NuveenMuniIncoOpp Fd
NuveenTaxAdv
NuvFloatRteInco Fd
Royce Micro-Cap
Royce Value Trust
WstAssetClymr InflLnk Sec
WstAstClymr InfLnkd Fd
Amount
Yld % New/Old Frq
Payable /
Record
JCE
JCO
JQC
NTC
JDD
DIAX
NEV
NKG
JGH
JHY
JHB
JHA
JHD
NXC
NXN
NID
NMT
NMY
NUM
NMS
NOM
JLS
JMT
JMM
NZF
NHA
NMI
NUV
NNC
NJV
NXJ
NRK
NYV
NNY
NAN
NUO
NPN
NQP
JPT
JPC
JPS
JPI
NAD
JRS
BXMX
NXR
NXP
NXQ
NIM
NSL
JSD
NTX
NPV
NMZ
JTA
JFR
RMT
RVT
WIA
WIW
7.2
5.7
6.8
4.4
8.5
6.6
5.5
4.0
8.4
5.9
6.0
4.2
5.1
3.7
3.9
4.7
4.5
4.6
4.6
4.6
4.2
5.3
5.5
5.7
5.8
2.1
4.2
3.8
3.9
3.8
5.0
4.6
3.7
3.8
4.8
4.3
3.7
5.1
6.1
7.5
7.3
6.8
5.0
8.9
6.7
3.5
3.7
3.6
3.0
7.2
7.4
4.4
4.1
5.7
7.6
6.9
7.9
7.6
3.6
3.8
.2775
.047
.0475
.045
.27
.275
.068
.044
.12
.049
.05
.035
.044
.048
.046
.053
.0545
.05
.0535
.06
.053
.1135
.1125
.036
.074
.0175
.0405
.0325
.044
.0475
.058
.051
.046
.0315
.058
.0555
.047
.0585
.1275
.065
.062
.1415
.06
.25
.2285
.0435
.0455
.042
.026
.0395
.106
.053
.046
.065
.248
.0675
.17
.28
.0345
.036
SBGL
3.6
2.00%
Oct16 /Oct06
HMY
NMKpB
NMKpC
2.5
3.8
3.9
.02689 SA
Q
.90
Q
.975
Oct23 /Oct13
Oct02 /Sep18
Oct02 /Sep18
Q
M
M
M
Q
Q
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
Q
Q
M
M
M
M
M
M
M
M
M
Q
M
Q
Q
M
M
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Oct02 /Sep15
Sep26 /Sep13
Sep26 /Sep13
Sep29 /Sep15
Sep29 /Sep15
Stocks
Sibanye Gold ADR
Foreign
Harmony Gold Mining ADR
Niagara Mhwk Pwr 3.6% pfd
Niagara Mhwk Pwr 3.9% pfd
KEY: A: annual; M: monthly; Q: quarterly; r: revised; SA: semiannual;
S2:1: stock split and ratio; SO: spin-off.
THE WALL STREET JOURNAL.
Wednesday, September 6, 2017 | B15
* * * *
MARKETS
U.S. government bonds
strengthened as investors
flocked to assets traditionally
considered safe and reassessed the future path of interest-rate inCREDIT
creases.
MARKETS
The yield on
the benchmark
10-year Treasury
note fell to a 2017 low of
2.072%, compared with 2.157%
on Friday, in the largest oneday decline since May. Yields
fall as bond prices rise.
The yield on the 10-year
note settled at its lowest level
since Nov. 9, 2016, the day after the U.S. presidential election. The decline highlights the
continuing demand for government debt after the benchmark
yield fell in August for a second consecutive month.
Many factors pushed bond
yields lower Tuesday, analysts
said. U.S. stock declines led investors to assets considered
safe, while Federal Reserve
governor Lael Brainard made
comments perceived as dovish
at the Economic Club of New
York.
Ms. Brainard noted that inflation hasn’t hit the Fed’s 2%
annual target over the past
five years, and that a “persistent shortfall in inflation”
could mean that it is “prudent
to raise the federal-funds rate
more gradually.” She also said
Hurricane Harvey raised “uncertainties” about the economic outlook in 2017, potentially having an effect on gross
domestic product this quarter.
These comments come after
the price index for personalconsumption
expenditures
The yield on the
benchmark 10-year
Treasury note fell to a
2017 low of 2.072%.
showed last week that inflation
remains tepid, highlighting
hurdles the Fed might face in
sticking to its path of rate increases. Inflation is a threat to
long-term government bonds
since it erodes the purchasing
power of their fixed payments.
Fed-funds futures, used by
traders to place bets on central-bank policy, late Tuesday
showed a 32% chance of a rate
rise by year-end, down from
47% a month ago.
Investors also sought assets
perceived as relatively safe after geopolitical stresses that
emerged over the weekend,
preparing for what could be a
month fraught with risks,
some analysts said.
Those include tensions between North Korea and the
U.S. as well as a difficult
stretch for lawmakers, who
must prevent default on the
nation’s debt and keep the
government running. The
Trump administration is also
seeking approval for a $7.85
billion recovery package for
Hurricane Harvey.
In a sign of heightened anxiety over the debt-ceiling
deadline, yields on government debt expiring in October
remain elevated over notes expiring in November, according
to Tradeweb. Bonds with longer maturities typically yield
more than those due sooner.
AUCTION RESULTS
Here are the results of Tuesday's Treasury auctions.
All bids are awarded at a single price at the marketclearing yield. Rates are determined by the difference
between that price and the face value.
13-WEEK AND 26-WEEK BILLS
13-Week
26-Week
$124,144,298,400 $101,701,285,900
$39,000,018,400 $33,000,280,900
$503,233,800 $377,352,900
$0 $684,000,000
99.742167
99.436306
(1.020%)
(1.115%)
1.037%
1.137%
Coupon equivalent
87.30%
38.34%
Bids at clearing yield accepted
912796LB3
912796NU9
Cusip number
Applications
Accepted bids
" noncomp
" foreign noncomp
Auction price (rate)
Both issues are dated Sept. 7, 2017. The 13-week bills
mature on Dec. 7, 2017; the 26-week bills mature on
March 8, 2018.
FOUR-WEEK BILLS
$60,836,279,500
Applications
$20,000,002,500
Accepted bids
$445,822,500
" noncompetitively
$0
" foreign noncompetitively
99.898889
Auction price (rate)
(1.300%)
1.319%
Coupon equivalent
21.47%
Bids at clearing yield accepted
912796LW7
Cusip number
The bills, dated Sept. 7, 2017, mature on Oct. 5, 2017.
North Korea bomb
test and approaching
storm spook investors
as DJIA slides 1.1%
BY MICHAEL WURSTHORN
The Dow Jones Industrial
Average fell 234 points Tuesday, as threats from North Korea and another powerful hurricane weighed on major
indexes.
TUESDAY’S
Investors
MARKETS
headed for assets they consider to be
safer stores of value, like U.S.
government bonds and gold,
after North Korea tested its
most powerful nuclear bomb
yet.
Hurricane Irma dragged
down shares of insurance companies as it churned through
the Caribbean.
The blue-chip index ended
1.1% lower at 21753.31 after declining nearly 278 points earlier in the session. It was the
Dow industrials’ biggest oneday drop since Aug. 17.
The S&P 500 declined 18.70
points, or 0.8%, to 2457.85 and
DANIEL ACKER/BLOOMBERG NEWS
BY GUNJAN BANERJI
U.S. Stocks Fall as Tensions Flare
Shares of United Technologies dropped after it announced a purchase of Rockwell Collins, seen here.
the Nasdaq Composite shed
59.76 points, or 0.9%, to 6375.57.
The CBOE Volatility Index, a
measure of expected swings in
the S&P 500, jumped 21%.
“There is no solid game
plan as to what we can do with
North Korea,” said Larry
Adam, Deutsche Bank Wealth
Management’s chief investment officer. “People are getting nervous about that.”
Shares of financial companies in the S&P 500 tumbled
2.2%, making the sector the
worst performer out of the
broad index’s 11 major groups.
Recent declines in the 10-year
Treasury yield have narrowed
the gap between long- and
short-term rates, potentially
crimping profits for lenders.
Goldman Sachs Group fell
$8.10, or 3.6%, to $217.78, while
Bank of America shed 78
cents, or 3.2%, to 23.31.
The possibility of another
major storm hitting the U.S.
put insurers among the S&P
500’s biggest decliners.
Everest Re Group declined
17.19, or 6.9%, to 231.19; XL
Group fell 2.35, or 5.8%, to
38.27; and Travelers lost 4.47,
or 3.7%, to 115.43.
Travelers shaved about 31
points off the Dow industrials.
United Technologies erased
an additional 46 points off the
index after the company announced a $23 billion deal to
buy Rockwell Collins.
United Technologies was
the worst performer in the
Dow industrials, falling 6.71, or
5.7%, to 111.21—the stock’s biggest percentage decrease since
July 2015. Rockwell Collins
rose 39 cents, or 0.3%, to 131.
While market reactions to
the continuing tensions between the U.S. and North Korea have been short-lived in
recent weeks, some market
strategists and investors warn
the latest threats have made
investors skittish following
five consecutive months of
gains for both the Dow industr
Markets around the world
mostly finished lower. The
Stoxx Europe 600 fell 0.1%.
Japan’s Nikkei Stock Average closed down 0.6% after a
0.9% fall on Monday, as buying
of the yen, a traditional haven
asset, accelerated during Asian
trade. Early Wednesday, the
Nikkei was down an additional
0.4% and Hong Kong’s Hang
Seng Index was down 0.3%.
—Mike Bird
contributed to this article.
Wall Street
Migrates
To T+2
For Trades
COLUMBIA PICTURES/EVERETT COLLECTION
Treasurys
Advance
Amid
Hunt for
Havens
A scene from last year’s ‘Angry Birds Movie.’ Rovio Entertainment of Finland launched the mobile-game and film franchise in 2009.
‘Angry Birds’ Maker Hatches IPO
BY DAVID GAUTHIER-VILLARS
Rovio Entertainment Oy,
the Finnish company behind
the “Angry Birds” mobilegame and film franchise, plans
to list shares on the stock
market—a litmus test for an
industry known for its erratic
performance.
Shareholders hope the initial public offering in Helsinki
will value Rovio at a premium
to rivals and give it a price tag
of about €2 billion, or roughly
$2.38 billion, people familiar
with the matter said.
The company said in a written statement Monday that its
planned IPO would involve a
share issue of €30 million, as
well as the sale of existing
shares by majority owner Kaj
Hed, the uncle of Rovio cofounder Niklas Hed, and other
shareholders.
Mr. Hed, who owns about
70% of Rovio, intends to remain majority shareholder af-
ter the IPO, the people familiar
with the matter said. In 2011,
when “Angry Birds” mobile
games were among the most
popular world-wide, Rovio envisioned listing its shares on
the Nasdaq Stock Market in
New York. This time, the elder
Mr. Hed has opted for Nasdaq’s affiliate in Finland because he is eager to keep the
company rooted in the Nordics, one of the people said.
Rovio didn’t respond to a
request for comment.
Rovio said in its statement
that the planned listing would
enable the company to pursue
its growth strategy, including
through acquisitions, and gain
more flexibility to remunerate
its employees.
Mobile games have become
a full-fledged industry in the
past decade, accounting for
about one-third of the larger
videogame sector—which generated roughly $100 billion in
revenue last year.
Tech giants have been eager to take control of moneyspinners capable of producing
hit titles with hundreds of millions of regular users. Tencent
Holdings Ltd.’s deal last year
for Supercell Oy valued the
Finnish mobile-game maker
and its staff of about 200 at
more than $10 billion.
But fickle players have
caused some hit mobile games
to collapse in the charts, making their publishers a hard sell
to individual investors.
When Activision Blizzard
Inc. bought King Digital Entertainment PLC last year, the
maker of Candy Crush was
straining to repeat the success
of its blockbuster series, and
the $18-a-share offer was well
below the company’s IPO price
of $22.50.
Rovio itself has been on a
roller coaster in recent years,
going through several costcutting rounds and management changes.
The company could have a
steadier trajectory on the
stock market because it has
diversified revenue streams
thanks to the film franchise,
analysts said. The company
also has made good progress
in harnessing new formats
that allow players to download
games free and buy virtual
goods that help them advance
to new skill levels, they said.
For the year’s first half,
Rovio has said its revenue
climbed 94% to €152.6 million.
Founded in Espoo, near Helsinki, in 2003, Rovio surged in
2009 with the launch of “Angry Birds.” By 2011, the game
was widespread. But then the
industry shifted. Rovio used to
charge people a dollar or two
to download each game, but
competitors shifted to the
“freemium” model, in which
the games are free to play but
upgrades cost money.
—Razak Musah Baba
contributed to this article.
Nasdaq Sets Data-Business Purchase
BY CARA LOMBARDO
Nasdaq Inc. will buy data
provider eVestment for $705
million in a bid to bulk up its
proprietary analytics and technology offerings for institutional clients.
The exchange operator said
the deal, expected to close in
the fourth quarter, will be
funded with cash and debt.
Nasdaq Chief Executive Adena Friedman has pushed for
the company to expand its
data business. Information and
technology services combined
accounted for 22% of Nasdaq’s
revenue last year, according to
Thomson
Reuters,
with
roughly 60% from its core exchange business.
The business of eVestment
complements existing Nasdaq
products such as its mutualfund quote service and the Nasdaq Analytics Hub, which was
launched in May, Ms. Friedman
said. The company, which operates as a subscription-based
software-as-a-service business,
has more than 2,000 clients
ranging from BlackRock Inc. to
Alphabet Inc.’s Google, according to its website.
EVestment Chief Executive
and co-founder Jim Minnick
will remain with the company
and report to Bjørn Sibbern,
an executive vice president
who runs Nasdaq’s information-services segment.
In a note to clients, analysts
from Jefferies said that while
the purchase isn’t revolutionary, it is a “positive change in
direction” for Nasdaq as it continues to focus on more recurring, nontransactional revenue.
Jefferies said eVestment currently generates roughly $21
million in revenue a quarter.
Nasdaq shares fell 99 cents,
or 1.3%, to $74.38 on Monday.
They are up 11% for the year
so far.
BY CHRIS DIETERICH
Anybody who sold shares
Tuesday is guaranteed to receive cash for their trade by
Thursday, a day earlier than
any point during the past two
decades.
That’s because Tuesday
marked the first day that
trades in most financial products in the U.S. will be required to settle within two
business days, rather than the
three days in place since 1995.
The settlement process finalizes trades, transferring
money from buyers to sellers
in exchange for ownership of a
security.
In industry jargon, Tuesday
is the first day of the “T+2
era, which supplants “T+3.”
A large group of financial
firms and other market participants have pushed for the
shortened settlement cycle for
years.
They argue that risk is lessened for brokers and investors
alike when money moves more
quickly between buyers and
sellers. Since the global financial crisis nearly one decade
ago, the financial industry and
regulators alike aimed to reduce systemic risk within the
financial system. Shortening
the settlement period would
reduce the risk that one party
in a trade experiences financial
distress and is unable to complete settlement obligations,
industry participants say. It
also means that investors will
receive their money or shares
faster after making a transaction.
The Securities and Exchange Commission finalized
rule changes to facilitate the
shorter settlement cycle in
March.
The new settlement timeline applies to stocks, exchange-traded funds, corporate and municipal bonds,
among other financial products. Canada also is transitioning from a T+3 world to T+2,
aligning markets in North
America with others across the
Atlantic. Most European Union
member states harmonized
their settlement cycles to T+2
in 2014.
Dollar Falls on Doubts About Outlook for Rates
BY CHELSEY DULANEY
The U.S. dollar fell to its
lowest level against a basket
of currencies in over a year as
comments
CURRENCIES
from a Federal
Reserve official revived doubts about the
path for higher U.S. interest
rates.
The WSJ Dollar Index,
which measures the U.S. currency against 16 others,
dropped 0.4% to 85.30, its low-
est closing level since August
2016.
In a speech Tuesday, Fed
governor Lael Brainard said
the U.S. central bank should be
cautious about raising interest
rates amid the economy’s
“persistent failure” to reach
its 2% inflation target. Central
bankers and investors have
been puzzled by the recent
slowdown in U.S. inflation, a
potential obstacle to the Fed’s
plans for tightening policy.
Markets are now pricing in
just a 37% chance that the Fed
raises rates again this year,
down from 44% last week, according to CME Group Inc.
data.
Expectations that U.S. rates
will remain lower, compounded by political gridlock
in Washington, have driven
the dollar down 8.2% this year.
“About the only positive
things that can be said for the
U.S. dollar is that its tumble
over the past few months has
been severe,” Scotiabank analysts said in a research note.
“The U.S. dollar may have to
consolidate or correct before
additional, significant losses
can follow.”
Other Fed officials, including Federal Reserve Bank of
New York President William
Dudley, are scheduled to speak
this week.
The European Central Bank
and Bank of Canada also are
holding meetings this week.
Investors are searching for
clues about the central banks’
plans for paring back their
stimulus programs.
Meanwhile, investors con-
tinue to assess the impact of
the tensions over North Korea’s nuclear program.
South Korea warned this
week that North Korea appears to be preparing to test
another intercontinental ballistic missile, while the U.S.
said the regime is “begging for
war” after Pyongyang on Sunday set off its most powerful
nuclear bomb yet.
The Japanese yen has benefited from the tensions. The
dollar fell 0.8% against the yen
to ¥108.81.
B16 | Wednesday, September 6, 2017
THE WALL STREET JOURNAL.
MARKETS
Hurricane Irma Already Rattles Markets
Insurance stocks drop
again; possibility of
direct hit on Florida
raises futures prices
Traders were bracing for
another hurricane to hit the
U.S., sending insurance stocks
lower and driving up the price
of orange-juice futures.
The Category 5 storm, Hurricane Irma, raised severe
By Chris Dieterich,
Julie Wernau
and Leslie Scism
threats to islands in the Caribbean on Tuesday as it grew
into one of the most powerful
storms ever recorded over the
Atlantic Ocean.
Insurers, already grappling
with the damage from Hurricane Harvey, are now facing
the possibility of a direct
strike on Florida.
Shares of reinsurers, which
provide backup protection to
insurance companies to protect them against major disasters, posted some of the biggest declines in the S&P 500
on Tuesday.
Commodities
traders,
meanwhile, were attempting
to assess the potential impact
on crops in Florida or the Carolinas.
“We’re fresh on the past
week’s events in Texas, and
here’s a hurricane that could
hit the Carolinas,” said Bill
Nelson, senior economist at
Doane Advisory Services in St.
Louis. “No one wants to be
caught off guard a second
time.”
Florida is home to most of
the oranges used in U.S. juice.
Futures prices for frozen concentrated orange juice for November delivery rose 6.2% to
end at $1.45 a pound, the highest price for a most actively
traded contract since May 12.
The industry has already
struggled over the past decade
with crop damage from an in-
Email: heard@wsj.com
China’s Big
Banks Lack
Credibility
For China’s big banks,
business is looking better
than it has in years. Investors shouldn’t be fooled by
the act.
Midyear results for the
likes of Industrial & Commercial Bank of China and
Bank of China show China’s
regulatory crackdown has
had some success in whipping banks into shape. Interest income rose and asset
quality improved for all of
the Big Four banks. Under
pressure to clean up their
shadow-banking activities,
banks have reined in a profit
engine, noninterest income.
Still, going back to basics
isn’t proving simple. The
four banks earned a roughly
5% yield on new loans, while
their funding costs remain
lower than those of smaller
rivals. That should mean
easy profits, but the big
banks’ average return on assets was just over 1% in the
first half, partly thanks to
high operating costs and
partly because of still-high
loan-impairment charges.
Together with declining
fee income, poor profitability
is harming banks’ capital positions. With little to add to
retained earnings, bank capital levels are increasing
slowly. Their assets, meanwhile, are rising fast. The net
effect: falling capital ratios.
Banks’ bad-loan positions
seem to be improving, although, again, the good news
is qualified. Total loans have
been increasing faster than
bad loans. Big banks have
found creative ways to dispose of soured debt.
Chinese bank stocks are
up 17% this year and now
trade at 0.9 times book value
on average. Anyone hoping
they can push higher still
should take a closer look below the surface.
—Anjani Trivedi
Storm Clouds
Orange-juice futures soared and shares of reinsurance companies slumped as Hurricane Irma
gained strength in the Caribbean, potentially taking aim at the continental U.S.
Irma threatens to further damage the orange crop in
Florida, which has struggled from years of decline due
to diseased groves.
This year's cotton crop was expected to be the largest in 11 years
before Hurricane Harvey flooded harvested crops in Texas. Traders
are concerned that Irma could damage crops in the Carolinas.
Frozen concentrated orange-juice price
Most-active contracts
Cotton price
Most-active contracts
$1.45 a pound
$0.74 a pound
1.40
0.72
1.35
0.70
1.30
0.68
0.66
1.25
July
Aug.
Sept.
July
Aug.
Florida orange production
Cotton production*
250 million boxes
25 million bales
200
20
150
15
100
10
50
5
Sept.
0
0
2003
’05
’07
’09
Reinsurers were among
the worst performers in
the S&P 500 on Tuesday.
’11
’13
’15
’17†
2003
’05
’07
’09
’11
’13
’15
0%
–1
–2
▼0.8% since
previous close
Stock and index performance
–3
S&P 500
Everest Re Group
XL Group
’17 ’18†
–4
–5
▼5.8%
–6
–7
▼6.9%
–8
9:30 a.m. 10
11
*Twelve months ending July 31 †Estimate
Sources: CQG (prices); U.S. Agriculture Department (production); FactSet (reinsurers, S&P)
curable disease that causes
fruit to drop before it is ripe.
The U.S. Agriculture Department is expected to put out its
first
estimate
for
the
2017-2018 crop next month, after last year’s final estimate
was the lowest output since
1964.
Cotton traders were still
calculating the impact that
Hurricane Harvey had on
crops in Texas, the country’s
largest cotton-producing state.
Cotton for December delivery
rose 4.2% to close at 74.88
noon
1
2
3
4
THE WALL STREET JOURNAL.
cents a pound on the ICE Futures U.S. exchange.
In the insurance industry,
major household names such
as Allstate Corp. and Liberty
Mutual have sharply reduced
their market shares in Florida
over the past 15 years, as mea-
sured by the volume of insurance sold, state figures show.
Some of the largest home
insurers in the state are now
companies such as Fort Lauderdale-based Universal Insurance Holdings Inc., whose
shares fell 15% Tuesday, and
HEARD ON THE STREET
FINANCIAL ANALYSIS & COMMENTARY
United Technologies’ Heavy Load
United Technologies is
building an aerospace supermarket. The question is
whether anyone needs one.
By buying Rockwell Collins, United Technologies’
aerospace and jet-engine divisions will become a virtual
one-stop shop for building
an airplane, producing engines, cockpit gear, seats,
toilets, auxiliary power units
and landing gear. The company speaks about linking
these systems to create “connected airplanes,” though
airplanes are already among
the most connected devices
on the planet. Dividends
from further technological
leaps would seem to be some
way down the road.
Investors should worry
that the bigger rationales for
the deal are defensive. Becoming a nose-to-tail provisioner of airplane parts gives
United Technologies added
heft vis-à-vis its biggest customers, Airbus and Boeing.
It is an irony that United
Technologies rebuffed a 2016
approach by Honeywell In-
Grounded
Total-return performance
200%
S&P 500
Aerospace
& Defense
Index
150
100
50
United
Technologies
0
–50
2012 2013
2014
2015
2016
2017
THE WALL STREET JOURNAL.
Source: FactSet
ternational, partly on the
grounds such a big supplier
would upset relationships
with those same customers.
Bulking up, including raising
$14 billion in debt, could be
a way to forestall Honeywell
trying again and keeps attention away from the company’s slower-expanding Otis
Elevator and Carrier units.
The benefits for shareholders are less clear. United
Technologies is paying $30
billion including debt, almost
17 times Rockwell’s trailing
earnings before interest, tax,
depreciation and amortization when including the operations of B/E Aerospace,
which it acquired this year.
That deal was for less than
14 times, a price many investors thought was expensive.
The pretax cost savings
target of $500 million in
four years, taxed and capitalized, would almost justify
the roughly 30% premium
United Technologies is paying over where Rockwell
traded in the two months before news of the deal leaked
in early August. Trouble is,
some of that savings counts
the $160 million Rockwell
hoped to get with its integration of B/E Aerospace.
Assuming $60 million of that
is achieved before this deal
closes, then its forecast of
6% savings on Rockwell’s
sales shrinks to 5%.
United Technologies boss
Gregory Hayes reiterated
Tuesday that he thinks his
company’s shares trade below their intrinsic value. Yet
he is using them as currency
for the part of the deal not
paid in cash, while the company is canceling its buyback
program for the next few
years. The shares, already
badly trailing the market,
declined 5.7% Tuesday. They
suddenly have a new load
keeping them down.
—Alex Frangos
Clearwater-based Heritage Insurance Holdings Inc., which
dropped 17%.
State insurance regulators
require carriers to document
that they have the financial resources in place to properly
pay claims, and many rely
heavily on reinsurers for
backup protection.
No hurricane registering as
a Category 3 or stronger has
hit Florida since Wilma in
2005, meaning that Irma
threatens to put the reinsurance industry on the hook for
major Florida claims for the
first time in years.
The value of the insured
property in coastal areas of
Florida is about $3.2 trillion in
aggregate, according to an
analysis by catastrophe-modeling company AIR Worldwide.
Reinsurer Everest Re
Group Ltd. was off 6.9%, making it the worst-performing
stock in the S&P 500, and XL
Group Ltd. was down 5.8%.
Other reinsurers not included in the benchmark
dropped more, with Aspen Insurance Holdings Ltd. down
9.4% and Validus Holdings
Ltd. falling 8.8%.
Cruise-ship companies that
operate in the Caribbean were
also among the big decliners
in the S&P 500. Miami-based
Royal Caribbean Cruises Ltd.
tumbled 4.2%. Rival cruise operator Carnival Corp. declined
3.1%.
Shares of home-improvement companies climbed as
the threat from Hurricane
Irma grew.
Home Depot Inc. and
Lowe’s Cos. Inc. rose 1.4%
apiece.
Shares of other building
suppliers have catapulted
higher on the heels of two
strong storms. Beacon Roofing Supply Inc., based in
Herndon, Va., climbed more
than 17% over the nine trading
sessions ended Friday. The
stock rose another 2.4% Tuesday as the broader market
slumped.
WSJ.com/Heard
OVERHEARD
Investments of “passion”
are becoming less about the
investment and more about
the passion.
Returns from classic cars,
fine wines and the like have
been mediocre for a while.
Last year a portfolio of these
passion assets typically held
by the superrich appreciated
just 1.2%, according to Coutts,
a London-based private bank.
Since 2006, the average
annual return has been 5.3%,
net of costs, lagging behind
the stock market. Almost all
the money was made before
2012. Classic cars have fared
best, up 14% a year on average, but even these have lost
momentum, with prices down
10% in 2016.
At the other end of the
spectrum, pre-Impressionist
paintings have depreciated
4.8% a year.
It was always unrealistic
to expect your vintage Ferrari
to do better than a basket of
stocks in the long run.
All the more reason to enjoy driving it.
Want to Bet on Eurozone? Spain Is a Good Place to Start
One of the problems for
investors in Europe is that
there are many moving
parts: Spain is different from
Italy is different from Germany. But when the movement is in the right direction, that creates
opportunities. Spanish stocks
look like a rewarding way of
playing a stronger eurozone.
Spain was hit hard by the
eurozone crisis as a property
and banking bust unfolded.
Spanish gross domestic
product fell almost 10% from
its precrisis peak and unemployment surged to over
25%.
But the turnaround has
been notable. Spain is on
track to expand its economy
by 3% this year. The current
account has swung into sur-
Catching Up
Cumulative change in GDP
10%
Germany
France
Eurozone
Spain
5
0
–5
Italy
–10
’08
2010
’17
Source: Eurostat
plus from a deficit of close
to 10% of GDP precrisis.
Spain has seen a lot of deleveraging, too, with credit
to the nonfinancial sector
falling by some 50 percentage points of GDP since
2010, Bank for International
Settlements data show.
There should be more to
come. Spanish GDP has only
just regained its precrisis
level. And while joblessness
has fallen steadily, unemployment still stands at
17.1%, suggesting there is
plenty of slack to be used up
in the labor market.
Spanish stocks offer a
good way to bet both on domestic growth and on trends
within Europe. In particular,
bank stocks figure heavily in
the IBEX 35 and the MSCI
Spain indexes—with the latter available to investors via
the iShares MSCI Spain
Capped exchange-traded
fund. The European Central
Bank’s gradual exit from
ultraloose monetary policy
should support banks as
bond yields rise; heavy-
weights Banco Santander
and Banco Bilbao Vizcaya
Argentaria should benefit.
Further, there is a kicker
of exposure to potential
growth elsewhere, particularly in Latin America, although that carries risks
around politics and U.S.
trade policy.
Spanish stocks aren’t outright cheap—the IBEX 35
trades at 13.9 times forward
earnings versus 14.8 times
for the broader Euro Stoxx,
according to FactSet—but
they still look extremely attractive against eurozone
bonds, in which yields on
both government and corporate debt remain extraordinarily low. The bond rally
has run its course, but
shares have room to gain.
Spain bears some political
risk, with the question of independence for Catalonia
rumbling on and another
vote scheduled for October.
But the market is more likely
to be concerned about the
disruptive potential of politics in Italy, making Spain
look like a calmer bet.
The market has started to
catch on to these factors:
Spanish shares are beating
their French and German
peers this year and have
weathered the rising euro
better, but are well off their
2017 peak. With Europe
looking stronger than it has
for some time, it should be
more a case of fiesta than siesta for buyers of Spanish
stocks.
—Richard Barley
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