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The Wall Street Journal December 06 2017

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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
WEDNESDAY, DECEMBER 6, 2017 ~ VOL. CCLXX NO. 133
* * * * * *
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In U.S. Shift, Trump Poised to Declare Jerusalem Israel’s Capital
What’s
News
Business & Finance
ox’s talks to sell assets to
Disney are now advanced
and could be completed as
early as next week, but Comcast remains a contender. A1
F
Britain’s Cineworld is
buying Regal for $3.6 billion,
creating the world’s No. 2
movie-theater operator. B9
JAL has become the first
carrier to invest in Boom,
a startup seeking to build
a supersonic airliner. B5
Trucking companies are
boosting orders for new big
rigs, anticipating strong
shipping demand in 2018. B3
Nestlé agreed to buy Canadian vitamin firm Atrium,
expanding its offerings as
packaged-food sales slow. B3
TheSkimm, a news digest
aimed at young women, is
exploring a possible sale. B9
World-Wide
The Supreme Court
wrestled with competing visions of individual rights in
the case of a Colorado baker
who refused to make a wedding cake for a gay couple. A1
Deutsche Bank received
a subpoena earlier in the
fall from Mueller’s office
concerning people or entities affiliated with Trump. A1
Trump is poised to declare Jerusalem Israel’s capital and begin the process of
moving the U.S. Embassy. A11
TENSIONS RISE: President Donald Trump is set to reverse decades of U.S. policy Wednesday by recognizing Jerusalem as Israel’s capital and
starting the process of moving the U.S. Embassy to the holy city from Tel Aviv, a step that threatens to spark unrest across the Middle East. A11
Mueller Seeks Deutsche Bank Data
BY JENNY STRASBURG
Deutsche Bank AG received
a subpoena earlier in the fall
from U.S. special counsel Robert Mueller’s office concerning
people or entities affiliated
with President Donald Trump,
according to a person briefed
on the matter.
The subpoena requested
documents and data about accounts and other dealings tied
to relationships with Mr.
Trump and people close to
him, the person said.
The bank has lent more
Rep. Conyers resigned
from the House amid sexualmisconduct allegations against
the Michigan Democrat. A4
The GOP hierarchy is
fracturing over Moore, the
party’s controversial Senate nominee in Alabama. A4
A series of wildfires ripped
through California, burning
into urban neighborhoods
and forcing evacuations. A3
Kim Jong Un is a rational actor, U.S. officials believe, a conclusion that is
guiding their approach to
the North Korean leader. A8
Houthi forces rounded
up fighters loyal to Yemen’s
ex-president, consolidating
control of the capital. A11
Tillerson pressed European allies to help rein in
Iran’s missile program and
its regional activities. A11
The undocumented Mexican man acquitted of murder
in Kate Steinle’s death now
faces federal charges. A2
CONTENTS
Business News..... B3,
Crossword.............. A16
Heard on Street. B16
Journal Report.. R1-6
Life & Arts...... A13-15
Markets............. B15-16
Opinion.............. A17-19
Property Report B6-8
Sports........................ A16
Technology.......... B4-5
U.S. News............. A2-6
Weather................... A16
World News...... A8-11
>
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
than $300 million to entities
affiliated with Mr. Trump, according to public disclosures.
Ty Cobb, the White House’s
chief lawyer handling the Russia investigation, said bank records of Mr. Trump and his
family weren’t subpoenaed.
“Previous reports today
about subpoenas for financial
records relating to the president and his family are false,”
Mr. Cobb said.
Mr. Mueller is investigating
Russian meddling in the 2016
election, including flows of
cash tied to Russia and people
in Mr. Trump’s orbit, in a
deepening probe that has led
to charges against former advisers to Mr. Trump.
A Deutsche Bank spokesman said Tuesday that the
bank “takes its legal obligations seriously and remains
committed to cooperating
with authorized investigations
into this matter.” The subpoena was earlier reported by
German newspaper Handelsblatt.
Deutsche Bank’s relationship with Mr. Trump goes
back decades. Since 1998, the
lender has led or participated
in loans of at least $2.5 billion
to companies affiliated with
Mr. Trump, The Wall Street
Journal has reported. The financing helped Mr. Trump
build or purchase some of his
highest-profile projects, including in Washington, New
York, Chicago and Florida.
Deutsche Bank kept doing
business with Mr. Trump after
other banks pulled away, and
even after Deutsche Bank itself became embroiled in a
nasty legal battle over 2005
Please see PROBE page A6
Russia
Behind the Murdochs’ Sale Talks:
Is Banned Scale, Price and Family Dynamics
From 2018 Disney and Comcast’s strong bids come as family’s priorities shift
Olympics
The International Olympic
Committee suspended Russia
from the 2018 Winter Olympics for its alleged state-sponsored doping scheme at the
2014 games in Sochi, saying it
would permit some Russian
athletes to compete neutrally
by invitation only.
By Sara Germano,
Thomas Grove and
Joshua Robinson
no
Russia was banned from
the 2018 Winter Olympics
for alleged state-sponsored
doping at the 2014 games. A1
Cake Case
Muddies
Usual
Positions
In Court
WASHINGTON—Supreme
Court justices wrestled with
competing visions of individual
rights Tuesday, vigorously debating a legal collision between
a baker whose Christian faith
condemns same-sex marriage
and a state law requiring him to
sell wedding cakes without regard to sexual orientation.
The case was the first major
dispute to reach the high court
in the wake of its 2015 ruling
extending same-sex marriage
nationwide, forcing the justices
to evaluate that decision’s impact on private parties who,
typically for religious reasons,
remain opposed to the practice.
While federal law doesn’t explicitly protect gay couples
from discrimination, more than
20 states and hundreds of local
jurisdictions outlaw discrimination based on sexual orientation, much as they forbid bias
against customers for reasons
of race, sex, religion, disability
and other attributes.
Neither side’s attorneys
yielded ground during the arguments, which left little clear
other than the court’s recognition that both Jack Phillips,
the Lakewood, Colo., baker,
and the Denver couple he refused to serve, Charlie Craig
and David Mullins, have significant rights at stake.
Please see COURT page A4
ly
.
U.S. stocks pulled back
broadly, even as tech shares
rebounded. The Dow shed
109.41 points to 24180.64. B15
co Fo
m rp
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Dish said Ergen relinquished his role as CEO to
focus on the firm’s fledgling wireless business. B3
n-
A Senate panel approved
a plan to ease the rule book
for regional banks, advancing a regulatory rollback. B14
THOMAS COEX/AGENCE FRANCE-PRESSE/GETTY IMAGES
The tax overhaul moving
through Congress could have
big consequences for the
corporate-debt market. B1
YEN 112.60
BY JESS BRAVIN
AND BRENT KENDALL
Aetna’s CEO stands to
pocket roughly $500 million if the $69 billion deal
with CVS goes through. B1
UPS is struggling to handle a surge in shipments
from online shoppers, resulting in delivery delays. B1
EURO $1.1826
The ruling is an unprecedented penalty against a nation accused of drug cheating
in international sports. Some
Russian politicians immediately called for a boycott of
the Pyeongchang, South Korea,
Games, although the president
of the Russian National Olympic Committee apologized for
doping violations.
The decision also scrambles
the outlook for the Pyeongchang Games just two
months ahead of their opening. By suspending the Russian
Olympic Committee, the IOC is
punishing one of its most
prominent
medal-winning
powerhouses and stepping
headfirst into political tensions between Russia and the
West.
The sanctions signal the
IOC is taking a stronger position against doping. The penalties stem from a massive
doping fraud at the Sochi
Games, when Russian officials
allegedly carried out an elaborate scheme to infiltrate the
Olympic doping control lab,
swapping out urine samples
from Russian athletes who
were on an organized doping
program. The real samples
were replaced then with clean
urine samples taken before the
event.
Often accused of being
weak-kneed in dealing with
Please see RUSSIA page A11
Jason Gay: What do you
want from the Games?..... A16
For more than six deing behemoths Google
By Amol Sharma,
cades, media titan Ruand Facebook Inc., peoJoe Flint
pert Murdoch mostly
ple familiar with the
and Keach Hagey
was a buyer, rather than
family’s thinking say.
a seller. Not anymore.
While talks with DisIn October, Walt Disney Co. Chief Executive
ney are now advanced and could be completed
Robert Iger phoned Mr. Murdoch, the executive as early as next week, it isn’t the only conchairman of 21st Century Fox, to propose a pur- tender. Comcast is pursuing Fox assets, too,
chase that would hive off Fox assets valued at
and the cable giant’s chief executive, Brian Robsome $40 billion. Changes in the media landerts, met Mr. Murdoch at the New York Athletic
scape had altered Mr. Murdoch’s thinking. A
Club on Monday, people familiar with the situadeal could also clarify the family’s succession
tion say.
plans.
Mr. Murdoch’s most recent attempt at a big
21st Century Fox is worth $60 billion in
acquisition, Fox’s deal to pay $15 billion for the
stock-market value and is a global entertain61% stake in British pay-television company Sky
ment giant spanning movies, cable television
PLC that Fox doesn’t already own, has hit govand broadcasting. Yet the Murdochs are quesernment roadblocks. Some Fox executives are
tioning whether the company will be big
pessimistic about its chances, people familiar
enough in the years ahead to battle programwith the situation say.
ming distributors such as Netflix Inc., AmaMeanwhile, the power-sharing arrangement
Please see FOX page A12
zon.com Inc. and Comcast Corp., and advertis-
David Rockefeller’s Rolodex Reveals
A Secret History of the World
i
i
i
Bank executive filed 200,000 note cards
in 50 years; a who’s who of global elites
BY JOANN S. LUBLIN
Rockefeller Center for about
half a century.
POCANTICO HILLS, N. Y.—
“In the annals of CEO hisSome might say David Rocke- tory, the breadth and depth of
feller, a scion of America’s this record of contacts stand
greatest fortune and the vet- out,’’ said Nancy Koehn, a Hareran chief executive of Chase vard business professor and
Manhattan Bank, was a dedi- historian. “This is a man with a
cated networker
large, long reach.’’
long before the age
Mr. Rockefeller’s
of Facebook.
legendary Rolodex
That
would
was
a
closely
grossly understate
guarded trove of inhis horizons. Mr.
formation.
Now,
Rockefeller
renearly nine months
corded contact inafter his death at
formation along
101—and long after
with every meeting A standard Rolodex many of his conhe had with about
tacts have also
100,000 people world-wide on died—The Wall Street Journal
white 3-by-5-inch index cards. got a private peek.
He amassed about 200,000 of
Overall impression: The
the cards, which filled a cus- Rockefeller Rolodex collection
tom-built Rolodex machine. He embodies the ultimate expreskept the 5-foot high electronic sion of communication in the
device at his family’s suite of analog age. It provides a unique
Please see CARDS page A12
offices in New York City’s
GOP hierarchy fractures over
Moore’s Senate bid................ A4
After taxes, Republicans plan
pivot to welfare revamp..... A6
Conyers Resigns
After Calls to Go
J. SCOTT APPLEWHITE/ASSOCIATED PRESS
DJIA 24180.64 g 109.41 0.5%
HHHH $4.00
WSJ.com
Rep. John Conyers (D., Mich.)
resigned from Congress
Tuesday, after facing allegations
of sexual misconduct. A4
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IS LIVE.
Using live data, SAP HANA helps
the City of Buenos Aires monitor
and react to a complex network of
citywide sensors. So they can use
that data to plan for a better future.
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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A2 | Wednesday, December 6, 2017
* *****
THE WALL STREET JOURNAL.
© Verdura. All rights reserved.
U.S. NEWS
More Home Buyers Pay All Cash
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M O N DAY – F R I DAY 10A M – 6 P M • S AT U R DAY 11A M – 5P M
All-cash share of single-family
home and condo purchases for
selected price ranges
All Price Ranges
$400K to $750K
Under $100K
$2 Million Plus
80%
60
40
20
0
2005
’10
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Source: Attom Data Solutions
Some Sell High
To Make Deals
In Other Areas
[places like] California, Washington and Utah and they’re
bringing their cash to Idaho
and buying homes,” he said.
Housing inventories are so
low that buyers even in historically calm markets such as
Boise and Minneapolis are facing bidding wars, prompting
them to make all-cash offers.
Lindsay Ross, 28 years old,
of Boise, said she and her husband heard from agents that
cash buyers were “all over the
place” as they looked for another home in the area. They
lost out on three offers before
buying a home her husband
never saw because they had to
move so quickly.
They then turned around
and sold their house to a cash
buyer.
Cash sales are spreading
even to sleepier markets away
from the coasts, as middleclass buyers sell homes in San
Francisco or Portland and
move to cheaper areas.
More than 20% of homes
under $250,000 in the Boise
area sold for cash in October,
up from 15% a year ago, according to the Boise Regional
Realtors. Mike Brown, a realestate agent there, said he
sees a lot of out-of-state buyers. “People have sold their
home at all-time highs in
THE WALL STREET JOURNAL.
Cash deals are attractive to
sellers because they don’t
need to wait for a bank to
make a mortgage. Closings are
quicker, and risks are lower.
But many younger buyers
have a hard time coming up
with a down payment, much
less an all-cash offer.
“First-time buyers drive the
market, and if they are
blocked out of the market
then we are not building that
next generation of homeowners,” said Nela Richardson,
chief economist at Redfin, a
national brokerage company
based in Seattle.
Agents say the cash buyers
include investors, wealthy foreigners, downsizing baby
boomers. people moving from
pricey markets to cheaper
ones and younger buyers
spending gifts from parents.
The starter-home market is
especially tight. Average down
payments for lower-priced
homes have climbed by more
than a third over the past decade, while down payments
for higher-priced homes have
edged up only about 2%, according to data company CoreLogic. The average down payment for a lower-priced home
in September was about
$18,360, according to CoreLogic, up from about $16,470
the previous year.
As some buyers pool all of
their assets to make cash offers, however, they are finding
themselves strapped for cash.
Bank of America Corp. is
promoting a product for those
buyers, allowing them to take
out a loan of up to 80% of
their home’s value soon after
they purchase it in cash.
Ann Thompson, the bank’s
divisional sales executive for
Northern California, said executives saw that cash buyers
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Vee rd u r a
Meagan Freeman and her
boyfriend have been looking
for a midprice house in the Seattle area for six months but
keep running into a hurdle:
cash buyers swooping in and
snatching up their properties.
It has happened three times,
she said, most recently two
weeks ago. The couple bid on a
home in an unfashionable suburb they believed was a sure
bet in the midst of a dreary Seattle November, when the market typically is slow.
Instead, the 27-year-old
said, a cash buyer won out yet
again.
“It is definitely discouraging,” she said.
Five years after the housing
market hit rock bottom, mortgage credit is finally returning
to the healthy levels of the
early 2000s, before the boombust cycle began. But all-cash
deals remain well above normal levels, even as prices in
many markets have pushed to
record highs.
In all, 28.8% of U.S. home
sales this year have been allcash transactions, according to
Attom Data Solutions, a data
provider. That was down from
the peak of more than 40% in
2011 and 2012, when investors
were buying homes at a furious
pace to turn into rentals. But
the percentage of cash deals
stands much higher than the
20% or so common in the early
2000s, and it has edged up
from 28.6% last year, according
to Attom.
Economists said the decision to tie up so much liquidity
in a home is puzzling at a time
when mortgage rates are near
record lows.
House Money
no
CHRIS URSO/TAMPA BAY TIMES/ZUMA PRESS
n-
Tampa Zoo Welcomes a New Baby
MINI ME: A baby pygmy hippopotamus followed its mother, Zsa Zsa, at Lowry Park on Tuesday.
The baby, born on Dec. 1, hasn’t been named yet because the zoo’s handlers don’t know the sex.
U.S. WATCH
IMMIGRATION
Arrests Rise, but
Deportations Decline
The Trump administration
ramped up arrests of undocumented immigrants in 2017, but
the number of deportations fell
below even the lowest level recorded during the Obama administration, the government said
Tuesday.
That is largely because the
number of people caught crossing the border illegally plummeted to the lowest level since
1971, according to the Department of Homeland Security,
meaning there were fewer people to deport. At the same time,
undocumented immigrants ar-
rested inside the U.S. were
caught in a growing backlog of
cases at the immigration courts,
slowing deportations.
In the fiscal year that ended
Sept. 30, the Immigration and
Customs Enforcement agency removed 226,119 people from the
country, including those just
caught crossing the border and
people living in the country. That
was down 6% from fiscal 2016,
and well below the record year of
removals during the Obama administration, in 2012, when nearly
410,000 deportations were tallied.
As of October, there were
630,000 cases pending in immigration courts, and some people
have their hearings scheduled for
years in the future.
—Laura Meckler
THE WALL STREET JOURNAL
(USPS 664-880) (Eastern Edition ISSN 0099-9660)
(Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241)
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were continuing to make up a
significant chunk of the market because of tight competition and that the bank was
missing out on that business.
“Oftentimes, it’s people
who have lost out on two or
three bids...and they say, ‘By
golly, I’m going to make a really good bid this time,’ ” she
said.
The online lender Better
Mortgage Corp. is testing a
product that would underwrite
mortgages within a day, allowing would-be buyers to better
compete against cash offers.
Chief executive Vishal Garg
started the company after he
got outbid for his first home
by a cash buyer several years
ago. The other buyer offered
8% less, Mr. Garg said, but the
seller didn’t want to wait the
weeks that it would take a
typical bank mortgage to
close.
ly
.
BY LAURA KUSISTO
AND CHRISTINA REXRODE
HARVARD
Policy Seeks to End
Single-Gender Clubs
Harvard University said it was
going ahead with its plan to bar
members of unsanctioned singlegender social groups, including
fraternities, sororities and final
clubs, from leadership positions
in campus organizations and
from receiving formal endorsements for prestigious awards
such as the Rhodes Scholarship.
The decision comes after more
than a year of deliberation. The
saga laid bare conflicting views
on what role administrators
should play in policing social activities, how to make sure those
activities are welcoming to a diverse student body, and whether
the prevalence of groups in
which men serve as gatekeepers
at parties lead to increased instances of sexual assault.
—Melissa Korn
Acquitted
Immigrant
Faces U.S.
Charges
BY ALICIA A. CALDWELL
An undocumented Mexican
national who was acquitted of
murder in the death of a San
Francisco woman now faces federal charges in connection with
the case.
A federal grand jury indicted Jose Ines Garcia Zarate
Tuesday on charges of being a
felon in possession of a firearm
and ammunition and of being an
illegally present immigrant in
possession of a firearm and ammunition.
His attorney couldn’t be
reached for comment Tuesday
night.
Mr. Garcia Zarate is a repeat felon who had been deported five times.
A San Francisco jury acquitted him last week of murder and
manslaughter in the fatal shooting of 32-year-old Kate
Steinle. The verdict drew
broad condemnation from the
White House and Republican lawmakers around the country after he was convicted of
only a state weapons charge.
President Donald Trump described the verdict as “disgraceful” and said it was more evidence that a wall was needed at
the Mexican border.
Mr. Garcia Zarate faces a
maximum of 10 years in prison if
convicted of the new federal
charges, according to the Justice
Department. He is currently in
custody in California awaiting
sentencing on his weapons conviction.
As a candidate, Mr. Trump
routinely cited Ms. Steinle’s
death and the criminal case
against Mr. Garcia Zarate as
part of his pledge to crack
down on “sanctuary cities”—
jurisdictions that limit cooperation with federal immigration
agents.
CORRECTIONS AMPLIFICATIONS
The Senate and House Republican tax bills both allow a
$10,000 deduction for property taxes but no break for
state and local income or sales
taxes. Some California Republicans who voted for the first
House bill will want concessions on deductions for in-
come taxes on the second
round. In some editions Monday, a U.S. News article about
some of the differences between the tax bills omitted the
second sentence, failing to
make clear the issue that will
need to be reconciled as the
bills move forward.
Readers can alert The Wall Street Journal to any errors in news articles by
emailing wsjcontact@wsj.com or by calling 888-410-2667.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A3
* * * * * *
NOAH BERGER/ASSOCIATED PRESS
©T&CO. 2017
U.S. NEWS
Fires Spread in California
BY IAN LOVETT
AND NOUR MALAS
LOS ANGELES—For the second time in as many months, a
series of wildfires ripped
through California, burning into
urban neighborhoods that had
not been hit by fire for decades
and forcing tens of thousands
of people to flee.
The fires started late Monday, and by Tuesday afternoon
more than 150 buildings had
been damaged or destroyed
across Southern California.
Three fires had consumed
more than 50,000 acres.
At least 27,000 people had
been evacuated. Schools across
Ventura County, north of Los
Angeles and hit hardest by the
flames, were closed. Vista del
Mar Hospital, a psychiatric facility in Ventura, was torched
after patients were evacuated
Monday night.
Gov. Jerry Brown declared a
state of emergency in both
Ventura and Los Angeles counties Tuesday. Strong seasonal
gusts, known as Santa Ana
winds, blasted the region and
spread the flames, threatening
to ignite still more of the dry
brush. The winds were expected to die down Wednesday
but pick up again by Thursday.
On Monday night, the
Thomas Fire, as one of the
blazes is called, fueled by wind
gusts of at least 50 miles an
hour, raced from the rural hills
of Santa Paula into the city of
Ventura, where it destroyed
much of the Ondulando neighborhood.
Several Ventura County officials said that in more than
25 years, they had never seen
the urban areas of the county
burn. By Tuesday afternoon,
that was no longer the case.
“We see fires in our wild areas, but not in our cities,” said
Linda Parks, a county supervisor. “The sparks and these kinds
of Santa Ana winds can end up
sparking areas in the cities.
That’s a huge concern, and we
haven’t really had that before.”
CALATRAVA | REF. 5119R
THE PATEK PHILIPPE BOUTIQUE AT FIFTH AVENUE AND 57TH STREET
ON THE MEZZANINE 212 605 4036
co Fo
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Thousands evacuate
as Santa Ana winds
fan three blazes in
Los Angeles area
PATEK PHILIPPE
ly
.
The remains of an apartment complex in the city of Ventura, Calif., on Tuesday. Three wildfires have consumed more than 50,000 acres.
Atlanta Vote Goes Down to Wire
the world’s busiest airport by
traffic.
Ms. Bottoms is calling for
more public-safety cameras
and security patrols, bringing
reliable transit to more neighborhoods and a $1 billion public-private fund to help expand
affordable housing in the city.
Her campaign benefited
from Mr. Reed’s backing in an
initially crowded race of about
The next mayor will
face a host of issues,
including the effects
of gentrification.
a dozen candidates. She received 26% of the votes cast in
the initial Nov. 7 election, while
Ms. Norwood received 21%.
Ms. Norwood is running on
a platform that calls for increased police pay to boost retention, added bus routes to
help workers come to the city
and measures like a propertytax freeze to help older people
stay in their homes in gentrifying areas.
Supporters of Ms. Bottoms
have worked to paint Ms. Norwood as a Republican, which
she denies, and supporters of
Ms. Norwood have repeatedly
mentioned a corruption scandal involving the Reed administration, though Ms. Bottoms
isn’t implicated in the case.
Atlanta has had a black
mayor since 1974, the year
Maynard Jackson took office—
the first black person to become mayor of a major Southern city since Reconstruction.
White Mayor Sam Massell,
elected in 1969, lost to Mr.
Jackson in a 1973 contest.
The city, which has been majority black since at least 1970,
has seen an explosion in growth
with the population rising to
more than 470,000 in 2016
from 420,000 in 2010, according to the U.S. Census Bureau.
Meanwhile, the city’s black
population has shrunk from
61% in 2000 to 50% in 2016,
while the white population has
risen to 38% from 31%.
—Paul Overberg
contributed to this article.
no
ATLANTA—Voters here went
to the polls Tuesday to choose a
new mayor from between two
city councilwomen in a heated
race that was too close to call.
Mary Norwood, 65 years old,
is running against Keisha Lance
Bottoms, 47, who has the backing of outgoing Mayor Kasim
Reed, a vocal Democrat. While
the mayor’s post is technically
nonpartisan, Ms. Bottoms identifies as a Democrat, while Ms.
Norwood is an independent
who in the past has voted for
Republicans and Democrats.
With all precincts reporting
early Wednesday, Ms. Bottoms
was leading by just 759 votes,
according to the Associated
Press.
If Ms. Norwood wins, she
would be the first white mayor
elected in the majority-black
city since 1969. Ms. Bottoms is
African-American.
Kameron Corvet, 30, an African-American musician living
in the Buckhead neighborhood,
said he was uncomfortable
with Ms. Norwood, believing
she wasn’t clear enough about
her positions on issues like racial profiling and gentrification. He also didn’t like that
she had voted Republican in
the past. “That’s a big deal to
me,” he said.
Dinah Harrison, 67, a white
woman from the Morningside
neighborhood, said she voted
for Ms. Norwood because she
is fed up with the current administration, which has been
dogged by a federal corruption
investigation.
The next mayor will face a
host of issues in the growing
city, including the effects of
gentrification in many neighborhoods. The city has been
growing in recent years as migrants from all over move to
the area where jobs are relatively plentiful and the cost of
living is relatively low.
While the city of Atlanta is
only a portion of the metro
area, it is the heart of the region and home to the headquarters of leading companies,
including Coca-Cola Co. and
Delta Air Lines Inc.
The city government controls Hartsfield-Jackson Atlanta International Airport,
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A4 | Wednesday, December 6, 2017
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THE WALL STREET JOURNAL.
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U.S. NEWS
Sexual-misconduct
accusations end his
half-century tenure;
2 relatives seek seat
called on Mr. Conyers to resign last week, putting pressure on the Detroit-area lawmaker first elected in 1964.
Calling it a retirement, Mr.
Conyers, 88 years old, told a
Detroit-area radio station on
Tuesday that he was leaving
Congress “today” and endorsed his son to succeed him.
Mr. Conyers last month
stepped down from his post as
the top Democrat on the
House Judiciary Committee
while an ethics panel investigated the allegations. He denied the allegations of misconduct, saying “they aren’t
accurate.”
“We take these in stride,”
he said of the allegations.
“This goes with the issue with
politics, the game of politics,
which we’re in. We take what
BY NATALIE ANDREWS
WASHINGTON—Rep. John
Conyers, the longest-serving
current member of the House,
resigned from Congress on
Tuesday, after facing calls to
step down over allegations of
inappropriate behavior toward
female staff members.
Multiple former staffers
have accused the Michigan
Democrat in the past two
weeks of sexual misconduct.
Both House Speaker Paul Ryan
(R., Wis.) and House Minority
Leader Nancy Pelosi (D., Calif.)
happens, we deal with it, we
pass on and move on.”
Mr. Conyers’s replacement
will be elected by the district’s
voters on a date chosen by
Michigan’s secretary of state.
Because all seats in the House
of Representatives are up for
election next year, the state
could use dates for the midterm
election to hold primary and
general elections to fill the seat.
By mid-Tuesday morning,
the race for Mr. Conyers’s seat
promised to be a family affair:
After the congressman endorsed his son John Conyers
III, 27, his great-nephew Ian
Conyers, 29, a state senator,
said he was running.
Seen as an icon of the civilrights movement, Mr. Conyers
co-founded the Congressional
Black Caucus in 1969 and spon-
ANDREW HARNIK/ASSOCIATED PRESS
Rep. Conyers Resigns Amid Allegations
Rep. John Conyers
sored a bill to establish the
Martin Luther King Jr. Day holiday. He is one of seven people
to serve in Congress for at least
50 years, and the only AfricanAmerican to do so.
“Congressman Conyers has
served in the Congress for
more than five decades, and
shaped some of the most consequential legislation of the
last half century,” Mrs. Pelosi
said. “But no matter how great
the legacy, it is no license to
harass or discriminate.”
Pramila Jayapal, a freshman
Washington congresswoman
who was the second Democrat
to call for Mr. Conyers to resign last month, said his status
as a civil-rights leader didn’t
preclude the need for accountability among Democrats on
the issue of sexual harassment.
“I think that we lose our moral
authority if we also don’t call
out those we love who have
done things that are bad,” she
said.
Last week Marion Brown, a
member of the Michigan Dem-
ocrat’s staff, described behavior over her 11-year tenure
with his office during which
Mr. Conyers repeatedly invited
her to hotel rooms and
touched her inappropriately.
Other women have accused
him of inappropriate touching
and other misbehavior, including appearing in his underwear during work.
In announcing his retirement, Mr. Conyers becomes
the first politician to leave office over allegations of sexual
misconduct this year.
Other members of Congress
face allegations of sexual harassment and calls to resign, as
heightened focus on the issues
of sexual and workplace harassment have roiled industries
from the business community
to the media to Hollywood.
WASHINGTON
WIRE
COURT
DIPLOMACY
Ambassador Nominee
Hits Snag in Congress
K.T. McFarland’s nomination to
be the next U.S. ambassador to
Singapore appeared to be in jeopardy after lawmakers questioned
whether she told the truth to the
Senate Foreign Relations Committee in written testimony this year.
Ms. McFarland said she was
“not aware” of former national
security adviser Michael Flynn’s
contacts with Sergey Kislyak,
then the Russian ambassador.
Mr. Flynn pleaded guilty last
week to lying to the Federal Bureau of Investigation about the
conversations.
The conversations are central
to a criminal investigation being
conducted by Special Counsel
Robert Mueller into whether
there was inappropriate contact
with Moscow.
Ms. McFarland and a White
House spokesman didn’t respond
to requests for comment.
—Byron Tau
ly
.
co Fo
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CHIP SOMODEVILLA/GETTY IMAGES
David Mullins, left, and Charlie Craig, in Washington on Tuesday, filed a complaint in 2012 after a baker refused to sell them a wedding cake.
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cause “other good bakery
shops” presumably would welcome business from engaged
couples of the same sex.
The dispute arose in 2012,
when Messrs. Craig and Mullins
came to Mr. Phillips’s Masterpiece Cakeshop, only to be
turned away within moments of
expressing their interest in a
wedding cake. The couple filed
a complaint with the Colorado
Civil Rights Division, where an
administrative law judge and
then a seven-member commission found the bakery must offer wedding cakes to same-sex
couples on the same terms as
other customers.
When a state appellate court
upheld the commission’s decision, Mr. Phillips stopped selling wedding cakes altogether.
The case poses several levels of legal questions, starting
with whether baking a custom
wedding cake counts as
speech under the Constitution.
Kristen Waggoner, an attorney with the advocacy group
Alliance Defending Freedom
that represented Mr. Phillips,
painted her client as an artist
with expressive rights equal to
that of any sculptor or painter.
Mr. Phillips would have no
choice but to sell an off-theshelf cake to a gay couple but
he can refuse to bake a cake to
order, she contended. The difference, she said, was that “his
speech has been completed”
when the cake is placed on the
retail rack.
David Cole, an American
Civil Liberties Union attorney
representing Messrs. Craig and
Mullins, argued that siding with
the baker would undermine
broad antidiscrimination laws,
including those passed to protect African-Americans.
Chief Justice John Roberts
didn’t buy it.
“The racial analogy obviously is very compelling, but
when the court upheld samesex marriage in [2015], it went
out of its way to talk about the
decent and honorable people
who may have opposing
views,” said Chief Justice Roberts, who dissented from that
opinion. “And to immediately
lump them in the same group
as people who are opposed to
equality in relations with respect to race, I’m not sure that
takes full account of that concept.”
That may be so, Mr. Cole
said, but the 2015 decision also
“did not say that businesses
who make a choice to open
themselves to the public can
then turn away people because
they are gay and lesbian.”
A decision in the case is expected by June.
—Louise Radnofsky
contributed to this article.
OHIO
Ex-CFPB Boss Cordray
Running for Governor
Richard Cordray, the former
chief of the Consumer Financial
Protection Bureau, said he is
running for governor of Ohio.
Mr. Cordray, 58 years old, said
he is joining the Democratic race
to succeed Republican Gov. John
Kasich, who faces term limits
and is stepping down in January
2019.
The announcement followed
Mr. Cordray’s resignation as
CFPB director on Nov. 24.
Mr. Cordray, an appointee of
former President Barack Obama,
encountered criticism from congressional Republicans and officials in President Donald Trump’s
administration.
—Yuka Hayashi
Trump, Senate GOP Divided on Moore
BY JANET HOOK
The GOP hierarchy is fracturing over the party’s controversial Senate nominee in Alabama, with the Senate
campaign committee continuing to withhold support for Roy
Moore despite President Donald Trump’s decision to endorse him.
Sen. Cory Gardner (R.,
Colo.), chairman of the National
Republican Senatorial Committee, told reporters Tuesday that
there was no change in the position of the panel, which provides fundraising and other
campaign assistance to Senate
nominees. Its position “will not
change,” Mr. Gardner said.
The Senate panel and the
Republican National Committee
had ended joint fundraising
agreements with the Moore
campaign last month after the
emergence of multiple allegations of sexual misconduct with
minors when he was in his 30s.
The RNC restored its support
after Mr. Trump’s Monday endorsement.
Mr. Moore has denied the allegations.
Now, polls suggest he may
weather the scandal and win
the special election Dec. 12 to
succeed Jeff Sessions, who left
to become attorney general.
Some Republicans are rallying
to his support or softening
their tone, but others are unmoved in their opposition to
the nominee.
Sen. Jeff Flake (R., Ariz.), a
DANIEL ACKER/BLOOMBERG NEWS
n-
think that an affront to the gay
community?”
“I would not minimize the
dignity interests to Mr. Craig
and Mr. Mullins one bit, but
there are dignity interests on
the other side here, too,” Mr.
Francisco said.
When Frederick Yarger, the
Colorado solicitor general, took
the lectern, Justice Kennedy upbraided the state with equal
force. “Counselor, tolerance is
essential in a free society, and
tolerance is most meaningful
when it’s mutual,” he said. “It
seems to me that the state in its
position here has been neither
tolerant nor respectful of Mr.
Phillips’s religious beliefs.”
Where Justice Kennedy
questioned Mr. Francisco over
the possibility of a nationwide
campaign pressuring bakers to
refuse service to gay couples, he
told Mr. Yarger that “accommodation is quite possible” be-
no
Continued from Page One
In a nod to the complexity of
the case, several justices challenged lawyers representing the
side they were expected to sympathize with.
Justice Neil Gorsuch, a Donald Trump appointee championed by conservatives, suggested that the administration’s
argument favoring Mr. Phillips
could open the door to wider
discrimination. And liberal Justice Stephen Breyer voiced concern that Colorado had been too
cavalier in its treatment of the
vendor’s religious views.
But empathy rarely is
enough to move justices off
their ideological ground, leaving
the spotlight on Justice Anthony Kennedy, the maverick
conservative who embodies the
legal conflict within the case.
Over the past two decades,
Justice Kennedy has joined, and
led, the court’s liberal wing in
expanding gay rights, culminating in a 2015 decision extending
same-sex marriage nationwide.
But Justice Kennedy also has
joined fellow conservatives in
easing the strict separation of
church and state that had been
charted by precedents dating
from the 1960s.
On Tuesday, he pressed both
sides toward the uncomfortable
extremes their arguments could
portend.
U.S. Solicitor General Noel
Francisco, making his first argument as the Trump administration’s high-court advocate, suggested that regardless of
discrimination laws, the First
Amendment’s free-speech guarantee should allow businesses
to reject any customer seeking
their product or services for “an
expressive event like a marriage
celebration to which they’re
deeply opposed.”
“If you prevail, could the
baker put a sign in his window,
‘We Do Not Bake Cakes for Gay
Weddings’?” Justice Kennedy
asked. “And would you not
The GOP Senate campaign committee won’t help Roy Moore.
vocal critic of Mr. Moore and
Mr. Trump, put money where
his mouth is Tuesday: He wrote
a $100 check to the Democratic
candidate in the race, former
U.S. Attorney Doug Jones, with
a notation “For: Country over
Party.”
A loss in the election would
narrow the GOP’s Senate majority to just 51-49, and Mr.
Trump has emphasized the
need to hang on to Republican
seats. In comments Tuesday at
the White House, Mr. Trump
said of Mr. Moore: “I think he’s
going to do very well. We don’t
want to have a liberal Democrat
in Alabama, believe me.”
Former White House adviser
Steve Bannon appeared at a
rally with Mr. Moore on Tuesday night in Fairhope, Ala.,
where they spent more time attacking the Republican establishment than Mr. Jones.
“They don’t want me up
there,” Mr. Moore said of GOP
leaders in Washington. “They
would rather have a Democrat
there than me in the Republican Party.”
Mr. Bannon cast the race as
a referendum on Mr. Trump
and his agenda. “The whole nation and the entire world are
watching,” he said.
Mr. Trump is holding a rally
Friday night in Pensacola,
Fla.—not expressly for Mr.
Moore but with a message that
could be heard by many of his
voters. Pensacola is about 12
miles from the Alabama state
line and shares a media market
with Mobile, Ala., one of the
state’s largest cities.
The RNC reversal will provide a last-minute $170,000
cash infusion to the Alabama
GOP, which can use the money
for get-out-the-vote efforts,
mailing or digital advertising,
an RNC official said.
The $11.8 million raised
by Mr. Jones as of Nov. 22 is
more than twice as much as Mr.
Moore raised, including money
he raised for a long contested
GOP primary.
The continuing NRSC boycott deprives the campaign of
fundraising help it would have
gotten under their now-defunct
joint fundraising agreement.
The different policies of the
two GOP committees reveals a
continuing division within the
party: The Senate committee
works closely with Senate Majority Leader Mitch McConnell
(R., Ky.), who has often been at
odds with President Trump,
while the RNC is essentially a
political arm of the White
House.
RNC Chairwoman Ronna
McDaniel was told by the White
House late Monday to resume
support for the Moore campaign just hours after Mr.
Trump endorsed Mr. Moore in
Twitter messages and a personal phone call to the candidate, an RNC official said. “The
president says jump and the
RNC jumps,” the official said.
The Republican tide is turning after weeks of condemnation of Mr. Moore, including
threats by Messrs. McConnell
and Gardner to seek to expel
him from the Senate if he won.
With polls showing that Mr.
Moore may yet win the race,
many Republicans are softening
their tone.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A5
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A6 | Wednesday, December 6, 2017
* *
THE WALL STREET JOURNAL.
U.S. NEWS
After Taxes, Republicans Pivot to Welfare
Trump and GOP
lawmakers set to kick
off fight to revamp
social programs
Speaker Paul Ryan, above with his ‘A Better Way’ plan, and other GOP lawmakers have been pushing for changes to welfare programs.
Californians Push
To Keep Deduction
itemized deduction for property taxes.
That property-tax break was
especially important to New
York and Illinois Republicans
who voted for the House bill.
But it is less useful in California, where property taxes are
limited and income taxes are
more important.
California Republicans would
like the $10,000 cap to be
higher. And they want at a minimum to let taxpayers deduct
$10,000 against either property
or income taxes, said Rep. Mimi
Walters (R., Calif.).
“I am strongly in favor of
making sure we have some
sort of fix because I feel it’s
very important to give that
flexibility,” said Ms. Walters,
who voted for the House bill.
She said she didn’t know how
much such a fix would cost
and didn’t know whether she
would vote for the final version
of a tax package without
something new.
A $10,000 itemized deduction wouldn’t be used by everyone in those states. Taxpayers
would likely claim it only if it
helped their total itemized deductions, including mortgage interest and charitable donations,
get over the new higher standard deduction of about
$12,000 for individuals and
$24,000 for married couples.
—Richard Rubin
and Siobhan Hughes
head of the conservative
House Freedom Caucus, has
argued in recent weeks that
the issue is one of the most
winning ones with Mr.
Trump’s voters and should
take center stage next year.
He said he and fellow con-
servative Rep. Mark Meadows
(R., N.C.) had made a pitch to
the president to pursue welfare as an issue in a meeting
in the early summer.
Democratic lawmakers have
indicated they are ready for a
fight, in which they will argue
proposals to change assistance
programs are a sign of misplaced priorities by Republicans who favored the rich in
the tax overhaul.
“Republicans are already
saying ‘entitlement reform’
and ‘welfare reform’ are next
up on the docket,” said Sen.
Ron Wyden (D., Ore.) in a Senate speech. “But nobody
should be fooled—that’s just
code for attacks on Medicaid,
on Medicare, on Social Security, on anti-hunger programs.
The story will be that America
ly
.
WASHINGTON—Though the
House and Senate have voted
to repeal the deduction for
state income taxes in Republican tax-overhaul plans, it isn’t
dead yet.
California Republicans are
pushing for an income-tax deduction in the final tax bill being worked out by lawmakers in
a House-Senate conference
committee on tax legislation.
“There’s a lot of things that
Californians are working on and
why we said we’d move the
process forward, looking to be
able to make those fixes,”
House Majority Leader Kevin
McCarthy (R., Calif.) told reporters on Tuesday.
In November, 11 of the 14
California Republicans in the
House voted for the tax bill;
New Jersey and New York GOP
members, with similarly high
state taxes, were much more
willing to vote no. The House
will need to vote again, and Republicans need 217 votes to
guarantee passage if no Democrats vote for the bill.
The House and Senate bills
both repealed the deductions
for state and local income and
sales taxes, using that money
to lower individual tax rates.
They also preserved a $10,000
co Fo
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WASHINGTON—As Republicans near the finish line on a
long-sought tax overhaul,
President Donald Trump has
committed them to taking up a
welfare-revamp fight next.
Mr. Trump has repeatedly
said he is interested in kickstarting a debate around
means-tested social programs,
with allies seeing significant
political rewards from taking
up the issue even without a
clear-cut goal.
“Does anyone want welfare
reform?” Mr. Trump asked, to
applause, at a speech in Missouri last week. “And infrastructure. But welfare reform,
I see it, and I’ve talked to people. I know people that work
three jobs and they live next
to somebody who doesn’t
work at all.…So we’re going to
go into welfare reform.”
The president didn’t offer
specifics about which of the
dozens of welfare programs he
was seeking to change, or how.
But congressional Republicans
who have been pushing him
for months to pursue the issue
have
proposed
layering
tougher work requirements on
programs such as food stamps,
which are used by around 43
million Americans, and Temporary Assistance for Needy
Families, which is received by
around 3.5 million people.
Such proposals have been
floated in House Speaker Paul
Ryan’s “A Better Way” plan,
which included a broader call
to review the ways in which
welfare programs interact, as
well as bills from lawmakers
such as Rep. Jim Jordan (R.,
Ohio), who also has proposed
tallying spending on all welfare programs.
A spokesman for Mr. Ryan
said the goals for 2018 would
be set at a conference retreat
in January. But Mr. Jordan, a
GARY CAMERON/REUTERS
BY LOUISE RADNOFSKY
can’t afford these programs.”
Mr. Trump also has signaled his intention to simultaneously pursue infrastructure
and a renewed effort to overturn the Affordable Care Act
after any tax overhaul is complete. His advisers have made
clear they are ready to move
ahead on welfare.
A draft executive order has
been prepared during the past
two months for Mr. Trump to
sign, at the president’s request, said Paul Winfree, Mr.
Trump’s domestic policy council deputy at a November forum of the Heritage Foundation, a conservative think
tank.
“It’s something that excites” Mr. Trump, who often
changes the topic to discuss it
in meetings, said Mr. Winfree.
“We will end up pivoting to
welfare very quickly.”
The order is expected to lay
out broad principles for an
overhaul of some or all of the
federal programs that provide
government aid to low-income
people, Mr. Winfree said. The
order also would include instructions for federal agencies
to propose changes to the particular programs they oversee.
The president’s budget, expected in February, could include further details about
his aims on a welfare overhaul
and outline a cross-government approach, a senior administration official said.
Some of the programs with
the smallest political constituencies, such as state grants for
the Temporary Assistance for
Needy Families programs,
present few official savings in
government spending because
they are already capped. By
contrast, large programs, such
as unemployment compensation or food stamps could trigger bigger political fights.
Democrats, in particular,
are expected to quickly counter that much of what is considered welfare already comes
with steep requirements, and
that the beneficiaries to whom
the requirements don’t apply
are typically the elderly, disabled, or children.
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Continued from Page One
loans worth more than $600
million to build the Trump International Hotel and Tower
in Chicago. After Mr. Trump
missed loan payments in
2008, he and Deutsche Bank
sued each other. They settled
out of court in 2009.
About that time, Deutsche
Bank’s
investment
bank
soured on the relationship,
people close to the matter say.
But the lender’s private-banking unit stepped in and extended more than $300 million in loans to Trump entities
over several years, according
to public disclosures and people close to the bank.
Mr. Trump offered personal
guarantees for large portions
of the Deutsche Bank loans.
Those personal guarantees
have factored into months of
internal discussions among
bank lawyers and executives
about the implications of a default, were one to happen, according to people familiar
with the discussions. One issue is the thorny prospect of
pursuing a high-profile elected
official for payment, and one
with potential sway over ongoing investigations or other
decisions that could affect
Deutsche Bank, the people say.
Dan Stein, former chief of
the criminal division at the
Manhattan U.S. attorney’s office, said the special counsel’s
subpoena of Deutsche Bank
signals one of two possible directions for the broader investigation.
“Either it means they’re going beyond the narrow question of election interference,”
Mr. Stein said of Mr. Mueller’s
team. Or it means the question of election interference
may now somehow involve the
transfer of funds to the president or his family or inner circle, he said.
Mr. Trump has called the
special counsel’s investigation
a “witch hunt,” and Moscow
has denied meddling in the
election.
Michael Caputo, a former
Trump campaign adviser, said
in an interview that the
Deutsche Bank subpoena suggests the special counsel investigation is now veering
into a probe of Mr. Trump’s
private business dealings. Re-
JOSHUA ROBERTS/REUTERS
PROBE
Special Counsel Robert Mueller, right, on Capitol Hill in June.
Investigation Incurs
Costs of $3.2 Million
Special Counsel Robert Mueller’s office spent $3.2 million in
just over four months as it investigated alleged Russian meddling in the 2016 elections and
potential links between Moscow
and the Trump campaign.
The office disclosed its expenditures from May 17 through
Sept. 30 in a report posted
Tuesday to the Justice Department website. The report said
the special counsel’s office spent
$1.7 million on salaries and benefits, of which $1.2 million was
reimbursed to the Justice Department for employees on loan
to the investigation.
The report provided little insight into the direction of Mr.
Mueller’s investigation, but the
filing underscored the special
counsel’s role as a largely independent actor within the Justice
Department. Only discrete organizations within the department are required to file such
reports.
Mr. Mueller’s office spent
more than $220,800 on relocating Justice Department employees to work in Washington. The
report said various department
components, including the Federal Bureau of Investigation,
spent about $3.5 million on investigative activities related to
the Russia probe.
The reports will be filed every six months.
—Del Quentin Wilber
ferring to Mr. Mueller, he said,
“If he goes into the Trump Organization financial records,
that’s a clear indication that it
(the investigation) has gone
amok.”
The Justice Department order authorizing the special
counsel gives Mr. Mueller a
wide remit to investigate “any
matters that arose or may
arise directly from the investigation.”
Deutsche Bank executives
and lawyers had been expecting a demand for information
from Mr. Mueller’s team as
the special counsel investigation progressed, according to
people close to the bank. As
Mr. Trump’s primary lender in
recent years, Deutsche Bank
this year faced repeated document requests from Democratic lawmakers scrutinizing
the administration’s ties to
Russia.
The Democrats lacked Re-
publican support to compel
Deutsche Bank to provide the
information. Deutsche Bank
lawyers have said U.S. banksecrecy rules prohibited the
lender from revealing details
about its clients or their business with the bank without a
subpoena or other formal request from Congress.
Deutsche Bank faces ongoing questions about a series of
Russian trades that have been
scrutinized in multiple investigations in the U.S. and Europe,
including in a still-pending
U.S. Justice Department
probe. The Democratic U.S.
lawmakers wanted the bank to
detail any ties between those
trades or other Russian financing and anyone connected
to Mr. Trump, his family or
advisers.
—Erica Orden, Rebecca
Ballhaus and Peter Nicholas
in Washington contributed
to this article.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
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Wednesday, December 6, 2017 | A7
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A8 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
NY
WORLD NEWS
U.S. Officials See Kim as ‘Rational Actor’
Assessment guides
Washington’s approach
toward North Korea’s
nuclear ambitions
Fishing Boat Crew
Survives a Long
Journey at Sea
TOKYO—When 10 North
Korean squid fishermen set
sail in September, part of
what the country’s state media call a “battle” to fill annual seafood quotas, they
likely knew the risks.
Dozens of fishing boats
from the country are found by
Japan’s coast guard each year,
many empty and some carrying corpses of crew members.
A month out of the port of
Chongjin, their small wooden
boat lost steering, Japan’s
coast guard said. After weeks
adrift, it reached an uninhabited island. All crew survived.
On Tuesday, authorities
questioned the men, whose
craft was the latest in a
surge of fishing boats washing up in Japan or getting
stranded in nearby waters. A
coast guard official quoted
the men as saying they
wanted to go home.
—Alastair Gale
U.S. officials believe North Korean leader Kim Jong Un, seen in August, understands the consequences of attacking the U.S. or its allies.
U.S. efforts rely on economic
and diplomatic measures, including appealing to China—
steps that are possible only because the U.S. believes Mr. Kim
is rational, two U.S. military officials said.
tion official said. “We may
have even done something
pre-emptively by now.”
A driving factor behind the
U.S. assessment is that each
time North Korea could have
behaved in dangerous ways regarding its nuclear weapons,
Mr. Kim hasn’t taken that risk.
While angry exchanges of
tweets and statements by President Donald Trump and North
Korea this year appeared to
portend an imminent threat,
national-security experts said
the uptick in rhetoric didn’t
appear to change Mr. Kim’s
calculations or behavior.
Intelligence officials said
they first assessed that Mr.
Kim was a rational actor after
a 2012 launch was met by
sanctions and international
condemnation. For months afterward, Mr. Kim heightened
his rhetoric against the U.S.
But by April, he stopped.
“He learned something. He
fanned the flames, but didn’t
take it further,” the senior U.S.
intelligence official said.
More recently, during Mr.
Trump’s visit to China in November and the meeting of
China’s Party Congress a month
earlier, North Korea didn’t conduct any weapons tests, its longest lull of the year.
A test in October would
have risked embarrassing an
important ally, with Chinese
President Xi Jinping seeking to
shore up his political standing
at home, some U.S. officials concluded. During Mr. Trump’s Asia
visit, there were three U.S. carrier strike groups conducting
exercises in the region. U.S. military officials have said Mr.
Kim’s decision to not conduct a
‘We think he…can be
bartered with,’ a
former administration
official said.
“The fact that we are leaning on China says that we
think he is someone can be
bartered with. If we had no
faith in that, why would we
bother to ask China to do
more?” a former administra-
test in the midst of an extensive
U.S. military presence was, for
them, a rational act.
A former top South Korean
government official who took
part in talks with senior aides
to Mr. Kim in 2014 and 2015
said the approach to negotiations under Mr. Kim was rational and well-thought out. During talks in 2015 over an
armed standoff, North Korea
initially refused to discuss the
precipitating incident, a landmine explosion that maimed
two South Korean soldiers.
Under pressure from South
Korea to apologize, the North
Koreans agreed to express regret, the former top official
said. “Kim Jong Un’s leadership
is better than we had expected.”
—Jonathan Cheng in Seoul
and Alastair Gale in Tokyo
contributed to this article.
ly
.
U.S. sees someone who is methodical and driven by a desire
for world recognition, securing
his family’s dynasty and developing his nation economically.
“Rational actors have clear
goals and know how they want
to get there based on reality,” a
senior U.S. intelligence official
said. “He hasn’t demonstrated
anything that would make one
reconsider his rationality.”
Had the U.S. feared an irrational actor, U.S. officials would
likely have gone beyond threats
of military action and undertaken a massive and sustained
U.S. military buildup around
the peninsula in anticipation of
unexpected actions by North
Korea, two U.S. officials said.
Mr. Pompeo and White
House national security adviser
Lt. Gen. H.R. McMaster said
over the weekend that current
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WASHINGTON—U.S. intelligence and military officials believe Kim Jong Un is a rational
actor, a conclusion that for
now is guiding Washington’s
approach to the North Korean
leader as he risks economic
sanctions and military reprisals to build nuclear weapons
and threaten rivals.
The assessment by the main
components of the U.S. national
security community has shaped
their thinking toward North
Korea in two major ways, U.S.
officials said. It means they believe Mr. Kim understands that
any attack on the U.S. or its allies threatens the security of
his country and his grip on
power. And it means they believe there is potential to alter
his behavior through diplomacy
to lower the threat of war.
U.S. officials are also calculating that Mr. Kim’s ability to
act rationally is compromised.
“We in the intelligence
community…have said that
Kim Jong Un is rational, but it
is also the case today that we
don’t think he has an understanding about how tenuous
his position is—domestically
and internationally,” Central
Intelligence Agency Director
Mike Pompeo said in an address at a security forum in
California on Saturday.
U.S. military and intelligence officials, detailing the
U.S. assessment in interviews,
said that conclusion doesn’t
mean Mr. Kim isn’t brutal or
provocative, and they consider
him to be immature and brash.
U.S. officials said he has ordered the killing of relatives,
and last week, he tested what
he called the Hwasong-15, a
missile that can reach every
part of the U.S.
But the finding means the
KCNA/REUTERS
BY NANCY A. YOUSSEF
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A10 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
WORLD NEWS
Bali Volcano Is Watched for Big Reprise
ASSOCIATED PRESS (2); BULLIT MARQUEZ/ASSOCIATED PRESS (RIGHT)
Mount Agung’s 1963
eruption lowered world
temperatures; a repeat
is a long shot
BY BEN OTTO
Fire and Fury
In 1963, Indonesia’s Mount
Agung, above left, spewed
about 7 million metric tons of
sulfur dioxide, or SO2, to a criti-
cal altitude of 18 kilometers.
At that height, aerosols
formed from the sulfur dioxide,
a colorless toxic gas, absorb
sunlight and reflect it, depriving
the lower atmosphere of a
small amount of solar radiation
and a lowering of Earth’s temperature.
In 1982, El Chiconal in Mex-
ico erupted, above, center,
sending 8.1 million metric tons
of SO2 to an altitude of 17 kilometers.
In 1991, Mount Pinatubo in
the Philippines, above right, unleashed 18 million metric tons
of SO2, this time reaching an
altitude of 19 kilometers.
—Ben Otto
time,” said Janine Krippner, a
volcanologist at the University
of Pittsburgh. “All of that, plus
the extensive monitoring efforts, indicates that there is
definitely a possibility of a
larger eruption.”
The 1963 eruption, which
killed more than 1,100 people,
was one of the first documented by scientists as having
a short-term impact on climate
change, lowering global temperatures by a couple tenths of
a degree Celsius. It was one of
the 20th century’s largest volcanic explosions, rating a 5 on
the Volcanic Explosivity Index,
on par with the explosion of
Mount St. Helens in 1980. The
last time the upper limit of the
scale, 8, was reached on Earth
was probably more than
25,000 years ago.
To alter temperatures, volcanoes must expel huge quantities of sulfur dioxide into the
Since 1963, three volcanic
eruptions have changed the
world’s temperatures.
ly
.
BALI,
Indonesia—When
Bali’s Mount Agung erupted in
1963, enough sulfur dioxide
was launched into the stratosphere to lower global temperatures for more than a year.
Scientists watching the newly
active volcano today say that
scenario is a long way off this
time round—but they can’t
rule it out, either.
The volcano was quiet
Tuesday after eruptions last
week brought magma to the
crater and sent ash into airspace over this Indonesian resort island. Tens of thousands
of visitors have been stranded
with airports closed for several days.
Indonesia’s disaster agency
says tremors continue to shake
the nearly 10,000-foot volcano.
Scientists note the volcano
took four months in 1963 to go
from earthquakes to lava flow
to its climactic explosion.
"There is no actual data record of the 1963-64 eruptions.
All they have to go on is what
people felt—and that has been
reported to be similar this
smaller eruption is more
likely,” said Simon Carn, a volcanologist and associate professor at Michigan Technological University. “But an
eruption similar to 1963 cannot be ruled out at this point.”
The last eruption to significantly alter global temperatures was Mount Pinatubo, a
blast rating 6 on the explosivity
index, in the Philippines in
1991. Pinatubo sent nearly 20
million tons of sulfur dioxide
high into the stratosphere.
Northern Hemisphere temperatures in 1992 and 1993 dropped
by about 0.6 degree Celsius.
In 1815, Mount Tambora exploded on the Indonesian island of Sumbawa in what was
the largest eruption in recorded history, reaching 7 on
the index.
Scientists estimate that
Tambora unleashed 60 million
tons of sulfur dioxide, leading
to a drop in global temperatures for several years and
“the year without a summer”
in 1816 when snow fell in June
and frosts killed off crops in
July and August in the U.S.
and famines hit Europe.
More than 10,000 people
died immediately in the Tambora blast, with more than
60,000 others succumbing to
starvation and disease amid
crop failure on Sumbawa and
neighboring islands.
stratosphere, more than 10
miles into the sky.
Mount Agung, rich in sulfur
like many volcanoes east of Indonesia’s main island of Java,
expelled more than seven million tons of sulfur dioxide into
the stratosphere in 1963. Not
all major eruptions, such as the
St. Helens blast, have enough
sulfur to alter temperature.
Indonesian scientists are
using new satellite and ground
technology to study Agung’s
activity. This month, the European Space Agency’s new Sentinel-5P satellite began delivering its first global images of
air pollutants and aerosols, including a high-resolution mapping of Agung’s sulfur dioxide
that shows a near-perfect image of the eruption’s plume.
Agung’s
plume
hasn’t
reached higher than about
23,000 feet—not even halfway
to the stratosphere—and its ash
has likely fallen back to Earth,
Indonesian scientists say.
Still, Agung’s giant burst in
1963 hasn’t been the exception. Scientists studying ash
deposits in Bali say they have
found records for 51 eruptions
going back 5,000 years—
roughly once a century—including some that appear close
to the size of the 1963 blast.
“Most of its previous known
eruptions have been smaller
than 1963, so you could say a
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Beijing’s Mass Evictions of Migrants Cloud Xi’s Lofty Vision
People walked through the outskirts of Beijing on Nov. 27 after being evicted from their homes following a deadly tenement fire.
I
n-
thorities to the tragedy: flatten
migrants’ dilapidated dwellings and expel the capital’s
most vulnerable inhabitants.
f this is how Mr. Xi intends to resolve the contradictions that cloud
China’s future, expect trouble ahead.
A popular revolt isn’t in
the cards. The migrants have
mostly submitted to their
fate. Many simply melted
back to their villages.
Still, the plight of tens of
no
SHANGHAI—As a Marxist
thinker who sees the world
in terms of titanic struggles
between opposing social
forces, Xi Jinping has put his
finger on China’s main challenge.
It is, he told a Communist
Party gathering in October,
the conflict between people’s
desire for a
better life and
“unbalanced
and inadequate development.” In a
commentary,
Xinhua News Agency explained that if such a “principal contradiction” is left unresolved, “it can lead to
chaos and eventually, as Marx
predicted, to revolution.”
The first test of this new
dialectic wasn’t long in coming. A fire that killed 19 migrant workers in a tenement
on Beijing’s outskirts highlighted the inequalities to
which Mr. Xi was alluding.
Rural migrants built modern
Beijing and other megacities.
They collect the trash, deliver
lunches to gleaming office
towers, nanny the babies of
affluent families and guard
the mansions of the superrich.
The answer from Beijing au-
FRED DUFOUR/AGENCE FRANCE-PRESSE/GETTY IMAGES
CHINA’S WORLD
By Andrew Browne
thousands of refugees struck
a chord among Beijing’s middle classes. Some donated
food and blankets. Critics
threw back at authorities the
disdainful official appellation
for the urban underclass:
“low-end population.” Internet censors quickly blocked
the term.
A group of lawyers, artists
and public intellectuals were
so scandalized they circulated a signed petition online
that attacked what they
called “a serious violation of
human rights.”
It remains to be seen how
long this sympathy will last.
Beijingers in general resent
migrants for swamping city
services, bringing crime, clogging the streets with unlicensed motorbikes and depleting scarce water resources.
Yet wealthy urbanites have
their own jumble of contradictions. After decades of frenetic economic growth, they
are demanding cleaner air
and safer food. Many are angry at corruption. The social
WORLD WATCH
BREXIT
British Prime Minister Theresa May sought to get Brexit
talks back on track after a small
Northern Irish party she relies
on in Parliament blocked a deal
to advance negotiations over a
disagreement on the future of
the border with Ireland.
The European Union has said
goods will be able to continue to
move freely between Ireland and
Northern Ireland—the only part
of the U.K. that shares a land
border with the EU—only if
Northern Ireland agrees to adhere to broadly similar trade
rules.
The Democratic Unionist
Party on Monday said it
wouldn’t agree to a deal that
carved out a special trading relationship between Northern Ireland and Ireland—delaying
broader Brexit negotiations.
The DUP mostly draws its
support from Northern Ireland’s
pro-British community and says
it won’t accept any deal that
would weaken Northern Ireland’s
ties to the rest of the U.K.
—Jenny Gross
DAVID YOUNG/AGENCE FRANCE-PRESSE/GETTY IMAGES
Minority Party Balks
At Irish Border Issue
FIRST RESPONSE: Firefighters work at the site of a two-train
collision in Meerbusch-Osterath, Germany, that injured 50 people.
CATALONIA
Separatists Spared
One Arrest Warrant
A top judge in Spain withdrew an international arrest
warrant for former Catalan
leader Carles Puigdemont and
four of his ex-cabinet members
but maintained a Spanish arrest
warrant for the separatists,
which means they could be detained if they return home.
Spanish judicial authorities
had issued European arrest war-
rants for the five separatist
leaders after they fled to Belgium following the Catalan parliament’s declaration of independence from Spain at the end of
October. On Tuesday, Spanish
Supreme Court Judge Pablo Llarena, who is overseeing an investigation into Catalan separatist
leaders’ secessionist push, said
he was withdrawing that European arrest warrant.
Judge Llarena didn’t withdraw
a Spanish detention order, however, which means Mr. Puigdemont and his former colleagues
would be arrested if they enter
Spanish territory, a spokesman
for the Supreme Court said. It
was unclear whether Mr. Puigdemont and his ex-cabinet members would return to Spain.
—Jeannette Neumann
EUROPEAN UNION
Brussels Names 17
Tax-Haven Offenders
The bloc published the names
of 17 countries and territories it
said weren’t sufficiently cooperating on taxation issues in a
continuing push against tax
avoidance.
The final version of the list
reflected a diplomatic tug of war
between certain countries that
pushed back against inclusion on
earlier drafts and the European
Commission, the European
Union’s executive arm, which
wanted tougher sanctions.
The places on the list are
American Samoa, Bahrain, Barbados, Grenada, Guam, the Republic of Korea, Macau, the Marshall Islands, Mongolia, Namibia,
Palau, Panama, St. Lucia, Samoa,
Trinidad and Tobago, Tunisia and
the United Arab Emirates.
—Todd Buell
compact in which citizens
traded away political freedom for economic prosperity
is fraying. Increasingly, a demanding public expects the
government to respond sensitively to its grievances.
Mr. Xi has recognized all
these pressures, hence his
drive to deliver improved
living conditions even as the
economy slows. So far, he
has scored highly with an
anticorruption campaign,
along with efforts to combat
air pollution.
The big question facing
the Xi administration is
whether these contradictions
will eventually yield to his
style of governance: ruthlessly authoritarian, focused
on imposing top-down discipline. Beijing has set strict
population-control targets
and many residents believe
authorities used the tenement fire as an excuse to
squeeze out migrants.
Behind Mr. Xi’s confident
narrative about his country’s
emergence as a global superpower at the recent 19th
Communist Party Congress
is a more fragile reality.
C
hina’s invincible rise is
a myth. The contradictions have grown big
enough to threaten the
party’s rule. A deep cleavage
between privileged urban
dwellers and the rural poor
who serve them could limit
the country’s economic prospects for decades.
The West tracks Mr. Xi’s
progress by the billions he
spends on ports and highspeed railways for his Eurasian “Belt and Road” megaproject, by the fortunes he
lavishes on robotics and other
high-tech industries at home,
and the even larger sums devoted to his naval buildup.
As Mr. Xi suggests, these
are the wrong metrics. The
Marxist contradictions that
challenge his rule don’t necessarily require huge spending, but they do demand responsive governance. The
evictions in Beijing during
the depths of winter have
cast a chill over Mr. Xi’s
lofty new message.
Venezuela’s U.N. Envoy
Resigns Under Pressure
Venezuela’s ambassador to
the United Nations, Rafael
Ramírez, said he resigned his
post at the request of President Nicolás Maduro, who has
been unseating political foes
as his authoritarian government shores up control.
By Kejal Vyas, José de
Córdoba and Anatoly
Kurmanaev
Mr. Ramírez’s departure
Tuesday marks a dramatic fall
for one of Venezuela’s most
powerful politicians and
comes in the midst of what
Mr. Maduro says is a sweeping
antigraft crusade. In recent
weeks, the effort has resulted
in the arrest on corruption
charges of about 65 executives
of Petróleos de Venezuela SA,
the state oil company Mr.
Ramírez once headed. Many of
them had forged close ties to
Mr. Ramírez during his 12-year
tenure as Venezuela’s energy
minister until 2014.
Mr. Maduro’s aides haven’t
publicly presented evidence
against the charged officials.
The president’s critics say the
action amounts to a purge
aimed at helping the embattled leader consolidate power
as he prepares for 2018 presidential elections.
“Maduro is disqualifying
those who could represent another option from him,” said
John Magdaleno, a public-policy professor at the Simón
Bolívar University in Caracas.
“You can’t forget that Ramírez
has his aspirations.”
As he came under fire from
Caracas, Mr. Ramírez published a column Nov. 26 on an
online Venezuelan leftist forum, Aporrea, defending his
record. “I demand respect,”
Mr. Ramírez wrote.
On Tuesday, he posted a
letter on Twitter announcing
his resignation. Mr. Ramírez
said he faced pressure for expressing opinions over how to
overcome an economic crisis
that has left what was once
Latin America’s richest nation
grappling with food shortages,
annual inflation topping
1,000% and slumping oil production.
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A10B | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
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THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A11
* * * *
WORLD NEWS
Trump Plans Jerusalem Embassy
President voices
intent to make move
from Tel Aviv; speech
is set for Wednesday
By Felicia Schwartz
and Dion Nissenbaum
in Washington and
Rory Jones in Tel Aviv
RUSSIA
Continued from Page One
doping problems in the past,
this time the IOC took roughly
a year to conduct and digest
allegations of Russia’s manipulation of the doping lab at the
Sochi Games.
The decision, which came
late Tuesday from an IOC Executive Board meeting in Lausanne, Switzerland, prompted
anger in Moscow, with some
politicians encouraging a boycott among the athletes still
eligible to participate.
By late Tuesday, the Kremlin hadn’t made any official
statement. It wasn’t clear
whether Russia could block eligible individuals from participating if they chose to.
But Alexander Zhukov, head
of the ROC, offered “my apolo-
Population
320,309
ARAB
545,391
JEWISH
79%
Poverty rate*
27%
82%
Labor force participation, men
Labor force participation, women
74%
21%
79%
3.2
Fertility rate (births per woman)
4.4
5.2
Average people per household
3.3
*Defined as an income level equal to 50% of the median disposable income per person
Source: Jerusalem Institute for Policy Research, all figures for 2015
for regional peace.
Mr. Trump passed a deadline Monday for his decision
on moving the U.S. Embassy. A
1995 U.S. law requires the U.S.
Embassy in Israel to be located in Jerusalem, but allows
for a presidential waiver,
something each U.S. leader
has signed.
Mr. Trump signed a relocation waiver in June, but became frustrated during a National
Security
Council
meeting last week in which
another waiver deadline was
discussed, U.S. officials said.
Mr. Trump promised to
move the embassy as part of
his presidential campaign. By
declaring Jerusalem the capital of Israel now, Mr. Trump
can delay the formal embassy
relocation while still fulfilling
part of his campaign pledge.
The president in his 1 p.m.
speech Wednesday will direct
the State Department to begin
the process of moving the em-
bassy, including by identifying
and constructing a new facility in Jerusalem, administration officials said on Tuesday.
Mr. Trump will say that Jerusalem’s specific boundaries
are subject to final status negotiations, and that the U.S.
respects the status quo at the
Temple Mount, a move which
appears intended to address
concerns from Arab officials
and others that he is prejudging the final outcome of the
peace process.
In a shift, he also will say
that he is prepared to accept a
two-state solution. Mr. Trump
has previously declined to endorse one, bucking longstanding bipartisan consensus.
The Trump administration
expects the process of moving
the embassy to take several
years and officials said on
Tuesday that new facilities
take at least three to four
years to build.
The president’s son-in-law
THE WALL STREET JOURNAL.
and senior adviser, Jared
Kushner, and chief negotiator,
Jason Greenblatt, have been
leading an effort to restart
peace negotiations, meeting
with Arab and Israeli officials
for the past several months.
Administration officials are
betting that fallout from
Wednesday’s announcement
can be contained in the long
run, because Mr. Kushner and
Mr. Greenblatt are months
away from presenting final
proposals.
“It seems clear now that
the physical location of the
American embassy is not material to a peace deal,” an administration official said
Tuesday.
A second administration official said: “While we understand how some parties might
react, we are still working on
our plan, which is not yet
ready. We have time to get it
right and see how people feel
after this news is processed
co Fo
m rp
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ci on
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e
on
ing Jerusalem Israel’s capital
and beginning the process of
moving the U.S. Embassy to
the holy city, a step that
threatens to spark unrest
across the Middle East and
undermine American efforts
to forge a new peace plan.
Mr. Trump placed a flurry
of phone calls to Arab leaders
Tuesday, on the eve of a policy address in which he plans
to explain the move, and
fielded protests from Arab,
Palestinian and European
leaders to his plan, according
to foreign officials. The State
Department,
meanwhile,
warned U.S. embassies around
the world to prepare for possible protests and violence
and banned travel by government employees and their
families to Jerusalem’s Old
City and the West Bank.
The U.S. will delay the actual embassy relocation for
now to address logistical and
security challenges, officials
said, but U.S. recognition of
Jerusalem as Israel’s capital
also will come as a potent diplomatic step with implications
Yemen Rebels Move on Ex-Leader’s Backers
Houthi forces rounded up
hundreds of fighters loyal to
Yemen’s former president on
Tuesday, consolidating their
control of the capital a day after they killed the longtime
leader and his forces dispersed.
The Iranian-aligned Houthis
set up new checkpoints across
San’a, residents said, and
aired television footage of
dozens of purported loyalists
of former President Ali Abdullah Saleh being detained.
A senior Houthi official,
Saleh al-Sammad, in a televised speech, urged fighters to
“take action against saboteurs
and their collaborators,” referring to Mr. Saleh’s forces.
He also called on the Saudiled coalition to end its war
against the Houthis and enter
into a dialogue with them.
At a rally of Houthi backers
who had gathered in northern
San’a to celebrate the victory
against Mr. Saleh’s forces, senior Houthi official Mohammed Ali al-Houthi said that
some of the former president’s sons were receiving
treatment in a hospital. He
didn’t elaborate and the assertion couldn’t be independently
verified.
Mr. Saleh’s death marks a
possible turning point in the
conflict in Yemen. The Houthi
rebels and pro-Saleh forces
had been allied in their conflict with a military coalition
led by Saudi Arabia, which in
2015 intervened in Yemen to
try to restore to power the
MOHAMMED HUWAIS/AGENCE FRANCE-PRESSE/GETTY IMAGES
By Mohammed al-Kibs
in San’a, Yemen, and
Margherita Stancati in
Riyadh, Saudi Arabia
no
BRUSSELS—Secretary of
State Rex Tillerson called on
European allies to work with
Washington to rein in Iran’s
missile program and its regional activities, saying Tehran’s behavior must be challenged.
Speaking in Brussels with
European Union foreign-policy
chief Federica Mogherini, Mr.
Tillerson said Iran’s interference in Yemen’s civil war, its
exporting of weapons and militias to Syria and support for
Hezbollah pose a threat to the
region.
“These issues and activities
of Iran cannot be ignored and
go unanswered and we intend
to continue to take action to
ensure Iran understands this
is not acceptable and look forward to working with the European partners in that regard
as well,” he said.
Ms. Mogherini said the EU
was willing to work with
Washington but made clear
that joint action depended on
the U.S. continuing to abide by
the 2015 Iranian nuclear
agreement.
President Donald Trump
has strongly criticized the deal
and has asked Congress to
tighten terms under which the
U.S. abides by it.
Calling the nuclear deal “a
key strategic priority for European security,” Ms. Mogherini
said Iran’s regional activities
and missile program should be
discussed separately from the
nuclear deal.
Iran has continued to test
ballistic missiles. Europe and
the U.S. believe the program
adds to tensions in the Middle
East and could be a long-term
direct threat.
Tehran says its missile program is for defensive purposes
and isn’t forbidden under the
nuclear deal.
It has blamed Saudi Arabia
for escalating the Yemen conflict. Senior Iranian officials
have warned European countries to respect its sovereignty
on military matters.
Ms. Mogherini recently
ruled out the EU tightening
sanctions on Iran in the near
term over its missile tests or
regional activities.
However, the French and
German governments this
week called on Iran to halt its
ballistic missile development
and end its interference in
other Middle Eastern countries.
Most European sanctions
on Iran were lifted after the
nuclear deal was implemented
in January 2016.
Mr. Tillerson said the U.S. is
committed to working with
the Europeans to “hold Iran
fully compliant with the terms
of” the nuclear deal and to
“fully enforce that agreement.”
When asked later if she
took his comments as a sign
the administration would continue to abide by the agreement, Ms. Mogherini said yes,
but in a sign of wariness in
Europe toward the administration added, “let me see the
follow-up.”
The Iran nuclear agreement, she said, remains one of
several points of disagreement
with the Trump administration. “It is a deal that is working,” she said. “It needs to be
preserved.”
Despite appeals and warnings from world leaders, President Donald Trump is poised
to reverse decades of U.S. policy on Wednesday by declar-
Jerusalem is deeply divided physically and economically between Arabs and Jews.
over the next period of time.”
Still, Mr. Trump called a series of world leaders, including Israel’s Prime Minister
Benjamin Netanyahu, Palestinian Authority President Mahmoud Abbas, Jordan’s King
Abdullah II, Egyptian President Abdel Fattah Al Sisi and
Saudi Arabia’s King Salman, to
preview his intention to move
the embassy, American and
Arab officials said.
A spokesman in Mr. Netanyahu’s office didn’t respond to
a request for comment. Israeli
officials have said they would
welcome the U.S. Embassy
move and Washington’s acknowledgment of the city as
Israel’s capital.
Mr. Abbas’s office said he
would “continue his contacts
with…world leaders to prevent
such unacceptable action.”
King Salman told Mr. Trump
in a phone call that an embassy relocation or recognition of Jerusalem as the capital of Israel would “constitute
a flagrant provocation of Muslims all over the world,” according to Saudi state media.
Israel has administered
East Jerusalem since 1967,
when it won control of that
half of the city in the Six Day
War. Palestinians consider
East Jerusalem the capital of
a future state.
Because of Jerusalem’s disputed status, Mr. Trump now
risks derailing a Middle East
peace effort that the White
House had been working on
and could damage strong ties
his U.S. administration has
nurtured with Arab states,
foreign officials say.
—Farnaz Fassihi at the
United Nations contributed
to this article.
n-
BY LAURENCE NORMAN
AND JULIAN E. BARNES
Tale of Two Cities
ly
.
Tillerson
Presses
Europe to
Curb Iran
gies for the violations of antidoping regulations, which
were allowed in our country.”
Russian Foreign Ministry
spokeswoman
Maria
Zakharova also offered support for Russian athletes. “Is it
painful?” she wrote on her
Facebook page. “Yes very. We
are with our athletes with our
heart and soul. Will we survive? Yes.”
In its sanctions, the committee said it would permit
some Russian athletes to compete in Pyeongchang by invitation only and as neutral athletes without any Russian
insignia, including the national
flag and, in cases of medal
ceremonies, the Russian anthem.
Such athletes would have to
be reviewed by an IOC panel
and show they have submitted
to regular drug testing. They
cannot have been in leadership
Houthi fighters inspect damage around the presidential palace in San’a after an airstrike by the Saudi-led coalition on Tuesday.
internationally recognized
president, Abed Rabbo Mansour Hadi.
Fissures
between
the
Houthis and Mr. Saleh came
into the open last week, and
their forces clashed, plunging
San’a into violence that has
left more than 200 people
dead, according to the International Committee of the Red
Cross. The alliance collapsed
on Saturday, when Mr. Saleh
said he was open to dialogue
with the Saudi-led coalition.
Two days later he was
killed along with a top aide as
their convoy approached a
Houthi checkpoint outside
San’a, a Houthi official said.
In a sign the Houthis were
tightening their grip on the
city, residents said the clashes
between the two sides appeared to have subsided, as
Mr. Saleh’s forces, said to
number in the thousands, were
pushed out of the capital.
Six units loyal to Mr. Saleh,
each hundreds of men strong,
were stationed in San’a when
the fighting began a week ago,
according to residents and
Houthi officials. Hundreds of
those were detained after rebels overran pro-Saleh strongholds, one of the officials said.
A statement by the exiled
government of Mr. Hadi urged
the international community
to put pressure on the Houthis
to stop their arrests of members of Mr. Saleh’s party.
The Saudi-led coalition,
meanwhile, stepped up its
bombing campaign against the
Houthis in San’a on Tuesday,
with
multiple
airstrikes
against targets, including the
presidential palace, the second day of heavy bombard-
ment of San’a since the assassination, residents said.
“For the time being, the
Houthis really hold the internal balance of power in the
northwest of the country,”
said Peter Salisbury, a Yemen
expert at Chatham House, a
London-based think tank. “In
the medium-term, they will be
cracking down on anyone they
perceive as a threat or potential rival in the territory they
control.”
—Saleh al-Batati
in Aden, Yemen,
contributed to this article.
positions at the 2014 Games.
Should any Russian athletes be
cleared to compete in Pyeongchang they will do so under
the designation “Olympic Athlete from Russia.”
The IOC said it wouldn’t accredit any officials from the
Russian Ministry of Sport, and
it levied a $15 million fine
against the ROC to be used for
reimbursement of costs related to the IOC’s investigation.
The committee also banned
for life several prominent Russian officials, including Russian Deputy Prime Minister Vitaly Mutko. Mr. Mutko, the
country’s most powerful
sports official, was Russia’s
sports minister during the
2014 games and is chairman of
Russia’s 2018 World Cup organizing committee.
IOC President Thomas Bach
called the Russian doping
scheme “an unprecedented attack on the integrity of the
Olympic Games and sport” and
said the committee reached its
decision by consensus.
It was the second time in as
many years that the IOC took
up for discussion whether
own due process with the Russian team and conduct its own
analysis of evidence and previous investigations by the
World Anti-Doping Agency
into the Russian scheme.
Tuesday’s decision came as
the IOC received a report from
its own inquiry into the Russian doping scheme. The report, chaired by former Swiss
President Samuel Schmid, offers a thorough summary of
the allegations of Russian improprieties, from tampering
with urine samples to efforts
to conceal positive tests by
Russian athletes.
But the report also said the
inquiry “has not found any
documented, independent and
impartial evidence confirming
the support or the knowledge
of this system by the highest
State authority.” That suggests
that the IOC found no evidence that Russian President
Vladimir Putin was implicated,
but other state entities were.
The impact of the absence
of the Russian flag, or Russian
athletes altogether, would be
particularly profound in figure
skating events that are among
the most high-profile competitions of the Games.
Evgenia Medvedeva, the
2016 and 2017 world champion
in ladies’ figure skating, is the
prohibitive favorite for gold in
Pyeongchang and attended the
executive board meeting in
Lausanne. According to Russian media RSport, she said, “I
can not accept the option that
I would compete in the Olympic Games without the Russian
flag as a neutral athlete.”
Kremlin spokesman Dmitry
Peskov didn’t immediately respond to a request for comment.
—Louise Radnofsky
contributed to this article.
The committee said it
would permit some
Russian athletes to
compete.
Russia should be permitted to
compete at the Olympics; last
year, the IOC passed on banning Russia from the 2016
Summer Games in Rio de Janeiro. Mr. Bach said the difference this time was that the
IOC had time to complete its
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A12 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
* *
Discussions with Disney initially sputtered but recently
heated back up, people familiar
with the matter say. Disney sees
Fox’s assets as a way to jumpstart its own ambitions, especially in streaming video and expanding internationally. A
transaction with Disney would
be all in stock. It is possible that
no deal will be reached.
Rupert Murdoch and his family hold 39% of 21st Century
Fox’s voting shares and a similar
‘It’s crowded when
you have three people
making decisions,’
says one executive.
no
stake in News Corp, parent of
The Wall Street Journal.
The elder Mr. Murdoch sees
an opportunity to capture a premium price for assets built over
his career. He also is embracing
the chance to focus more on the
news business, long his passion,
and less on Hollywood.
Lachlan Murdoch preferred
to keep the family company together, though he has come
around to the notion of a sale,
people familiar with his thinking
say. Last month, he declined to
discuss speculation about a deal
and said: “Let me be very clear.
Fox has the required scale to
continue to both execute on our
growth strategy and deliver increased returns to shareholders.”
James Murdoch has embraced—and even propelled—
the idea of doing the deal, according to people familiar with
his thinking. If a deal happens
with Disney, James could wind
up going to Disney in a senior
role, setting him up as a potential candidate to succeed Mr.
Iger, who has said he plans to
retire in 2019, people close to
the deal talks say.
CARDS
Continued from Page One
time capsule of modern history,
both idiosyncratic and revelatory.
As a grandson of oil baron
John D. Rockefeller Sr. and a
prominent philanthropist, David Rockefeller enjoyed access
to virtually everyone in the ruling and financial elite. He kept
track of countless connections
with the rich and famous across
borders, disciplines and interests, from fellow business titan
Bill Gates to the shah of Iran,
President John F. Kennedy,
Pope John Paul II and Neil
Armstrong, the first man to
walk on the moon.
During the 1970s, Mr. Rockefeller forged bonds with Egypt’s
leader Anwar Sadat, the Soviet
Union’s Leonid Brezhnev and
China’s Zhou Enlai. His efforts
helped Chase become the first
U.S. bank to operate in those
countries. Of course, the trio
Breaking up the Empire
After taking over his father’s newspaper business in 1952, Rupert Murdoch built a global media powerhouse, acquiring the Twentieth Century Fox studio and creating Fox Broadcasting in the mid-1980s.
40
1
2
3
4
5
6 7
30
20
10
0
’95 ’96 97
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11
’12 ’13 ’14 ’15 ’16 ’17
1 Launch of Fox News
In October 1996, Rupert Murdoch and Roger Ailes debut a new cable news network, Fox News Channel.
2 Acquisition of Dow Jones/WSJ
News Corp. prevailed in its $5 billion bid for Dow Jones & Co., the publisher of The Wall Street Journal.
The deal ended a century of Bancroft family ownership of Dow Jones.
were in his Rolodex alongside
other heads of state, including
President Donald Trump, whose
prior wives’ names were lined
out or added.
“I can quickly review the nature of my past associations before seeing someone again,’’
Mr. Rockefeller wrote in his
2002 memoir.
Even if Mr. Rockefeller
hadn’t seen someone for years,
“he was able to pick up as
though he had seen you the
week before,’’ said James
Wolfensohn, a friend and former World Bank president who
was introduced while a Harvard
M.B.A. student in 1959. “It was
because of this extraordinary
record system.”
Henry Kissinger, a former
secretary of state, garnered the
most cards because he was
among Mr. Rockefeller’s best
friends, said Peter Johnson, the
Rockefeller family historian.
Close behind was Gianni Agnelli, the Italian industrialist
who ran Fiat.
One Kissinger card mentions
3 News Corp. Split
Following the phone-hacking scandal in the U.K. and investors’ concerns that newspapers were a drag on the
company’s valuation, News Corp. split in mid-2013. The newspapers and HarperCollins retained the News Corp name,
while entertainment assets such as the studio, Fox broadcast network and Fox News became 21st Century Fox.
4 Failed Time Warner Bid
21st Century Fox withdrew its unsolicited $80 billion bid for Time Warner Inc. in August 2014 after Time Warner
management rebuffed the bid and Fox’s stock declined.
5 Succession Plan
Rupert Murdoch laid out a succession plan for his global entertainment empire in mid-2015. James Murdoch
replaced his father as chief executive of 21st Century Fox, and Lachlan Murdoch was named executive co-chairman.
6 Sky Bid
21st Century Fox bid roughly $15 billion to gain full control of British pay-TV giant Sky PLC, five years after
abandoning a previous bid in the wake of the phone-hacking scandal. U.K. regulators are still scrutinizing the deal,
including corporate governance questions raised by the sexual-harassment scandal at Fox News.
7 Disney Talks Begin
Reports that Walt Disney Co. held talks about acquiring a significant portion of the entertainment assets owned
by 21st Century Fox put Rupert Murdoch’s media empire in play. The news spurred approaches from other interested
buyers, including Comcast Corp.
THE WALL STREET JOURNAL.
Source: FactSet, WSJ reporting
the company boomed and the
publishing part stagnated, there
was appetite among investors to
split them up. That was fueled
further after the phone-hacking
scandal at the now-defunct U.K.
tabloid News of the World in
2011.
It was a damaging episode
for the Murdoch family and the
biggest blemish on the résumé
of James, who was head of News
Corp.’s international division.
Though he took his post after
the wrongdoing was alleged to
have occurred, he faced aggressive questioning from British
lawmakers. He acknowledged
approving settlements to phonehacking victims but said he “did
not have a complete picture” of
what was going on and called
that “a matter of serious regret.”
The scandal led to News of
the World’s closing and derailed
the Murdochs’ attempt to buy
out the remainder of Sky, long a
goal of Rupert.
Mr. Murdoch split his business empire in 2013. The publishing assets, including the
Rupert Murdoch was reluctant to separate Fox News from
the rest of the news-related assets, and that feeling has resurfaced in the past few years, a
person familiar with his thinking says.
If a sale of Fox’s entertainment assets is completed with
Disney, Mr. Murdoch has contemplated combining News Corp
with the remaining Fox entity,
though that is unlikely in the
near term, people familiar with
the situation say.
In June 2015, the elder Mr.
Murdoch stepped down as Fox’s
chief executive and installed
James and Lachlan in their current posts. He went to great
lengths to ensure that the brothers would feel equal and be re-
the time when Queen Elizabeth
II knighted him in June 1995.
“He is not to be referenced as
Sir Henry as he is an American,’’ the card said, with the
word “not” underlined for emphasis.
During a lunch at his estate
in 2015, Mr. Rockefeller gave
Mr. Kissinger a copy of his 35
Rolodex cards. They contained
descriptions of their hundreds
of encounters since they first
met in 1955.
“I am astonished that we
have seen each other so much,’’
Mr. Kissinger recalled telling
his friend. Having a record of
their frequent times together
over the years “meant a lot to
me,” he said in an interview.
Several cards reveal some of
the billionaire banker’s more
personal interactions. Mr.
Rockefeller was studying at the
London School of Economics in
1938 when he met Mr. Kennedy,
the future president, and his
sister Kathleen at a party held
by their father, then the U.S.
ambassador to Great Britain.
Ms. Kennedy got top billing.
JFK, the first card said, “is a
brother.”
“She was more important
than JFK’’ because Mr. Rockefeller had dated her, Mr. Johnson said. Ms. Kennedy, who
married a marquess, was killed
in a plane crash at age 28.
Mr. Rockefeller learned the
importance of contacts while an
Army intelligence officer overseas during World War II, according to his memoir. “My effectiveness depended on my
ability to develop a network of
people with reliable information,’’ he wrote.
Joining Chase after the war,
Mr. Rockefeller visited 103
countries and met more than
200 heads of state during his
35-year career. He stepped
down as CEO in 1980 and chairman in 1981. He traveled for
Chase, now part of JPMorgan
Chase & Co., into the 21s century, Mr. Johnson said, working
several days a week until his
late 90s.
In August 2015, Rockefeller
Journal, U.K. papers and book
publisher HarperCollins, went
into a new company that took
the old News Corp. name, minus
a period. The TV and movie
properties went into 21st Century Fox.
Reluctantly separate
ment sued last month to block
Time Warner’s pending sale to
AT&T Inc.
James and Lachlan Murdoch
operate with different styles and
interests, people who know
them say. James, who works
from New York, gets deep into
day-to-day management and
isn’t enthralled by the news
business.
His social circle includes people in the media and technology
world, such as Tesla Inc. Chief
Executive Elon Musk and Vice
Media co-founder Shane Smith.
James also brings a global perspective, having held top posts
at Star India and Sky.
Likely heir
Lachlan was viewed as the
likely heir to his father when he
was News Corp.’s deputy chief
operating officer. He left the
company in 2005 after clashes
with some top executives, including Peter Chernin and Mr.
Ailes, over his executive role,
and moved to Sydney to found
an investment company. He returned as part of the 2015 succession planning.
Lachlan is described by some
executives and associates as being more easygoing and approachable than James. Lachlan
is warm with Fox executives,
sending them gifts on their
birthdays with funny personal
notes that make it clear he
wrote them, not an assistant.
He asks executives tough
questions, has expressed passion about the news business
and is co-chairman of News
Corp with his father. Lachlan
moved into his father’s former
office on the Fox lot, having become attached to it while growing up.
The Murdoch empire was
jolted in the summer of 2016
when Fox News anchor Gretchen
Carlson sued Mr. Ailes, alleging
she was fired in retaliation for
rejecting his sexual advances.
The lawsuit, which Fox settled
for $20 million, set in motion an
internal investigation that uncovered a pattern of alleged harassment by Mr. Ailes and led to
his exit that July.
Mr. Ailes, who died in May,
denied the allegations. 21st Century Fox’s handling and disclosure of settlement payments is
the subject of a federal probe,
which the company says it is cooperating with. Fox has denied
any knowledge of harassment
allegations against Mr. Ailes or
earlier settlements he paid prior
to Ms. Carlson’s suit.
The Murdochs were on the
same page about extending Fox
News anchor Bill O’Reilly’s contract early this year, despite being aware that he faced an accusation of sexual harassment
from a network analyst, according to people familiar with the
matter. The controversy snowballed when the New York
Times reported in April that
multiple women who accused
Mr. O’Reilly of harassment had
been paid settlements.
At that point, James Murdoch pushed to oust Mr.
O’Reilly, while his father wanted
to proceed more deliberately
and not react to media reports,
people familiar with the situation say. Within weeks, Fox cut
ties with Mr. O’Reilly, citing a
clause in the new contract. Mr.
O’Reilly has denied any wrongdoing.
People close to the Murdoch
family say there is excitement
about the prospects of a tie-up.
For example, Disney is “a machine of extracting value from
franchises,” says someone close
to the family. “ I think the value
of Fox would be astronomically
bigger.”
—Sarah Rabil
contributed to this article.
ly
.
Heating up
Lachlan Murdoch, left, and brother James, right, attend Rupert Murdoch’s 2016 wedding in London
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Continued from Page One
instituted by Mr. Murdoch, 86
years old, in 2015 with the elevation of his sons, James and
Lachlan, has faced stresses.
The power-sharing setup
made James Murdoch, 44, the
chief executive of 21st Century
Fox. Lachlan Murdoch, 46, is coexecutive chairman of the company alongside his father and is
viewed as the first among
equals.
At times, James has felt like a
CEO in title only, according to
some people who know him.
These people say James was
never keen about the setup, is
ready for a new chapter in his
career and has sometimes been
on a different page from his father and brother.
Despite having stepped down
as CEO, the elder Mr. Murdoch
has deepened his involvement in
Fox, partly because he took the
helm at Fox News last year to
stabilize the network in the
wake of a sexual-harassment
scandal.
“It’s crowded when you have
three people making decisions,”
says one executive familiar with
the leadership dynamics at the
top of Fox.
The sale talks center on the
Twentieth Century Fox movie
studio, international assets such
as Fox’s 39% stake in Sky and its
promising Star India business,
and U.S. cable networks like FX
and National Geographic. Fox
News, the Fox broadcast network and the Fox Sports 1 sports
channel aren’t on the table.
n-
FOX
Mr. Murdoch would be up
against other succession contenders with long Disney tenures. Disney hasn’t promised
any job to James Murdoch.
The people close to James
say he also could use some of
his proceeds from a sale to pursue an entrepreneurial venture.
Mr. Murdoch once founded a
hip-hop record label and is interested in technology, music
and advertising.
“He has always talked about
having an appetite for change
rather than reacting to change,”
one person close to James says.
Lachlan Murdoch, meanwhile, would be in position to
run the remaining pieces of 21st
Century Fox. He is hoping to
stay in Los Angeles, where he
moved his family from Australia
a few years ago and has settled
in. Fox News and other key
pieces of 21st Century Fox are
based in New York.
The Murdochs see value for
Fox shareholders in a potential
transaction, including shares
they would hold in a combined
company with a strong collection of entertainment assets and
global reach.
Rupert Murdoch’s two older
daughters, Elisabeth and Prudence, also have votes, while
two younger daughters hold a financial interest but no voting
power.
At a meeting of senior Fox
managers and top executives in
late November, Mr. Murdoch
said a transaction might or
might not happen, according to
a person familiar with the meeting.
An attendee asked: “If nothing were going to happen, when
would that be?”
“December,” Mr. Murdoch responded.
Fox’s openness to a sale
shocked many analysts and investors given the longtime expectation that the elder Mr.
Murdoch wanted his sons to inherit all the entertainment assets he assembled through decades of deal-making and gutsy
investments that sometimes
stretched the company financially but often paid big dividends over time.
After his father died in 1952,
Rupert Murdoch took over his
newspaper company at 22 and
began expanding it through acquisitions, first at home in Australia and later in the U.K. and
U.S.
By the early 1980s his company, known as News Corp., had
purchased titles that included
the British tabloids News of the
World and Sun, and the Times
U.K., along with the New York
Post.
As he pushed into the entertainment business with a flurry
of deals in the mid-1980s, Mr.
Murdoch began taking bigger financial risks. When the iconic
Hollywood studio Twentieth
Century Fox came into play, Mr.
Murdoch pounced, paying $550
million in two stages to win full
control. He added TV stations
from John Kluge’s Metromedia
in a $2 billion deal, a handsome
premium, setting the stage for
what would become the Fox network.
The company had borrowed
during its expansion, and those
deals and losses at newspapers
led to a debt squeeze by 1990
that nearly sank News Corp.
Saving the company took a restructuring in which Mr. Murdoch sold its magazine unit, reduced its interest in satellite-TV
venture Sky through a merger
and diluted the Murdoch family’s control to about 40%.
News Corp. recovered, and
Mr. Murdoch made more big
bets, adding a controlling interest in Star India and launching
Fox News in 1996.
As the entertainment wing of
JAMES SHAW/REX SHUTTERSTOCK/ZUMA PRESS
IN DEPTH
spected by executives at Fox.
Many top executives reported to
James and Lachlan.
Fox News boss Roger Ailes
resisted that line of command,
and a report on the sister Fox
Business Network suggested he
would report directly to the elder Mr. Murdoch. Rupert Murdoch called Mr. Ailes, told him
he shouldn’t disrespect James
and Lachlan and would be reporting to all three Murdochs,
according to people familiar
with the matter.
21st Century Fox issued a
statement saying Mr. Ailes
would report to the brothers
while maintaining his longstanding relationship with Rupert.
Mr. Murdoch believed the
next generation was inheriting a
fairly stable company, though
he began to think that a big,
strategic move might make
sense.
In 2014, Fox made an $80 billion offer for Time Warner Inc.,
the owner of HBO, but investors
feared Fox would overpay. Fox
pulled the offer after its stock
price fell. The Justice Departstaffers tossed the oversize
Rolodex machine and stored its
cards in the mildewed basement of a building on the
banker’s estate in Pocantico
Hills, N.Y. They now nearly fill a
wall of filing cabinets at Kykuit,
the nearby estate built by his
grandfather.
The Rockefeller
Rolodex is a time
capsule of modern
world history.
Mr. Rockefeller’s will requires that the cards and the
rest of his papers remain hidden from public view for a decade after his death.
“The building blocks of history end up being constructed
from material like the Rolodex
cards,” Mr. Johnson said.
Take Shah Mohammad Reza
Pahlavi of Iran, whom Mr.
Rockefeller met in 1965. Mr.
Rockefeller came under criticism for Chase’s deep involvement with Iran after he helped
persuade the Carter administration to admit the exiled shah
to the U.S. for cancer treatment
in the fall of 1979.
The banker likely visited him
during his treatment: One of
the shah’s Rolodex cards lists
the private phone number for
his New York City hospital
room.
Student revolutionaries and
militants in November that year
took 52 U.S. citizens hostage at
the American embassy in Tehran, sparking an extended crisis
that doomed President Jimmy
Carter’s reelection.
Mr. Rockefeller even saved
acquaintances’ cards postmortem. Former President Gerald
Ford died in late 2006, but his
Rolodex card stated that Mr.
Ford’s widow, Betty, continued
to receive Christmas greetings
from the billionaire until 2008.
“He didn’t like to throw
things away,” Mr. Johnson said.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A12A
NY
* * * *
GREATER NEW YORK
BY MARA GAY
New York City Housing Authority Chairwoman Shola Olatoye told the City Council that
she regretted submitting documentation to federal officials
showing the agency was in
compliance for lead-paint inspections when it hadn’t conducted the required checks in
four years.
“Signing the forms at that
time was a mistake,” she said
during nearly four hours of
testimony Tuesday. She said
she thought at the time that
an informal notice to federal
officials was sufficient.
Ms. Olatoye and other senior de Blasio administration
officials appeared before the
City Council for the first
time on Tuesday since a Department of Investigation re-
port last month revealed that
the New York City Housing
Authority had submitted the
misleading lead-paint inspection documentation. Lawmakers convened the hearing to
get answers from the de Blasio
administration on the issue.
Ms. Olatoye said she didn’t
intend to mislead federal officials or the general public
about the four-year gap in inspections.
She has said that in July or
August of 2016 she told an official at the U.S. Department of
Housing and Urban Development, the federal agency that
oversees the housing authority,
that the city agency wasn’t in
compliance. In September
2016, she told additional HUD
officials about the issue, she
said. In October 2016, she filed
the misleading paperwork.
BESS ADLER FOR THE WALL STREET JOURNAL
Council Grills Housing Chief on Lead Flap
Shola Olatoye, the housing authority chairwoman, testified Tuesday.
HUD declined to comment.
City lawmakers said they
were most upset about the
trickle of information given to
residents and the public con-
The Manhattan U.S. attorney’s office also is investigating health and safety issues at
the housing authority. Spokesmen for the U.S. attorney and
lead-paint experts to advise
her on safety and compliance
issues. She also said she is
creating an “Environmental
Health Officer” position to advise the housing agency.
During the hearing, senior
de Blasio administration officials defended their approach
to lead poisoning overall, saying the city had made significant strides in reducing the
hazard. Corinne Schiff, a deputy commissioner at the city’s
health department, said New
York City is “a national model”
in reducing lead poisoning, and
“a public-health success story.”
The number of children under 6 who showed elevated
blood-lead levels per 1,000
children tested fell from 8.6 in
2005 to 2.3 last year, according to data from the city’s
health department.
cerning the lapses in inspections, which occurred from
2012 to 2016.
Ms. Olatoye, Mayor Bill de
Blasio and other senior city
officials knew the inspections
required under city law hadn’t
taken place as early as April
2016 but didn’t tell residents
until July of this year. She said
she learned in July or August
of 2016 that the agency wasn’t
performing inspections required by federal rules either.
“One has to wonder what
else we have yet to find out,”
said Councilman Ritchie Torres, who heads the council’s
Committee on Public Housing.
“My regret is that we didn’t
tell people more, sooner,” Ms.
Olatoye said.
Ms. Olatoye told the City
Council she would create a
task force made up of national
Doctors Charged
With Health Fraud
CUNY’s numbers
have improved, but
educators remain
worried, report says
Gradually Graduating
Three-year graduation rate for
students who began attending
CUNY community colleges in
each year.
22.5%
BY LESLIE BRODY
20.0
MIKE SEGAR/REUTERS
n-
17.5
15.0
12.5
Source: CUNY Office of Institutional Research
and Assessment
THE WALL STREET JOURNAL.
nior colleges, and six graduate schools. CUNY gets state
and New York City funding,
and the report calls on leaders to put a higher priority
on college completion.
“Even with all the gains
CUNY has made, 22% is not
acceptable in this economy,”
said Jonathan Bowles, executive director of the center.
“Not enough adults have the
credentials to succeed.”
With more than 240,000
undergraduates at the largest urban-education system
in the U.S., the stakes are
high. The system has given a
springboard to the middle
class for many New Yorkers,
but the report says thousands stumble over a range
of barriers, including arriving unprepared for collegelevel work, inadequate advising, fees and the difficulty of
graduation rates within 5
years and improve four year
college graduation rates by
10 percentage points by scaling up proven initiatives that
CUNY has pioneered,” said
Chancellor James B. Milliken
by email.
CUNY’s community college
graduation rate appears
roughly in line with the national norm for public twoyear institutions. Federal data
shows that 25% of students at
such programs nationwide
finish within three years, although that figure includes
students pursuing more shortterm certificates as well.
Mayor Bill de Blasio has
vowed to improve college readiness through a range of steps.
A spokeswoman for Gov. Andrew Cuomo said the state is
“committed to improving graduation rates across the board.”
no
A 2016 City College of New York graduation ceremony in Harlem.
juggling jobs with classes.
Most CUNY students attend tuition free due to aid
programs, but the report
says more than half have
jobs to pay for other expenses. About 71% of its
community-college students
live in households earning
less than $30,000 a year, the
report said, and dropping out
to work is common.
Many students burn
through all their state and federal tuition grants before they
get degrees because they have
to take remedial courses before they can enroll in classes
for credit. Roughly 80% of students entering CUNY community colleges, which have open
admissions, are put in remedial classes in math, reading
or writing.
“We are on track to double our community college
ly
.
Eric Gonzalez,
the acting
Brooklyn
district
attorney,
announced the
indictments.
clinic, according to prosecutors. The clinics were located in
the Brooklyn neighborhoods of
Crown Heights, Canarsie and
Bedford-Stuyvesant, the district
attorney said.
Mr. Gonzalez said the patients undertook unnecessary
examinations, such as allergy
tests or ultrasounds. Ms. Mirbabayeva and other leaders of the
scheme paid doctors to read
and sign off on the tests and
then submitted fraudulent
claims, he said.
The defendants then laundered the money through shell
companies, according to prosecutors.
Ms. Mirbabayeva used her
proceeds to purchase a $3.25
million apartment in Brooklyn,
and to buy luxury bags and
shoes, prosecutors said.
“She has expensive tastes,”
Mr. Gonzalez said.
A Sign of a Changing Skyline
BESS ADLER FOR THE WALL STREET JOURNAL
Graduation Rates Need a Boost
Santiago Pelaez, a 19-yearold freshman at City College of
New York, works 24 hours a
week for a bakery at LaGuardia
Airport in addition to studying
electrical engineering. He gets
financial aid for tuition but
spends about $670 a month on
rent, books and transportation.
When it all seems too
daunting, he thinks of joining
the military. “The fatigue
gets to me, but I try to handle it,” he said. “I’m hoping
to stay at college if I can.”
Many CUNY students
struggle to get over the finish line. At CUNY’s four-year
colleges, 55% get diplomas in
six years. At its community
colleges, 22% of those studying full time earn a two-year
associate degree in three
years. That rate has improved during the past decade, but educators say it remains troubling at a time
when many occupations that
pay more than $50,000 annually require a college degree.
A new report by the Center for an Urban Future, a
nonpartisan think tank, highlights the challenges low-income students face getting
diplomas at CUNY’s 24 campuses, which include seven
community colleges, 11 se-
Brooklyn
prosecutors
said Tuesday that they charged
20 people and 14 corporations
in a $146 million fraud scheme,
calling it the biggest health-care
case in their office’s history.
The defendants paid patients
to come to clinics, where they
received unnecessary tests that
were subsequently billed to
Medicare and Medicaid, prosecutors said. The defendants
then spent the proceeds on real
estate, luxury shopping sprees
and lavish vacations, according
to an indictment.
“The point of the enterprise
was to steal money from Medicare and Medicaid by subjecting
the most vulnerable people who
reside with us in our city to unnecessary tests and imaginary
care,” Acting Brooklyn District
Attorney Eric Gonzalez said at a
news conference Tuesday.
The companies and people,
including four doctors, were
charged in a 878-count indictment with crimes including enterprise corruption, fraud and
money laundering.
Lawyers for the defendants
declined to comment or
couldn’t be identified.
The defendants who appeared
in
court
Tuesday pleaded not guilty.
One of four doctors charged,
Robert Vaccarino, 61 years old,
also worked as a New York Police Department surgeon. A person who answered the phone at
a clinic where Dr. Vaccarino
works declined to comment.
The NYPD said Tuesday that
Dr. Vaccarino had been suspended. His arrest was related
to his private practice and not
his police work, the department
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
KELLYANN PETRY FOR THE WALL STREET JOURNAL
City College of New York in Harlem. With more than 240,000 undergraduates, CUNY is the largest urban-education system in the U.S.
said.
Prosecutors said Kristina
Mirbabayeva, 35, of Brooklyn,
was the ringleader of the
health-care scheme. Her recruiters found patients by approaching people at places including a soup kitchen in East
New York, prosecutors said.
They then asked potential patients if they had a Medicaid or
Medicare card, and if so, offered them $30 or $40 if they
would agree to be taken to a
ANDY KATZ/ZUMA PRESS
BY CORINNE RAMEY
ICON’S END: Workers on Tuesday dismantled the Watchtower
sign atop the Brooklyn building that once housed the Jehovah’s
Witnesses’ headquarters. The building was sold to developers.
OYSTER PERPETUAL
LADY-DATEJUST 28
rolex
oyster perpetual and datejust
are ® trademarks.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A12B | Wednesday, December 6, 2017
NY
THE WALL STREET JOURNAL.
* ***
GREATER NEW YORK
METRO MONEY | By Anne Kadet
from Puerto Rico, the Dominican Republic and Mexico, offers inexpensive Latin
restaurants and shops,
lovely limestone row houses
and fantastic views of Manhattan.
It would be fun to see
these worlds intermingle.
But Sunset Park shopkeepers
say that so far, Industry
City’s 6,500 workers tend to
head straight to their offices
and studios from the 36th
Street subway stop.
“They go directly to work,
basically,” says Bob Palinkas,
who sells discount fragrances and cosmetics at
Mariposa Products Corp.
across the street from Industry City. “I expected more.”
Mike Roger, manager of
Video City, says the Industry
City crowd has no interest in
his X-rated DVDs. “The
younger generation, they
don’t want to buy a movie
because everything is free
on the internet,” he says.
“They’re smart!”
Industry City workers say
it is easy to stay on campus.
“You have everything you
need here,” said David
Vitully, a product developer
munching a $4 slice of coaloven pizza in the food hall.
“They built out the courtyards. They have bars. Mini
golf. Ping pong.”
Industry City’s retailers,
meanwhile, say they don’t
get much business from Sunset Park residents, though
that is starting to change.
Dave Crofton, co-owner of
One Girl Cookies bakery,
says three years ago, he
never saw customers from
the neighborhood. “Now I
get a few folks a week.”
But they tend to be Sunset Park’s newest arrivals
rather than Latinos. “I don’t
know anyone old school, of
ELIZABETH SHAFIROFF FOR THE WALL STREET JOURNAL
watch craftspeople producing organic ice cream or artisanal wallpaper. You can
buy an $18 cup of coffee.
The west side of Sunset
Park, meanwhile, with its
huge population of families
Industry City on weekends
when the complex is relatively empty, he says. And
Industry City tenants benefit
from hiring locally because
wage workers living near
their jobs tend to last longer.
Efforts to attract locals
will continue, he adds, with
plans to add more inexpensive shopping and food options.
But while the complex
may evolve in its effort to
lure residents, it will more
likely refashion the neighborhood in its own image.
Thanks to Industry City, reports StreetEasy, the popular New York real-estate
guide, “a new hipster wave
is beginning” in Sunset Park.
Photographer Corey Hess,
a returns agent for an Industry City photo-equipment
rental company, says he
hasn’t had much time to explore Sunset Park, but that
will change when he moves
to the neighborhood from
his current home in Brooklyn’s Bed-Stuy neighborhood.
“I know it’s on the rise,”
he says of Sunset Park. “I’m
trying to get in early.”
ly
.
Customers line up at Cryo Cream, a store in Industry City that uses liquid nitrogen in making ice cream.
that demographic, that
comes here,” he says.
Jose Navarro, who moved
to Sunset Park in 1977 and
owns a local bodega, says he
knows why. While he enjoyed a recent tour of Industry City with his son, he was
taken aback by the prices,
such as the $9 hamburger.
“That’s for different people, not me,” he says. “And
that’s what people say
around here.”
To be sure, Industry City
is trying to welcome the
Sunset Park community with
free events including “Salsa
Sunday” dance parties, a
dominoes tournament, a
Cinco de Mayo celebration
and tours for school children.
More than 1,000 locals,
meanwhile, have enjoyed Industry City’s free job training and placement, English
instruction, small-business
consulting and citizenship
classes.
Industry City isn’t doing
this just to be neighborly; it
is good business, says Chief
Executive Officer Andrew
Kimball.
Folks from the neighborhood could shop and eat at
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
What happens when
you lure 450
of the area’s
trendiest
small businesses to a working-class
Latino neighborhood? New
York City is full of such unintentional sociological experiments, and the most interesting these days has to
be the development of Industry City—a former warehouse complex catering to
sophisticated craftspeople,
designers and technology
types—in the Sunset Park
section of Brooklyn.
If you haven’t checked out
Industry City, you should, if
only to see what the cool
kids are up to. The
brusquely elegant 16-building complex, with its waterfront block-long industrial
buildings totaling 6 million
square feet, has been transformed in four years into
what feels like the office
park of the future.
Its food hall claims to
have the “world’s first avocado bar” and a “Whole-animal Salumeria” sells beef
tenderloin for dogs. You can
ELIZABETH SHAFIROFF FOR THE WALL STREET JOURNAL
Two Worlds Collide in a Working-Class Area
Shoppers browse through clothes and other items at Juicy D’s Tees.
NYPD, Civilian Board Differ on Penalties
no
n-
BY ZOLAN KANNO-YOUNGS
IMAGINE THE BEST
SLEEP OF YOUR LIFE...
EVERY NIGHT
The New York Police Department issued disciplinary action
to fewer officers recommended
for punishment by a city independent oversight agency in the
first six months of 2017 from a
year earlier, according to a report by the watchdog group.
The Civilian Complaint Review Board, which investigates
complaints made by civilians
against the NYPD, recommended punishment for 251 officers in the first half of 2017,
according to the agency’s semiannual report. Commissioner
James O’Neill, who has final say
over what penalty an officer
will receive, issued punishment
to 182 of those officers—or 73%.
In the first six months of
2016, then-Police Commissioner William Bratton penalized 289 of the 350 officers
who were recommended punishment by the CCRB, or 83%.
Mr. Bratton stepped down in
September 2016.
Fewer civilians are issuing
complaints to the CCRB, as the
number of interactions between
civilians and police decline, ac-
cording to agency officials. Civilians filed 2,263 complaints
with the agency in the first half
of 2017 compared with 2,339
during the same time last year.
Of the 182 officers to receive punishment in the first
half of 2017, Mr. O’Neill gave a
lesser penalty than recommended by the CCRB to 64 of-
ficers, meaning 52% of the officers
recommended
punishment by the CCRB received lesser or no punishment. This compares with 38%
of officers who received no
punishment or a lesser discipline in the first half of 2016.
The recommended punishments ranged from commanding-officer guidance to additional training, a loss of
vacation days or charges that
could lead to a department trial.
If a case goes to trial, Mr. O’Neill
receives recommendations from
the CCRB, which sometimes
serves as the prosecution, and
an NYPD-employed judge before
deciding the penalty.
The discrepancy in the
CCRB recommendations and
punishments doled out by Mr.
O’Neill are mostly due to a
tightening of the appeal process, according to CCRB and
NYPD officials.
In previous years, the NYPD
was able to ask the CCRB to
reconsider a recommended
punishment within 90 days of
it being issued. Officials from
both agencies said this deadline was loosely followed.
CCRB officials said they are
now only considering appeals
presented within 90 days that
include new evidence or raise
questions about whether the
law was followed. Appeals
submitted after the deadline
that “merely requests consideration of the CCRB’s disciplinary recommendations” automatically are denied.
The CCRB rejected 61 of 79
appeals filed by the NYPD in
the first half of 2017, compared with 16 of 38 appeals in
the first half of 2016.
“There was always a provision of allowing cases received
after 90 days to be presented
to the Board, but the Board
came to more stringently enforce this toward the end of
2016,” said Jonathan Darche,
CCRB executive director.
The disciplinary procedures
have gained attention over the
years, including the trial of officer James Frascatore, who
was accused of using excessive
force against retired tennis star
James Blake in 2015. The CCRB
recommended a loss of 10 vacation days, which is still under
consideration by Mr. O’Neill.
NYPD
Police Shoot Man
In Bronx Apartment
SOHO | 75 GRAND ST,
NEW YORK, NY 10013, 212-219-8022
MADISON | 1100 MADISON AVE,
NEW YORK, NY 10028, 212-628-8022
W 18TH STREET | 232 W 18TH ST,
NEW YORK, NY 10011, 212-706-0509
GREENWICH | 23 E PUTNAM AVE,
GREENWICH, CT 06830, 203-629-8022
58TH STREET | 202 E 58TH ST,
NEW YORK, NY 10022, 212-486-8022
HAS T E N S . COM
Police shot and killed a man
they said confronted them with
a “machete-type sword” while
they were executing a search
warrant early Tuesday on a
Bronx apartment.
Officers went to an apartment at 230 Brook Ave. in the
Mott Haven section of the
Bronx at 4:10 a.m. with a warrant that was based on infor-
CORRECTIONS AMPLIFICATIONS
A photo with a Nov. 29 article about development on
Staten Island showed a view of
Brooklyn from St. Marks Place,
Staten Island. A photo caption
incorrectly said it was a view
of lower Manhattan.
Readers can alert The Wall Street
Journal to any errors in news articles
by emailing wsjcontact@wsj.com or
by calling 888-410-2667.
mation that guns and drugs
were there, said Terence Monahan, chief of patrol for the New
York Police Department.
Two officers went to the
rear bedroom of the apartment,
where they encountered a man
holding “a 2-foot-long blade,”
Chief Monahan said. The man—
identified as Mario Sanabria, 69
years old—ignored officers’ orders to drop the weapon and
approached the lead officer,
who fired one shot hitting the
man in the chest, police said.
The only other person in the
apartment—an elderly man who
wasn’t injured—was transported
to the hospital for evaluation,
police said.
Chief Monahan said the machete-wielding man wasn’t the
person the police were looking
for in the search warrant. That
man was arrested outside the
apartment after the shooting,
police said.
The two officers who went
to the rear bedroom didn’t have
stun guns, but a sergeant behind them did, Chief Monahan
noted. The officers weren’t
wearing body cameras.
—Zolan Kanno-Youngs
THEODORE PARISIENNE
GREATER NEW YORK WATCH
Officers at the Bronx building where police shot and killed a man.
WEST POINT
Remains in Grave
Aren’t 1776 Hero
Remains believed to be of a
Revolutionary War hero buried
at West Point don’t belong to a
woman known as “Captain
Molly” after all, but to an unknown man.
The U.S. Military Academy
said Tuesday the discovery
stems from a study of skeletal
remains conducted after Margaret Corbin’s grave was accidentally disturbed by excavators
building a wall in the West Point
Cemetery last year.
Tests revealed the remains
were those of a man who lived
in the 1700s.
Corbin was known for firing a
cannon in 1776 during a battle in
New York City after her husband
was killed. She was wounded
but lived another 24 years.
—Associated Press
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A13
LIFE&ARTS
TURNING POINTS | By Clare Ansberry
Be personal. Reach out in person, or on
the phone, rather than online. While
social media has opened more
channels to express sorrow and
offer condolences, it’s not the
same as personal connection.
Be inclusive. Invite those who are
grieving to a holiday outing or
gathering. (You might want to avoid
using the word ‘party.’) If they aren’t
feeling up to it, they can always say no,
but they might want to be with others.
Be flexible. Understand that plans might change at the last
n-
a friend at a party. “He helped me
through a lot,” the boy wrote. “I’ll
always appreciate his friendship.”
Another letter, from the mother of
a fellow student, recalled how Bryson had come over to help put together a dining room table. “He
made me laugh so hard,” she wrote.
The family is trying to figure
out how to get through Christmas,
Ms. Blohn says. In years past, they
decorated the tree with bulbs
given every year to each child.
This year, they bought all new ornaments. They are adding more
outdoor lights at the request of
her youngest son, Jorge. “He
wants Bryson to see them from
heaven,” says Ms. Blohn, who lives
in Lincoln. Bryson’s name will be
included when the kids draw
names for gifts. Whoever gets his
name will buy a gift for Toys for
Tots or another charity.
Ms. Blohn says she still plans to
host Christmas dinner, with the
Be specific. Instead of saying ‘Let me know if you need
anything,’ offer to put up lights, address cards, carry a
tree into the house, bake cookies or take
children shopping.
Be mindful. Remember to remember
not just on the holidays. On important dates like birthdays and anniversaries send a note, saying that you
miss the person who died. Mention
their name. Families don’t want loved
ones forgotten.
same meal and mayonnaise Jell-O
salad that the kids joked about. She
is asking relatives and friends to
share stories and tears. “Don’t make
Bryson the elephant in the room,”
she says. “I don’t want him to be
the thing you shouldn’t talk about.”
Such encouragement is useful.
More than 60% of Americans admit they sometimes avoid talking
to someone about their loss because they don’t want to say the
wrong thing, according to the New
York Life Foundation survey.
Julie Kaplow, Ph.D. and director
of the Trauma and Grief Center at
Texas Children’s Hospital in Houston, remembers one mother of
three asking family members to
come to Christmas dinner and
bring a photo or keepsake relating
to her husband, who had died a
year earlier. One uncle brought
tickets to a football game they attended together. One of her children had a book they used to read
together, and another a
shirt that smelled like her dad.
“For the kids, especially, knowing that this was something that
their father had actually touched
or owned was especially powerful
and made them feel more connected to him,” says Dr. Kaplow.
For many who have lost family
members, deciding whether to
keep holiday traditions or start
new ones is complicated and
deeply personal. One person may
feel comforted by an empty place
setting and another pained.
Changing anything can make some
people feel guilty.
Brook Griese, a Denver-based licensed psychologist and chief executive of Judi’s House, which provides services to grieving children
and families, has a friend whose
daughter died several years ago and
continues to feel acute loss around
the holidays. The mother wrote her
daughter a letter every Christmas
HEALTH & WELLNESS
BY LUCETTE LAGNADO
A VEGAN DIET BEATS
A HEART-HEALTHY ONE
SASHA MASLOV FOR THE WALL STREET JOURNAL
KATHY FARIELLO LOVES Italian food,
from fried meat balls to pizza rustica with
ham and salami, and her favorite, mozzarella cheese wrapped in prosciutto.
But when the 69-year-old widow, who
suffers from coronary artery disease, joined
a clinical trial sponsored by NYU Langone
Health to test a vegan diet on heart patients, she had to say ciao to all these
dishes.
In came the kidney beans and dairy-free
imitation cheese. Out went the mozzarella
and cold cuts.
“All of that, forget about it,” says Mrs.
Fariello, who lives on Staten Island in New
York City. Yet she was determined to follow
the diet, convinced it could save her. “I have
four beautiful grandchildren. I will do whatever I have to do,” says Mrs. Fariello, who
had a heart attack a couple of years ago.
Results from the NYU Langone trial,
which were presented last month at a meeting of the American Heart Association,
found that a vegan diet was better at lowering one risk factor for heart attacks than
the meal plan recommended by the AHA itself.
Mrs. Fariello was one of 100 patients who
took part in the randomized clinical trial
that divided patients with heart disease into
two groups: One observed a vegan diet and
the other followed the diet of the American
Heart Association, viewed by some as the
gold standard.
Vegans typically embrace plant-based nu-
minute if someone becomes overwhelmed by the unexpected triggers of grief and can’t make a dinner or outing.
Kathy Fariello tried a vegan diet when participating in a clinical trial for patients with heart disease.
Eve and put it in her stocking. One
year, she forgot and needed encouragement from her friends that it
was OK to let that go.
“She said that no matter how long
it’s been, you still feel like someone
is missing,” says Dr. Griese, whose
husband, former Denver Broncos
quarterback Brian Griese, lost his
mother, Judi, when he was 12.
Every holiday in 2014 was
hard for Dana Germain, whose
husband Rich died of a heart attack in January of that year.
Having a big family and being
together helped.
The hardest holiday was
Mother’s Day because her husband was the one who made sure
their four children made cards and
bought flowers. In his absence, her
friends stepped in to make that
happen. They also left balloons
and streamers outside the family’s
house in the weeks leading up to
Valentine’s Day. Her children
called them their elves.
“The most meaningful things
weren’t words,” she says. “They
were actions.” And they didn’t just
come around the holidays, but
throughout the year. Friends left
bagels and coffee outside their front
door every Sunday morning for six
months. One left notes in her mailbox. Another came over to watch a
movie. “It was just a reminder that
I wasn’t alone,” she says.
That support, along with counseling at Dr. Kaplow’s center, helped
them through that first year. On Father’s Day 2015, she and her children began a 14-month trip around
the world, visiting 28 countries—a
trip Ms. Germain and her adventurous husband dreamed about.
trition. They don’t eat animal-based foods
such as meat or fish, and shun eggs and
dairy products such as milk or cheese. The
AHA diet allows modest amounts of lean
meat, including sirloin and pork chops,
chicken and fish, along with eggs and lowfat dairy products.
Mrs. Fariello stuck to the vegan plan and
“never cheated.” She learned to enjoy fake
cheese and for protein, she prepared lots of
bean salads. But she drew the line at tofu,
dismissing it as “rubbery.”
James Slater, the senior NYU Langone interventional cardiologist who helped oversee the trial, said he wanted it to help demonstrate that a vegan diet might be “a
powerful form of therapy” for people with
coronary artery disease.
“Despite all of our amazing pharmacology, we haven’t exactly cornered this disease,” says Dr. Slater, a professor of medicine at NYU School of Medicine, citing the
fact that heart disease remains the leading
cause of death for Americans. “We have to
be thinking along other lines” beyond medication and procedures, he says.
But when he and his colleagues launched
the diet trial three years ago, they found
few takers. The doctors offered two months
of free groceries delivered to each participant’s home, oversight by a dietitian and
monitoring by medical experts.
Clinical staff reached out to more than
700 people to get the needed 100 for the
trial. “It had absolutely no risk. We give you
the food, what have you got to lose?” he recalled thinking. “And we only got 14% [sayPlease see DIET page A15
JON KRAUSE
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Ways to Care for Friends and Family Dealing With Loss
no
PETE DEMMA remembers one of
the greatest gifts he and his
daughter, Rubie, received the
Christmas of 2015, the year his
wife died of a brain aneurysm.
His wife, Teresa, cherished the
holidays, hosting parties and decorating their home in Lincoln, Neb.
Over their 13-year marriage, she collected enough decorations to fill 15
large plastic boxes. His job was to
bring them down from the attic. She
did the rest, beautifully. When she
died, both he and Rubie, who was 10
at the time, were overwhelmed.
“I was real close to getting rid of
most of them,” says Mr. Demma.
But then some of Teresa’s closest
friends came over and together they
put all 15 boxes of decorations up.
Looking back, he says, it was
probably one of the most helpful
things they could have done.
The holiday season, whether
Christmas, Hanukkah or Kwanzaa,
is among the most difficult times
of year for survivors of loss. The
rituals that made them special—
hanging stockings, lighting candles, baking cookies, singing carols—are now painful because a
central figure who shared those
special moments is now gone.
“It really magnifies the absence
of that person in our lives,” says
Terese Vorsheck, a clinical psychologist and director of Pittsburgh’s
Highmark Caring Place, which
founded Children’s Grief Awareness
Day, a day set aside every November to recognize that holidays are
hard for children whose parent,
sibling or grandparent has died.
That’s true whether the loss
was months ago, or years ago.
Adults who lost a parent in childhood say it takes six years or
more to move forward, according to a new survey on bereavement from the New York Life
Foundation, which supports programs for grieving children. Yet
support typically tapered off
within three months for a majority
of those surveyed, and was especially missed around the holidays.
What many of those grieving
find most helpful is hearing stories
about their loved ones. It doesn’t
have to be momentous or poignant.
It can be funny: her comical Irish
jigs, his snoring. Teresa Demma
was legend for her chip dips.
Families don’t want loved ones
forgotten. For children, it can be
even more important, giving them
permission to talk about what is
on their minds and helping them
feel less lonely.
“Kids worry they will forget
what mom smelled like or the
sounds of their dad’s laugh,” says
David Schonfeld, a Los Angeles pediatrician and leading childhood
grief expert and director of the
National Center for School Crisis
and Bereavement. “If you learn
more about someone close who
died, your relationship grows.”
Donna Blohn knew that Bryson,
the sixth of her seven children, was
empathetic but didn’t know how
much her son had touched other
people’s lives. One boy wrote her a
letter after Bryson, 18, died in May
after taking a pill offered to him by
ly
.
Coping With Grief at Holidays
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or personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A15
LIFE & ARTS
SIGHTINGS | By Terry Teachout
The Levine Cataclysm
How allegations against James Levine of sexual misconduct with teenagers could topple the entire Metropolitan Opera.
truly great artist to be swept up in
the current maelstrom of sexualharassment accusations. If it is
proved that he did what his accusers claim, there can be no doubt
that his extraordinary career will
come at once to a shameful end.
Beyond that, much will hang on
what Proskauer Rose’s investigation
finds about Mr. Levine and what
“everybody”—that is, those inside
the Met—did in fact know. For this
is no ordinary scandal: It is an existential crisis, one that threatens the
survival of a financially beleaguered
organization that had already spent
years struggling with the problem
of Mr. Levine’s declining health.
Will more accusers now come
forward? If so, how many? And
DIET
ported allegations of sexual abuse
by Mr. Levine.” It isn’t hard to
imagine the company’s major donors similarly deciding en masse
that they no longer wish to be associated with an opera company
that shielded Mr. Levine from the
consequences of his actions, if that
proves to have been the case.
It’s hard to see how Mr. Gelb
could survive under such circumstances, despite his statements to
the Times and elsewhere that accusations against Mr. Levine came
to his attention only twice before
and that Mr. Levine had denied
them. He would likely have to be
replaced in the short term by a
complete outsider charged with
cleaning house—especially since
Mr. Teachout, the Journal’s drama
critic, writes “Sightings,” a column
about the arts, every other week.
Write to him at tteachout@wsj.com.
A vegan menu
BREAKFAST: tofu scramble (1
serving), avocado (2 tbsp);
whole wheat bread (1 slice),
fresh fruit (1 small or ½ cup),
soy or almond milk B-12 fortified (1 cup), juice (½ cup)
LUNCH: vegan chili (1 serving),
whole wheat roll (1)
DINNER: smothered black bean
sweet potato, tossed salad
n-
tant risk factor for heart patients, and some doctors
contend that reducing it may
help stave off events such as
heart attacks. According to
Dr. Shah, the group on the
vegan diet saw a median decrease of 28% in an inflammation marker known as
high sensitive C-reactive
protein; the median decrease
in the heart association diet
group was 7%.
Some researchers aren’t
persuaded. “What we care
about is not what happens to
these markers, but can you
reduce the risk of cardiovascular death and heart attacks
and strokes?” says Steven
Nissen, chairman of cardiovascular medicine at the
Cleveland Clinic, who believes the trial’s findings
aren’t “statistically significant.”
“There is this cult around
the vegan diet that I object
to,” Dr. Nissen says. “People
fervently believe a vegan
diet will erase your heart
[disease] but we can’t tell
the public to go out and have
this diet based on flimsy science.” To prove the vegan
diet’s efficacy would take
more than NYU Langone’s
100-person trial, he says.
“These are very interesting preliminary findings,”
no
Continued from page A13
ing yes], which was unbelievable to me.”
The trial, which was supposed to take two years,
ended up running three
years, because of the difficulty in enrolling patients,
says Binita Shah, the interventional cardiologist who
was the principal investigator. Begun in March 2014, it
ended in February 2017.
Some patients refused for
fear they would be assigned
to the vegan regimen. “If I
don’t have meat,” one declared, “I will die.”
Then there were objections raised by purists, who
spotted graham crackers and
other processed foods on
sample menus of what was
labeled a vegan and wholefoods diet. Dr. Shah didn’t
waver. “A graham cracker
was allowed,” she says, as
were waffles and pretzels.
Organizers dropped the
claim that it was a wholefoods diet.
One patient on the vegan
diet withdrew because he
was hungry at night and
kept raiding the refrigerator.
Still, there were only two
dropouts from the 100, Dr.
Shah says, both from the vegan group.
She unveiled the results at
the American Heart Association’s Scientific Sessions in
November. The NYU Langone
team stated that “a vegan
diet significantly reduced
systemic inflammation and
improved lipid profiles in patients” with coronary artery
disease while “an AHA recommended diet did not.”
Inflammation is an impor-
An AHA menu
BREAKFAST: scrambled egg (1), avocado (2 tbsp), whole wheat bread
(1 slice), fresh fruit (1 small or ½
cup), 1% milk (1 cup), juice (½ cup)
GETTY IMAGES/ISTOCKPHOTO (2)
were attempts made to control,
bury or cover up the damage? If
the number of accusers continues
to grow, it will appear increasingly
likely that others, at the Met and
elsewhere, knew more about Mr.
Levine’s alleged behavior than has
previously been acknowledged.
Should this prove to be the case,
then the poison will have spread
beyond a single individual to the
institution as a whole.
The distancing maneuvers have
already started. After the story
broke, Local 802 of the American
Federation of Musicians, which
represents the members of the
Met’s orchestra, issued a statement that began, “We are horrified
and sickened by the recently re-
ly
.
HIROYUKI ITO/GETTY IMAGES
James Levine in
2013; four men
have publicly
accused him of
abusing them
sexually many
years ago.
the storm may grow so big as to
make it immaterial that Mr.
Levine’s alleged actions occurred
on someone else’s watch. Furthermore, Mr. Gelb’s successor could
conclude that the only way for the
Met to break with its now-tainted
past would be to make a fresh
start by asking Lincoln Center to
assume temporary control of the
company, replacing its entire management team with independent
outsiders fully empowered to
change the company’s culture.
And the board? In this scenario,
would its members be perceived as
having been collectively responsible for the company’s failure to
uncover Mr. Levine’s offenses? If
so, they, too, would have to resign.
Think such things can’t happen?
Well, recall the Chicago “Black
Sox” scandal, in which eight members of the White Sox were
charged with throwing the 1919
World Series to the Cincinnati
Reds. When the fix came to light,
the team owners responded by appointing a federal judge, Kenesaw
Mountain Landis, as the first baseball commissioner. In order to restore faith in the integrity of the
game, Landis was given unlimited
power over organized baseball. His
first move was to ban all eight
players—for life.
I’ve had sharp things to say in
the past about Mr. Gelb’s unsure
leadership. Moreover, it may well
be, as I’ve also suggested in this
space, that the 3,800-seat Met is
simply too unwieldy to successfully embrace the innovative policies without which it cannot flourish in an adverse cultural climate.
But even in its present state of
disorder, the Met remains one of
the world’s greatest artistic organizations. For it to go under would
be a disaster. Yet this is the dire
future it may end up confronting.
co Fo
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‘EVERYBODY KNEW.” That’s
what they said about Harvey
Weinstein, and that’s what they’re
saying now about James Levine—
but can it be true? Not in the narrowly legal sense. As of today, nobody “knows” anything about the
alleged transgressions of the Metropolitan Opera’s music director
emeritus beyond the indisputable
fact that, as the New York Times
has reported, four men have publicly accused him of abusing them
sexually many years ago when
they were teenagers. According to
the New York Post, which broke
the initial story on Saturday, one
of them went so far as to file a police report in 2016.
Yet it is no less indisputable
that rumors that Mr. Levine is a
pedophile have circulated for the
whole of my adult life. I first heard
them in Kansas City in the ’70s. I
have yet to meet anyone in the
world of opera who was unaware
of these rumors. In that sense, everybody really did “know” about
him—and now, the whole world
knows it as well.
The Times reported over the
weekend that a spokesman for Mr.
Levine had no comment on the specific allegations that have now
emerged, and that he has twice denied to Met executives, in 1979 and
a year ago, any sexual misconduct.
But the company is taking the accusations seriously enough to have
suspended its relationship with the
conductor, who served as its music
director from 1976 to 2016. Over
the weekend, Peter Gelb, the Met’s
general manager, canceled all of
Mr. Levine’s scheduled performances and commissioned
Proskauer Rose, an outside law
firm, to conduct an investigation.
It is impossible to overstate the
significance of these developments.
In a very real sense, James Levine
is the Met. He is the public figure
most closely associated with the
company, the one who has been
central to its fortunes for more
than four decades, and the first
LUNCH: Asian quinoa salad (1 serving), fresh fruit (1 small or ½ cup)
DINNER: skirt steak with vegetables (1 serving), brown rice (½ cup)
Source: NYU Langone Health and
NYU Steinhardt, Department of
Nutrition & Food Studies
Christopher Gardner, a professor of medicine at Stanford University in Palo Alto,
Calif., says of the NYU Langone study. “This helps support that vegan can be a
healthy choice for some,” he
says, but more in-depth
studies are needed. Dr. Gardner, a vegan and a former
member of the nutrition
committee of the American
Heart Association, says that
the NYU findings don’t undermine the AHA diet.
Jo Ann Carson, chairman
of the AHA’s nutrition committee, recognized the work
that went into the NYU Langone trial but said its findings didn’t shake her belief
in the more moderate approach the association endorses.
“Does this mean we
should give up our chicken
and skirt steak? I would say
wait a minute,” says Dr. Carson, a professor of clinical
nutrition at the University of
Texas Southwestern Medical
Center. “They have shown in
the short term, in the eight
weeks [of the trial], that the
inflammatory marker was
lower, but I wouldn’t call
that an amazing difference.”
Dr. Shah acknowledges
that what she and her team
conducted was a “pilot
study” and that a larger trial
is needed. Realistically, says
Dr. Slater, “it will take 10
years and meanwhile you are
supposed to advise your patients” now on what to eat.
The study noted that both
diets offered benefits such as
weight loss. Mrs. Fariello
says she went to 150 pounds
from 172 and felt “terrific.”
These days she is a vegan
two days a week, and has
gone back to fried meat
balls, but only once a month
“when my daughters-in-law
make them.”
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THE WALL STREET JOURNAL.
A16 | Wednesday, December 6, 2017
SPORTS
HEARD ON
THE FIELD
The Coaching Carousel
In the Sunshine State
To understand the head coaching
delirium that has engulfed college
football in the state of Florida this
month, consider the trajectory of
Willie Taggart.
In 2016, he was the coach of
South Florida. For 2017, he left to
coach Oregon. Now he’s the next
coach at Florida State.
Taggart (pictured below), who
went 7-5 in his lone season with
the Ducks, will replace Jimbo
Fisher, the former Seminoles coach
who won the school a national
championship in the 2013 season
but split for a jumbo-sized offer
from Texas A&M.
Taggart’s hiring on Tuesday
capped a dizzying array of coaching changes in the state that is
one of the country’s premier
football hotbeds.
The last two weeks alone have
been a mad dash of coaches crisscrossing the entire country—and
Florida has been at the epicenter of
the action. It wasn’t only Florida
State hiring Taggart. Florida also
hired Mississippi State coach Dan
Mullen to try to revive its struggling program.
Central Florida’s Scott Frost,
who engineered a stunning turnaround at a program that went
0-12 in 2015 and is 12-0 this year,
bolted to coach Nebraska, the
school Frost helped lead to a
share of the 1997 national championship. That created the state’s
sixth vacancy in the last year and
change. The school filled it with
Josh Heupel, who had been the offensive coordinator at Missouri.
These three hires match the
flurry from a year ago, when three
high-profile names took mid-tier
jobs in the state: Butch Davis at
Florida International, Lane Kiffin at
Florida Atlantic and Charlie Strong
at South Florida. And with so many
openings this year, there have even
been rumors that some of these
coaches may look elsewhere.
All of this means in the last year
or so, six of the seven Football
Bowl Subdivision jobs in Florida
have changed hands.
The seventh is Miami’s Mark
Richt. He’s now the longest-tenured
coach in the state. He’s only in his
second season with the Hurricanes.
—Andrew Beaton
The Olympic flag and the Russian flag during
the closing ceremony of the 2014 Sochi Games.
OLYMPICS | By Jason Gay
Weather
Most of us have some
pretty great memories of
the Games. But that
nostalgia is fading.
city or country seems laughable today. There’s a reason why Boston
ran screaming from them (they also
ran screaming from them because,
well, it’s Boston). The IOC could
barely give away the 2022 Winter
Olympics before they settled on the
charming ski village of Beijing,
China. Beijing! That’s right—host of
the 2008 Summer Games.
I wonder if Tampa could have
gotten them if they applied.
And now this long-brewing fiasco with Russia and doping. The
IOC is taking an unprecedented
step here, banning an entire country—the harshest of all punishments for a nation it believes
thumbed its nose at the most
50s
Calgary
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40s
Seattle
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30s
Salt Lake
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Cheyenne
Sacramento
Los A
Angeles
Ange
San Diego
70s
40s
Colorado
p g
Springs
Las
L
Vegas
Veg
60s
Omaha
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Denver
San
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Phoenix
Ph
Springfield
Kansas
City
St.. Louis
th
Ft. Worth
10s
20s
70s 80s
Anchorage
A
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30s
40s
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Austin
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Mobile
Houston
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New
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an Antonio
A
San
Honolulu
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60s
U.S. Forecasts
32
80s
37
Rain
Cold
80s
Miami
50s
T-storms
Hi
38
83
49
75
44
47
47
61
49
35
62
44
50
25
52
Today
Lo W
15 pc
62 pc
36 pc
49 pc
26 s
26 pc
34 s
33 s
24 pc
18 s
47 s
16 s
34 s
8 c
39 pc
Tomorrow
Hi Lo W
32 17 pc
76 58 c
47 30 s
68 44 s
36 19 pc
43 24 s
48 32 pc
63 34 s
36 21 pc
38 22 s
65 48 s
38 15 s
50 32 s
26 18 pc
50 34 s
International
City
Amsterdam
Athens
Baghdad
Bangkok
Beijing
Berlin
Brussels
Buenos Aires
Dubai
Dublin
Edinburgh
Today
Hi Lo W
49 37 c
54 45 s
70 50 pc
89 75 c
48 26 s
44 37 c
45 35 c
84 64 pc
78 61 s
54 42 r
53 42 r
Tomorrow
Hi Lo W
48 36 r
62 46 s
60 39 s
92 76 s
41 24 s
43 39 pc
48 33 r
87 63 s
79 65 s
47 31 sh
46 30 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
42
42
85
70
48
91
53
67
53
52
89
72
74
51
26
82
43
82
77
57
83
41
51
86
76
68
52
38
46
44
36
39
40
41
46
50
54
60
27
65
67
68
Showers
Flurries
69
70
71
47
56
57
6 Mattress
annoyance
10 Ibuprofen
target
14 “Go this way”
indicator
15 Piece from
Puccini
16 Rustic cuisine
17 Job holder?
25 “People of Earth”
network
53 Schmear
accompanier,
often
28 Strategic alliance
54 Honshu hostess
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57 Make ___ of
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26 Mess up
61 Base vehicle
27 Treacherous
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37 Some charity
62 Tourney passes
29 Cornfield cry
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64 Skedaddle
30 Grad school
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67 In other ways
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45 Bulb holder
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POWER GRID | By David Alfred Bywaters
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who’s trying to compete clean
(don’t be a cynic—these athletes
do exist!), the IOC’s move must be
welcome, because there has to be
nothing like the frustration in dedicating your life to something—
and losing out to cheats. Yes, doping isn’t simply a Russian problem
—surely there will be souped-up
humans competing in Pyeongchang—but to not punish a
rogue national program (a host, no
less) would have been a demoralizing declaration of defeat.
What do you think? I still have
a soft spot for the remarkable athletic moments the Games routinely
produce—and I hold out hope that
future competitions like Los Angeles 2028 and a rotation of cities
can solve the abundant issues with
waste.
Still, it’s you, as part of the audience—which creates all those
media and sponsorship billions—
that gives the Games their global
power. What will the Olympic audience look like in a generation?
Viewing habits are changing by
the second, it seems. What will
Olympic brand be 10 years from
now? Five years from now? How
much damage is too much?
Most of us have some pretty
great memories of the Games. But
that nostalgia—along with some of
the myths—is fading. Lately, and
positively, we’ve been seeing the
Olympics for what they truly are.
The question is whether you’ll
want to see more.
The WSJ Daily Crossword | Edited by Mike Shenk
Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
V
Vancouver
baseline standards of integrity.
At the same time, it’s installing
a pathway to competition for Russian athletes who can prove no involvement in doping, allowing
them to compete neutrally under
the Olympic flag. They’ll reportedly wear outfits with the words
“Olympic Athlete from Russia,” or
“OAR,” which will immediately become the hottest duds on eBay.
(I am slightly panicked that the
money-crazed IOC might consider
allowing a corporate sponsor to
put its name on OAR—and those
unfortunate, clean Russian athletes
wind up as Team Arby’s Smokehouse Brisket.)
As for the ban, I think it’s the
right move. It’s easy to dismissively
wave a hand and assume that everyone is doping in global sports,
but the charges against Russia are
spectacular in terms of their scope
and cravenness. (If you haven’t
watched the Netflix whistleblower
documentary “Icarus”—which follows a dramatic period in the life
of Russian doping doctor Grigory
Rodchenkov—do it tonight.) Claims
of what happened in Sochi—a hole
through a wall to replace dirty
urine with clean urine; FSB participation—I’ve never seen anything
like it. And I follow bike racing.
That kind of systemic flouting
of the rules needs to be punished,
unhesitatingly, without worry of
the geopolitical ramifications. Or
possible tweets.
If you’re an athlete out there
co Fo
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catching up to the idea that, in the
absence of firm leadership, the
Olympics can be a wildly wasteful
endeavor. Have you watched the
photos from Sochi? A number of
the 2014 facilities already look like
decrepit haunted houses. Same for
Rio de Janeiro—and those Games
were barely one year ago.
The notion that the Olympics
will radically lift an aspirational
ly
.
Forget what I think.
I want to know what
you think about the decision Tuesday to ban
Russia from the 2018
Winter Olympics.
I want to know, because it’s really your take that matters—not
my thoughts as a privileged media
donkey. I’m getting on a plane to
Pyeongchang, South Korea, in February, regardless of who else is
showing up. You really think I
want to stick around and cover the
NBA All-Star Game? Zzzzzzz.
But my Olympic participation
is superfluous, to say the least.
It’s you—your time, your eyeballs,
your dollars, your high-volume
fascination that turned the modern games into a multibillion-dollar juggernaut, catnip for those
corporate sponsors like Visa and
media empires like NBC, which
may need programming and like
sports, but, make no mistake, are
really after you.
And it’s your continued fascination—or perhaps, disgust—that determines where they go from here.
It’s been a rough ride for the
Olympics in recent years. Even if
you put aside the crazy doping
conspiracy that the International
Olympic Committee believes Russia
engaged in when it hosted the 2014
Winter Games in Sochi—those interlocking rings have had a brutal
half decade. There have been the
predictable corruption sideshows,
but the public also seems to be
n-
MARK J. TERRILL/ASSOCIATED PRESS
What Do You Want From the Games?
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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A17
OPINION
conclusion, not the report’s.
The report, by former federal
prosecutor Timothy J. Heaphy,
a partner at Hunton & Williams, couldn’t be clearer that
most Charlottesville residents
revile the white supremacists,
but the report’s first line also
refers to Americans’ belief in
“an ordered liberty that guarantees all Americans the right
to express themselves in the
public square.”
Five weeks before the rally
in question, a KKK group from
North Carolina, consisting of
fewer than 60 people, held a
permitted rally in Charlottesville. More than 1,500 counterprotesters showed up. The city
urged left-wing groups to organize protest events away
from the Klan rally. Under the
slogan “don’t take the bait,”
police advised local activists
not to confront the Klan. The
permit holder, Amanda Barker,
asked the city not to publicize
the permit until the last minute to discourage an influx of
out-of-town activists—a request the town would have
been wise to honor.
“Counterprotester” is perhaps the wrong term, because
antiracist demonstrators came
not to express their own views
but to attack a legally sanctioned gathering. A lucky break
was a late decision, contrary to
plan, to allow the Klan to park
in an enclosed downtown garage rather than an open lot.
Without this tactical advantage, one officer later said “we
probably would have had to
shoot someone” to allow the
Klan to leave town.
Only after the Klan left did
the real riot begin, featuring
attacks on police, which the
Virginia State Police broke up
with tear gas.
The KKK event was foreshadowing. Five weeks later
came the so-called Unite the
Right rally that became a national and global scandal. A
New York City detective
phoned in advance to warn local police about “Black Lives
Matter” activists heading to
An unflinching report
on the failure of police
to control ‘antifascist’
protesters.
Charlottesville. A joint state
and federal police agency, the
Virginia Fusion Center, “shared
credible threats that members
of Antifa would bring soda
cans filled with cement and
might attack police.”
To avoid giving left-wing
counterprotesters the impression the police were ready for
a fight, officers were denied
permission to don riot gear. A
proposal that local militants
be asked to sign statements
forswearing violence was rejected. A proposal to close the
whole of downtown to vehicle
traffic was rejected. A petition
from local businesses to cancel
the event was rejected. A single officer was assigned to the
intersection where Heather
Heyer would later be killed in
a vehicular homicide—a
lightly-equipped “school resource officer” who would be
withdrawn when events, as expected, “went south.”
Instead—and this is a bit
hard to believe—the local police chief’s plan was to let the
violence at the Aug. 12 event
get out of hand and then declare an unlawful assembly to
justify unleashing a Virginia
State Police riot force to disperse the crowd.
A name familiar to readers
of this column will be Pam
Starsia, a left-wing leader in
Charlottesville who consistently resisted police efforts to
protect peace and property as
a manifestation of “white supremacy.”
The report is unflinching in
its portrayal of Charlottesville
police standing behind barricades and failing to intervene
in the face of multiple crimes.
The “one instance” that represents an exception is captured
on page 128. A photo shows Lt.
Joe Hatter, head of the department’s investigative unit, towering over a scrawny, bannerwaving white supremacist
whom he had just rescued
from a mob.
As the report details, the
armed militias that featured so
heavily in press coverage at the
time, and were wrongly assumed to be aligned with the
white nationalists, closed in to
give the officer cover while he
intervened and generally acted
to protect members of the public regardless of affiliation.
Two officers were recorded
discussing the incident on
their body-cam mikes: “I like
those militia guys,” said one.
His colleague replied, “Yeah,
they’re doing a good job.”
The World Has Taken Trump’s Measure
By William
A. Galston
no
past 100 years.
By pulling the U.S. out of
the Trans-Pacific Partnership,
Mr. Trump has ceded economic
leadership in Asia and beyond
to China, whose president
touts the Chinese model to
other countries that want the
blessings of prosperity without
the inconveniences of liberty.
To back up this offer, China is
investing huge sums in its
“One Belt, One Road” plan and
in the Asian Infrastructure Investment Bank.
These moves are having the
intended effect. Myanmar,
which had long been dominated by anti-Chinese sentiment, is now accepting China’s
blandishments. The country’s
leader, Aung San Suu Kyi, went
to Beijing last week for a conference hosted by the Communist Party.
Vietnam, which has looked
to the U.S. as a counterweight
against its historical enemy to
the north, now wonders
whether it must accept Beijing’s economic leadership and
yield to its claims in the South
China Sea. Philippine President
Rodrigo Duterte has made
noises about abandoning his
country’s alliance with the U.S.
in favor of China. Even Australia, one of our closest allies, is
openly debating how to deal
with American decline.
In the Middle East, the
Trump administration is busy
giving ground to Russia. Vladimir Putin is conducting Syrian
peace talks while America languishes on the sidelines. Turkey, a member of NATO since
1952, is endorsing the Kremlin’s leading role. Turkey’s
President Recep Tayyip Erdogan recently met with Mr. Putin and Iran’s Hassan Rouhani
to support negotiations on the
future structure of the Syrian
government and state.
Egypt was another longterm linchpin of American diplomacy, and Mr. Trump has
lavished praise on its autocratic leader. Yet Cairo has just
struck a deal allowing the largest Russian military presence
on its soil and in its airspace
since 1973. The U.S. doesn’t
even have an ambassador in
Egypt, let alone a coherent
policy to deal with this pivotal
country.
Even in Europe, America
has been diminished. Mr.
Trump’s early ambivalence toward NATO, which gave way to
a grudging expression of support, have left a residue of
doubt about the credibility of
American guarantees. He has
driven a wedge between the
U.S. and Germany, long our
closest ally on the Continent.
The “special relationship” with
the United Kingdom may not
survive his repeated gaffes,
capped by his impulsive decision to retweet discredited
n-
POLITICS
& IDEAS
Donald Trump
campaigned
on a pledge to
make America
great again.
As president
he is doing the
opposite: He is
making America
smaller
than at any
time in the
anti-Muslim videos from a
British fringe group.
Close to home, Mr. Trump’s
brand of leadership is sorely
trying Canadians’ patience:
93% view him as arrogant, 78%
as intolerant, and 72% as dangerous. Mexico’s people have
also been united against the
U.S., by Mr. Trump’s hamhanded immigration policies
and heedless negotiations to
revise the North American Free
Trade Agreement. This may
From Asia to Europe,
he has squandered
America’s influence
and moral authority.
well lead Mexicans to elect an
anti-American left-wing populist as their president next year.
That Mr. Trump has no discernible policy toward Central
and South America is probably
a good thing.
Squandering
America’s
economic and political influence is bad enough. Far worse
has been the way Mr. Trump
has dissipated our moral authority. Yes, the U.S. has
struck deals with unsavory
regimes, especially during the
Cold War, and has sometimes
failed to respect the outcomes
of free and fair elections. In
the main, however, America
has pushed for free societies
and democratic governments
around the world, while
speaking against repression in
all its forms.
Until now. The Trump administration has all but abandoned democracy promotion.
In practice, an “America First”
foreign policy means being indifferent to the character of
the regimes with which the
U.S. does business.
I wish I could say that President Trump shares this indifference. In fact, he prefers autocrats to elected leaders. He
admires their “strength.” He
envies their ability to get their
way without the pesky opposition of legislatures and courts.
He probably wishes he had
their power to shut down critical news organizations. In his
ideal world, everyone would
fall in line behind his goals, and
his will would be law.
The world has taken President Trump’s measure. In a
2017 survey of 37 countries,
64% of people expressed confidence in Barack Obama’s
ability to do the right thing in
international affairs, compared with 22% for Mr. Trump.
The current president’s figures were 11% in Germany, 14%
in France, and 22% in the U.K.
The principal exception was
Russia, where Mr. Trump enjoyed 53% approval, compared
with 11% for Mr. Obama.
In 1776, at the threshold of
American independence, the
Founding Fathers espoused a
“decent respect to the opinions of mankind.” Today, citizens of countries around the
world regard the U.S. as morally diminished under Mr.
Trump’s leadership. He shows
no signs of caring, and he
probably doesn’t.
The Zionist Case Against an Embassy Move
By Eliora Katz
P
resident Trump will reportedly reveal Wednesday whether he will
soon fulfill his pledge to
“move the American embassy
to the eternal capital of the
Jewish people, Jerusalem.”
Some reports suggest Mr.
Trump will split the difference by officially recognizing
Jerusalem as Israel’s capital
while holding off the embassy
move.
As a Zionist, I agree Jerusalem is Israel’s eternal capital, as well as its contemporary one. But precisely as a
Zionist, I oppose such action
now. However appealing it is,
it would unnecessarily put
lives at risk.
Over the weekend, Hamas
vowed that U.S. recognition of
Jerusalem as Israel’s capital
would trigger “escalation” of
the “Jerusalem intifada.” The
Gaza-based terror organization issued a statement calling
on Palestinians to “incite an
Ad Libs
Ad Infinitum
Improv Nation
By Sam Wasson
(Houghton Mifflin Harcourt, 449 pages, $28)
H
aving made up an entire country, Americans like to
think of themselves as history’s great improvisers.
But it wasn’t until the decades after World War II
that improvisation took center stage in the arts. Think of
Miles Davis, John Coltrane and other jazz giants—but don’t
forget Jackson Pollock and his fellow action painters,
hurling color onto canvas with spontaneity and brio.
And then there was theater. In New York, the same period
was the heyday of the American musical, of frothy comedies
and heavy drama. But in Chicago something very different
was happening—young people were turning improvisation
into art. They were passionate, idealistic and, fittingly,
making it up as they went along. Over time, as Sam Wasson
tells us in his winning history of the subject, they would
transform the Windy City into the Florence of improv.
While they were at it, Mr. Wasson argues in “Improv
Nation,” they would revolutionize American comedy. By
now most of the funniest people in recent memory have
had some training in
improv, including Dan
Aykroyd, Buck Henry, Gilda
Radner, Bill Murray, John
Belushi, Steve Carell, Amy
Poehler, Tina Fey, Eugene
Levy, Andrea Martin and
Martin Short.
Chicagoans didn’t invent
improvisational theater, of
course. Starting in the 16th
century, troupes of itinerant
performers traveled Europe
improvising within the context of
familiar stories and situations in
the form of theater known as
commedia dell’arte. In Moscow, a century
ago, Konstantin Stanislavski used improv to teach his natural
acting style, an approach that became “the method” in the
U.S. thanks to the actor and teacher Lee Strasberg. The
psychiatrist J.L. Moreno, after coming to America from
Vienna, created a spontaneous form of theater around 1929.
Actors would improvise from audience suggestions or enact
stories from the day’s newspaper.
Yet Mr. Wasson is right that something special was
going on in Chicago. It started before World War II at Hull
House, the social-reform initiative launched by Jane
Addams, where young Viola Spolin taught improvisational
theater games to a multiethnic group of students. The goal
was both to liberate these cautious new Americans and to
bring them together into a community of trust. For a while,
at least, American theatrical improvisation would reflect
these therapeutic beginnings, retaining its emphasis on
generosity, cooperation and belonging. Spolin’s son, Paul
Sills, helped start Chicago’s Compass Players in 1955 in this
vein, and other early improvisers shared similar values,
insisting that they were doing a kind of people’s theater,
not mere comedy.
co Fo
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A m e r i c a ’s
news reporters couldn’t
get enough of
last summer’s
Charlottesville mayhem
BUSINESS
when
the
WORLD
story tangenBy Holman W.
tially
inJenkins, Jr.
volved Donald Trump.
But when a special report commissioned by the city this week
finally gives us something approaching a detailed story of
what happened that awful day,
the media couldn’t care less.
Read the report yourself. As
with any governmental snafu,
plenty of shortcomings are detailed in the city’s planning
and actions, not to mention a
dubious effort by the police
chief after the fact to control
the fact-finding. A bigger picture, though, suggests the city
should have canceled the
white-power groups’ permit
on grounds that the city
couldn’t assure their safety
given the expected influx of
counterprotesters.
Yes, this would have been
to invite a First Amendment
lawsuit. It would have meant,
as the city’s lawyers argued,
issuing a “heckler’s veto” to
left-wing activists, who sadly
were the primary threat of
violence.
The white supremacists
may be crazy but not the kind
of crazy as to welcome being
manhandled by a mob 40
times their size. And force
majeure is a pretty good legal
argument.
I should point out, this is my
BOOKSHELF | By Daniel Akst
ly
.
How Free Speech Lost in C-Ville
uprising so that this conspiracy does not pass.”
The “Jerusalem intifada”
refers to the Palestinian terrorism in the West Bank and
Jerusalem that exploded in
late 2015, largely over claims
that Israel was encroaching on
the holy site known to Muslims as Haram al-Sharif and to
Jews as the Temple Mount.
The symbolism isn’t
worth the risk to
life and stability.
Israelis have already been
murdered over the mere idea
of a U.S. Embassy move. In
early January Fadi al-Qunbar, a
Palestinian from East Jerusalem, killed four Israeli soldiers
in a truck-ramming attack. He
was allegedly motivated by
hearing a sermon excoriating
President-elect Trump’s campaign promise to move the
embassy.
In the Middle East, the political is always entwined with
the metaphysical. Moving the
embassy to the holy city is
playing with sacred fire, the
most dangerous kind. Especially as Israel needs to cooperate with Sunni Arab states
against Iran, now is not the
time to aggravate religious
volatility. No doubt Palestinian extremists will take any
excuse to attack Israel—but
why hand them such a potent
one?
Zionism was built on realizing the age-old dream of
Jewish self-determination, always married to a pragmatic
spirit. Zionists aim to become
agents, rather than victims, of
history by showing the world
that Jewish lives matter. That
requires realism—shrewd calculation of which battles are
worth fighting.
The father of modern Zionism, Theodor Herzl, expressed
the idea as follows: “Jews had,
as a matter of fact, long been
among the most ingenious
entrepreneurs. It was only our
own future that we had never
built upon a business basis.”
Idealism mattered, but so did
a hardheaded analysis of rewards and risks.
In this case, the potential
cost in lives outweighs the political symbolism. Would such
a declaration make a comprehensive peace deal any less
difficult? And there is only so
much Israeli authorities can
do to prevent enraged wouldbe martyrs from plowing cars
into crowds.
Former Prime Minister
Ehud Barak recently wrote
that all Israelis understand
“security comes before everything.” The fulfillment of
this presidential promise
would promote insecurity,
not security.
Is the symbolism worth the
risk to life and stability? I
think Herzl would say no.
Ms. Katz is a former Robert L. Bartley Fellow at the
Journal.
Improvisation revolutionized American comedy.
Early on, it emphasized generosity, cooperation
and belonging—and sometimes it still does.
Eventually rules emerged, formal and otherwise. In
general, it was better to give than to receive. Most
important of all: respond to a fellow performer’s initiative
with a “yes, and” approach by accepting any initiative and
building on it. If your partner claimed to have a lion cub in
his lap, play along.
In 1959, Sills co-founded Second City, which became a
magnet for young performers (and led to an important offshoot in Toronto). Improv not only conditioned the talent;
it changed the nature of the beast. Stephen Colbert cut his
teeth on improv and stayed in character (as a selfimportant opinion-monger) on “The Colbert Report,”
improvising routinely. Christopher Guest turned improv
into a cinematic art form: His “Waiting for Guffman”
(1996), a hilarious pseudo-documentary about a small-town
theatrical production, was largely improvised within a preestablished narrative.
Hovering over all this postwar invention like a pair of
enigmatic deities are Mike Nichols and Elaine May, or
“Fred and Ginger on Freudian parquet,” as the author
memorably describes them. They met at the University of
Chicago and drifted apart until Nichols spotted Ms. May a
couple of years later as she was reading a magazine in a
train station. “Out of the side of his mouth, in a German
accent, he whispered, ‘May I seet down?’ Immediately, she
replied, ‘If you veesh.’ ” Like a good spy, May kept her eyes
on her magazine.
In 1960, while their Broadway show was in previews,
Nichols & May initiated their practice of closing each
performance by riffing on audience suggestions. Mr.
Wasson’s account of these moments will make you weep for
Camelot. Audiences asked for improvs based on Eliot and
Proust, Salinger and Irwin Shaw, sometimes in Kabuki or
Elizabethan style. Once, when Nichols was improvising a
disc jockey named Jack Ego interviewing Ms. May (playing
a starlet), they discussed her imaginary new film—a
musical adaptation of “The Brothers Karamazov.” At his
request, she sings a bit: “There was dashing Dmitri, elusive
Ivan /and Alyosha with the laughing eyes / Then came the
dawn, the brothers were gone, I just can’t forget those
wonderful guys.”
Mr. Wasson is not the first to chronicle the innovative
comedians of the period (see Gerald Nachman’s “Seriously
Funny” from 2003), but he makes fine use of improv as a
prism for understanding the development of American
comedy, and it’s a pleasure to encounter his acute
characterizations of such talents as Alan Arkin, Bill Murray
and Del Close (1934-99), the self-destructive guru of the
genre little known in the wider world.
Mr. Wasson also captures the big picture, showing the
evolution of improv from its utopian beginnings to a more
commercial and aggressively funny style—from Elaine May,
in other words, to John Belushi. Yet the original spirit lives
on, dispersed into an array of spaces nationwide. There,
dentists, schoolteachers and executives take improv classes
after work to make their own spontaneous art, to gain
confidence and to be part of a community. Viola Spolin,
who had such high hopes for improv at Hull House, would
have been delighted.
Mr. Akst is the author of “We Have Met the Enemy:
Self-Control in an Age of Excess.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
A18 | Wednesday, December 6, 2017
OPINION
LETTERS TO THE EDITOR
No Alternative, No Tax Problem
It’s Time to Let the Market Set Interest Rates
P
The Right Move on Monuments
n-
resident Trump announced Monday that nounced Monday that he would shrink Bears
he will dramatically reduce the acreage Ears by about 85% and Grand Staircase-Escalof two national monuments. The order ante by nearly 46%.
ends excessive federal control
Over the past few days,
Trump puts an end to a thousands have marched in
of Utah land, allowing residents to protect their own terSalt Lake to oppose the decifederal land grab in
ritory and conserve their culsion. The Southern Utah Wilsoutheast Utah.
tural relics.
derness Alliance denounced
Congress passed the Antiqthe order as “the single most
uities Act in 1906 to give Presiharmful attack any president
dents emergency authority to prevent the looting has ever launched on public lands.” The group
and destruction of national treasures. The law claims the Trump Administration acted “at the
said designated monuments should be limited to behest of ideological extremists and dirty en“the smallest area compatible with proper care ergy barons,” adding that the decision is “an inand management of the objects,” but Bill Clinton sult to the tribes that advocated to protect
and Barack Obama misapplied this power to Bears Ears.”
carry out a Washington land grab.
Calm down, guys. Most of the two million
Without public comment, the federal govern- newly undesignated acres are still public lands,
ment unilaterally seized control of more than subject to rigorous federal and state protec3.2 million acres of southeastern Utah that to- tions. The Trump Administration increased Nagether constitute the Grand Staircase-Escalante tive American representation on the advisory
and Bears Ears national monuments. Residents Bears Ears Commission.
and their elected representatives had minimal
Utah Reps. Chris Stewart and John Curtis are
influence on the draconian land-use restrictions introducing two bills this week to govern the
imposed by Washington bureaucrats. In Sep- scaled-down monuments, with the support of
tember, Interior Secretary Ryan Zinke described Natural Resources Chair Rob Bishop. Under the
how the Antiquities Act had been abused “to Shash Jáa and Indian Creek National Monuprevent public access and to prevent public ments Act, locals would administer and protect
use” of land, harming everyone from cattlemen the former Bears Ears land, with tribal repreto cross-country skiers.
sentatives holding the majority vote.
Last spring Mr. Trump ordered a review of
In other words, the Trump Administration’s
27 supersized monuments. The Interior Depart- order not only ends federal overreach but rement made recommendations only after accept- stores power to local people. That’s a monuing formal public comment. Mr. Trump an- mental and welcome change.
Judging Roy Moore
no
R
Martin Feldstein presents a compelling case that the Federal Reserve has
aided and abetted what may be a serious bubble in stock and real-estate
prices (“New Priorities for a New Fed
Regime,” op-ed, Nov. 30). But I disagree with his solution that “financial
stability must become one of the leading objectives of monetary policy.” A
more feasible policy is to raise interest rates to normal levels after a financial crisis has passed and let the
free market sort out the appropriate
level for asset prices. If this had been
done, asset price distortions would
have been mitigated.
Instead the Fed has kept interest
rates at artificially low levels for much
too long, driving investors into more
risky assets. Ironically, a major reason
for doing this is an attempt to raise
inflation to their sacrosanct 2% level.
It hasn’t worked and it won’t work because the Fed cannot figure out why
inflation remains persistently low. The
Fed has apparently realized this and
has started on a long-overdue path to
interest-rate normalization. For the
record, we need to recognize that almost 10 years of ultralow interest
rates have caused major distortions in
the financial markets and have done
serious damage to the incomes of savers and pensioners. New priorities and
new Fed members are long overdue.
ROBERT F. STAUFFER
Salem, Va.
It is true that the Fed balance sheet
increased from $870 million in 2007
to $4.5 trillion today and that commercial real estate is overpriced because investors compare the yield on
real estate with interest rate on longterm bonds. I do not agree that the
combination of overpriced real estate
and equities has left the financial sector fragile and “has put the entire
economy at risk.” The stock markets
are at new heights, unemployment is
at its lowest level in years and the
economy is growing at 3%.
RANJIT K. BHANDARI
Piscataway, N.J.
Am I being too skeptical and cynical to believe that a large part of the
strategy to balloon the Fed balance
sheet to $4.5 trillion was to generate
over $90 billion of Fed “earnings,”
which in turn was turned over to the
Treasury, resulting in lower annual
deficits for the Obama administration? I think not.
A politicized Fed is what we have
had with President Obama and Fed
Chair Janet Yellen. Now that the
Obama administration is over, higher
fed-funds rates and a balance-sheet
liquidation are in process. Any ill effects from the Obama administration’s
policies will become the property of
the Trump administration.
JEFF SOLBERG
Bonita Springs, Fla.
Riding Chicago Transit to Financial Oblivion
William Galston’s ode to productive public infrastructure investment
by the Chicago Transit Authority
(CTA) shows that “Chicago Isn’t Always the Second City” (Politics &
Ideas, Nov. 29) and that Democratic
Mayor Rahm Emanuel appreciates
how crucial it is to make sure the
trains run on time. If public satisfaction with rapid transit cost and performance is the prime measure of effective municipal governance,
Chicago wins and should, as Mr. Galston recommends, serve as a model
for another national infrastructure
spending splurge by Washington.
Mr. Galston’s contention that Chicago isn’t always the second city also
rings true when the CTA is viewed as
one cog in a massive municipal
spending machine. With regard to unfunded pension liabilities, poor bond
ratings, high and ubiquitous taxes,
enormous projected budget deficits,
violent crime rates and loss of population, Chicago can make a strong
claim to being number one in the
U.S.—as long as worst is first in a
mismanaged blue-city race to the fiscal bottom.
Mayor Emanuel picked many new
tax-revenue pockets, but Chicago already had the highest sales tax of any
major city and property tax rates are
high and rising for its affluent residents. So, kudos to Mr. Emanuel for
not letting Chicago’s fiscal problems
delay its rapid transit riders. In fascist Italy, Benito Mussolini’s propagandists played up the importance of
public works. The regime explained
that the efficient running of trains
was a symbol of the restoration of
law and order. Given Chicago’s homicide rate, Rahm Emanuel also could
use a bit of law and order symbolism.
RICHARD DAVIS
Richmond, Va.
co Fo
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he GOP this week will try to compromise exemption. About 60% of filers earning between
on a final tax bill that can make it $200,000 and $500,000 are subject to the tax,
through both houses of Congress and according to an analysis by Duke University’s
Senate budget rules that often
Richard Schmalbeck. Compare
The AMT deserves
conspire against good policy.
that with less than 20% for filLast week Senate Republicans
ers north of $1 million. This
to die in the Houseexhumed a loathed portion of
shows the perversity in a levy
Senate tax conference. that was ostensibly created to
the tax code to “save” money,
and the reformers ought to
ensure that the wealthiest pay
dump these alternative-miniincome tax.
mum taxes.
The provision would amplify the bill’s biggest
The House bill strikes the corporate and indi- flaw, which is slamming productive high earners
vidual AMTs, which require filers to calculate in states with high taxes. These earners face a
two sets of income taxes and pay whichever one top rate of 38.5% in the Senate bill (39.6% or
is higher. But the Senate bill resurrected both higher if the House bill prevails). The filers will
because Republicans needed the revenue to buy lose the state-and-local income tax deduction,
off some GOP holdouts—while also complying which filers ensnared by the AMT can’t claim
with the chamber’s reconciliation rules that ban under the alternate calculation. One argument
deficits outside the 10-year budget window.
for dumping the state-and-local deduction has
The most glaring Senate problem is the rate been that at least taxpayers won’t have to bother
on corporations. The point of the AMT is to with the hassle of AMT.
prevent companies from eluding taxes with
The positive news is that almost no one is decredits and deductions. Yet the current AMT fending this idea on the merits. The Senate had
rate is 20%—the same as the bill’s proposed top to make the math work in a pinch last week, and
rate on corporations. If the AMT rate stays at now let’s hope Republicans offload the AMT in
20%, and the normal tax rate is cut to 20% with conference. The solution is to cobble together
a few more deductions, then the AMT would more items that broaden the tax base, and on
become the de facto corporate tax—and a stalk- this score the House bill is better.
ing horse for Democrats to raise when they’re
For instance, the House bill caps the mortnext in power.
gage-interest deduction at $500,000 and elimiAnother issue is that the Senate bill also nates the write-off for second homes. The Senate
crafted a form of corporate-minimum tax to stop bill does not limit that subsidy for wealthy
“base erosion” in which multinational compa- homeowners. The House bill is also more aggresnies try to reduce tax liability. If the original sive on breaks for higher education and green
AMT returns from the nearly dead, would some energy subsidies.
corporations have to crunch yet another set of
The AMT is a classic example of why the tax
separate tax assumptions? This is an illustration code needs an overhaul, with its inefficiency,
of why businesses waste so much time and complication and punitive nature. If the GOP
money on tax compliance.
wants to pass a bill that can credibly be called
The prospect is no more appealing on individ- reform, then the AMT should die an unlamented
uals, though the Senate bill would increase the death.
ly
.
T
REVIEW & OUTLOOK
epublicans have an unusual political fortunate decision this week by President
problem in Alabama: Their candidate Trump and the Republican National Committee
may win.
to endorse Mr. Moore. But victory would come
We’re talking about Roy
at considerable cost. The SenA GOP victory in
Moore, who is neck-and-neck
ate would be obliged to seat
in the polls against Demoand the allegations
Alabama may be more him,
cratic candidate and former
would surely be referred imcostly than a defeat.
U.S. Attorney Doug Jones for
mediately to the Ethics Comthe Senate seat vacated by
mittee, which is already vetJeff Sessions. By now there
ting the sexual misconduct of
cannot be a soul in America unaware of allega- Minnesota Democrat Al Franken.
tions that, as a 30-something assistant district
Depending on what the committee finds,
attorney, Mr. Moore had inappropriate sexual there could be a vote to censure or expel Mr.
contact with underage girls, including one as Moore. The many Republican Senators who
young as 14.
have already called for him to step aside as
The former judge has categorically denied a candidate would face a difficult political
it all, saying at a campaign event last week choice in an election year. If Mr. Moore is a
that the accusations are “malicious” and “I do Senator, the media will hang him around the
not know any of these women.” In response, neck of every Republican candidate as Demoone of the women, who says she dated him as crats try to drive turnout among women and
a 17-year-old, has produced a greeting card dispirit GOP voters.
she says he sent her, as well as a page in her
A Moore defeat would also go far to disscrapbook where she listed “Roy S. Moore” credit Steve Bannon, the former White House
just above her mom and dad as her guest at aide who wants to mount a primary challenge
her high school commencement.
to every Senate Republican other than Ted Cruz
We find her evidence and the testimony of in 2018. Mr. Bannon backed Mr. Moore in the
the other women persuasive, even if we are primary, and he knows that a defeat in Alagenerally skeptical about trial by newspaper, bama, of all conservative places, could persuade
especially four decades after events are said Republican voters elsewhere that he cares more
to have occurred. But this is an election, not about blowing up the GOP than he does about
a trial, and voters have to make decisions in passing a conservative agenda.
these imperfect circumstances.
We understand the fix Alabamans are in,
But as Alabamans decide, they should con- especially with a Democratic candidate who
sider that there are strong moral and practical better fits California than what may be the
reasons to reject Mr. Moore. For one thing, Re- country’s most conservative state. This is an
publicans have never embraced the idea—pro- example of how the country could benefit if
moted by Bill Clinton’s defenders for more Democrats still had an anti-abortion or modthan two decades—that bad behavior in a poli- erate wing. But no election is forever, and the
tician can be excused if it’s “just about sex.” winner next week will have to run again in
Now is no time to change a sound position 2020 for a full six-year term. Alabama Repubthat politics is about more than policy.
licans would get another chance at Mr. Jones,
A Moore victory would keep the GOP Senate but if they elect Mr. Moore they might be
majority at 52, which seems to explain the un- stuck with him for a very long time.
San Francisco Is Right About $15 Minimum
Michael Saltsman suggests that
San Francisco’s commitment to living
wages has harmed low-wage workers
and that a higher minimum wage is a
greater threat to our workers than
the coming wave of automation (“San
Francisco’s Problem Isn’t Robots; It’s
the $15 Wage Floor,” Cross Country,
Nov. 25).
But here are some facts: San Francisco’s unemployment rate is 3.4%—
lower than the national rate. Our leisure and hospitality industry alone
has added nearly 17,000 jobs since
San Francisco’s minimum-wage increase in November 2014. Even at $15
an hour, many jobs go unfilled because these wages are simply not
enough to cover cost of living for
working families.
Mr. Saltsman’s organization, the
Employment Policies Institute, funded
by conservative special interests and
devoted to opposing the minimum
wage, argues that workers either have
to work for poverty wages or have no
job at all. This is a false choice and
Regarding the letters of Dec. 1 redoes nothing to prepare our worksponding to your Nov. 25 editorial
force for the automation revolution.
“Licenses to Kill Opportunity”: I can’t
Automation will affect low-wage
speak for other professions, but as
jobs in areas like retail and food serfor my own there is one point I’d like vices, but also middle-class jobs in
to add to the discussion—the lack of transportation, accounting and manuenforcement. True, professional lifacturing. The fundamental challenge
censing regulations exist, but there is is to provide workers at all levels
rarely enforcement of those regulawith the training and skills to keep up
tions.
with technology and work jobs that
I process numerous applications
pay a decent wage.
for membership, and I can tell you
The minimum wage isn’t a pathway
that 75% of the people applying for
to the middle class; it is a safety net
membership with my union have as
to prevent destitution. If Mr. Saltsmuch as three, five, 10, 15, 20 and
man is concerned about unemployeven 25 years of experience, but few ment, then I invite him to join me in
possess a plumbing or gas-fitting lisupporting a major expansion of skills
cense. Our jurisdiction is Washingtraining and lifelong learning opporton, D.C, southern Maryland and
tunities. Funding these investments
greater northern Virginia.
through a “robot tax” is a practical
When the local authorities having
way to smooth the transitions caused
jurisdiction and their respective inby automation and prepare Amerispectors’ associations are apcans for the future of work.
proached about the matter, the anJANE KIM
Supervisor
swer is consistent—they don’t
San Francisco
enforce tradesmen licensing regulations.
That brings about another question: Why do the licensing regulations, coupled with continuing education requirements, exist?
I agree with the editorial’s last
THE WALL STREET JOURNAL
sentence: “That signals political potential for reform. Giving the poor a
pathway to a dignified, self-supporting life should be a bipartisan priority.” However, giving all citizens a
pathway to a dignified career and
common-sense consumer protection
should be a bipartisan priority.
JAMES L. “LOU” SPENCER
Plumbers and Gasfitters Local Five
Camp Springs, Md.
Fearsome Licensing Rules
Often Lack Any Enforcement
Pepper ...
And Salt
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.
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THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | A19
OPINION
What Is China’s Angle in North Korea?
Two competing narratives have
come to dominate the discussion. In
the first, China has no fondness for
Kim Jong Un’s regime and is aligned
with the rest of the world in viewing it as a threat to peace and stability. But Beijing is constrained. It
has less influence with Pyongyang
than the world imagines and fears
creating a humanitarian catastrophe
on the Chinese border. In short, the
Chinese share the world’s concerns
and would love to do more, but
their hands are tied.
In the competing narrative, China
has no real interest in pressuring
North Korea too forcefully, since it
serves as a useful buffer between
the Chinese border and U.S. troops
ANDY WONG/ASSOCIATED PRESS
Trump can’t rely on Xi’s
cooperation. Beijing seems
to be using Pyongyang
to weaken U.S. influence.
them. China’s aggressive territorial expansion and the growing North Korean threat have
prompted American allies to
begin taking independent steps
to expand their military capabilities, including arming their
own islands. The U.S. should
take the lead in coordinating
and accelerating these efforts,
tying them into a cohesive,
multinational effort that rings
China and North Korea from
Japan in the east to Vietnam
and Thailand in the south.
Although presented explicitly
as a response to the threat from
North Korean missiles, such an
approach would also clearly
challenge China’s own ambitions with the outcome that
most concerns officials in Beijing—encirclement. It also incorporates an implied economic
risk, threatening the shipping
lanes from West Asia on which
China depends. And unlike ships
briefly passing by, this presence
would be much more permanent. The
message to Beijing would be clear:
Curb North Korea’s antagonism, or
feel the noose tighten.
North Korea is a nuclear power,
and that is not about to change.
What must shift is America’s perception of the problem. China enables
North Korea’s belligerence as part of
a strategy to diminish and ultimately
eliminate U.S. influence in Asia and
dominate the region. To address it
as such, Washington must avoid rewarding Beijing for stoking instability and invert China’s incentives,
making it abundantly clear that failure to rein in Pyongyang will increase America’s role in Asia, not
decrease it.
ly
.
‘J
ust spoke to President
XI JINPING of China
concerning the provocative actions of North Korea,” President Trump
tweeted last week, referring to
Pyongyang’s launch of a missile
that may be capable of striking
anywhere in the U.S. “The situation
will be handled!”
That Mr. Xi will help resolve the
crisis on the Korean Peninsula has
been Mr. Trump’s expectation since
their first meeting at Mar-a-Lago.
With America’s Korea policy now
seemingly dependent on China’s cooperation, it is time to put the relationship between Pyongyang and
Beijing into perspective.
in South Korea. Realpolitik
dictates that, despite real concern over Pyongyang’s instability and unpredictability, a
somewhat erratic ally is immeasurably better than staring
at your enemies across the
Yalu River.
Most of the commentary on
China’s efforts falls somewhere
on the spectrum between these
two narratives. But there’s a
third possibility—that China
has been deliberately allowing
tensions on the Korean Peninsula to escalate, if not outright
stoking them. More than two
decades of U.S.-led diplomacy,
sanctions and threats have all
failed to halt North Korea’s nuclear and missile programs and
resulted in only one real casualty: American credibility. The
inability of the world’s only superpower to entice, coerce or
force a small, impoverished
nation to fall into line has un- Presidents Xi and Trump at Beijing's Great Hall of the People, Nov. 9.
doubtedly been observed by
Asian countries weighing whether North Korea’s pursuit of its nuclear demonstrations that the U.S. presto align with American or Chinese agenda, educating its scientists, and ence is passing, while the Chinese
spheres of influence.
providing just enough diplomatic one is permanent.
Using North Korea to highlight and economic cover to keep the reMr. Trump’s approach of appealing
the limits of American power and in- gime afloat, China allows the crisis to China to mediate not only reinfluence would fit into a larger Chi- to fester. As the crisis goads suc- forces this message but provides Beinese strategy of discrediting U.S. rel- cessive American administrations jing an opportunity to move beyond
evance in the Asia-Pacific region. into ever greater displays of impo- influencing perceptions to attempting
Despite consistent protests from the tence, America’s prestige continues to roll back America’s actual presence
U.S. and its allies, China has contin- to decline.
in the region. China has put forward
ued to expand and arm its chain of
Skeptics of this theory may the so-called Dual Freeze proposal,
artificial islands in the East China point to the “muscular” responses which would halt joint U.S.-South Koand South China seas. Beijing’s abil- when tensions escalate—the inevi- rean training exercises along with
ity to flout a legally binding decision table flyby of U.S. bombers. But North Korean nuclear development.
by an international tribunal on a ter- American planes come and go, and That would remove a significant pilritorial dispute with the Philippines North Korea’s weapons programs lar of Washington’s military alliance
further reinforces the message that continue their increasingly rapid with Seoul, diminishing the decadesthe U.S.-led international system is progress. Much like the “freedom long U.S. commitment in Asia. All
ineffective and irrelevant.
of navigation” operations, in which while leaving Pyongyang’s current
This is not to say that China is ac- U.S. Navy ships sail past China’s ar- nuclear capabilities intact.
tively pulling Pyongyang’s strings. It tificial islands, they are less signifiThe U.S. response must be to
doesn’t need to. By simply tolerating cant as shows of force than as strengthen its alliances, not weaken
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By Daniel Nidess
Mr. Nidess, a former Marine, is a
writer in San Francisco.
San Francisco Wasn’t a Sanctuary for Kate Steinle
system in place to bring the killer
to justice seems far more interested
in his well-being than it ever was in
hers. At the time of the shooting,
Mr. Garcia Zarate had racked up
seven felony convictions and been
deported from the U.S. five times.
His lawyers argued that the stolen
gun, which the defendant said he
found under a bench, went off by
accident. Prosecutors brought several charges. The jury could have
found Mr. Garcia Zarate guilty of
murder, manslaughter or even assault with a deadly weapon, but it
declined to convict on any of those
counts. Instead, he was found guilty
of being a felon in possession of a
firearm. He could face up to three
years in state prison—a term he
may have already satisfied.
During his race for president
against Hillary Clinton, Mr. Trump
spoke frequently and forcefully
about the Steinle case and how local law-enforcement officials deal
with the undocumented immigrants
they encounter. “My opponent
wants sanctuary cities,” he said in
his nomination acceptance speech
at the Republican National Convention last year. “But where was the
sanctuary for Kate Steinle?”
n-
If sanctuary policies
for illegal immigrants got Kate
Steinle killed, did
Donald
Trump’s
harsh anti-immigration rhetoric help
UPWARD
MOBILITY pave the way for
her assailant’s unBy Jason L.
expected acquittal
Riley
last week on murder, manslaughter
and assault charges?
Trying to make sense of Steinle’s
horrific death was difficult enough.
Now we must process the criminal
justice system’s horrifically lenient
treatment of her killer. Two years
ago, a man with a lengthy criminal
record—a man who should not have
been in the country in the first
place—fired a stolen semiautomatic
pistol on a crowded San Francisco
pier. The bullet ricocheted off the
pavement and into the back of a
32-year-old woman out for a stroll
with her father. The shooter then
threw the gun into the San Francisco Bay and fled, while his victim
died in her father’s arms.
Everyone acknowledges that Jose
Ines Garcia Zarate is the man responsible for Steinle’s death, yet the
That question still looms after
last week’s verdict given that sanctuary cities like San Francisco,
which restrict cooperation between
local police and federal immigration
authorities, see no need to change
their ways. Before the shooting, Mr.
Garcia Zarate was in custody and
on track to be deported (yet again)
Did the jurors acquit
her killer to send a
message of disapproval
to President Trump?
but was first transferred to the San
Francisco Jail on an outstanding
drug-related warrant. After city
prosecutors declined to prosecute
that case, he was released despite
a request from federal agents to
hold him for deportation. Which is
to say that this wasn’t a mix-up.
The San Francisco authorities did
not make a mistake. Mr. Garcia
Zarate didn’t fall through the
cracks. He was released because
that was the policy for dealing with
illegal aliens, and it’s still the policy.
Kate Steinle’s killer would be released again today.
Around 500 cities and counties
in the U.S. can be described as illegal immigrant sanctuaries, though
the level of cooperation with federal authorities varies. The Department of Homeland Security says
that it doesn’t have the manpower
to patrol the interior without help
from the nation’s 765,000 police officers. Some police departments
counter that sanctuary ordinances
strengthen relationships between
law enforcement and immigrants. If
people in a community fear that
the police are there to deport
them, they are less likely to report
crimes and public safety suffers.
But isn’t fear of deportation also a
deterrent to entering the country
illegally? Doesn’t lax enforcement
of our immigration laws beget
more violations of our immigration
laws?
Steinle’s death illustrates the
significant trade-offs involved in
constructing sanctuary jurisdictions. Americans understandably
want immigration policies in place
that prioritize the needs and concerns of U.S. citizens, not foreign
nationals. In effect, San Francisco’s
sanctuary policy prioritized the
Garcia Zarates, which is another
outrage.
Kate Steinle’s killer is not the
poster child for illegal immigration,
despite Mr. Trump’s efforts to turn
him into one. The research consistently has shown that immigrants
here both legally and illegally are
less likely than their native counterparts to be arrested and imprisoned. And that holds true whether
the immigrant hails from Japan,
India or Ecuador. America’s violent-crime rates are driven mostly
by Americans. But neither is every
immigrant a blameless Dreamer,
and too often immigration activists
and liberal politicians are as unwilling as the president to make a
distinction.
The San Francisco jurors who
went easy on Mr. Garcia Zarate haven’t made public their reasoning,
and maybe they never will. But
don’t rule out jury nullification.
The president is deeply unpopular
in the City by the Bay, where less
than 10% of voters supported his
presidential bid. Kate Steinle may
also have been a victim of ideologically driven jurors looking to send
a message to the president.
no
This Tax Plan Puts Another Knife Into American Democracy
By Tom Steyer
A
fter more than three decades
as an investor, I fully appreciate that folks on Wall
Street don’t have time to follow every detail of Capitol Hill’s policy
debates. What matters to the financial industry is the bottom line.
So how does the current Republican tax proposal look with that in
mind?
On the surface, the GOP plan
might seem to offer the kinds of
short-term rewards that really resonate. But let’s face it: Republicans’ supposedly pro-business
ideas have seemed that way before.
While business owners and investors may have made extra returns
in the near-term, however, America’s
economy ultimately suffered.
Less than a decade ago, after
years of dramatic deregulation coupled with revenue-draining tax cuts,
the entire U.S. financial system effectively collapsed. It took down
with it millions of American consumers, workers, small businesses,
retirees and middle-class homeowners.
The country can’t afford this
kind of outcome again. That’s why
I want to be as straight as possible: Despite what you may believe,
the Republican tax plan taking
shape is a sham. It will lead to
more pain and less prosperity for
the vast majority of Americans. Investment professionals have a
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moral obligation and a personal interest in opposing the bill.
Stopping it will be good for investors’ bank accounts, because when
Main Street and the rest of the nation does well, so does the financial
sector. Trickle-down economics
doesn’t work, but trickle-up does.
Trying to re-enact Reaganomics under completely different circumstances may well lead the economy
back into a recession—one that the
country will be ill-equipped to
weather after the GOP proposal adds
$1 trillion to the national debt.
The plan’s massive tax cuts won’t
reinvigorate the economy. For years
corporations have enjoyed historically high profits, but investment
hasn’t increased alongside them.
Last month at a meeting of The Wall
Street Journal’s CEO Council, an editor asked attendees whether they
would boost investment if the tax bill
passed. Few hands went up.
Neither will it juice consumer
spending. Sixty-two percent of the
benefits from the Senate bill’s tax
cuts flow to the top 1% of earners,
according to an analysis by the Tax
Policy Center. The true source of
consumer power rests with the
middle class, yet this report shows
that nearly half of American families would ultimately see their
taxes rise under this plan. They
would be left with less money to
spend, not more.
Honest analyses indicate that the
Republican proposal overwhelmingly
helps the wealthy and is probably a
net negative for almost everyone
else. That’s largely because it will be
paid for with money taken out of the
pockets of working Americans and
their children: The tax cuts will be
used as an excuse to further gut investments in education, health care
and training. Slashing these services
for working Americans will stunt the
country’s future prosperity and
weaken the overall economy.
Congress should realize that the
American people will not be fooled
by the noise. If they see a bill
passed that hands out filet mignon
to the wealthy while leaving them
Deep down, investors
know that when patriots
put country ahead of self,
everyone benefits.
struggling over scraps, they will be
furious. Once again, they’ll realize
that the system serves the needs of
those at the top and ignores working families. They’ll consider this
more evidence of corruption. And it
will be harder than ever to argue
otherwise.
For too long, those at the top of
the economic ladder have refused to
concede that opportunity in America
is nothing like it used to be for working people. The pain caused in small
towns when companies shipped their
operations overseas has been ignored. The people who experienced
globalization and automation as a
huge threat have been forgotten. Too
many families and communities have
been treated as costs, or as commodities to be ruthlessly exploited.
It’s time to remember that America does not start and end on Wall
Street. The country prospers when
all Americans succeed together.
That’s why we must address the
growing inequality that is tugging
at the seams of our society and destabilizing our politics. Passing this
tax plan, which adds to workers’
pain, would put another knife into
American democracy. It would be a
true disaster.
You have to ask yourself, how can
this make sense? When 1 in 3 Americans say they are still struggling to
recover from the Great Recession, is
it worth saving the Trump family $1
billion by repealing the estate tax?
Worth increasing insurance premiums for middle-class families in the
individual market by $2,000, as the
Center for American Progress estimates the Senate bill would? Worth
taxing tuition waivers, making it prohibitively expensive for young people
to get advanced degrees and thus
sacrificing America’s economic competitiveness down the road? Worth
cutting Medicare by $25 billion?
Worth ending tax credits for clean
energy, sabotaging one of the most
promising industries for the 21st century, while protecting much larger
tax breaks for oil and gas?
The rest of the country thinks
Wall Street’s greed clouds its judgment. But I know that doesn’t have
to be true. No matter where investors fall on the political spectrum,
deep down, they know that when patriots put country ahead of self, everyone benefits. There’s still time to
acknowledge the significant harm
that this destructive tax plan will do
to American society and then to oppose it. Let’s take the broad view.
Mr. Steyer is the founder and
president of NextGen America and
Need to Impeach.
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THE WALL STREET JOURNAL.
no
n-
co Fo
m rp
m e
er rs
ci on
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ly
.
A20 | Wednesday, December 6, 2017
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TECHNOLOGY: GOOGLE RETOOLS FOR INDIA’S BOOMING MOBILE MARKET B4
BUSINESS & FINANCE
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Wednesday, December 6, 2017 | B1
THE WALL STREET JOURNAL.
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Aetna CEO in Line for $500 Million Payout
Bertolini to benefit
from hefty increase
in value of stock
if CVS deal succeeds
company if it successfully
merges with CVS Health Corp.
If the $69 billion deal between the pharmacy chain and
health insurer goes through,
Mr. Bertolini stands to benefit
from a sizable increase in the
value of the stock and rights
he owns because of the premium CVS is paying for Aetna.
His combined payout is expected to be about $500 million, according to people familiar with the matter, a
review of Aetna filings, and
analysis from compensationresearch firm Equilar Inc.
Most of Mr. Bertolini’s projected payout is tied to stock
or rights he already held that
jump in value with the deal. At
the agreed-upon $207-a-share
deal price, more than $230
million is expected to come
from already-vested stock-appreciation rights Mr. Bertolini
HEARD ON
THE STREET
By Stephen Wilmot
Tax Bill Benefits Corporate Bonds UPS Hit
Aetna Inc. Chief Executive
Mark T. Bertolini is set to
pocket roughly half a billion
dollars when he leaves his
By Dana Mattioli,
Anna Wilde Mathews
and Nathan Becker
holds for Aetna shares. Additionally, Aetna common stock
he owns would be valued at
roughly $190 million at the
deal price. Some of the payout
will be in CVS shares, because
the acquisition was structured
as 70% in cash and 30% in
stock. A fluctuation in the
value of CVS shares, which fell
4.6% Monday, could change
the value of the payout. CVS
fell a further 1%, or 68 cents,
to $71.01 on Tuesday.
Between $60 million and
$85 million of his estimated
payout is tied to Mr. Bertolini’s so-called change-in-control package. That payment is
triggered if he is terminated
when the company sells itself,
1.1
1.0
0.9
Dec. 2016
’17
Investment-grade corporate bond issuance
$800 billion
First-day pop
Performance
since IPO
THE WALL STREET JOURNAL.
Cash held overseas by U.S. firms
Projected
$1.50 trillion
1.00
400
0.75
0.50
200
0.25
0
0
1995
2000
’05
’10
’15
’17
2010
’11
’12
’13
*As of Dec. 4 †Option-adjusted U.S. investment-grade corporate bond yield premium over Treasurys
Sources: Dealogic (issuance); Moody's Financial Metrics (cash); Bloomberg Barclays (spread)
BY VIPAL MONGA
AND SAM GOLDFARB
their need to borrow.
The proposed tax changes
would also make debt more
expensive for companies by
lowering the corporate tax
rate and placing a cap on the
corporate interest deduction.
Those changes could stress
some of the most highly indebted companies, which typically write off interest payments to ease their debt
burdens.
The combined effects could
ripple through the $7.87 trillion market for nonfinancial
corporate bonds, affecting
both issuers and investors.
One possible fallout, if the
supply of new debt diminishes,
n-
The proposed tax overhaul
winding its way through Congress could have significant
consequences for the corporate-debt market, changing
the way many companies raise
capital and boosting the prices
of existing bonds.
The Senate bill and the version passed by the House of
Representatives in November
unlock billions of dollars held
overseas for companies such
as Apple Inc. and Pfizer Inc.,
allowing them to repatriate future foreign earnings more
cheaply. That could reduce
no
The 10 biggest tech IPOs since
January 2015 by capital raised
YTD 2017*
$820 billion
1.25
600
could be higher prices on existing bonds, which are already in the midst of a rally
that has driven yields near
historic lows.
A tax overhaul “could have
the largest impact on corporate finance in decades,” said
David Brown, head of global
investment-grade credit at investment-management firm
Neuberger Berman. “It could
structurally change the way
companies look to finance
themselves.”
The U.S. corporate bond
market is a critical piece of
the global financial system.
Companies routinely borrow
billions in the U.S. for a vari-
By Vanessa Fuhrmans,
Joann S. Lublin
and Suzanne Vranica
the ad agency’s various holiday parties this season.
In a memo titled “Stupid
Fun vs. Responsible Fun” that
was sent to its 2,600 employees in the U.S. and Canada late
Friday, the unit of Interpublic
Group of Cos. laid out a number of party “don’ts”—from
kissing colleagues under mistletoe to over-the-line gyrating
on the dance floor. Posting
“Stupid Fun” pictures on social media shouldn’t happen,
the memo read, while off-color
jokes are a no-no since “someone might be wired.”
“Unfortunately, Stupid Fun in
the workplace often turns into
Regrettable Fun the next day,”
the email read. “And Regrettable
Fun has given rise to corporate
phrases like ‘HR has received a
MARY EVANS/RONALD GRANT/EVERETT COLLECTION
Holiday Office Parties Sober Up
As revelations of sexual
misconduct sweep the nation,
FCB Worldwide Inc. isn’t
mincing any words detailing
the kind of behavior that could
land employees in trouble at
2010, and the company’s revenue is up about 85%. Still,
shares of all major health insurers have done well over the
period that Mr. Bertolini ran
Aetna, fueled by strong results
and growing enrollment in
their Medicare and Medicaid
plans. Shares of the five major
insurers have risen multiplefold during the time frame, led
by UnitedHealth Group Inc.
and Aetna with roughly 500%
gains, compared with a 121%
advance in the S&P 500.
In October of this year, before The Wall Street Journal
reported CVS was in talks to
buy Aetna, its shares were
trading at roughly $160. CVS’s
Please see PAYOUT page B2
By Delays
On Web
Orders
ly
.
1.2
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
1.3 percentage points
Human Touch
40 80 120
Mr. Bertolini won’t have an
operational role.
Equilar conducted a study
of the biggest change-in-control payments in merger
agreements from 2005 to
Average U.S. corporate bond spread†
Early next
year, musicstreaming service Spotify is
due to mount
what is arguably the greatest challenge to
the Wall Street IPO machine
since Google went public in
2004. Silicon Valley’s startup
giants will be watching
closely.
Spotify has both disrupted
and revived the global music
industry by persuading some
60 million subscribers to pay
an average of roughly $7.80 a
month for as many tunes as
they can listen to through its
apps. Now it wants to go public through a “direct listing”
of its shares in New York. Unlike in a conventional IPO, it
won’t distribute new stock to
financial institutions through
a book-building process underwritten by investment
banks.
Like other platform-based
tech companies in a market
awash with venture capital,
Spotify doesn’t need public
money. But it does need—at
some point—a place for its
expanding roster of private
investors, including staff, to
sell their shares. A direct listing would provide this without incurring Wall Street underwriting fees, typically a
hefty 7% of capital raised.
The cost savings could be as
much as $300 million, estimates SharesPost, a research
firm specializing in startups,
which thinks Spotify is worth
between $14.4 billion and
$21.5 billion.
In a conventional IPO, investment banks try to allocate shares to long-term
shareholders looking to build
positions rather than hedge
funds looking for a shareprice pop—though in practice
the long-term shareholders
may simply be favored clients
who sell anyway. Existing investors also typically agree to
hold their stock for a
“lockup” period. In theory,
this brings a degree of certainty to both sides of the
trade, while allowing the
banks to determine an initial
trading price that matches
supply and demand.
The usual process has
“enormous inefficiencies”
Please see HEARD page B2
Source: Renaissance Capital
Mark T.
Bertolini
wouldn’t have
an operational
role with the
combined
company.
mid-2015 for companies that
changed hands and had at
least $5 billion in yearly revenue. Mr. Bertolini’s change-incontrol payment at $60 million would have been the 10thbiggest when ranked within
that data set; at $85 million, it
would have been fifth-biggest.
The CEO of another high-profile acquisition target, Time
Warner Inc.’s Jeff Bewkes,
stands to receive a change-incontrol package of about $80
million if AT&T Inc.’s purchase
of Time Warner succeeds, according to Equilar.
Aetna’s stock is now valued
at nearly six times what it was
when Mr. Bertolini became
chief executive in November
Corporate bond issuance has reached another record this year, partly because of tax laws that discourage
U.S. multinationals from bringing home foreign cash. That could change if tax-overhaul legislation is enacted.
Spotify
Wants to
Reinvent
Tech IPO
GoDaddy
Atlassian
Black Knight
LINE
Switch
First Data
Sogou
Snap
Sea
Inovalon
–40% 0
according to Aetna filings.
CVS Chief Executive Larry
Merlo has been tapped to run
the combined company, and
’14
’15
’16
’17
THE WALL STREET JOURNAL.
ety of reasons, including building new factories, financing
acquisitions and funding share
buybacks. The market is more
than triple the size of the euro
corporate-debt market, the
world’s second largest.
Nonfinancial, investmentgrade companies in the U.S.
have borrowed more than
$800 billion this year, already
breaking the full-year record
set in 2015, according to data
provider Dealogic.
Debt is attractive to companies because it is cheaper
Please see BONDS page B2
Heard : The great tax-windfall
surprise ...................................... B16
INSIDE
CARIBBEAN
STRUGGLES IN
STORM’S WAKE
PROPERTY REPORT, B6,B8
Year-end workplace festivities in the 1960 film ‘The Apartment.’
formal complaint,’ ‘zero tolerance,’ and ‘fired for cause.’ ”
The ad agency isn’t the only
company trying to rein in excessive employee merrymaking in
response to the allegations roiling the entertainment, media
and other industries. To head
off bad behavior this office-holiday-party season, scores of businesses are canceling open bars,
banning hard liquor or forgoing
dark nightclub settings for welllit or family-friendly venues.
Others, like FCB, are sending
employees blunt reminders of
the kind of antics that could
make them the subject of gossip
the next day—or worse.
The caution reflects the combustible mix that holiday work
parties often bring together: alcohol plus colleagues dismissive
or unsure of which work rules
still apply at a celebration outside the office. The heightened
sensitivity around sexual misconduct means “the terms of
engagement are changing,” said
Jay Starkman, chief executive of
human-resources services comPlease see PARTIES page B2
TRADERS LOOK
TO TECH AS
WEATHERVANE
STOCKS, B15
BY PAUL ZIOBRO
United Parcel Service Inc.
is struggling to handle the
surge in shipments from online shoppers, resulting in delivery delays early in the critical holiday season and
prompting the carrier to push
drivers to work extra hours.
UPS, which handles deliveries for many of the biggest retailers including Amazon.com
Inc., Wal-Mart Stores Inc. and
Macy’s Inc., is adding one or
two days in transit time on an
unspecified number of deliveries following record sales
around Cyber Monday, spokesman Steve Gaut said Tuesday.
“We have shifted more employees and other resources
to these markets to address
this cyber week surge and expect to have the issue resolved by midweek, this
week,” Mr. Gaut said.
The delays show that delivery networks such as UPS,
which are critical components
of the e-commerce boom, are
still struggling to cope with
the busiest shopping periods
despite heavy investment to
build out and automate their
operations and capacity. For
the first time this year, UPS
tried to manage the flow of
packages by adding surcharges to deliveries during
peak periods.
The week after Thanksgiving is the start of the delivery crunch, as carriers begin
to process online orders
placed during the holiday
weekend and millions more
packages pour in, starting the
following Monday. Adobe Systems Inc. estimated that Cyber Monday sales hit $6.6 billion this year, up more than
17% from 2016.
ShipMatrix, a software provider that analyzes shipping
data, said 89.2% of parcels
shipped last week through UPS
Express were delivered on the
day they were promised. By
comparison, 99.4% of FedEx
Express packages were delivered by the end of the day
they were scheduled to arrive.
Mr. Gaut said UPS doesn’t
comment on the accuracy of
third-party data. UPS expects
the “vast majority” of the 750
million packages it expects to
ship between Thanksgiving
and Christmas will be delivered on time, he added.
FedEx Corp. is “well-positioned” to meet record demand during the peak season,
when it plans to deliver up to
400 million packages, said
spokesman Glen Brandow. “We
plan and collaborate closely
with our customers year round
and engineer our networks to
be ready to meet the significant surge in demand for residential deliveries,” Mr. Brandow said.
The U.S. Postal Service,
which delivers more online orders to residences than anyone, is expanding delivery
Please see UPS page B5
Trucking fleets are snatching
up new big rigs......................... B3
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B2 | Wednesday, December 6, 2017
INDEX TO BUSINESSES
H-K
HNA Group..................B5
Homebrew Ventures...B9
Honda Motor...............B3
Hudson's Bay..............B6
Intel.............................R3
International Business
Machines...................R1
Interpublic Group........B1
Japan Airlines.............B5
Johnson & Johnson....R1
Jones Lang LaSalle.....R2
J.P. Morgan Chase
............................. B9,B14
Kohl's.........................B15
Kraft Heinz ................. B3
M-P
Macy's.........................B1
Marriott International
............................. B6,B14
Mastercard................B14
McCormack Baron
Salazar......................B8
Microsoft.....................R1
Nestle..........................B3
Netflix.........................A1
News Corp.........A12,B16
Nike........................R2,R3
Nissan Motor..............B3
Nvidia ............... R1,R2,R3
Odeon & UCI Cinemas B9
Omnicom Group..........B9
Oracle .......................... B2
Pfizer...........................B1
Procter & Gamble
.....................R1,R2,R3,R6
Publicis Groupe...........B9
R-S
Regal Entertainment..B9
Related........................B6
Reliance Jio Infocomm
.....................................B4
RRE Ventures..............B9
Simon Property GroupB6
Sky .............................. A1
Southwest Airlines .... R3
Spotify.........................B1
Starbucks..........B6,B9,R3
Starwood...................B14
Steel Dynamics...........R3
T-W
Target..........................R3
Taubman Centers........B6
Tesla..........................A12
theSkimm....................B9
3M ............................... R1
Time Warner.......A12,B1
Toyota Motor..............B3
21st Century Fox
........................A1,B9,B16
Uber Technologies.B2,B3
UBS............................B14
UnitedHealth Group....B1
United Parcel Service.B1
U.S. Xpress Enterprises
.....................................B3
Wal-Mart Stores...B1,R6
Walt Disney................A1
Weyerhaeuser.............R2
WPP.............................B9
INDEX TO PEOPLE
Fetzer, Marcy..............R3
First, Zach...................R3
J-M
Johnson, Clay..............R6
Kassel, Walter............B6
Korngold, Alice............R2
Kroboth, Patricia.........B2
Linnartz, Stephanie..B14
Loeb, Daniel S.............B3
Ma, Jack......................B4
Merlo, Larry................B2
Moeller, Jon................R2
Murdoch, Lachlan.....A12
Murdoch, Rupert.........A1
PARTIES
O-R
Oliver, Michael..........B15
Paulson, John..............B6
Peltz, Nelson...............R2
Pittman, RJ.................B4
Polit, Javier.................R6
Prouty, Nicholas ......... B6
Right, Andrew.............B6
Robb, Stephen ............ R2
Roberts, Brian ............ A1
Robertson, Jessica ..... B6
Rossello, Ricardo........B8
Rutte, Charles.............B8
S-Z
Schneider, Mark..........B3
Sorid, Daniel ............... B2
Squeri, Stephen........B14
Taylor, David...............R2
Weisberg, Danielle ..... B9
Wilde, Mark................R2
Zakin, Carly.................B9
Zoradi, Mark................B9
Percentage of employers
planning to fund year-end
holiday events
Party Tips: Dancing
But ‘Not Too Close’
Both lewd behavior and employees driving under the influence expose companies to potential liabilities at holiday
parties, particularly where alcohol
is served. Under the law, employers are just as responsible for
preventing sexual harassment at
work-related holiday parties as
they are in the workplace, employment-law attorneys say.
Employers are well aware
that holiday parties can result
in harassment claims, but before the Weinstein allegations
they were willing to accept the
risk, said Brian Kropp, head of
the human-resources practice
group at Gartner Inc., a research
and advisory firm. “If there was
a complaint of harassment at
the party, the historical playbook from HR was to eliminate
any knowledge of it and pay
people off,” Mr. Kropp said.
“Now companies say ‘we need
The architect of the year’s
biggest and arguably most
surprising health-care deal is a
former pharmacist from rural
Pennsylvania who won over
Wall Street with a reboot of
CVS Health Corp.
Larry Merlo, CVS’s chief executive since 2011, impressed
skeptics with his turnaround
of Caremark, the pharmacybenefits manager that CVS
bought four years before he
took over.
Now he is testing that confidence with a $69 billion bet
to buy insurer Aetna Inc. and
create a health-care juggernaut by melding companies
from very different corners of
the health-care ecosystem.
“I can’t say enough good
things about Larry and his
team,” Wolfe Research analyst
Scott Mushkin said. “But this
deal, whoa, I don’t know.
Sometimes I suppose you just
have to give a good team the
benefit of the doubt.”
The deal puts Mr. Merlo, a
27-year CVS veteran, in charge
of the company’s pharmacybenefits manager, its network
of 10,000 drugstores, and
Aetna’s coverage of about 22.2
million members enrolled in
employer plans, Medicare,
Medicaid and other plans. Together, the companies have
$240 billion in annual sales.
Mr. Merlo was in Hartford,
Conn., on Monday speaking to
employees at Aetna’s headquarters there. The first question he fielded was whether
Aetna workers will now get
employee discounts at CVS
stores, to which he answered,
“yes.” On Tuesday, he fielded
questions from CVS employees. Speaking to an auditorium
packed with roughly 1,000 CVS
employees at company headquarters in Woonsocket, R.I.,
and many thousands more
watching via a live stream, he
made the case that the deal
represents growth for CVS and
CVS chief Larry Merlo in 2014. He sees the firm’s Aetna bid as an antidote to rising health costs.
not contraction.
Mr. Merlo, who turns 62
this month, has cast the acquisition as an antidote to soaring health-care costs.
“The current U.S. healthcare system is failing too
many people,” he said Monday.
“A paradigm shift is needed to
bend the cost curve and put
spending back on a sustainable path.”
Wall Street analysts and
health-care experts say the
combination will be tough to
pull off. To succeed, the companies must knit together disparate operations and persuade consumers to change
long-held health-care habits.
Shares of CVS fell 4.6% on
Monday after the deal was officially unveiled. The stock fell
a further 1%, or 68 cents, to
$71.01 on Tuesday.
Mr. Merlo has confronted
doubt previously. Described by
colleagues as measured and
democratic, he took over CVS
at the same time Caremark
was losing billions in contracts, including $4.8 billion of
agreements lost for 2010. Critics fretted Mr. Merlo lacked
the health-care or management credentials to fix the
drug-benefit business.
But the business, which
CVS bought for $27 billion in
2007, won big contracts under
Mr. Merlo and now contributes more revenue to the company than its stores do.
Buying Caremark was a
good strategy that CVS had
struggled to execute, said Mr.
Mushkin, the analyst. “The
board said, ‘let’s fix it,’ and
boy did he,” Mr. Mushkin said.
“He really developed a good
strategy for the company and
Mr. Bertolini, 61 years old,
has long been viewed as an
empire builder, not a seller.
His substantial payout comes
largely because he was a large
stakeholder in his own company, where he started in 2003
as head of specialty products.
He is one of the highestprofile leaders in managed
care, known partly for sharing
his personal health-care experiences after a skiing accident.
He drew attention outside the
industry for boosting the incomes of Aetna’s lowest-paid
workers by as much as onethird a few years ago; he asked
Aetna executives at the time
to read economist Thomas
Piketty’s book about wealth inequality.
To be completed, the CVSAetna deal will have to pass
regulatory muster.
In what might be a sign of
investor nervousness about
the prospects for approval,
Aetna shares closed at $178.69
on Tuesday, a steep discount
to the agreed-upon price.
If the deal goes through,
Mr. Bertolini won’t have an executive role at the combined
company, but he will have a
seat on its board of directors.
$69B
The value of CVS Health’s offer
to purchase insurer Aetna.
PAYOUT
always the reason for unprofessional behavior, creating an
environment that encourages
overconsumption
certainly
contributes to it,” the email
read. Vox employees say the
decision fits with a broader,
longer-term effort to ensure
work events are more inclusive at the relatively young
media company.
In October, Vox CEO Jim
Bankoff announced that editorial director Lockhart Steele
had been fired after he “admitted engaging in conduct
that is inconsistent with our
core values.” His ouster came
a week after a former employee, in a blog post on Medium, alleged harassment and
assault at places where she
had once worked. She didn’t
identify Vox. Mr. Steele declined to comment.
—Benjamin Mullin
contributed to this article.
no
Continued from the prior page
pany Engage PEO, who predicts
less hugging at his employer’s
headquarters holiday bash next
week. After an Engage PEO holiday celebration a few years ago,
a woman complained to its HR
department because Mr. Starkman hugged her and other male
and female associates—but
didn’t hug every woman there.
He said the incident made him
wonder “whether I should ever
hug anybody at a holiday party
again.’’
Since October, when the first
of dozens of women accused
Hollywood producer Harvey
Weinstein of serial sexual harassment and assault, Mr. Starkman said about a dozen company clients have asked him
whether they should do anything differently in preparing
their holiday parties. His main
tip: Remind employees that “our
company has no tolerance for
any inappropriate conduct.”
Some companies muting the
holiday revelry have had the
national wave of sexual harassment allegations land on their
doorsteps. At Vox Media, the
cocktails flowed freely as the
digital-media group’s employees packed New York’s trendy
Highline Ballroom for the company’s staff holiday party last
year. But last week, the company announced the annual
party’s open bar would be eliminated. Instead, attendees will
get two drink tickets, party organizers said in a staff memo,
after which only nonalcoholic
drinks will be available.
“Even though alcohol isn’t
Mushkin, Scott ........... B2
Musk, Elon................A12
BY SHARON TERLEP
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
F-I
Fitzgerald, Tom...........B8
Ford, Bill......................B3
Foxx, Anthony.............B6
Gaut, Steve.................B1
Gere, Jason.................R2
Goepfert, Jason........B15
Greenberg, Reid..........R1
Gwennap, Linley.........R3
Hale, Jon...................B16
Heller, Eric .................. R1
Hinze, Jonathan........B16
Huang, Jensen............R3
Iger, Robert.................A1
n-
A-E
Alexander, Rob............R6
Alvarez-Diaz, Ricardo.B8
Anandan, Rajan .......... B4
Barra, Mary.................B3
Bennett, Vincent ........ B8
Bertolini, Mark T. ....... B1
Bewkes, Jeff...............B1
Bezos, Jeff..................R1
Bhar, Robin ............... B15
Blatt, Kenneth............B6
Brown, David .............. B1
Buyer, Lise..................B2
Byrne, Mike.................B8
Chenault, Kenneth....B14
Cook, Tim....................B4
Cooper, Rob.................B6
Crist, Peter..................R2
Crosby, Lawrence........R2
DeVries, Mark...........B14
Dickey, Andrew...........B6
Ergen, Charlie ............. B3
From Pharmacist to Deal Maker
BRENDAN MCDERMID/REUTERS
D-G
Dalian Wanda Group .. B9
Delta Air Lines ......... B14
DeNA...........................B3
Deutsche Bank............A1
Discover Financial.......R3
Dish Network..............B3
Dynasty Financial.....B14
Eaton...........................R2
Equilar.........................B1
Exxon Mobil................R3
Facebook...........A1,B4,B9
FedEx...........................B1
Ford Motor..................B3
General Electric .......... R2
General Motors...........B3
Goldman Sachs Group B6
to tell people what happened
and why that person’s not
working here anymore.’ ”
A major U.S. drug company
that Mr. Kropp advises told its
HR staffers they should consider the holiday party a work
night because they will be expected to police the event for
bad behavior. “They were told
to go ahead and interrupt that
conversation if they don’t like
the looks of it,” he said. “You’re
going to be like a parental
chaperone at a high school
party. Let them dance together,
but not too close.”
Brandon Bruce, chief operating officer and co-founder of
software startup Cirrus Insight, said that while he isn’t
worried about misbehavior at
his company’s holiday party, it
has made him think more of
the vibe he wants to set at
work events. His plan this
year is to host the staff holiday party at a children’s science museum so that colleagues can bond and have
fun in a family setting.
Continued from the prior page
deal to buy Aetna at $207 a
share is 29% above that price.
“Because of a combination
of the length of his tenure,
large equity grants early on a
lower stock price, and
[Aetna’s] current stock price,
he’s accrued quite a bit of equity that makes his total walkaway value much larger than
what we’ve seen in other
cases,” said Courtney Yu, Equilar’s director of research.
BONDS
Continued from the prior page
than selling shares. Its low
cost is enhanced by interest
deductibility, which began in
the early 1900s. Borrowing by
investment-grade companies
has surged in recent years,
largely because of ultralow interest rates and tax incentives. Current law allows U.S.
companies to defer paying up
to 35% in U.S. taxes on their
foreign earnings as long as
they keep them in overseas
subsidiaries.
That has created an incentive for companies with easy
access to the credit markets to
leave cash overseas and borrow in the U.S. to fund share
buybacks and dividends. Apple, for instance, has issued
roughly $90 billion of U.S. dollar bonds since 2013 as part of
a $300 billion program to return money to shareholders.
The tech giant had about $270
billion of cash and marketable
securities as of Sept. 30, more
than 90% of which is held by
foreign subsidiaries.
Cash held in foreign countries by U.S. nonfinancial corporations is expected to reach
$1.4 trillion by the end of this
year, according to Moody’s Investors Service, more than
double the amount at the start
of this decade.
Under the competing versions of the legislation that
Congress needs to reconcile,
multinationals would pay a
one-time tax on their accumulated foreign earnings. But
there would be no extra tax on
transferring that money across
borders, giving them an immediate alternative to the bond
market the next time they
want to invest or buy back
shares.
Lower-taxed access to overseas cash could lead to a re-
PAUL FAITH/AGENCE FRANCE-PRESSE/GETTY IMAGES
A-C
BUSINESS & FINANCE
The tax bill would allow companies like Apple to repatriate foreign
earnings more cheaply. The iPhone maker’s campus in Ireland.
duction in investment-grade
issuance between roughly $80
billion and $160 billion, one
year after the tax law is
passed, according to Daniel
Sorid, a credit analyst for Citi
Research.
Other aspects of the House
and Senate tax bills also could
crimp borrowing. Both bills in
their current form would reduce the corporate tax rate to
20% from 35%, though President Donald Trump has indicated he is open to a 22% rate.
That in turn would reduce the
value of the corporate interest
deduction.
For example, Oracle Corp.
sold $10 billion of bonds last
month to help fund buybacks,
dividends and other investments. The business-software
maker’s offering included
$2.75 billion of 10-year bonds
that carried a 3.25% interest
rate.
Under existing tax law, the
company could write off the
$89.4 million of interest payments from its taxes at a 35%
rate, which could result in tax
deductions of $31.3 million a
year. At a lower 20% tax rate,
the savings could drop to $17.9
million.
—Richard Rubin
contributed to this article.
grew into that CEO role.”
The son of a machinist and
homemaker, Mr. Merlo was the
first member of his family to
attend college. A lifelong Pittsburgh Steelers fan and casual
pianist, he grew up in Charleroi, Pa., a town of 5,000 located 25 miles south of Pittsburgh, and graduated from the
University of Pittsburgh pharmacy school in 1973.
His father died while he
was still in school, and the
pharmacy where Mr. Merlo
worked at the time lent him
money to help pay for classes.
“That shaped him,” said Patricia Kroboth, dean of the pharmacy school. He sits on the
university’s board and returns
each year to teach a course.
After college, Mr. Merlo
went to work for the Peoples
Drug Store, a mid-Atlantic
chain, and was a regional
manager for the company
when CVS acquired it in 1990.
He worked his way up through
CVS, always on the retail side
of the business.
ly
.
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.
Accenture....................R2
Adobe Systems...........R3
Aetna ..................... B1,B2
Airbnb..........................B2
Alibaba Group.............B4
Alphabet
..........B3,B4,B9,R1,R2,R3
Amazon.com
..........A1,B1,B4,B9,R1,R3
AMC Entertainment...B9
American Express.....B14
Anschutz.....................B9
Apple...........B1,R1,R2,R3
Atrium Innovations .... B3
AT&T .................... A12,B1
Bank of America.......B14
Blackstone Group ....... B6
Boom Technology........B5
Brown-Forman............R2
Cameco......................B16
Capital One Financial.R6
Cinemark Holdings ..... B9
Cineworld Group.........B9
Cisco Systems.............R1
Clorox .......................... R2
Colgate-Palmolive.......R2
Comcast ...................... A1
Costco Wholesale.....B14
CVS Health............B1,B2
THE WALL STREET JOURNAL.
* ***
HEARD
Continued from the prior page
that can be resolved “with
some original thinking,” says
Lise Buyer, founder of consultancy Class V Group and an
architect of Google’s unusual
IPO. But, in a direct listing,
she worries that “first-day
volatility, up or down, could
be even more unpredictable
than usual, and that fear
could possibly keep the larger
institutions on the sidelines
until it settles.”
Google tried to include
small investors and eliminate
the first-day pop by soliciting
bids via an auctionlike algorithm. As big buyers got cold
feet, it ditched the clever
math and cut the asking price
in a last-minute attempt to
bring them back to the table.
Google’s failure to break
the mold paved the way for
years of conventional IPOs in
an industry that only got
keener on disruption. Much
could ride on Spotify’s direct
listing, including Wall Street’s
underwriting fees. If it works,
Uber Technologies and
Airbnb and any other tech
group with a consumer brand
will be tempted to follow suit.
To the Policyholders of
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA
Notice of Annual Election of Directors
The Annual Election of Directors of The Guardian Life
Insurance Company of America will be held at its Home
Office, located at 7 Hanover Square, New York, NY 10004
on December 13, 2017. The polls will open at 10:00 AM
and remain open until 4:00 PM on that day. Policyholders
whose policies or contracts are in force on the date of the
election and have been in force at least one year prior to
the election date are entitled to vote in person or by proxy.
Proxies may be obtained from the Office of the Corporate
Secretary, The Guardian Life Insurance Company of
America, 7 Hanover Square, H-27-A, New York, NY 10004
or through Guardian’s website at www.guardianlife.com/
about-guardian/corporate-governance.
Harris Oliner
Senior Vice President
and Corporate Secretary
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B3
* *
BUSINESS NEWS
Nestlé Set
To Acquire
Vitamins
Company
Trucking Fleets Snatch Up New Big Rigs as Shipping Demand Spikes
BY DREW FITZGERALD
AND IMANI MOISE
Dish Network Corp. said
Tuesday that Charlie Ergen
has relinquished his role as
chief executive to focus on the
company’s fledgling wireless
business.
The company promoted its
operating chief, Erik Carlson,
to the CEO post and made
other executive appointments,
including a head for its traditional satellite-television business and one for a new division holding Sling TV, its
online-only pay-TV package.
This is the second time Mr.
Ergen has stepped down as
Dish CEO. He left the CEO post
in 2011 then reclaimed the po-
sition in 2015. During his most
recent stint as CEO, Mr. Ergen
launched Sling TV, the first
such service created by a traditional pay-TV provider to attract cord-cutters.
The reorganization announced Tuesday comes as
Dish’s satellite business bleeds
customers, pressuring its
earnings. Also, investors have
waited for years for the company to find a profitable use
for its trove of wireless-spectrum licenses. The Englewood,
Colo., company has spent
more than $21 billion over the
past decade to assemble airwaves it could use for its own
wireless network or to sell to
another carrier.
Mr. Ergen, who will remain
chairman of the company he
co-founded in 1980, previously
sought deals with major telecommunications businesses to
pair their networks with its
ly
.
Dish Names CEO as Ergen Turns Focus to Wireless
mergers and acquisitions.
That outlook was complicated by months of negotiations between wireless companies Sprint Corp. and T-Mobile
US Inc., talks that came to an
end last month after both
sides reached an impasse over
ownership terms. The telecom
industry got another shock a
few weeks later, when the U.S.
Justice Department sued to
block AT&T Inc.’s $85 billion
purchase of Time Warner Inc.,
arguing the combined company would have too much
power over video distribution
and innovation.
The department’s lawsuit,
which AT&T and Time Warner
have vowed to fight, tweaked
some assumptions about
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Nestlé SA agreed to buy
Atrium Innovations Inc., a
Canadian vitamin maker, for
$2.3 billion, including the assumption of debt—expanding
its range of consumer-health
offerings as sales slow for
packaged-food staples such as
TV dinners and chocolatepowdered drinks.
Atrium owns the Garden of
Life and Pure Encapsulations
supplement brands and is
owned by a consortium of investors led by private-equity
firm Permira. It will become
part of Nestlé’s health-sciences arm, which makes products such as nutritional therapies for conditions such as
diabetes and dysphagia.
That unit had sales of $15.2
billion last year, up 2% from
the prior year. Nestlé’s sales
last year totaled $90 billion,
most of that from businesses
such as coffee and candy bars.
Packaged-food makers such
as Nestlé and Kraft Heinz Co.
are being buffeted by a number of forces. Rapidly changing consumer tastes have
shoppers fleeing some of these
companies’ big brands in favor
of healthier options or locally
or more naturally made goods.
Earlier this year, Nestlé
abandoned its annual salesgrowth targets after years of
missing them. A few months
later, activist investor Daniel
Loeb took a $3.5 billion stake
in Nestlé, which makes Nescafe, Lean Cuisine and Nesquik, and demanded change.
In response, Nestlé Chief
Executive Mark Schneider has
rolled out share buybacks and
a formal profit-margin target.
In June, Switzerland-based
Nestlé put its North American
chocolate business up for sale.
The unit could bring in $3 billion, according to analysts.
DANIEL BECERRIL/REUTERS
BY BEN DUMMETT
AND SAABIRA CHAUDHURI
Trucking companies are
bumping up orders for new big
rigs, anticipating that 2018 will
be a banner year for shipping
demand.
Trucking fleets ordered 32,900
Class 8 trucks, the kind used on
long-haul routes, in November, according to ACT Research, which
compiles industry statistics. That
was up about 70% from a year earlier. October and November were
the strongest months since the
start of 2015.
Fleets are adding capacity as
strong economic growth fuels
surging volumes of freight
through the nation’s transportation networks. Trucks are in high
demand to carry record imports
from ports to distribution centers, move machine parts and
heavy goods for manufacturers,
and bring merchandise to retailers during the holiday shopping
season. Shippers are paying
higher rates as capacity tightens,
creating an incentive to put
more trucks on the road.
“We’re seeing a lot of volume…and rates are following suit,”
said Eric Fuller, chief executive of
trucking company U.S. Xpress Enterprises Inc. “I think with increased rates people are feeling a
bit more comfortable buying additional trucks.”
—Erica E. Phillips
For the second
time, Charlie
Ergen is
stepping aside
as CEO of the
company he
co-founded.
spectrum but hasn’t found
success. Earlier this year, he
said it could be a good time to
strike a deal, in light of what
he called a “more friendly” administration when it came to
which potential combinations
might raise antitrust concerns.
Some analysts said the department’s arguments, which
lump satellite service in with
other video-distribution methods, could make it easier for
AT&T, which owns DirecTV, to
buy Dish’s satellite-TV unit.
Including streaming-only accounts, DirecTV has about 21
million subscribers, topping
Dish and Sling TV’s 13 million.
On the wireless side, Dish
could still dig in for the long
haul. Executives have been
laying the groundwork for an
“internet of things” network
that could serve internet-capable cars, home devices and
other gadgets, but they say it
would take years to build.
Ford Aims for China Revival
Fading Ford
no
SHANGHAI—Ford Motor Co.
rebooted its China strategy on
Tuesday, announcing new models and initiatives aimed at reversing declining sales in the
world’s largest car market.
The car maker will launch 50
new vehicles in China by 2025,
including 15 electrics, Executive
Chairman Bill Ford and Chief
Executive Jim Hackett said at a
news conference, adding that
by 2019 all new models there
will be internet-connected.
“China will lead the way” in
the industry’s global shift to
autonomous, connected, electric cars, Mr. Ford said. “We
now have to expand our presence in China and deliver even
more for customers.”
Ford’s China sales in the
first 10 months of 2017 fell 5%
from a year earlier to 938,570
vehicles despite strong showings by its trucks and premium
Lincoln cars. Its passenger-car
sales were down 14%, even as
the overall Chinese market
grew 2%.
Like other global auto makers, Ford has come to depend
on China for growth; last year
its sales in the country were up
14%, making up for flat sales in
the U.S. But the Chinese market
is maturing and local rivals are
closing the quality gap, while in
the U.S. Ford’s January-October
unit sales were down 2%.
“China has always been a
very competitive market, but
now with growth slowing and
Chinese brands rising, the mar-
n-
BY TREFOR MOSS
gin for error is indeed small,”
said James Chao, Asia-Pacific
automotive managing director
at IHS Markit.
Ford isn’t the only foreign
maker with China trouble. Sales
for South Korea’s Hyundai Motor Co. took a hit from heightened political tensions between
Beijing and Seoul. But most of
Ford’s mass-market rivals are
managing to grow.
Ford is deepening its commitment in China. In November,
it opened a testing center in
Nanjing, and has set up a joint
venture build electric cars. It
also announced plans for a Lincoln plant in the country and
plans to shift production of the
Focus from the U.S. to China.
—Lin Zhu in Beijing
contributed to this article.
The auto maker's sales have stalled in China, while most other foreign brands post growth.
Annual sales growth in China
2017 vehicle sales in China*
50%
COMPANY
40
Honda
1.2 million
17%
Nissan
1.2
11%
30
VEHICLE SALES
CHANGE FROM 2016
Toyota
1.1
20
Volkswagen
3.3
2%
10
General Motors
3.1
2%
Ford
0.9
Hyundai
0.8
0
Total market
Ford
–10
2010
’11 ’12 ’13 ’14 ’15 ’16 ’17*
*Through October
Total market:
9%
TOKYO—Nissan Motor Co.
plans to start testing robo-taxis
on Japanese streets in March
with the aim of launching a
self-driving taxi service.
Nissan said at the start of
the year that it was teaming
up with Tokyo software company DeNA Co. to build selfdriving Leaf electric cars that
could be summoned using a
smartphone application. With
Tuesday’s announcement, the
auto maker has laid out its first
concrete plan to get those vehi-
Protecting your enterprise
in one hour.
–5%
–39%
22.9
4%
Sources: the companies; China Association of Automobile Manufacturers (total)
Nissan to Field Test
Self-Driving Taxis
Evolved over billions
of years...
cles on the road.
The company’s plan to introduce the service by the early
2020s puts it behind some
global car makers.
General Motors Co. said
last month it would have a
fleet of self-driving taxis operating in big cities by 2019. GM
Chief Executive Mary Barra
said the U.S. company is “quarters, not years” away from
fielding driverless cars.
Waymo LLC, the driverlesscar unit of Google parent Alphabet Inc., has 100 self-driving Chrysler Pacifica minivans
on the streets of the Phoenix
metro area, and has plans to
field 500 more. Uber Technolo-
THE WALL STREET JOURNAL.
gies Inc. has ordered 24,000
Volvo sport-utility vehicles to
convert into autonomous automobiles.
Nissan’s domestic rivals,
Toyota Motor Corp. and Honda
Motor Co., haven’t announced
any plans for a taxi service using self-driving vehicles.
One reason Japanese makers have been slower to roll out
such services is local regulation.
Japan recently amended its
rules to allow testing of autonomous vehicles on public roads,
but the rules require coordination with local municipalities
and police.
—Sean McLain
and Chieko Tsuneoka
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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B4 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
TECHNOLOGY
WSJ.com/Tech
Google Aims
To Catch
Wave in India
As online activity has risen in India, inexpensive smartphones have struggled to handle the surge.
ple of a mobile-first internet
market, in part due to its massive scale,” said Ishan Dutt, an
analyst at research firm
Canalys. “The rapid expansion
of 4G coverage over the last
year in addition to low-cost
smartphones…makes it a favorable market to start delivering
online services that are primarily catered for mobile users.”
Indians’ embrace of broadband could provide a windfall
locally for Google, which
makes most of its money globally from advertising.
Still, many new internet users have been flocking to Facebook Inc.—a formidable digital-advertising rival—and its
popular messaging platform
WhatsApp. The social-media
giant in 2015 introduced a
stripped-down version of its
app aimed at emerging markets, and many users in India
prefer the simplicity of WhatsApp, which requires only a mobile-phone number to use.
Indian consumers last year
downloaded more apps from
Going Mobile
Number of smartphone users in
India as a share of the total
population.
25%
20
15
10
5
Projections
0
2015
’16
’17
’18
’19
Source: eMarketer
THE WALL STREET JOURNAL.
Google’s Play Store than users
in any other country, knocking
the U.S. from the top spot, according to analytics firm App
Annie. In the most recent quarter, the amount of time Android
phone users in India spent on
Google’s YouTube video site
more than doubled from a year
earlier, the firm said.
Google, which has been effectively shut out of China
since 2010, is eager to bolster
its user base in rapidly expanding emerging markets as
growth slows in developed
countries, analysts said.
Tuesday’s offerings from
Google were the latest in a
long string of tailored features
the technology titan has rolled
out first in India. The company previously launched a
version of its popular YouTube
smartphone app, called YouTube Go, that lets users share
videos, among other products.
Google said that the market
challenges in India force the
company to make apps and
other features that are quicker
and easier to use, paving the
way for their rollout in other
countries, including the U.S.
“We believe these [Indian]
users are showing us what the
global internet is going to look
like in the future,” Caesar Sengupta, a Google vice president,
said Tuesday.
Jack Ma Says China Market Not Impenetrable
BY LIZA LIN
‘When you
determine to
come, prepare for
it. Follow the
rules and laws
and spend
10 years.’
n-
COLE BURSTON/BLOOMBERG NEWS
—Jack Ma, Alibaba
no
WUZHEN,
China—Amid
rumblings of a U.S.-China
trade conflict, Alibaba Group
Holding Ltd. founder Jack Ma
defended China against complaints that it creates barriers
against outside competitors.
Companies that struggle
here may simply not be taking
the right approach, Mr. Ma
said Tuesday at a prominent
internet forum.
“I gave advice to Jeff Bezos
10 years ago,” Mr. Ma said, referring to Amazon.com Inc.’s
chief executive. “I said: ‘Please
send people with entrepreneurial spirit, not professional
management. Because wherever you go, doing business in
another country is very difficult.’ ”
An Amazon spokesman had
no response to the comments
from Mr. Ma, whose online
shopping portals compete
against the Seattle-based
company. Amazon dominates
e-commerce in the U.S., but is
the underdog in China.
China’s annual World Internet Conference has become a
forum for the government to
promote its views on the internet and related technologies. This year’s event comes
as the Office of the United
Alibaba’s founder rebutted complaints about Beijing’s trade policies.
States Trade Representative
examines complaints that U.S.
companies are forced to give
valuable technology and trade
secrets to Chinese partners as
the price for doing business in
the country.
China contends the USTR
probe is a protectionist action
that will undermine economic
and trade relations between
both countries.
Mr. Ma spoke out against
the perception that U.S. companies can’t succeed in China,
citing Microsoft Corp. and
Coca-Cola Co. as businesses
that have thrived here.
“Give me five examples of
Chinese companies that succeed in America,” he said. “Or
Asian companies that succeed
in America. Because it’s not
easy to do business across nations. It takes time.”
Mr. Ma’s comparison is
flawed, said Kenneth Jarrett,
president of the American
Chamber of Commerce in
Shanghai. He said American
firms have been active in
China for a long time, while
Chinese companies are just
making inroads in the U.S.
Surveys by Mr. Jarrett’s
group and other business organizations have long showed
that U.S. companies believe
they have to compete on an
uneven playing field.
The Wuzhen conference,
which ended Tuesday, was
sponsored by the Cyberspace
Administration of China,
which censors content and
blocks social-media platforms
including Facebook. The CAC
is also enforcing a new cyberspace law that recently led
Apple Inc. to remove from its
China store virtual private
Google said it is pulling
YouTube from some Amazon.com Inc. devices in retaliation for Amazon refusing to
sell many Google products, escalating a battle between two
tech titans as their businesses
increasingly overlap.
Google said Tuesday it had
cut access to the video service
on Amazon’s smart speakers
with screens, called the Echo
Show, and plans to block YouTube on Amazon’s Fire TV media-streaming device on Jan. 1.
Google, a unit of Alphabet
Inc., said Amazon’s retail website doesn’t sell competing
products like the Google Home
smart speaker or Google’s
Chromecast streaming device.
Google also claimed that Amazon’s Prime Video lineup of
shows and movies isn’t available
via the Chromecast. It added
that Amazon has stopped selling some products from Nest, a
connected-device maker that is
Google’s sister firm under Alphabet. Amazon in October
launched a home-security system that competes with Nest.
“Given this lack of reciprocity, we are no longer supporting
YouTube on Echo Show and Fire
TV,” a Google spokeswoman
said Tuesday.
An Amazon spokeswoman
said, “Google is setting a disappointing precedent by selectively blocking customer access
to an open website.”
Both companies said they
hope to resolve the issue
quickly.
The rare public spat between
two of the world’s most powerful companies highlights increasing tensions as they
spread their ambitions to new
products and industries. While
Google started in online search
and Amazon in retail, each now
has competing hardware and
content businesses that they
are betting will expand their
dominance.
Google already pulled YouTube off Amazon’s Echo Show
device in September because it
said Amazon’s implementation
of YouTube violated its policies
by barring users from logging in
or commenting.
Last month, a few days before the Black Friday shopping
bonanza, Amazon said YouTube
was working on the Echo Show
again. A person familiar with
Google’s thinking said Amazon
had worked around its move to
block access to its YouTube
voice-controlled app by sending
users to YouTube’s website, an
approach that also violates YouTube’s policies.
Patrick Moorhead, head of
tech-research firm Moor Insights & Strategy, said Google
appears to be using access to
YouTube as leverage in its negotiations with Amazon—and
the losers are customers. “This
is classic tech-giant sparring,”
he said. “For consumers, it’s
not good.”
—Laura Stevens
contributed to this article.
ly
.
NEW DELHI—An explosion
of smartphone usage in India
is changing the way Alphabet
Inc.’s Google sees the future of
the internet.
As a mobile price war in
the South Asian nation has
slashed data rates to less than
$5 a month for unlimited highspeed access, hundreds of millions of people are getting online for the first time and
bingeing, stretching their lowend smartphones to the limit.
Google on Tuesday rolled
out several apps and functions
aimed directly at these net
newbies and those like them in
other emerging markets.
As online activity has increased in India this year, the
inexpensive smartphones used
by many consumers have
struggled to handle the surge.
To help, Google has shrunk the
file size of its mobile operating
system and many popular apps.
Users in India are frequently offline, so the Mountain View, Calif., company has
given them the ability to do
more without an internet connection. Also, recognizing that
denizens are much more likely
to get around on motorcycles
than in cars, Google Maps has
DHIRAJ SINGH/BLOOMBERG
BY NEWLEY PURNELL
started offering suggested
routes and travel-time estimates for two-wheelers.
“Over the last 15 months India has become a broadband
nation,” said Rajan Anandan,
Google vice president for
Southeast Asia and India, at a
launch event in New Delhi.
“We know that this set of new
users will need an internet
that is very different from
what you and I use.”
India’s telecommunications
industry is in the midst of a
data-price war. It started last
year when Reliance Jio Infocomm Ltd., a new phone service backed by a local billionaire, began offering free
unlimited 4G-speed data for
six months. It continues to offer 4G at record-low rates, and
competitors have slashed their
prices to stay competitive.
Data traffic per smartphone
has advanced from less than 1
gigabyte a month in years past
to more than 4 gigabytes as Indians download videos and access social media in rising
numbers. That figure will likely
reach 11 gigabytes a month by
2022, according to the Indian
Council for Research on International Economic Relations.
If Google can ride this wave
in India, analysts said, the
company will have the tools
and knowledge needed to attract the next wave of internet
users—the vast majority of
whom will likely get online
only via their phones.
India is “the notable exam-
BY JACK NICAS
co Fo
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Company is tailoring
its service to a rapidly
emerging mobile-first
internet market
Google,
Amazon
Spar Over
Products
network apps that allowed users to evade China’s internet
restrictions.
In his remarks, Mr. Ma said
foreign firms must be prepared to abide by China’s laws
and not expect quick success.
“When you determine to
come, prepare for it. Follow
the rules and laws and spend
10 years,” Mr. Ma said to
hearty applause. “This is not a
market that you can come and
go.”
In a testament to the importance of the Chinese market, conference participants
included Apple Chief Executive Tim Cook, Facebook Inc.
Vice President Vaughan Smith
and Sundar Pichai, chief executive of Alphabet Inc.’s
Google.
Facebook and Google cannot be accessed in China without VPNs, but both companies
have been exploring ways to
increase their presence here.
Online shopping platform
eBay Inc. is taking the long
view in its China strategy, said
RJ Pittman, a senior vice president for the San Jose, Calif.based e-commerce platform.
“It’s been a growing business for us,” he said. “It’s not
a sprint, it’s a marathon. You
need to make that sort of
commitment and investment.”
Top ad agencies boost
spending with Amazon........ B9
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the Start with WSJ+
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THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B5
NY
BUSINESS NEWS
Subsiding
HNA Investment Group
share price
¥15
10
5
0
2015
’16
Note: ¥10 = $1.51
Source: FactSet
’17
A rendering of Boom Technology’s proposed faster-than-sound aircraft, which has drawn a small investment from Japan Airlines.
Supersonic Jet Gets Boost
BY ANDY PASZTOR
Japan Airlines Co. has become the first carrier to invest
in Boom Technology Inc., a
U.S. startup seeking to build a
faster-than-sound airliner capable of flying more than four
dozen passengers between Tokyo and the U.S. West Coast in
roughly five hours.
The $10 million commitment is a pittance for JAL,
which flies more than 200 aircraft to roughly 180 destinations world-wide. Nonetheless,
the strategic partnership reflects escalating industry interest in the project, known as
Boom Supersonic.
JAL also signed nonbinding
options to purchase 20 of the
ultimate aircraft, bringing
such expressions of interest to
a total of 76.
Further details of the investment in the Colorado-
based company weren’t disclosed. Overall, the project is
expected eventually to cost
more than $1 billion.
A one-third scale version of
the plane is scheduled to start
flight tests in late 2018, nearly
a year later than initially
planned, and JAL’s involvement is expected to influence
cabin design and various operational issues. Blake Scholl,
Boom’s founder and chief executive, said such cooperation
is intended “to determine
whether airlines will really be
happy to have this airliner in
their fleets,” including from a
maintenance perspective.
Other potential customers
will be asked to make the
same type of direct financial
commitment to the development process when they agree
on options, according to Mr.
Scholl.
Even if all the technical,
regulatory and manufacturing
challenges are resolved on
schedule, the proposed supersonic jetliners—which are envisioned as cruising about 10%
faster than the now-mothballed Concorde—won’t start
carrying passengers until
2023. The goal is to cut current transcontinental trip
times in half.
The price of the jetliner
hasn’t been set nor is there a
specific estimated cost of a
seat to fly on it. Also, there is
the uncertainty of whether it
will be certified in the U.S. or
Europe.
The concept of a three-engine aircraft featuring limited
seating in a premium-only
configuration
previously
gained the support of engine
maker General Electric Co. and
avionics supplier Honeywell
International Inc. A cabin
mock-up features large oval
windows, almost like portholes, and a single row of
seats on each side of the fuselage.
The demonstrator, called
Baby Boom, resembles the
contours of an experimental
jet fighter with its needlelike
nose, swept-back wings and
tapered carbon-fiber body. The
final version is expected to be
half the length of the roughly
100-foot-long Concorde, which
stopped flying in 2003
Boom’s project has initial
support from several venture
funds, and the company says it
has enough funds to start test
flying the prototype.
Mr. Scholl’s team is taking
an unusual approach by integrating various technologies
already certified by regulators,
rather than developing new
systems as backers of some
supersonic business jets are
doing.
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the sprawling conglomerate
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HNA Investment was originally a real-estate developer in
the early 1990s. In recent years
it shifted its focus to investing
in China’s financial sector, buying into trusts, insurers and
other companies. The company
recently had a market value of
$741 million, down sharply
from a peak of $3.5 billion in
mid-2015, according to data
from Wind Information Co.
In a regulatory filing Monday, HNA Investment said factors behind its decision included
“approval progress, the company’s current status and development plan, as well as the capital market environment.”
—Yifan Xie
and Anjani Trivedi
co Fo
m rp
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ci on
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Pressure is mounting on
China’s HNA Group Co.
A Shenzhen-listed unit of the
Chinese company said it has
scrapped plans to sell up to 5.2
billion yuan ($785.7 million)
worth of shares to a small number of investors in a private
placement, the latest in a string
of fundraising setbacks for the
airlines-to-hotels conglomerate.
The share sales by HNA Investment Group were meant to
help parent company HNA increase its stake in a Chinese
property-and-casualty insurer
and acquire a Beijing-based
medical investment business,
according to a regulatory filing.
HNA didn’t say if it intends
to proceed with those deals,
which would aid asset diversification. But the canceled share
sales are another indication the
conglomerate is finding it
harder to raise money following an aggressive global acquisition spree.
HNA has bought shares in
the Hilton hotel chain and
Deutsche Bank AG, as well as
various Chinese businesses,
drawing scrutiny from lenders
and regulators about its ownership, debt levels and sources of
funding. The company recently
said it would scale back its expansion plans and consider asset sales in some sectors.
Investor concerns about
HNA’s finances have become increasingly evident in the credit
markets, where subsidiaries of
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THE WALL STREET JOURNAL.
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DAVID RYDER/REUTERS
The Mart
UPS has notified drivers at more than 100 package-delivery centers that it may add work hours.
ments and that workers are
paid time-and-a-half for work
beyond eight hours a day.
“UPS customers can be confident that UPS is taking the
necessary steps to ensure the
network operates with its customary dependable performance throughout the holiday
season,” Mr. Gaut said.
no
Continued from page B1
hours to handle the peak season’s volume, with packages
delivered early in the morning,
evening and on Sundays.
“We have planned for this
holiday season all year long
and have flexed out network
and expanded delivery hours
to accommodate increased volume,” said spokesman David
Partenheimer.
UPS, which is based in Atlanta, is making some adjustments to cope. It has notified
workers at more than 100
package-delivery
centers
where demand is highest that
it may raise the number of
hours drivers work to 70 hours
over an eight-day period, up
from 60 over seven days.
Union leadership, which
represents UPS drivers, has
objected to the move in some
places, saying that the longer
hours put package-delivery
drivers at risk and keep them
away from their families during the holidays.
In a letter sent Monday to
UPS Chief Executive David Abney, Teamsters President
James P. Hoffa said: “I fail to
understand how the Company
neglected to take the steps
n-
UPS
necessary to ensure that it had
a sufficient number of trained
workers available to meet the
demand generated by the digital economy.” The Teamsters
represent more than 250,000
UPS workers and are currently
engaged in contract talks.
UPS said the change complies with federal require-
Jon Paul Borella
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He is predeceased by his mother,
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B6 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
INTERNATIONAL PROPERTY REPORT
The Caribbean
Hotels Battle Reality and Perception
Owners race to repair
properties hobbled
by hurricanes and look
to lure wary tourists
The El Conquistador Resort on Puerto Rico’s east coast has remained closed since the hurricanes. Other parts of the Caribbean emerged unscathed.
projection of 2.5% to 3.5%.
A separate industry group,
the Caribbean Hotel and Tourism Association, estimates
about 25% of the hotel stock in
the region was affected by the
hurricanes.
One of the lucky islands
was Aruba, which is south of
where the biggest hurricanes
hit. In October, hotel occupancy there rose more than
18% from a year earlier, according to data from STR Inc.,
which tracks the industry.
Puerto Rico’s hotel room
supply fell more than 15% in
October, and occupancy surged
more than 27% from a year
earlier, the data showed.
Only a few hotels in the
downtown San Juan, Puerto
Rico, area are fully shut down.
Those that are open have seen
brisk demand from the relief
workers, insurance companies
and utility crews who have descended on the island.
Supply is so tight that the
Federal Emergency Management Agency has been using
an Italian passenger ferry to
house some of its workers.
Reynaldo Rey Fernandez,
general manager of the AC Hotel in San Juan’s Condado district, said his hotel has been
running at nearly 100% occupancy, and meeting spaces
have been filled by local businesses that don’t have power.
It is a different kind of
business, he said: Large government and corporate contracts are negotiated at a flat
rate, and those kinds of guests
don’t tend to spend a lot at
the bar like vacationers. Mr.
Fernandez said he expects that
demand to continue through
February or March, but after
that is an open question.
“The real challenge is how
strong the infrastructure is
going to be able to come
back,” he said. “We cannot
pretend to say, ‘Hey tourists,
come back, everything is fine,’
if it’s not.”
Meanwhile, major hotel
brands say leisure travel is
picking up in unaffected parts
of the region. Brian King,
global sales officer at Marriott International Inc., said
the company has seen strong
demand in places such as the
Cayman Islands, Aruba and
Cancún as supply in other
parts of the Caribbean is offline.
Daniel Hughes, senior vice
president and commercial director of the Americas for Hilton Worldwide Holdings Inc.,
said he doesn’t believe there
will be a perception problem
with the Caribbean, because
customers have access to so
much real-time information
about specific resorts.
Despite the operational
challenges in parts of the Caribbean, investor interest in
the region doesn’t appear to
be waning.
Andrew Dickey, who focuses on the Puerto Rico and
Caribbean hospitality market
for real-estate and investment
firm JLL, said many buyers
have shown interest and are
looking for distressed assets
in the region. “There’s a
strong belief and strong story
to investors that that market
is going to return very well,”
he said.
Even before the hurricanes,
Mr. Dickey said, hotels in
co Fo
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Investors Bargain Hunt in Storms’ Wake
GERALD HERBERT/ASSOCIATED PRESS
no
Within 48 hours of Hurricane Maria blowing out to sea,
leaving a ransacked Caribbean
region in its wake, Andrew
Dickey got a phone call from
an investor looking to buy a
hotel in the region.
“That was a shock,” said
Mr. Dickey, a senior broker
with real estate services firm
JLL. “It was pretty quick: You
get the call that says: ‘I hope
I’m not insensitive, but…”
It takes more than a Category 5 hurricane to completely
shut down the Caribbean realestate market.
Deals, of course, have been
delayed in the hardest-hit areas, where power still hasn’t
been completely restored and
many buyers and sellers have
moved to the sidelines during
the initial recovery effort. But
the markets for both commercial and residential property
have begun stirring to life
sooner than many would have
thought after 2017’s harrowing
hurricane season.
Investors are being lured
back by the short-term prospect of low prices and the
long-term possibility that disaster aid could spark an economic boom in the region.
“Hopefully they’ll use this
as an opportunity to rebuild a
lot of the infrastructure and
make some pro-business
changes, so the island will
emerge stronger than it was
before,” said hedge-fund manager John Paulson, who has
purchased such trophy properties in Puerto Rico as the Condado Vanderbilt Hotel in San
Juan and the St. Regis Bahia
Beach Resort over the past
five years.
For now, interest is particularly keen among sellers cutting prices and buyers looking
for discounts. For example, a
five-bedroom house with a
panoramic ocean view in
Dutch St. Maarten, which was
on the market for $3.5 million
in the summer, is now for sale
in damaged condition for
n-
BY PETER GRANT
AND SHEFALI ANAND
This Puerto Rico plot was lately appraised at about half its prior value, according to Douglas Elliman.
about $1.9 million, according
to Walter Kassel, managing director of local brokerage Tendal Real Estate.
The owner of a seven-bedroom apartment on Tortola,
the largest of the British Virgin Islands, had been asking
$3.25 million. Now the owner
is open to any offer, according
to Rob Cooper, director at 7th
Heaven Properties Ltd., a U.K.based brokerage.
On Puerto Rico, brokerage
firm Douglas Elliman is getting ready to start marketing
two side-by-side 413-acre waterfront parcels that recently
had been appraised for $90
million each, according to Jessica Robertson, a realtor with
the firm.
That is about half their
original appraised values and
“starting points for us especially given where we stand at
the moment with the recovery
efforts,” she said.
Investors such as Mr. Paulson, Nicholas Prouty, Blackstone Group LP and Goldman
Sachs Group Inc. have purchased billions of dollars
worth of hotels, office buildings, distressed debt and other
assets in the region.
But some deals have turned
out to be fool’s gold, especially
for investors who thought
they would be able to flip
properties for a quick profit.
While real estate in most of
the U.S. has recovered, Puerto
Buyers are being
lured back partly by
the short-term
prospect of low prices.
Rican property has remained
low as the island has lurched
from the Zika-virus scare to
the government’s default on
billions of dollars of debt.
Mr. Paulson, who bet
against residential housing before the 2008 crash, said in an
interview last week that he is
ahead on his investments in
Puerto Rico, although he
doesn’t expect them to be
“home runs” without a healthy
economy.
He agreed that one of the
problems is that other big in-
stitutions didn’t follow him
and a few other investors to
the island “at a level that’s as
strong as I’d like to see,” creating a healthy market.
The big hurricanes of 2017,
particularly Maria and Irma,
have added a new pile of problems in the region. Some islands, like Barbuda, suffered
so much damage they remain
virtually uninhabitable.
In Puerto Rico, the recovery
has been slow, particularly in
terms of restoring power.
More than 100,000 residents
are estimated to have left the
islands, raising the specter of
a long-term decline in Puerto
Rico’s economy if they don’t
return.
The retail sector, in particular, is a mess. One sign of this
is the lawsuit that luxury-mall
landlord Taubman Centers
Inc. filed against luxury retailer Saks Fifth Avenue about
a month ago alleging the retailer has dragged its feet in
the rebuilding of its store in
the Mall of San Juan. Hudson’s Bay Co., the owner of
Saks, said it is in the process
of repairing the store and is
focused on its staff’s well-
being.
But some landlords have
benefited. Because dozens of
hotels and office buildings
have shut down, those that
have remained open are doing
strong businesses with recovery workers and others.
Optimists hope Puerto
Rico’s economy will benefit
from what they describe as a
“mini-Marshall Plan,” referring
to tens of billions of dollars in
hoped-for U.S. recovery aid
similar to support offered to
Europe at the end of World
War II.
Many investors also believe
the hurricanes will help spark
a favorable resolution of the
bankruptcy negotiations under
way among creditors, Puerto
Rico’s government and the
public power utility.
“Maria was the best thing
to happen to Puerto Rico visà-vis its debt,” said Kenneth
Blatt, chief operating officer of
the hospitality division of Caribbean Property Group LLC,
an investor in the region.
Thanks to the hurricanes,
Puerto Rico also might have
dodged a bullet in the tax
overhaul effort under way in
Congress. The House version
of the bill contains numerous
onerous provisions including
one that would eliminate the
incentive for many manufacturing companies to operate
there.
House Speaker Paul Ryan
and Jenniffer González-Colón,
Puerto Rico’s delegate in Congress, released a statement
last month indicating the territory might get more benign
treatment.
“It is our intention to make
improvements to our tax-reform legislation as it relates to
Puerto Rico when we go to
conference,” the statement
said.
Investors already in the region said they would be making new investments once the
economy recovers. For example, Mr. Paulson said he would
probably go ahead with an expansion he is planning for the
St. Regis.
Puerto Rico were attractive to
investors because of the perception that there were bargain prices due to the Zika virus and the island’s fiscal
situation. He pointed to the
San Juan Marriott, which JLL
helped sell to a Chinese buyer
in May for $184 million.
Mr. Dickey said it was a
competitive deal, with eight
bidders in the first round.
Hector Aponte, managing
director of the San Juan office
of Newmark Grubb Caribbean, said he expects a sale of
the historic Normandie hotel
to go forward. The property is
under contract, and he said
the buyer plans to invest
about $45 million to rebuild
the hotel, which has been
closed since 2009.
—Peter Grant
contributed to this article.
PLOTS
& PLOYS
SIMON PROPERTY GROUP
Starbucks Is Ordered
To Keep Stores Open
Mall owner Simon Property
Group Inc. won a victory over
Starbucks Corp. after an Indiana
judge ordered the coffee chain
to keep open Teavana stores in
77 of Simon’s shopping centers,
striking a blow to underperforming tenants hoping to wiggle out
of their leases.
Landlords are pushing back
against tenants that try to end
their leases prematurely if they
can remain economically viable
with the store remaining open.
The judge at Marion County
Superior Court last week
granted a preliminary injunction
to halt Starbucks from closing
and conducting any going-out-ofbusiness sales in its Teavana
stores in 77 retail locations
owned by Simon.
“We are disappointed in the
judge’s ruling and will continue
to focus on finding a resolution,”
said a Starbucks spokeswoman.
—Esther Fung
RELATED
Ex-Officials Named
To Build Business
Developer Related Cos. has
hired two former senior Transportation Department officials in
the Obama administration to
build an infrastructure business.
Former Transportation Secretary Anthony Foxx, along with
Andrew Right, who helped create the department’s Build
America Bureau, plan to invest
in businesses that develop and
operate airports, ports, toll roads
and other infrastructure. Related
has hundreds of millions of dollars available to invest from the
private-equity funds the firm
has raised, plus its own capital.
Messrs. Foxx and Right said
in an interview there is plenty of
work available because of the
enormous needs throughout the
country for upgrading and building new infrastructure.
—Peter Grant
PETER GRANT/THE WALL STREET JOURNAL
The hurricanes that tore
through the Caribbean this fall
have left hotels and resorts
across the region scrambling
to salvage the crucial winter
high season.
On some islands, the storms
caused devastation that will
leave resort properties on the
sidelines for much of the winter, as owners perform major
repairs and contend with hobbled infrastructure. Hotels
that remain closed on Puerto
Rico include Blackstone
Group LP’s El Conquistador
Resort and Wyndham Garden
at Palmas del Mar.
Other parts of the Caribbean emerged entirely unscathed, fortunate to be out of
the storms’ paths. For the hotels that remain, the reduced
room supply in the region
presents an opportunity to
boost occupancy.
Yet hoteliers throughout
the region are facing a similar
challenge: How to persuade
leisure travelers—especially
tourists from North America
and Europe looking to escape
the snow—to move past the
harrowing images of two
months ago and book Caribbean vacations.
“Our biggest damage was
people misunderstanding the
degree to which we were hit,”
said Stan Hartling, chief executive of the Hartling Group,
which owns three resorts on
the Turks and Caicos Islands
that were operational about
two weeks after the hurricanes. “People broad brush
and say ‘the Caribbean in general is devastated.’ ”
It is still too early to gauge
the full impact the hurricanes
will have on the region’s hotel
industry. The Caribbean Tourism Organization cut its annual growth projections of visitors for the year to between
1% and 2% after the hurricanes, down from an original
ly
.
BY CHRIS KIRKHAM
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B7
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B7A | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
NY
ADVERTISEMENT
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To advertise: 800-366-3975 or WSJ.com/classifieds
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THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B7B
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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B7C | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
NY
ADVERTISEMENT
Retail Real Estate Showcase
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THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B7D
NY
ADVERTISEMENT
Retail Real Estate Showcase
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B8 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
NY
THE PROPERTY REPORT
Builders Seek Clarity
On Insurer Coverage
A man installs a temporary roof at his house, which suffered damage during Hurricane Maria in San Juan, Puerto Rico.
Island’s Building-Code Policing Hit
Puerto Rico has adopted
building codes that include
some of the strictest standards
in the world when it comes to
hurricane resistance.
But there is a big problem:
Bad enforcement. About 55% of
all structures in Puerto Rico haven’t been built to code partly
because the government lacks
an adequate process for code
certification during the building
process, said Ricardo AlvarezDiaz, president of the Puerto
Rico Builders Association.
The result: About 250,000
housing units were damaged in
the latest hurricane season,
Mr. Alvarez-Diaz said. The
number would have been much
lower if they had all been built
to code.
“The codes are great,” he
said. “But if they’re not implemented, what’s the point?”
Weak building regulations
and enforcement are common
throughout the Caribbean. The
results aren’t surprising when
natural disasters hit.
For example, the death toll
and destruction from the 2010
earthquake in Haiti was particularly severe because that
country had no building code
at the time, according to Vicente Moreno, the Caribbean
region head for JLL, a commercial real-estate services
firm.
Some of the hardest-hit islands in this year’s hurricane
season, like Barbuda, lost most
of their infrastructure. As
much as half of the structures
need to be completely rebuilt,
experts say.
The challenge now for the
region is to rebuild using the
highest standards so infrastructure and buildings are
more hurricane resistant. The
Federal Emergency Management Agency, which is coordi-
ADVERTISEMENT
nating much of the U.S. government’s recovery efforts in
Puerto Rico and the U.S. Virgin
Islands, said the new power
system on those islands will be
more resilient than the old
one.
“I can replace all the wood
poles with concrete poles. I
can move substations that
were built in the flood plain
out of the flood plain,” said
Mike Byrne, FEMA’s federal
coordinating officer in Puerto
Rico. “We’re going to be investing in designing a system
that will withstand the next
event.”
But it is less clear whether
the country is going to adopt a
better system for certifying
that apartment buildings,
homes and other structures
have conformed with the country’s building code.
Puerto Rico has adopted the
strict International Building
Code, which includes some of
the highest standards in the
world. But, unlike most cities
in the continental U.S., local
governments in Puerto Rico
don’t send inspectors to approve planning documents or
visit construction sites, according to Mr. Alvarez-Diaz.
Contractors aren’t required to
be licensed, he added.
Some structures, particularly in poorer communities
outside San Juan, aren’t certified at all, experts say. Other
times, private building inspectors approve building plans
not built to international
building-code standards. “You
see that a lot, particularly with
the way roofs are anchored or
the foundation of the home
was built,” Mr. Moreno said.
A spokeswoman for Ricardo
Rosselló, the governor of
Puerto Rico, didn’t respond to
a request to comment.
—Peter Grant
contributed to this article.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY EMILY NONKO
McCormack Baron Salazar
faces long delays in completing a 100-unit affordable-housing project on St. Croix because the island was hit hard
by Hurricane Maria.
But it is up in the air
whether the St. Louis developer’s insurance will cover it
for these delays. If they were
caused by physical damage, it
likely wouldn’t be an issue.
But that isn’t the problem:
McCormack
Baron
faces
months of delays because the
U.S. Virgin Island’s labor force
has been depleted by evacuations and demand for immediate repair work.
Does the firm’s insurance
cover that? “That’s one of the
issues we’re working through
right now,” said Vincent Bennett, McCormack Baron’s president.
Every natural disaster presents a unique set of challenges
for insurance companies and
real-estate owners and developers. But insurance executives and property owners say
that the back-to-back hurricanes that hit the Caribbean
this year left in their wake unprecedented challenges that
will keep lawyers, accountants
and appraisers busy for years.
The thorniest cases are
likely to involve so-called business-interruption claims resulting from broad regional
problems like labor shortages,
long-term damage to power
grids and moribund tourism
industries. These policies typically reimburse landlords and
other business owners for lost
revenue during the time it
takes to fix hurricane damage.
It is less clear whether coverage extends to lost revenue
when a property or business
can’t reopen because staff has
relocated or there is no power
in the area. “You see a lot of
issues about business inter-
Stormy Weather
Costliest hurricanes by
insured losses
Maria* (2017)
$85 billion
Katrina ('05)
62.2
Irma* ('17)
50.0
Sandy ('12)
29.5
Ike ('08)
18.5
Andrew ('92)
17.0
Ivan ('04)
13.8
Wilma ('05)
12.5
Rita ('05)
12.1
Harvey* ('17)
10.0
Charley ('04) 8.0
Irene ('11)
6.0
Frances ('04) 5.5
*Upper limit of estimates
Note: Losses not adjusted for inflation
Sources: Munich Re; NatCatSERVICE; AIR
Worldwide (2017 storm estimates)
ruption, consequential damage,” said Charles Rutte, an attorney at law firm HBN Law in
St. Maarten. “It’s kind of a
shady area.”
The challenge facing the insurance industry stems partly
from the scale of the devastation. Hurricanes Irma and Maria are expected to cause insured losses of as much as
$135 billion to the Caribbean
islands and the U.S., including
Puerto Rico, according to catastrophe modeling firm AIR
Worldwide. By comparison,
the costliest prior hurricane
world-wide was Hurricane Katrina in 2005, which resulted
in insured losses of more than
$60 billion at the time, according to 2015 data by Munich Re.
Insurance industry representatives say so far the process of settling claims has
been going relatively well.
“The insurance companies are
prepared to take these claims
on,” said Tom Fitzgerald, chief
executive of Aon Global Broking, an insurance broker.
—Peter Grant
contributed to this article.
ly
.
CARLOS GIUSTI/ASSOCIATED PRESS
BY SHEFALI ANAND
Business Real Estate & Services
To advertise: 800-366-3975 or WSJ.com/classifieds
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THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B9
* *
ANDREW TOTH/GETTY IMAGES FOR VANITY FAIR
MEDIA & MARKETING
Give the Gift of Excellence
TheSkimm Considers a Sale
Newsletter targeted
at young women talks
with media companies
after drawing interest
BY BENJAMIN MULLIN
AND SUZANNE VRANICA
TheSkimm, the daily news
digest that has taken off with
younger women, is exploring a
possible sale after being contacted by an interested buyer,
according to people familiar
with the matter.
After receiving the inbound
interest, theSkimm has been
holding preliminary discussions with media companies to
gauge their interest in investing or acquiring it outright,
the people said. They cautioned that it is possible that
no deal will materialize.
As many digital publishers
are looking for exits in a mar-
routine-based products for our
devoted audience of female
millennials,” Ms. Zakin and Ms.
Weisberg said in a statement.
By acquiring theSkimm, a
buyer would get access to its
most valuable asset: more
than six million subscribers
who have signed up for its
early-morning weekday email.
Most of the company’s revenue comes from advertising,
such as sponsored content
from brands such as JPMorgan Chase & Co., Alphabet
Inc.’s Google and Starbucks
Corp. But Ms. Zakin and Ms.
Weisberg have also branched
out beyond advertising with a
$2.99-a-month app that adds
important events to subscribers’ calendars and includes
Skimm Notes, an audio product that adds context around
big topics; two original shows
on Facebook Watch; a newsmaker series called “Sip ’n
Skimm”; and a growing affili-
ate advertising business.
TheSkimm’s revenue is on
pace to double from last year,
and it now has more than 60
full-time employees, according
to a person familiar with the
matter.
According to a recent presentation from theSkimm obtained
by The Wall Street Journal, 40%
of theSkimm’s audience opens
all five email newsletters each
week. About 80% of its readers
are female, and 45% earn more
than $100,000 a year, according
to the presentation.
TheSkimm has won favorable attention in the press,
with profiles of the business
and its founders across major
publications. But theSkimm
has also been polarizing, drawing criticism for what is seen
by some as an oversimplification of current events and assumption that its largely female readership doesn’t pay
attention to the news.
Professional Accessories Bags & Totes
Home & Office Furniture & Lighting Travel Essentials
Folios & Notebooks Writing Instruments
Levenger.com
800.544.0880
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theSkimm has been a success
story in reaching a younger
audience with its free morning
newsletter that sums up the
news of the day in a concise
but chatty style for an on-thego professional.
Founded in 2012 by former
NBC employees Carly Zakin
and Danielle Weisberg, theSkimm so far has raised more
than $16 million from investors including Homebrew
Ventures, 21st Century Fox
Inc. and RRE Ventures. In
June 2016, theSkimm completed an $8 million round
that valued the company at
$55 million, Recode reported.
(21st Century Fox and Wall
Street Journal parent company News Corp share common ownership.)
“While we never comment
on matters relating to the
company’s strategic direction,
we are focused on providing
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U.K.’s Cineworld to Purchase Regal
n-
A Regal Entertainment theater in Los Angeles. Cineworld will have over 9,000 screens after the deal.
Cinemark Launches
Subscription Service
For Moviegoers
no
British movie theater operator Cineworld Group PLC
has agreed to buy American
counterpart Regal Entertainment Group for $3.6 billion,
creating the world’s secondlargest cinema operator.
Cineworld said Tuesday the
deal would give it a meaningful footprint in the U.S.—the
biggest box office market—
and create a company with
more than 9,000 screens.
Cineworld added that the
combined group’s scale will
help it mitigate any volatility
in particular markets and
match the global nature of rivals, including industry leader
AMC Entertainment Holdings
Inc.
AMC, part of China’s Dalian
Wanda Group, last year
bought Odeon & UCI Cinemas
Group in Europe, and ran or
had interests in more than
11,000 screens in 1,006 the-
PATRICK T. FALLON/BLOOMBERG NEWS
BY IAN WALKER
$3.6B
Value of Cineworld’s planned
purchase of Regal Entertainment
aters as of Sept. 30, according
to regulatory filings.
Cineworld will pay $23 a
share for Regal as announced
last week when it confirmed
that the two companies were
in talks.
Regal is the second-largest
movie theater operator in the
U.S. with 7,315 screens in 561
theaters and is controlled by
Rather than try to stop
movie subscription services, theater chains are getting
in on the game.
Cinemark Holdings Inc., the
nation’s third-largest cinema chain
by locations, on Tuesday launched
a subscription service, the first of
its kind by a major exhibitor in
the U.S. For $8.99 a month,
members of the Cinemark Movie
Club will be able to see one film a
month, get a 20% discount on
concessions and bring a compan-
Phil Anschutz’s Anschutz
Corp. Mr. Anschutz, whose
fortune Forbes estimates at
more than $12 billion, was
part of a consortium that took
control of the then Regal Cine-
ion for an additional $8.99 a film.
The launch comes four
months after MoviePass cut
the price on its service allowing
subscribers to see one movie a
day at any theater with which
its technology is compatible for
$9.99 a month. The digital ticketing company said it had more
than 600,000 subscribers in
late October.
Cinemark CEO Mark Zoradi
said he is supportive of MoviePass and that his company had
been developing Cinemark
Movie Club before MoviePass’s
August price drop and subsequent surge in popularity.
The $8.99 monthly fee is
roughly equal to Cinemark’s av-
erage ticket price. Mr. Zoradi
said he thought other benefits
would appeal to users, including
the ability to reserve seats online with no additional fee,
which MoviePass doesn’t offer.
Mr. Zoradi said his goal is to
encourage subscribers to go to
theaters more often at one of
his company’s 339 locations.
“We want people currently going to theaters four or five
times per year to go six or
seven times,” he said.
AMC Entertainment Holding Inc., the largest theater
chain in the U.S., has a subscription service in the U.K. and
Germany but not domestically.
—Ben Fritz
mas Inc. in 2001 after the
chain entered chapter 11 bankruptcy protection.
Cineworld is the secondlargest cinema business in Europe with 2,227 screens at 232
sites across nine countries.
The company will fund the
acquisition through a mixture
of debt and a £1.7 billion
($2.29 billion) equity fundraising.
Ad Firms Step Up Outlays on Amazon
BY ALEXANDRA BRUELL
Amazon.com Inc. only has a
small slice of digital ad revenue compared with behemoths
like Google and Facebook, but
that imbalance might change
in the coming years as the top
ad holding companies rapidly
boost their spending with the
e-commerce giant.
Publicis, WPP and Omnicom plan to increase their ad
spending with Amazon to upward of $800 million, collectively, according to multiple
agency executives.
This year, WPP will spend
around $200 million with Amazon, according to Martin Sorrell, chief executive of the
world’s largest ad holding company. Its spending on Amazon’s
ad products and platforms—including search and banner ads,
for example—may increase 40%
to 50% in 2018, according to another holding company executive familiar with the matter.
“We are absolutely leaning
into Amazon as an ad partner
and think there are big advan-
tages to our clients,” said Kelly
Clark, CEO of WPP’s GroupM.
French holding company
Publicis also currently spends
about $200 million with Amazon, and plans on boosting that
figure around 50% to $300 million in 2018, according to a person familiar with the matter.
Omnicom spends around
$100 million with Amazon, according to another source.
That number could double
next year and continue on that
trajectory in the following
years, the person said. Ama-
zon declined to comment.
Amazon in the past has only
dabbled in advertising. But in
recent years, the tech and commerce company has quietly
been building up an ad business
that includes search and banner
ad inventory on its own platform, as well as ads around the
streaming NFL games available
to Amazon Prime members.
Amazon also has a product,
fueled by its data and technology, that helps advertisers get
their messages in front of audiences on other websites.
The Last
Music System
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or personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B11
BIGGEST 1,000 STOCKS
WSJ.com/stocks
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.
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.
Grifols
GRFS 22.07
GrubHub
GRUB 67.58
GpoAeroportuar PAC 104.01
GpoAvalAcc AVAL 8.23
GpoFinGalicia GGAL 59.10
GpFinSantMex BSMX 7.75
GrupoTelevisa TV
18.79
HCA Healthcare HCA 83.22
HCP
HCP 26.56
HDFC Bank HDB 94.19
HD Supply
HDS 38.80
HP
HPQ 21.07
HSBC
HSBC 49.08
Halliburton HAL 43.63
Hanesbrands HBI 20.68
Wall Street Journal stock tables reflect composite regular trading as of 4 p.m. and
HarleyDavidson HOG 50.64
changes in the closing prices from 4 p.m. the previous day.
Harris
HRS 142.58
HartfordFinl HIG 54.64
Tuesday, December 5, 2017
Net
Net Hasbro
HAS 91.11
Stock
Sym Close Chg
Stock
Sym Close Chg HealthcareAmer HTA 30.53
Net
Heico
A
HEI.A 73.95
Stock
Sym Close Chg
BerkHathwy B BRK.B 196.07 -0.89 Cummins
CMI 164.84 -0.12 Heico
HEI
88.85
BerkHathwy A BRK.A 294105-1385.00
Helm&Payne HP
57.84
s BerryGlobal BERY 60.77 -0.02
HenrySchein HSIC 71.10
BBY 61.98 -0.57
ABB
ABB 25.42 -0.31 BestBuy
HLF 67.99
DISH Network DISH 52.03 0.43 Herbalife
AECOM
ACM 37.49 -0.50 Bio-RadLab A BIO 253.80 -3.69 DTE Energy DTE 114.35 -1.18 Hershey
HSY 112.76
BIIB 319.87 2.47
AES
AES 10.72 -0.05 Biogen
HES 46.29
DXC Tech
DXC 92.87 -0.35 Hess
Aflac
AFL 87.84 -0.30 BioMarinPharm BMRN 80.76 -2.86 Danaher
DHR 92.74 -0.08 HewlettPackard HPE 14.08
44.90 0.10
AGCO
AGCO 71.50 -0.72 BlackKnight BKI
HLT 77.63
Darden
DRI 86.14 0.08 Hilton
BB
10.34 -0.10
AGNC Invt
AGNC 20.36 0.04 BlackBerry
DaVita
DVA 60.93 -1.00 s HollyFrontier HFC 45.90
BLK 512.12 -1.38
Ansys
ANSS 143.44 1.43 BlackRock
HOLX 41.89
Deere
DE 150.67 -0.30 Hologic
BX
32.14 0.03
ASML
ASML 170.50 1.17 Blackstone
DellTechs
DVMT 74.47 -0.42 HomeDepot HD 182.85
AT&T
T
36.55 -0.72 BlueBuffaloPet BUFF 30.65 0.36 DeltaAir
DAL 52.39 -0.52 HondaMotor HMC 33.20
AbbottLabs ABT 54.79 0.08 bluebirdbio BLUE 162.65 0.35 DentsplySirona XRAY 65.61 -0.14 Honeywell
HON 153.06
BA 275.54 -2.43
AbbVie
ABBV 95.41 0.19 Boeing
DeutscheBank DB
18.76 -0.36 s HormelFoods HRL 37.10
Abiomed
ABMD 187.96 -1.61 BorgWarner BWA 54.38 0.14 DevonEnergy DVN 38.38 -0.26 DR Horton
DHI 50.24
Accenture
ACN 147.67 0.52 BostonProps BXP 125.49 -2.35 s Diageo
DEO 140.03 0.13 HostHotels HST 19.73
BSX 24.94 0.04
ActivisionBliz ATVI 59.55 0.95 BostonSci
DiamondbkEner FANG 109.06 0.04 HuanengPower HNP 25.26
BAK 27.91 0.29
AcuityBrands AYI 170.30 -1.88 Braskem
HUBB 126.73
DigitalRealty DLR 113.02 2.43 Hubbell
Adient
ADNT 78.93 0.83 BrighthouseFin BHF 58.25 -0.24 s DiscoverFinSvcs DFS 73.18 -0.26 Humana
HUM 253.34
AdobeSystems ADBE 167.54 -0.90 Bristol-Myers BMY 62.02 -0.45 DiscovComm C DISCK 18.57 -0.95 JBHunt
JBHT 109.28
65.46 0.51
AdvanceAuto AAP 101.15 -2.87 BritishAmTob BTI
DiscovComm A DISCA 19.86 -0.99 HuntingtonBcshs HBAN 14.46
AVGO 261.65 -1.96
AdvMicroDevices AMD 9.91 -0.12 Broadcom
Disney
DIS 107.22 -3.00 HuntingIngalls HII 232.79
88.56 -1.61
AdvSemiEngg ASX
6.52 0.12 BroadridgeFinl BR
HUN 30.77
DolbyLab
DLB 61.40 -0.42 Huntsman
Aegon
AEG
6.13 -0.05 BrookfieldMgt BAM 42.31 0.39 DollarGeneral DG
72.20
90.37 -0.40 HyattHotels H
43.85 0.19
AerCap
AER 51.88 -0.10 BrookfieldInfr BIP
IAC/InterActive
IAC 122.71
DollarTree
DLTR 105.89 -0.48
Aetna
AET 178.69 -0.01 Brown&Brown BRO 50.95 -0.58 DominionEner D
IBN
9.44
83.12 -0.43 ICICI Bank
AffiliatedMgrs AMG 197.01 -0.35 s Brown-Forman A BF.A 62.29 -0.28 Domino's
IDXX 159.78
DPZ 185.50 -2.12 IdexxLab
AgilentTechs A
65.83 -0.41 s Brown-Forman B BF.B 62.01 -0.08 Donaldson
INFO 44.67
DCI
48.18 -0.32 IHSMarkit
AgnicoEagle AEM 42.43 -0.74 BuckeyePtrs BPL 47.19 -0.21 DouglasEmmett DEI
ING 17.87
39.84 -0.60 ING Groep
BG
66.06 -1.43
Agrium
AGU 106.22 -0.47 Bunge
IVZ
36.63
Dover
DOV 95.95 -1.59 Invesco
AirProducts APD 161.98 -0.42 s BurlingtonStrs BURL 110.24 -1.31 DowDuPont DWDP 71.54 -0.59 IPG Photonics IPGP 202.98
CA
33.22 -0.06
AkamaiTech AKAM 56.44
... CA
IQV 101.00
DrPepperSnap DPS 93.50 0.40 IQVIA
CBD 22.46 0.13
AlaskaAir
ALK 68.10 -0.18 CBD Pao
IRCP 56.48
DrReddy'sLab RDY 34.52 -0.38 IRSA Prop
Albemarle
ALB 127.99 -1.36 CBRE Group CBG 43.61 0.24 DukeEnergy DUK 87.96 -0.66 IcahnEnterprises IEP
52.98
CBS 58.10 -2.00
Alcoa
AA
41.18 -0.61 CBS B
ICLR 112.51
DukeRealty DRE 27.36 -0.49 Icon
CBS.A 59.15 -2.36
AlexandriaRlEst ARE 126.02 -3.01 CBS A
IDEX
IEX
132.85
ENI
E
32.89 0.08
AlexionPharm ALXN 108.90 -2.85 CDK Global CDK 69.08 -0.46 EOG Rscs
EOG 100.90 -0.15 IllinoisToolWks ITW 165.02
CDW 69.41 -0.73
Alibaba
BABA 168.96 -0.62 CDW
ILMN 211.06
EQT
EQT 59.02 -0.63 Illumina
37.36 0.46
AlignTech
ALGN 227.36 1.56 CF Industries CF
IMO 31.22
E*TRADE
ETFC 49.92 -0.62 ImperialOil
GIB
52.80 0.04
Alkermes
ALKS 54.34 -0.24 CGI Group
INCY 93.71
EXACT Sci
EXAS 53.50 -1.68 t Incyte
Alleghany
Y
578.36 -6.64 CH Robinson CHRW 85.92 -0.84 EastWestBncp EWBC 60.43 -1.75 Infosys
INFY 15.69
CIT
49.70 -0.87
Allegion
ALLE 82.00 -1.43 CIT Group
84.58
EastmanChem EMN 91.20 -0.20 Ingersoll-Rand IR
Allergan
AGN 164.28 -2.62 s CME Group CME 152.11 -1.30 Eaton
INGR 138.86
ETN 74.95 -1.46 Ingredion
AllianceData ADS 232.50 -5.67 CMS Energy CMS 49.31 -0.45 EatonVance EV
INTC 43.44
55.77 -0.71 Intel
CNA 53.92 -0.48
AlliantEnergy LNT 44.34 -0.35 CNA Fin
eBay
EBAY 36.81 1.11 InteractiveBrkrs IBKR 58.85
CEO 138.56 1.57 s
AllisonTransm ALSN 41.26 0.05 CNOOC
ICE
70.95
Ecolab
ECL 137.42 0.16 ICE
Allstate
ALL 102.84 -0.78 t CPFLEnergia CPL 11.38 -0.31 Ecopetrol
59.28
EC
11.86 -0.04 InterContinentl IHG
CRH 34.74 -0.39
AllyFinancial ALLY 27.95 0.39 CRH
IBM 155.35
EdisonInt
EIX 70.00 -10.26 IBM
CSX 55.79 -1.20
AlnylamPharm ALNY 127.00 -1.01 CSX
IFF 154.97
EdwardsLife EW 113.05 -0.75 IntlFlavors
Alphabet A GOOGL 1019.60 7.73 CVS Health CVS 71.01 -0.68 ElbitSystems ESLT 137.34 -2.27 IntlPaper
IP
56.92
COG 28.33 -0.24
Alphabet C GOOG 1005.15 6.47 CabotOil
IPG
20.57
ElectronicArts EA 103.38 2.55 Interpublic
Altaba
AABA 68.13 -0.18 CadenceDesign CDNS 42.67 0.25 EmersonElec EMR 64.68 -0.42 Intuit
INTU 154.47
CZR 12.65 -0.28
AlticeUSA
ATUS 18.52 0.16 CaesarsEnt
EnbridgeEnPtrs EEP 14.08 -0.28 IntuitiveSurgical ISRG 369.50
CAA 55.28 -0.90
Altria
MO 70.18 0.10 CalAtlantic
Enbridge
ENB 38.39 0.08 InvitatHomes INVH 23.07
AlumofChina ACH 16.39 -0.24 CamdenProperty CPT 91.09 -0.87 Encana
ECA 12.05 0.15 IonisPharma IONS 52.46
Amazon.com AMZN 1141.57 7.62 CampbellSoup CPB 49.83 -0.49 EnelAmericas ENIA 9.77 -0.31 IronMountain IRM 40.35
CM
94.05 -0.70
Ambev
ABEV 6.30 0.02 CIBC
4.13
EnelGenChile EOCC 24.85 -0.72 IsraelChemicals ICL
79.35 0.16
Amdocs
DOX 64.88 -0.36 CanNtlRlwy CNI
EnergyTransferEq ETE 16.59 -0.14 ItauUnibanco ITUB 12.80
Amerco
UHAL 374.31 -9.58 CanNaturalRes CNQ 35.15 0.30 EnergyTransfer ETP 16.62 -0.23
Ameren
AEE 62.48 -0.61 CanPacRlwy CP 174.55 -1.13 Entergy
ETR 83.13 -1.24
CAJ 37.88 0.10
AmericaMovil A AMOV 17.02 -0.03 Canon
EnterpriseProd EPD 24.80 -0.19 JD.com
JD
37.30
AmericaMovil AMX 17.05 -0.02 CapitalOne COF 93.91 -0.98 Equifax
EFX 114.39 0.99 JPMorganChase JPM 105.72
AmerAirlines AAL 49.47 -0.46 CardinalHealth CAH 60.35 -0.67 Equinix
EQIX 445.59 3.31 JackHenry
JKHY
114.77
CSL 114.82 -1.09
AmCampus ACC 42.87 0.12 Carlisle
EquityLife
ELS 90.43 -0.70 JacobsEngg JEC 66.46
CG
20.55
...
AEP
AEP 76.27 -1.12 Carlyle
EquityResdntl EQR 65.51 -0.79 JamesHardie JHX 16.28
KMX 67.72 -2.99
AmerExpress AXP 98.71 0.12 CarMax
Ericsson
ERIC 6.30 0.08 JanusHenderson JHG 35.85
CCL 65.94 -1.31
AmericanFin AFG 104.61 -1.21 Carnival
EssexProp
ESS 242.99 -3.29 JazzPharma JAZZ 135.75
CUK 66.12 -1.08
AmerHomes4Rent AMH 21.32 -0.27 Carnival
EsteeLauder EL 124.50 -0.84 JetBlue
JBLU 21.66
CAT 140.14 -1.36
AIG
AIG 59.53 0.27 Caterpillar
EverestRe
RE 212.15 -1.41 J&J
JNJ 139.67
CAVM 84.87 -0.84
AmerTowerREIT AMT 140.76 1.79 Cavium
EversourceEner ES
64.88 -0.60 JohnsonControls JCI
37.13
AmerWaterWorks AWK 90.66 -0.66 CboeGlobalMkts CBOE 123.77 0.66 Exelixis
EXEL 26.73 -0.84 JonesLang
JLL 152.21
Ameriprise AMP 164.36 -1.19 Celanese A CE 105.86 -0.94 Exelon
EXC 41.25 -0.31 JuniperNetworks JNPR 27.61
Celgene
CELG
102.56
-0.05
AmerisourceBrgn ABC 85.89 -1.53
Expedia
EXPE 120.77 -1.47 JunoTherap JUNO 53.20
CX
7.29 -0.15
Ametek
AME 71.05 -0.74 t Cemex
ExpeditorsIntl EXPD 64.80 -0.13 s KAR Auction KAR 50.74
9.67 -0.11
Amgen
AMGN 178.67 -0.02 CenovusEnergy CVE
ExpressScripts ESRX 67.84 -0.32 KB Fin
KB
54.72
CNC 99.73 1.45
Amphenol
APH 88.18 -0.28 Centene
ExtraSpaceSt EXR 84.87 0.02
KKR 19.58
AnadarkoPetrol APC 48.26 -0.33 CenterPointEner CNP 28.91 -0.45 ExxonMobil XOM 82.89 -0.68 KKR
KLA
Tencor
KLAC
102.64
5.79 -0.07
AnalogDevices ADI 84.83 0.04 CentraisElBras EBR
F5Networks FFIV 132.60 0.07 KT
KT
15.77
Andeavor
ANDV 107.58 0.61 CenturyLink CTL 14.39 -0.42 FMC
FMC 89.85 -1.62 KSCitySouthern KSU 112.09
CERN 70.09 0.30
AndeavorLog ANDX 45.31 -1.14 Cerner
Facebook
FB 172.83 1.36 Kellogg
K
67.97
AB InBev
BUD 112.97 -2.44 CharterComms CHTR 330.95 -3.05 FactSet
FDS 202.24 -2.25 KeyCorp
KEY 19.33
AnnalyCap
NLY 11.97 -0.02 CheckPoint CHKP 103.59 0.94 Fastenal
FAST 53.89 -0.99 KeysightTechs KEYS 42.19
CC
49.30 -0.14
AnteroResources AR
18.57 -0.04 Chemours
FederalRealty FRT 131.54 -2.03 KilroyRealty KRC 74.41
Anthem
ANTM 223.49 -1.46 CheniereEnergy LNG 47.50 -0.84 FedEx
FDX 235.40 -3.65 KimberlyClark KMB 122.85
Aon
AON 139.24 -0.43 CheniereEnerPtrs CQP 27.25 -0.02
Ferrari
RACE 104.17 -0.17 KimcoRealty KIM 18.48
Apache
APA 42.15 -1.06 CheniereEnHldgs CQH 26.09 -0.18
FiatChrysler FCAU 17.19 0.01 KinderMorgan KMI 17.14
CVX 120.39 -0.45
ApartmtInv AIV 43.39 -0.55 Chevron
FibriaCelulose FBR 13.69 0.09 Knight-Swift KNX 42.58
ApolloGlbMgmt APO 30.94 -0.11 ChinaEastrnAir CEA 29.56 -0.80
FidNatlFin
FNF 39.87 0.18 Kohl's
KSS 48.26
Apple
AAPL 169.64 -0.16 ChinaLifeIns LFC 16.07 -0.05
FidNatlInfo FIS
95.17 1.54
KoninklijkePhil PHG 38.20
ApplMaterials AMAT 50.08 0.31 ChinaLodging HTHT 110.72 0.80
FifthThirdBncp FITB 30.78 -0.58 KoreaElcPwr KEP 17.72
Aptiv
APTV 88.77 1.41 ChinaMobile CHL 50.11 -0.06
58.com
WUBA 68.12 1.14 KraftHeinz
KHC 80.64
AquaAmerica WTR 37.40 -0.27 ChinaPetrol SNP 71.29 -0.13
FirstAmerFin FAF 55.30 0.02 Kroger
KR
26.22
Aramark
ARMK 42.42 -0.34 ChinaSoAirlines ZNH 45.09 -0.62
FirstData
FDC 16.25 0.28 Kyocera
KYO 67.89
ArcelorMittal MT
30.24 -0.89 ChinaTelecom CHA 48.96 -0.03
FirstRepBank FRC 93.80 -2.01 LATAMAirlines LTM 12.26
ArchCapital ACGL 92.71 -0.92 ChinaUnicom CHU 14.21 -0.16
FirstSolar
FSLR 61.21 3.94 L Brands
LB
55.30
CMG 315.56 -0.04
ArcherDaniels ADM 40.84 -0.36 Chipotle
FirstEnergy FE
32.35 -0.23
LG Display
LPL 13.91
CB 150.18 -0.64
Arconic
ARNC 24.23 -0.50 Chubb
Fiserv
FISV 130.88 -1.36 LINE
LN
42.83
AristaNetworks ANET 211.05 1.57 ChunghwaTel CHT 34.33 -0.06
FleetCorTech FLT 183.87 0.27 LKQ
LKQ 39.24
ArrowElec
ARW 77.74 0.03 Church&Dwight CHD 48.28 -0.07
Flex
FLEX 18.08 0.04 L3 Tech
LLL
195.05
CI
204.12 0.01
AstraZeneca AZN 32.20 0.03 Cigna
FlirSystems FLIR 46.04 -0.21 LabCpAm
LH 155.22
Athene
ATH 47.65 0.96 CimarexEnergy XEC 112.75 -0.05
Fluor
FLR 48.86 -0.53 LamResearch LRCX 180.53
Atlassian
TEAM 44.97 0.69 CincinnatiFin CINF 74.38 -0.99
FomentoEconMex FMX 93.99 0.75 LamarAdv
LAMR 76.41
Cintas
CTAS
156.28
-2.43
AtmosEnergy ATO 91.45 -0.25
FordMotor
F
12.43 -0.20
LambWeston LW
54.45
Autodesk
ADSK 106.59 -1.36 CiscoSystems CSCO 37.31 -0.41
ForestCIty A FCE.A 23.77 -0.31 LasVegasSands LVS
69.44
C
76.54 -0.56
Autohome
ATHM 57.53 1.94 Citigroup
Fortinet
FTNT 41.10 -0.44 s
Lazard
LAZ 50.23
Autoliv
ALV 128.37 1.02 CitizensFin CFG 40.89 -0.96
Fortis
FTS 36.94 -0.20
Lear
LEA 177.80
ADP
ADP 115.68 0.87 CitrixSystems CTXS 87.20 0.43
Fortive
FTV 72.95 -1.28
Leggett&Platt LEG 47.51
CLX 144.66 1.67
AutoZone
AZO 712.76 2.99 s Clorox
FortBrandsHome FBHS 68.48 -0.41
Leidos
LDOS 63.34
KO
46.26 0.03
Avalonbay
AVB 178.81 -2.31 Coca-Cola
Franco-Nevada FNV 78.66 0.06
Lennar A
LEN 62.03
Avangrid
AGR 51.49 -0.80 Coca-Cola Euro CCE 39.32 -0.41
FranklinRscs BEN 44.15 -0.47
Lennar
B
LEN.B 50.77
AveryDennison AVY 113.21 1.19 Coca-Cola Femsa KOF 68.87 -1.05
FreeportMcM FCX 14.11 -0.19
LennoxIntl
LII
206.60
CGNX 62.89 -0.42
AxaltaCoating AXTA 32.80 0.47 Cognex
FreseniusMed FMS 50.72 -0.23
LeucadiaNatl LUK 25.99
BB&T
BBT 49.81 -0.43 CognizantTech CTSH 70.43 0.11
LibertyBroadbandA
LBRDA
86.46
Coherent
COHR
282.00
7.85
BCE
BCE 48.49 0.07
LibertyBroadbandC LBRDK 87.78
74.59 0.07
BHPBilliton BHP 41.41 -0.69 ColgatePalm CL
GGP 23.54 -0.09 LibertyGlobal A LBTYA 31.80
BHPBilliton BBL 36.02 -0.68 ColonyNorthStar CLNS 12.12 0.05 GGP
AJG 65.82 -0.76 LibertyGlobal C LBTYK 30.88
BOK Fin
BOKF 88.16 -2.01 Comcast A CMCSA 39.52 -0.80 Gallagher
CMA 83.94 -1.17 Gaming&Leisure GLPI 35.72 -0.04 LibertyGlobal B LBTYB 32.00
BP
BP
39.73 -0.18 Comerica
GPS 33.32 -0.77 LibertyLiLAC A LILA 21.27
BRF
BRFS 11.62 -0.23 CommerceBcshrs CBSH 56.17 -0.98 Gap
31.16 -0.29 LibertyLiLAC C LILAK 21.09
BT Group
BT
17.42 -0.06 CommScope COMM 36.31 -0.28 GardnerDenver GDI
GRMN 61.52 0.67 LibertyQVC A QVCA 24.80
SBS 10.20 -0.06 Garmin
BWX Tech
BWXT 61.51 -0.25 SABESP
IT
121.52 0.27 LibertyVenturesA LVNTA 56.61
Baidu
BIDU 231.75 2.09 ConagraBrands CAG 37.17 -0.76 Gartner
BakerHughes BHGE 30.81 -0.90 ConchoRscs CXO 138.31 -0.88 s Gazit-Globe GZT 10.61 0.07 LibertyFormOne C FWONK 33.91
Ball
BLL 40.79 0.14 ConocoPhillips COP 51.23 -0.06 GeneralDynamics GD 199.91 -1.78 LibertyFormOne A FWONA 32.37
17.76 -0.19 LibertyBraves A BATRA 21.90
ED
88.02 -0.46 GeneralElec GE
BancoBilbaoViz BBVA 8.46 -0.03 ConEd
57.25 -0.61 LibertyBraves C BATRK 22.02
BancodeChile BCH 81.40 -1.00 ConstBrands B STZ.B 216.61 0.61 GeneralMills GIS
42.80 -0.25 LibertySirius C LSXMK 42.67
BancoMacro BMA 106.27 1.77 ConstBrands A STZ 216.82 0.48 GeneralMotors GM
G
32.16 -0.09 LibertySirius A LSXMA 42.79
BcoSantChile BSAC 26.65 -0.46 ContinentalRscs CLR 47.41 -0.40 s Genpact
GNTX 20.31 -0.47 LibertyProperty LPT 44.17
COO 231.89 2.15 Gentex
BancoSantander SAN
6.50 -0.07 Cooper
LLY
86.06
CPRT 43.52 0.53 GenuineParts GPC 94.16 0.20 EliLilly
BanColombia CIB
38.31 0.02 s Copart
GIL
31.36 0.18 LincolnElectric LECO 90.44
GLW 32.24 0.03 Gildan
BankofAmerica BAC 28.93 -0.13 Corning
CSGP 292.59 -3.18 GileadSciences GILD 73.29 0.20 LincolnNational LNC 75.91
BankofMontreal BMO 78.05 -0.23 CoStar
GSK 34.86 -0.14 LionsGate A LGF.A 32.06
COST 187.82 -1.74 GSK
BankNY Mellon BK
54.43 -0.54 s Costco
COTY 17.64 0.08 GlobalPayments GPN 96.63 0.67 LionsGate B LGF.B 30.43
BkNovaScotia BNS 63.90 -0.34 Coty
GDDY 46.09 -1.23 LiveNationEnt LYV 43.35
BAP 207.33 -1.78 GoDaddy
BankofOzarks OZRK 46.51 -1.41 Credicorp
3.54
GG
12.29 -0.27 LloydsBanking LYG
Barclays
BCS 10.21 -0.17 s CreditAcceptance CACC 309.07 3.19 Goldcorp
16.88 -0.32 GoldmanSachs GS 248.33 -2.32 LockheedMartin LMT 310.14
Bard CR
BCR 332.49 -0.06 CreditSuisse CS
L
50.11
GT
32.22 0.15 Loews
BarrickGold ABX 13.77 -0.14 CrownCastle CCI 108.81 -0.82 Goodyear
GGG 127.54 -1.16 LogitechIntl LOGI 33.01
BaxterIntl
BAX 64.02 -0.23 CrownHoldings CCK 59.76 -0.43 Graco
LOGM 113.90
CTRP 45.95 -0.17 Grainger
GWW 226.71 -0.79 LogMeIn
BectonDicknsn BDX 219.07 0.15 Ctrip.com
LOW 86.31
Berkley
WRB 69.48 -0.27 Cullen/Frost CFR 94.35 -2.22 GreatPlainsEner GXP 33.89 -0.28 s Lowe's
A B C
s
D E F
-0.08
0.64
-0.43
-0.04
0.86
-0.11
0.01
-1.05
0.16
-0.02
2.31
-0.01
-0.26
-0.26
-0.47
-1.17
0.89
-1.86
-1.03
0.04
-0.50
0.06
-0.59
-0.11
0.33
-0.06
-0.28
-0.15
-0.03
1.59
0.04
-2.05
-0.20
-0.71
-0.58
-0.34
-0.13
-0.24
-1.56
1.06
-0.92
-0.24
-1.52
-1.04
-0.40
0.78
0.09
0.48
0.23
-0.22
-0.25
2.18
-0.27
-0.02
0.43
0.54
-0.74
-1.20
-2.39
0.08
0.03
0.23
-0.54
-1.23
-1.05
-0.06
-0.88
-0.07
-1.11
0.63
0.04
-0.11
-0.07
-0.45
-0.40
0.20
-0.18
0.02
-0.09
J K L
no
n-
s
s
Net
Sym Close Chg
Stock
Stock
lululemon
LULU 66.36 -0.86
LyondellBasell LYB 104.58 0.77
M N
s
s
s
s
M&T Bank
MTB 170.43 -1.82
MGM Resorts MGM 33.94 -0.28
MPLX
MPLX 36.44 0.80
MSCI
MSCI 128.36 0.79
Macerich
MAC 65.24 0.04
Macy's
M
25.22 -0.58
MagellanMid MMP 67.02 -0.71
MagnaIntl
MGA 55.39 -0.07
Manpower
MAN 125.01 -2.02
ManulifeFin MFC 21.02 -0.14
MarathonOil MRO 14.88 -0.02
MarathonPetrol MPC 64.54 1.24
Markel
MKL 1112.05 -0.41
MarketAxess MKTX 196.09 -1.10
Marriott
MAR 127.53 -0.20
Marsh&McLen MMC 85.01 -0.96
MartinMarietta MLM 205.90 -2.54 s
MarvellTech MRVL 21.97 -0.33
Masco
MAS 42.98 -0.32
Mastercard MA 145.13 1.70
MatchGroup MTCH 28.33 0.11
Mattel
MAT 15.95 -0.90
MaximIntProducts MXIM 51.64 0.23
McCormick MKC 102.96 -1.52
McCormickVtg MKC.V 102.99 0.72
McDonalds MCD 172.99 2.34
McKesson
MCK 150.69 -2.40
Medtronic
MDT 80.92 1.05
MelcoResorts MLCO 25.57 0.09
MercadoLibre MELI 270.80 -0.93
Merck
MRK 55.77 -0.45
MetLife
MET 53.04 -0.58
MettlerToledo MTD 612.25 5.45
MichaelKors KORS 59.81 1.02
MicroFocus MFGP 32.93 0.25
MicrochipTech MCHP 86.21 -0.09
MicronTech MU
41.21 1.31
Microsemi
MSCC 51.37 0.22 s
Microsoft
MSFT 81.59 0.51
MidAmApt MAA 101.41 -1.11
Middleby
MIDD 124.12 -2.29
MitsubishiUFJ MTU 7.06 -0.05
MizuhoFin
MFG 3.63 0.01
MobileTeleSys MBT 9.57 -0.24
MohawkInds MHK 281.26 -3.39
MolsonCoors B TAP 80.32 -0.19
MolsonCoors A TAP.A 79.85 0.01
Mondelez
MDLZ 42.99 -0.12
Monsanto
MON 118.26 -0.35
MonsterBev MNST 63.05 -0.30
Moody's
MCO 152.08 0.33
MorganStanley MS
52.01 -0.67
Mosaic
MOS 23.84 0.14
MotorolaSol MSI 90.66 -2.97
Mylan
MYL 37.41 -0.03
NRG Energy NRG 27.32 -0.09
NTTDoCoMo DCM 25.40 0.01
NVR
NVR 3400.52 -55.90
NXP Semi
NXPI 113.75 -0.12
Nasdaq
NDAQ 78.51 -0.42
NationalGrid NGG 59.59 -0.36
NatlOilwell
NOV 33.17 -0.81 s
NatlRetailProp NNN 41.54 -0.41
NektarTherap NKTR 51.92 1.19
NetApp
NTAP 56.14 0.21
Netease
NTES 317.99 -10.92
Netflix
NFLX 184.21 0.17
Neurocrine
NBIX 70.98 -1.00
NewOrientalEduc EDU 84.48 -0.21
NY CmntyBcp NYCB 13.49 -0.14
NewellBrands NWL 31.78 -0.03
NewfieldExpln NFX 30.56 -0.84
NewmontMin NEM 36.20 -0.64
NewsCorp B NWS 16.55 -0.20
NewsCorp A NWSA 16.40 -0.14
NextEraEnergy NEE 155.64 -0.33
NielsenHoldings NLSN 37.83 0.22
Nike
NKE 60.42 0.32
NiSource
NI
26.80 -0.23
NobleEnergy NBL 26.63 -0.21
Nokia
NOK
4.70 -0.04
NomuraHoldings NMR 5.94 0.07
Nordson
NDSN 126.22 -1.30
Nordstrom
JWN 46.15 -1.11
NorfolkSouthern NSC 138.84 -1.05
NorthernTrust NTRS 96.95 -2.00
NorthropGrum NOC 297.75 -2.81
NorwegCruise NCLH 54.33 -1.08
Novartis
NVS 83.84 -1.04
NovoNordisk NVO 50.70 -0.34
Nucor
NUE 57.64 -1.18
NVIDIA
NVDA 187.74 1.08
Net
Sym Close Chg
Stock
Net
Sym Close Chg
Net
Sym Close Chg
Stock
G H I
Mutual Funds | WSJ.com/fundresearch
Explanatory Notes
Fund
Data provided by
Top 250 mutual-funds listings based on total net assets for Nasdaq-published share
classes. NAV is net asset value. Percentage performance figures are total returns,
assuming reinvestment of all distributions and after subtracting annual expenses.
Figures don’t reflect sales charges (“loads”) or redemption fees. NET CHG is change
in NAV from previous trading day. YTD%RET is year-to-date return. f-Previous day’s
quotation. p-Distribution costs apply, 12b-1. r-Redemption charge may apply. tFootnotes p and r apply. NA-Not available due to incomplete price, performance or
cost data. NE-Not released by Lipper; data under review. NN-Fund not tracked. NSFund didn’t exist at start of period.
Fund
Tuesday, December 5, 2017
Net YTD
Net YTD
NAV Chg %Ret Fund
American Century Inv
45.20 -0.03
Ultra
American Funds Cl A
AmcpA p
32.02 -0.08
AMutlA p 42.15 -0.18
27.79 -0.04
BalA p
12.91
...
BondA p
CapIBA p
63.49 -0.11
CapWGrA 52.67 -0.01
56.74 +0.07
EupacA p
64.32 -0.14
FdInvA p
51.74 -0.06
GwthA p
10.42
...
HI TrA p
41.96 -0.11
ICAA p
23.64 -0.05
IncoA p
44.89 -0.04
N PerA p
NEcoA p
47.35 -0.06
NwWrldA 66.36 +0.08
56.88 -0.26
SmCpA p
13.04 +0.04
TxExA p
WshA p
NAV Chg %Ret Fund
46.46 -0.22 17.8 IntSmVa
29.6 Baird Funds
AggBdInst
19.3 CorBdInst
16.1
13.7
3.2
12.9
22.0
28.4
20.4
23.1
6.8
17.2
11.5
27.1
31.7
29.0
23.7
5.3
10.89 +0.01
11.25 +0.02
BlackRock Funds A
GlblAlloc p 20.40 -0.03
BlackRock Funds Inst
22.53 -0.11
EqtyDivd
20.53 -0.03
GlblAlloc
HiYldBd
7.82
...
...
StratIncOpptyIns 9.94
Bridge Builder Trust
10.19 +0.01
CoreBond
Dimensional Fds
5GlbFxdInc 11.01
...
EmgMktVa 30.38
...
EmMktCorEq 22.42 -0.03
IntlCoreEq 14.23 -0.02
19.97 -0.04
IntlVal
21.49 -0.04
IntSmCo
Net YTD
NAV Chg %Ret
23.31 -0.05 23.3
US CoreEq1 22.60 -0.12 18.6
4.1 US CoreEq2 21.48 -0.13 16.7
4.6 US Small
37.11 -0.38 10.4
US SmCpVal 39.48 -0.45 6.1
12.2 US TgdVal 25.69 -0.31 7.8
40.14 -0.27 16.0
USLgVa
15.5 Dodge & Cox
12.5 Balanced
110.98 -0.45 10.9
7.8 GblStock
14.04 -0.06 17.9
4.4 Income
13.86 +0.01 4.2
45.88 -0.13 20.4
Intl Stk
4.0 Stock
207.23 -1.35 15.6
DoubleLine Funds
2.1 TotRetBdI
NA
... NA
28.6 Edgewood Growth Instituti
31.1 EdgewoodGrInst 29.37 +0.03 32.2
24.2 Federated Instl
21.9 StraValDivIS 6.10 -0.44 13.7
25.6 Fidelity
500IdxInst
500IdxInstPrem
500IdxPrem
ExtMktIdxPrem r
IntlIdxPrem r
SAIUSLgCpIndxFd
TMktIdxF r
TMktIdxPrem
USBdIdxInstPrem
0.55
-1.23
-0.71
-0.23
-0.18
-0.18
-0.81
-0.31
0.66
-0.30
1.28
-0.35
-1.46
0.09
-0.03
-0.37
1.76
0.03 OGE Energy OGE 34.27
-1.35 ONEOK
OKE 52.34
0.43 OReillyAuto ORLY 250.21
-0.30 OccidentalPetrol OXY 70.00
0.29 OldDomFreight ODFL 127.30
-0.80 Olin
OLN 34.96
-0.26 Omnicom
OMC 75.31
-0.61 ON Semi
ON
19.16
-0.11 OpenText
OTEX 32.45
-0.29 Oracle
ORCL 47.99
-1.89 Orange
ORAN 16.82
-0.12 OrbitalATK
OA 132.49
0.27 Orix
IX
84.52
-1.28 Oshkosh
OSK 89.57
-0.66 OwensCorning OC
88.90
-1.11 PG&E
PCG 53.60
-0.28 PLDT
PHI
28.90
-1.80 PNC Fin
PNC 142.43
0.13 POSCO
PKX 78.07
0.31 PPG Ind
PPG 116.75
-0.04 PPL
PPL 35.29
2.11 PTC
PTC 61.53
-2.69 PVH
PVH 133.60
-0.21 Paccar
PCAR 70.17
0.27 PackagingCpAm PKG 117.76
-0.50 PacWestBancorp PACW 47.52
-0.34 PaloAltoNtwks PANW 142.82
-0.51 ParkHotels
PK
28.80
0.80 ParkerHannifin PH 184.31
-0.79 ParsleyEnergy PE
26.37
-0.12 Paychex
PAYX 67.94
-0.95 PayPal
PYPL 71.20
-0.41 Pearson
PSO
9.52
-2.43 PembinaPipeline PBA 35.07
-0.40 Pentair
PNR 68.55
-1.16 People'sUtdFin PBCT 18.95
-1.22 PepsiCo
PEP 117.59
-0.36 PerkinElmer PKI
69.36
-0.43 Perrigo
PRGO 83.58
1.00 PetroChina
PTR 67.79
0.23 PetroleoBrasil PBR
9.85
0.21 PetroleoBrasilA PBR.A 9.46
-0.16 Pfizer
PFE 35.63
-0.70 PhilipMorris PM 105.46
-1.07 Phillips66
PSX 98.27
-0.98 PilgrimPride PPC 37.29
-0.66 PinnacleFoods PF
57.22
-0.53 PinnacleWest PNW 89.34
0.03 PioneerNatRscs PXD 153.86
0.14 PlainsAllAmPipe PAA 19.75
-0.58 PlainsGP
PAGP 20.80
0.48 PolarisIndustries PII
126.05
-0.39 Potash
POT 18.96
-1.59 Praxair
PX 153.08
-1.10 Priceline
PCLN 1724.88
-1.13 PrincipalFin PFG 70.68
-0.31 Procter&Gamble PG
91.40
-0.02 s Progressive PGR 54.25
-1.64 Prologis
PLD 64.44
-0.54 PrudentialFin PRU 115.51
-0.12 Prudential
PUK 48.48
0.40 PublicServiceEnt PEG 52.68
-1.73 PublicStorage PSA 211.05
Net YTD
NAV Chg %Ret Fund
92.27 -0.35
92.27 -0.34
92.27 -0.34
63.66 -0.48
43.26 -0.04
14.14 -0.06
76.46 -0.34
76.45 -0.34
11.60 +0.01
Fidelity Advisor I
NwInsghtI 33.56 -0.03
Fidelity Freedom
FF2020
16.82 -0.03
FF2025
14.57 -0.03
18.27 -0.04
FF2030
Freedom2020 K 16.83 -0.03
Freedom2025 K 14.57 -0.03
Freedom2030 K 18.28 -0.04
Freedom2035 K 15.35 -0.04
Freedom2040 K 10.79 -0.03
Fidelity Invest
23.88 -0.06
Balanc
87.56 +0.01
BluCh
126.76 +0.07
Contra
126.77 +0.07
ContraK
CpInc r
10.27
...
DivIntl
41.34 -0.05
GroCo
181.66 -0.16
GrowCoK 181.63 -0.16
7.94 +0.01
InvGB
11.29 +0.01
InvGrBd
54.02 -0.24
LowP r
LowPriStkK r 53.98 -0.24
MagIn
102.24 -0.16
OTC
108.18 -0.08
19.6
19.7
19.6
16.0
22.6
19.6
19.0
19.0
3.4
25.7
14.0
15.1
17.7
NS
NS
NS
NS
NS
15.1
32.7
29.6
29.7
10.7
24.1
32.8
32.9
3.9
4.3
17.9
18.0
23.7
35.8
Puritn
SrsEmrgMkt
SrsGroCoRetail
SrsIntlGrw
SrsIntlVal
TotalBond
O P Q
Net YTD
NAV Chg %Ret Fund
23.32 -0.04
21.15 -0.07
17.85 -0.01
16.25 -0.02
10.82 -0.03
10.67
...
First Eagle Funds
60.88 -0.18
GlbA
FPA Funds
FPACres
35.13 -0.05
FrankTemp/Frank Adv
IncomeAdv 2.34 -0.01
FrankTemp/Franklin A
7.48 +0.04
CA TF A p
2.36 -0.01
IncomeA p
RisDv A p 59.91 -0.25
FrankTemp/Franklin C
Income C t 2.39 -0.01
FrankTemp/Temp A
...
GlBond A p 12.21
Growth A p 27.13 -0.11
FrankTemp/Temp Adv
GlBondAdv p 12.16 -0.01
Harbor Funds
NA
...
CapApInst
NA
...
IntlInst r
Harding Loevner
NA
...
IntlEq
Invesco Funds A
11.46 -0.06
EqIncA
John Hancock Class 1
LSBalncd
16.07 -0.03
17.25 -0.05
LSGwth
John Hancock Instl
DispValMCI 24.44 -0.22
16.9
34.7
33.6
27.0
18.1
4.1
12.2
9.0
7.7
5.9
7.5
17.8
7.3
4.3
15.2
4.5
NA
NA
NA
9.7
13.8
17.3
13.8
-0.78
0.05
-0.18
-0.06
-0.44
0.38
0.61
0.18
0.18
-0.41
-0.05
-0.28
0.10
-2.53
-1.31
0.08
0.57
-1.41
-0.39
-0.81
-0.67
-0.08
-0.68
-0.10
-1.15
-1.06
-0.07
0.06
-1.54
-0.29
0.33
0.23
-0.02
0.24
-0.61
-0.30
0.13
-0.42
-2.72
-0.03
-0.09
-0.10
-0.43
0.85
0.74
-0.26
-0.99
-0.87
-2.49
-0.45
-0.33
1.92
-0.05
-0.28
1.64
-0.17
-0.01
-0.11
-1.50
-1.25
-0.67
-0.21
1.08
s
s
s
Stock
Net
Sym Close Chg
VALE 11.07 -0.25 WestPharmSvcs WST 99.49 0.10
TransCanada TRP 48.76 0.12 Vale
TransDigm
TDG 271.95 -3.06 ValeantPharm VRX 17.75 0.26 WestarEnergy WR 56.39 -0.15
TransUnion TRU 54.91 -0.12 s ValeroEnergy VLO 85.78 2.15 WestAllianceBcp WAL 58.14 -0.78
VNTV 72.13 0.26 WesternDigital WDC 78.56 1.45
Travelers
TRV 135.32 -1.04 Vantiv
VAR 109.26 -0.30 WesternGasEquity WGP 36.30 -0.08
Trimble
TRMB 41.23 -0.38 VarianMed
VEDL 17.74 -0.13 WesternGasPtrs WES 44.99 -0.58
TurkcellIletism TKC
9.68 0.19 Vedanta
19.55 -0.16
TurquoiseHill TRQ
2.95 -0.05 VeevaSystems VEEV 57.77 0.52 WesternUnion WU
VTR 62.73 -0.09 WestlakeChem WLK 98.41 1.22
s 21stCenturyFoxA FOXA 32.99 -0.10 Ventas
VeriSign
VRSN 112.44 -0.12 WestpacBanking WBK 23.30 -0.27
RELX
RENX 22.74 -0.12 s 21stCenturyFoxB FOX 32.48 0.17
WRK 63.31 -0.16
TWTR 20.77 0.37 VeriskAnalytics VRSK 95.94 -0.07 WestRock
RELX
RELX 23.45 -0.05 Twitter
35.19 0.06
Verizon
VZ
50.92 -0.80 Weyerhaeuser WY
s
TylerTech
TYL
183.70
-0.01
RPM
RPM 53.39 -0.48
WheatonPrecMet
WPM 20.95 -0.01
VertxPharm VRTX 138.36 -0.43
RSP Permian RSPP 36.34 -0.34 TysonFoods TSN 83.35 -0.21
Whirlpool
WHR
169.12
-0.51
Viacom
B
VIAB
28.94
-0.24
RalphLauren RL
95.79 -3.92 UBS Group UBS 17.10 -0.26
WMB 29.07 0.02
VIA 34.25 -0.25 Williams
UDR 38.80 -0.49 Viacom A
RandgoldRscs GOLD 91.55 0.27 UDR
WilliamsPartners
WPZ
36.35
-0.58
UGI 48.81 -0.17 VistraEnergy VST 17.81 -0.76
RaymondJames RJF 88.32 -1.79 UGI
VMW 114.54 -0.55 WillisTowers WLTW 157.32 -1.16
USFD 30.18 0.08 VMware
Raytheon
RTN 183.85 -1.69 US Foods
WIT
5.18 0.06
VOD 30.61 -0.12 Wipro
UltaBeauty
ULTA 223.97 2.33 Vodafone
RealtyIncome O
55.22 -0.12
WF 44.15 -0.26
VornadoRealty
VNO 76.91 -0.41 WooriBank
RedHat
RHT 120.87 0.56 UltSoftware ULTI 208.05 -5.56
WDAY 99.20 2.62
VoyaFinancial VOYA 44.73 -0.36 Workday
RegencyCtrs REG 67.79 -0.81 UltraparPart UGP 21.88 -0.03
s Wyndham
WYN 112.90 0.69
UN
57.26 -0.10 VulcanMatls VMC 122.71 -2.54
RegenPharm REGN 372.34 -6.03 Unilever
s WynnResorts WYNN 159.45 1.38
UL
55.86 -0.14
RegionsFin RF
16.87 -0.08 Unilever
XPO Logistics XPO 76.38 0.05
ReinsGrp
RGA 160.82 -0.89 UnionPacific UNP 128.01 -2.07
XcelEnergy XEL 50.80 -0.28
UnitedContinental
UAL
62.20 -0.39 WABCO
WBC 141.20 -3.53 Xerox
RelianceSteel RS
80.48 -1.14
XRX 29.44 0.07
RepublicSvcs RSG 65.08 0.05 UnitedMicro UMC 2.56 -0.06 WEC Energy WEC 68.24 -0.34 Xilinx
XLNX 68.42 0.26
UPS 120.37 -3.35 W.P.Carey
WPC 70.10 -0.91 Xylem
ResMed
RMD 84.35 0.78 UPS B
XYL 67.84 -0.93
WPP 88.15 -0.11 YPF
RestaurantBrands QSR 60.79 -0.16 UnitedRentals URI 159.19 -0.56 WPP
YPF 22.37 -0.62
WAB 76.93 -0.67 YY
RioTinto
RIO 47.20 -1.09 US Bancorp USB 54.82 -0.81 Wabtec
YY 100.68 -0.44
WMT 97.83 0.82 Yandex
RobertHalf RHI 53.29 -3.37 UnitedTech UTX 120.29 0.25 Wal-Mart
YNDX 32.37 0.34
Rockwell
ROK 187.68 -3.10 UnitedTherap UTHR 134.17 0.15 WalgreensBoots WBA 70.18 -1.39 YumBrands YUM 83.10 -0.21
RockwellCollins COL 133.04 0.20 UnitedHealth UNH 220.09 -1.33 WasteConnections WCN 68.28 -0.85 YumChina
YUMC 40.73 -0.32
WM 83.32 0.17 ZTO Express ZTO 15.61 -0.22
RogersComm B RCI
51.53 -0.19 UnivDisplay OLED 166.00 -1.55 WasteMgt
WAT 194.26 -0.41 ZayoGroup ZAYO 34.42 -0.25
Rollins
ROL 45.59 -0.51 UniversalHealthB UHS 105.95 -0.31 Waters
WSO 167.48 -1.03 ZebraTech
ZBRA 107.36 -2.15
RoperTech
ROP 258.20 -3.67 UnumGroup UNM 56.52 -0.50 Watsco
VEON 3.92 -0.02 Wayfair
W
72.58 0.68 Zillow A
ZG
40.32 0.44
RossStores ROST 77.02 -0.99 VEON
VER
7.75 -0.12 Weibo
WB 100.41 -1.62 Zillow C
Z
40.33 0.34
RoyalBkCanada RY
79.46 -0.34 VEREIT
VFC 70.39 -0.83 WellCareHealth WCG 206.80 3.57 ZimmerBiomet ZBH 115.49 0.67
RoyalBkScotland RBS
7.44 -0.04 VF
s
Visa
V
108.58
1.15
WellsFargo
WFC
58.55
1.16
ZionsBancorp
ZION
50.88 -0.86
RoyalCaribbean RCL 122.82 -2.26
HCN 66.12 -1.01 Zoetis
ZTS 70.85 -0.17
RoyalDutchA RDS.A 63.99 -0.16 VailResorts MTN 223.43 2.57 Welltower
RoyalDutchB RDS.B 65.50 -0.19
Ryanair
RYAAY 118.97 -1.92
SAP
SAP 111.30 -0.14
S&P Global SPGI 167.89 0.43
SBA Comm SBAC 163.87 1.67
SEI Investments SEIC 70.08 -0.10
Tuesday, December 05, 2017
Sina
SINA 96.07 -0.93
SINOPEC
SHI
58.03 -0.04
MMA 1-MO 2-MO 3-MO 6-MO 1-YR 2-YR 2.5YR
5YR
SK Telecom SKM 27.96 0.50 Type
SLGreenRealty SLG 102.61 -1.34 National average
SS&C Tech SSNC 40.65 0.17
0.13 0.07 0.07 0.13 0.20 0.36 0.50 0.47 0.95
SVB Fin
SIVB 227.53 -3.74 Savings
Salesforce.com CRM 100.69 0.84 Jumbos
0.26 0.07 0.08 0.14 0.22 0.39 0.55 0.50 1.01
Sanofi
SNY 43.51 -0.65
SantanderCons SC
17.76 -0.27 Weekly change
Sasol
SSL 31.15 -0.25 Savings
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01
Scana
SCG 43.50 -0.83
Jumbos
0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.00 0.02
Schlumberger SLB 63.45 -1.15
SchwabC
SCHW 50.78 -0.77
ScottsMiracleGro SMG 101.29 0.62
ScrippsNetworks SNI
81.98 -1.39
Seagate
STX 39.13 -0.07
SealedAir
SEE 47.99 -0.13 Explanation of ratings: Safe Sound SM, (855) 733-0700, evaluates the financial condition of fedSeattleGenetics SGEN 56.05 -1.83 erally insured institutions and assigns a rank of 1,2,3,4 or 5 based on data from the fourth quarter
SemicondctrMfg SMI
6.73 -0.24 of 2015 from federal regulators. 5: most desirable performance; NR: institution is too new to rate,
SempraEnergy SRE 116.22 -4.27 not an indication of financial strength or weakness. Information is believed to be reliable, but not
SensataTech ST
47.53 -0.03 guaranteed.
ServiceCorp SCI
37.65 0.38
ServiceMaster SERV 49.99 -0.09
ServiceNow NOW 116.20 2.58
Yield
Bank/rank
Yield
ShawComm B SJR 22.91 -0.01 Bank/rank
Minimum
(%)
Phone number
Minimum (%)
SherwinWilliams SHW 405.55 -1.38 Phone number
ShinhanFin SHG 44.48
...
Six-month CD
Shire
SHPG 144.54 -0.80 Money market and savings account
Shopify
SHOP 95.28 -1.34 DollarSavingsDirect /4
M.Y. Safra Bank, FSB /NR $5,000
$1
1.50
1.42
SignatureBank SBNY 137.87 -0.63
(212) 652-7200
SimonProperty SPG 162.75 -0.92 (866) 395-8693
First Internet Bank of Indiana /4 $1,000
$100
1.35
1.41
SiriusXM
SIRI
5.74 0.13 CIT Bank /5
Skyworks
SWKS 97.60 -0.66 (855) 462-2652
(888) 873-3424
SmithAO
AOS 61.58 -0.62
CD Bank /4
$0
1.30
$10,000
1.40
Smith&Nephew SNN 35.91 0.23 Barclays /5
(888) 201-8185
Smucker
SJM 117.46 -1.93 (888) 720-8756
Snap
SNAP 14.94 1.37
One-year CD
SnapOn
SNA 171.17 -2.15 One-month CD
SOQUIMICH SQM 52.16 -0.41 EH National Bank /5
Banesco USA /4
$0
0.81
$1,500
1.75
Sony
SNE 45.87 0.09
(786) 552-0524
Southern
SO
50.36 0.03 (888) 392-5265
CD Bank /4
0.30
$10,000
1.75
SoCopper
SCCO 42.42 -0.70 M.Y. Safra Bank, FSB /NR $5,000
SouthwestAir LUV 61.72 -0.31 (212) 652-7200
(888) 201-8185
SpectraEnerPtrs SEP 40.16 -0.25
EverBank /4
$10,000
0.15
$5,000
1.72
SpectrumBrands SPB 114.98 0.91 VirtualBank /4
(855) 228-6755
SpiritAeroSys SPR 82.24 -1.76 (877) 998-2265
Splunk
SPLK 78.01 0.33
Two-year CD
Sprint
S
5.74 -0.21 Two-month CD
Square
SQ
37.60 0.73 VirtualBank /4
First Internet Bank of Indiana /4 $1,000
1.88
$10,000
0.15
StanleyBlackDck SWK 168.34 -1.47
(888) 873-3424
Starbucks
SBUX 59.34 0.58 (877) 998-2265
EverBank /4
StateStreet STT 96.83 -0.27 Applied Bank /5
$1,000
0.05
$5,000
1.86
Statoil
STO 20.35 -0.04 (800) 616-4605
(855) 228-6755
SteelDynamics STLD 38.73 -1.06
Banesco USA /4
$1,500
1.85
Stericycle
SRCL 66.50 -0.86
Steris
STE 89.08 -0.39
(786) 552-0524
SterlingBancorp STL 26.05 0.05
Five-year CD
STMicroelec STM 21.92 0.03 Three-month CD
Stryker
SYK 152.03 -0.33 M.Y. Safra Bank, FSB /NR
Capital One 360 /5
$5,000
1.16
$0
2.45
SumitomoMits SMFG 8.16 0.04
(800) 289-1992
SunComms SUI
94.07 -0.95 (212) 652-7200
SunLifeFinancial SLF 40.52 0.03 CD Bank /4
Goldman Sachs Bank USA /5
$10,000
1.15
$500
2.40
SuncorEnergy SU
34.60 0.15 (888) 201-8185
(855) 730-7283
SunTrustBanks STI
64.03 -0.33
First Internet Bank of Indiana /4 $1,000
1.06
2.38
Symantec
SYMC 27.44 -0.31 First Internet Bank of Indiana /4 $1,000
SynchronyFin SYF 37.31 -0.14 (888) 873-3424
(888) 873-3424
Syngenta
SYT 92.37 -0.06
Synopsys
SNPS 87.34 -0.38
- Minimum is $100,000
SynovusFin SNV 49.22 -0.91
Sysco
SYY 59.28 -0.25
PulteGroup PHM
Qiagen
QGEN
Qorvo
QRVO
Qualcomm
QCOM
QuantaServices PWR
QuestDiag
DGX
33.49
31.02
71.78
64.69
38.42
97.87
-0.95
-0.22
-0.62
0.13
-0.38
-2.37
R S
W X Y Z
BANKRATE.COM® MMA, Savings and CDs
Average Yields of Major Banks
Consumer Savings Rates
High yield savings
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
t
Net
Sym Close Chg
Stock
ly
.
How to Read the Stock Tables
High yield jumbos
Money market and savings account
T U V
TAL Education TAL 27.78
TD Ameritrade AMTD 52.20
TE Connectivity TEL 92.56
Telus
TU
37.55
TIM Part
TSU 18.19
TJX
TJX 75.60
T-MobileUS TMUS 60.96
s TRowePrice TROW 101.64
TaiwanSemi TSM 39.20
TakeTwoSoftware TTWO 104.19
Tapestry
TPR 41.65
TargaResources TRGP 45.03
Target
TGT 62.20
TataMotors TTM 31.11
TechnipFMC FTI
28.24
TeckRscsB
TECK 22.85
TelecomArgentina TEO 37.10
TelecomItalia TI
8.28
TelecomItalia A TI.A
6.92
TeledyneTech TDY 179.52
Teleflex
TFX 251.75
TelefonicaBras VIV 15.00
Telefonica
TEF 10.02
TelekmIndonesia TLK 30.98
Tenaris
TS
29.59
Teradyne
TER 39.67
Tesla
TSLA 303.70
TevaPharm TEVA 15.06
TexasInstruments TXN 96.90
Textron
TXT 54.01
ThermoFisherSci TMO 182.45
ThomsonReuters TRI
44.22
ThorIndustries THO 149.96
3M
MMM 238.26
Tiffany
TIF
95.02
TimeWarner TWX 91.08
Toll Bros
TOL 46.93
Torchmark
TMK 89.00
Toro
TTC 65.40
TorontoDomBk TD
57.04
Total
TOT 56.22
s TotalSystem TSS 74.02
ToyotaMotor TM 123.68
TractorSupply TSCO 68.75
Net YTD
NAV Chg %Ret Fund
JPMorgan Funds
MdCpVal L 41.02 -0.43
JPMorgan R Class
CoreBond
11.64 +0.01
Lazard Instl
EmgMktEq 19.60 +0.05
Loomis Sayles Fds
14.20
...
LSBondI
Lord Abbett A
ShtDurIncmA p 4.26
...
Lord Abbett F
ShtDurIncm 4.25 -0.01
Metropolitan West
TotRetBd
10.67 +0.01
TotRetBdI 10.67 +0.01
TRBdPlan 10.04 +0.01
MFS Funds Class I
ValueI
41.72 -0.13
MFS Funds Instl
IntlEq
25.38 -0.06
Mutual Series
GlbDiscA
32.50 -0.12
Oakmark Funds Invest
EqtyInc r
34.41 -0.10
86.07 -0.26
Oakmark
OakmrkInt 28.78 -0.05
Old Westbury Fds
LrgCpStr
15.01 -0.04
Oppenheimer Y
DevMktY
NA
...
43.16 -0.04
IntGrowY
Parnassus Fds
42.41 -0.25
ParnEqFd
PIMCO Fds Instl
NA
...
AllAsset
TotRt
10.26 +0.01
0.45
-1.14
-0.31
-0.10
-0.01
-1.40
0.72
-1.18
-0.19
2.08
...
0.23
-0.36
-0.02
-0.67
-0.68
1.11
-0.05
...
-2.40
-1.23
0.04
-0.05
0.13
-0.48
0.43
-1.50
0.01
0.93
-1.17
0.42
-0.06
1.29
-1.00
-0.52
-1.63
-3.73
-0.40
-0.85
-0.77
-0.13
0.92
-0.24
0.48
ableBanking,adivisionofNortheastBank/5
(877) 505-1933
M.Y. Safra Bank, FSB /NR
(212) 652-7200
BBVA Compass /3
(800) COMPASS
1.30
1.26
1.25
One-month CD
EH National Bank /5
(888) 392-5265
M.Y. Safra Bank, FSB /NR
(212) 652-7200
USAA /NR
(800) 583-8295
0.81
0.30
0.22
Two-month CD
Six-month CD
1.45
TriState Capital Bank /4
(866) 680-8722
M.Y. Safra Bank, FSB /NR
(212) 652-7200
First Internet Bank of Indiana /4
(888) 873-3424
1.42
1.41
One-year CD
1.77
MyeBanc,ADivisionofBACFloridaBank/4
(855) 512-0989
EverBank /4
(855) 228-6755
First Internet Bank of Indiana /4
(888) 873-3424
1.72
1.71
Two-year CD
VirtualBank /4
(877) 998-2265
Applied Bank /5
(800) 616-4605
Citizens Trust Bank /4
(404) 659-5959
0.15
0.05
0.01
Three-month CD
TriState Capital Bank /4
(866) 680-8722
Luana Savings Bank /5
(800) 666-2012
M.Y. Safra Bank, FSB /NR
(212) 652-7200
2.00
MyeBanc,ADivisionofBACFloridaBank/4
(855) 512-0989
First Internet Bank of Indiana /4
(888) 873-3424
Luana Savings Bank /5
(800) 666-2012
1.88
1.86
Five-year CD
1.30
1.21
1.16
2.38
First Internet Bank of Indiana /4
(888) 873-3424
Synchrony Bank /5
(800) 903-8154
EverBank /4
(855) 228-6755
2.35
2.35
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
Net YTD
NAV Chg %Ret Fund
PIMCO Funds A
12.7 IncomeFd
NA
...
PIMCO Funds D
3.8 IncomeFd
NA
...
PIMCO Funds Instl
23.4 IncomeFd
NA
...
PIMCO Funds P
7.4 IncomeP
NA
...
Price Funds
2.3 BlChip
96.84 +0.01
CapApp
30.10 -0.04
2.4
35.75 -0.23
EqInc
70.84 -0.26
EqIndex
3.0
69.77 -0.02
Growth
3.4
HelSci
73.43 -0.37
3.4
39.37 +0.01
InstlCapG
19.15 -0.01
IntlStk
16.4
15.17 -0.04
IntlValEq
MCapGro
93.07 -0.25
25.3
32.07 -0.31
MCapVal
55.77 -0.24
8.1 N Horiz
9.50 +0.01
N Inc
11.26 -0.03
OverS
SF
r
13.1
23.35
-0.04
R2020
18.7
18.01 -0.04
26.8 R2025
26.54 -0.07
R2030
19.41 -0.05
17.0 R2035
27.89 -0.07
R2040
NA Value
39.77 -0.17
24.5 PRIMECAP Odyssey Fds
Growth r
37.03 -0.16
15.3 Principal Investors
DivIntlInst 13.79 -0.01
NA Prudential Cl Z & I
4.9 TRBdZ
14.56 +0.03
Net YTD
NAV Chg %Ret Fund
Schwab Funds
41.18 -0.16
NA S&P Sel
TIAA/CREF Funds
19.74 -0.09
NA EqIdxInst
IntlEqIdxInst 20.28 -0.03
Tweedy
Browne
Fds
NA
28.53 -0.02
GblValue
NA VANGUARD ADMIRAL
500Adml 243.64 -0.91
34.52 -0.08
33.4 BalAdml
11.79 +0.04
14.9 CAITAdml
15.2 CapOpAdml r157.21 -0.55
36.78 -0.13
19.4 EMAdmr
EqIncAdml 78.10 -0.33
31.0
ExplrAdml 96.36 -0.48
24.3
ExtndAdml 83.62 -0.64
34.6
GNMAAdml 10.49
...
25.2
GrwthAdml 71.27 -0.11
18.4
HlthCareAdml r 88.98 -0.34
23.5
HYCorAdml r 5.93
...
10.4
InfProAd
25.89 +0.01
28.8 IntlGrAdml 93.77 -0.20
3.9 ITBondAdml 11.39
...
24.1 ITIGradeAdml 9.78
...
14.4 LTGradeAdml 10.77 +0.04
16.2 MidCpAdml 188.84 -1.17
17.8 MuHYAdml 11.44 +0.04
19.2 MuIntAdml 14.14 +0.04
20.2 MuLTAdml 11.70 +0.04
18.2 MuLtdAdml 10.90 +0.01
MuShtAdml 15.73 +0.01
29.3 PrmcpAdml r137.69 -0.27
REITAdml r 118.29 -0.99
25.4 SmCapAdml 69.92 -0.60
STBondAdml 10.39
...
6.2 STIGradeAdml 10.64 -0.01
Net YTD
NAV Chg %Ret Fund
TotBdAdml 10.77 +0.01
19.6 TotIntBdIdxAdm 22.03 +0.02
TotIntlAdmIdx r 29.95 -0.05
19.0 TotStAdml 65.86 -0.29
22.5 TxMIn r
14.20 -0.02
ValAdml
40.94 -0.22
13.9 WdsrllAdml 70.58 -0.25
WellsIAdml 66.01 -0.06
19.6 WelltnAdml 74.97 -0.26
12.6 WndsrAdml 80.50 -0.39
4.8 VANGUARD FDS
26.5
27.11 -0.08
DivdGro
26.0
HlthCare r 210.90 -0.80
16.5
INSTTRF2020 22.71 -0.03
19.9
INSTTRF2025 23.00 -0.03
16.0
INSTTRF2030 23.21 -0.04
2.1
INSTTRF2035 23.42 -0.05
25.5
INSTTRF2040 23.63 -0.06
17.4
6.9 INSTTRF2045 23.78 -0.07
39.58 +0.03
2.5 IntlVal
20.00 -0.01
39.3 LifeCon
33.49 -0.07
3.8 LifeGro
27.16 -0.04
4.2 LifeMod
27.43 -0.11
PrmcpCor
11.3
33.67 -0.28
SelValu
r
17.1
27.40 -0.03
7.6 STAR
10.64 -0.01
4.5 STIGrade
6.3 TgtRe2015 16.02 -0.02
2.1 TgtRe2020 31.85 -0.04
1.1 TgtRe2025 18.69 -0.03
26.5 TgtRe2030 33.79 -0.06
4.0 TgtRe2035 20.77 -0.04
14.2 TgtRe2040 35.79 -0.09
1.1 TgtRe2045 22.49 -0.06
2.0 TgtRe2050 36.18 -0.09
3.5
2.6
24.0
19.0
23.4
15.1
14.3
9.3
13.3
17.2
17.5
17.3
12.8
14.4
15.8
17.1
18.5
19.1
24.7
10.0
17.2
13.6
23.7
17.0
16.5
2.0
10.4
12.7
14.3
15.7
17.1
18.5
19.1
19.1
TgtRetInc
TotIntBdIxInv
WellsI
Welltn
WndsrII
Net YTD
NAV Chg %Ret
13.65
...
11.02 +0.01
27.25 -0.02
43.41 -0.15
39.76 -0.15
VANGUARD INDEX FDS
500
243.59 -0.91
ExtndIstPl 206.36 -1.58
SmValAdml 56.62 -0.56
TotBd2
10.73 +0.01
17.91 -0.02
TotIntl
65.83 -0.28
TotSt
VANGUARD INSTL FDS
34.53 -0.08
BalInst
DevMktsIndInst 14.22 -0.02
DevMktsInxInst 22.23 -0.02
83.62 -0.64
ExtndInst
GrwthInst 71.27 -0.11
10.55 +0.01
InPrSeIn
240.38 -0.89
InstIdx
240.40 -0.90
InstPlus
InstTStPlus 59.08 -0.26
MidCpInst 41.72 -0.26
MidCpIstPl 205.75 -1.27
SmCapInst 69.92 -0.60
STIGradeInst 10.64 -0.01
10.77 +0.01
TotBdInst
TotBdInst2 10.73 +0.01
TotBdInstPl 10.77 +0.01
TotIntBdIdxInst 33.05 +0.02
TotIntlInstIdx r119.78 -0.19
TotItlInstPlId r119.81 -0.18
TotStInst
65.87 -0.29
40.94 -0.22
ValueInst
Western Asset
CorePlusBdI NA
...
7.8
2.6
9.3
13.2
14.3
19.5
16.0
10.3
3.4
23.9
18.9
12.6
23.4
23.4
16.0
25.5
2.6
19.6
19.7
19.0
17.1
17.1
14.2
2.1
3.5
3.5
3.5
2.7
24.0
24.0
19.0
15.1
NA
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
B12 | Wednesday, December 6, 2017
MARKETS DIGEST
EQUITIES
S&P 500 Index
Dow Jones Industrial Average
Last Year ago
24180.64 t 109.41, or 0.45%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio 21.12 21.00
P/E estimate *
19.82 18.02
Dividend yield
2.21
2.46
All-time high 24290.05, 12/04/17
Nasdaq Composite Index
Last
2629.57 t 9.87, or 0.37%
High, low, open and close for each
trading day of the past three months.
Year ago
Trailing P/E ratio 24.94 24.22
P/E estimate *
19.72 18.41
Dividend yield
1.90
2.12
All-time high: 2647.58, 11/30/17
Last Year ago
6762.21 t 13.15, or 0.19%
High, low, open and close for each
trading day of the past three months.
Trailing P/E ratio * 26.25
23.45
P/E estimate *
21.01
18.96
Dividend yield
1.07
1.25
All-time high: 6912.36, 11/28/17
Current divisor 0.14523396877348
24600
2640
6900
24000
2600
6750
23400
2560
6600
22800
2520
6450
22200
2480
6300
2440
6150
Session high
t
DOWN
Session open
t
Close
UP
Close
Open
Session low
65-day moving average
65-day moving average
65-day moving average
21600
Bars measure the point change from session's open
Sept.
Oct.
Aug.
Nov.
6000
2400
21000
Aug.
Sept.
Oct.
Sept.
Aug.
Nov.
Oct.
Nov.
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
High
Latest
Close
Low
Net chg
% chg
High
52-Week
Low
% chg
% chg
YTD 3-yr. ann.
Dow Jones
-0.45
24349.74 24155.28 24180.64 -109.41
24290.05 19251.78
25.6
22.4
10.4
Transportation Avg 10382.44 10227.13 10229.03 -139.55 -1.35
10368.58
8783.74
11.9
13.1
3.8
750.62 -12.10 -1.59
774.47
631.38
18.9
13.8
7.9
27433.82 23053.30
708.56
596.75
18.1
17.5
16.9
16.5
8.1
9.0
Industrial Average
763.20
Utility Average
Total Stock Market
Barron's 400
746.86
-0.44
27421.41 27199.80 27215.18 -120.85
708.15
701.14
701.15 -4.71
Nasdaq Stock Market
Nasdaq Composite
6836.45
Nasdaq 100
6337.06
6752.32
6235.77
-0.67
-0.19
6762.21 -13.15
1.41
6265.11
0.02
Standard & Poor's
500 Index
2648.72
2627.73
2629.57
MidCap 400
SmallCap 600
1894.14
938.60
1878.97
928.06
1879.13 -14.94
928.08 -9.93
-1.06
Other Indexes
Russell 2000
1534.01
1516.75
1516.76 -15.65
-1.02
-0.79
12640.38 12559.49 12567.16 -67.73
18.9
17.5
8.2
1899.18
944.10
1658.28
815.62
13.3
11.5
13.2
10.8
9.2
10.8
1345.24
12.1
11.8
8.7
12634.89 10970.78
14.6
13.7
4.6
559.05
503.24
9.1
9.4
3.5
-0.66
4304.77
3075.02
29.1
34.8
6.3
538.92
535.08
535.77
-2.31
KBW Bank
107.45
105.65
105.88
-0.96
78.41
77.17
77.51
-1.22 -1.55
-1.81 -1.31
553.53
138.12
135.59
135.85
1251.35
11.67
1213.53
10.65
1228.51
11.33
0.66
-0.35
Philadelphia Stock Exchange
Volume, Advancers, Decliners
Region/Country Index
-0.43
-0.90
0.05
-3.00
Most-active issues in late trading
Volume
(000)
Last
8,874.6
12.43
DLPH
Delphi Technologies
Cnsmr Staples Sel Sector XLP
8,387.4
8,345.4
iSh Curr Hdgd MSCI Japan HEWJ
Company
Symbol
Net chg
After Hours
% chg
High
Close
Net chg
3007.29
388.66
259.68
The Global Dow
DJ Global Index
DJ Global ex U.S.
–10.47
–1.26
–0.60
–0.35
–0.32
–0.23
–0.40
–2.50
–544.00 –0.74
–0.33
–53.35
301.47
–67.66 –1.78
DJ Americas
630.82
Sao Paulo Bovespa 72546.17
S&P/TSX Comp
15915.68
S&P/BMV IPC
47462.79
Santiago IPSA
3733.41
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
386.74
389.99
3999.67
5375.53
13048.54
1460.04
22416.31
543.08
1134.25
10211.30
577.24
9288.92
7327.50
–0.73
–0.21
–1.44
–13.76
–10.01
–6.24
54.20
1.54
0.38
2.70
–0.80
–39.71
–11.47
–0.19
–0.05
–0.04
–0.26
–0.08
–0.43
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
S&P/ASX 200
5971.80
Shanghai Composite 3303.68
Hang Seng
28842.80
S&P BSE Sensex
32802.44
Nikkei Stock Avg
22622.38
Straits Times
3438.06
Kospi
2510.12
Weighted
10566.85
–13.80
–5.94
–295.48
–67.28
–84.78
–0.41
8.45
–84.26
–0.23
–0.18
–1.01
–0.20
–0.37
–0.01
unch.
12.54
12.40
56.50
...
unch.
56.89
55.99
56.74
0.11
0.19
56.92
56.60
7,846.3
32.92
0.11
0.34
32.92
32.81
Frontier Communications FTR
7,591.5
9.10
...
unch.
9.20
8.74
SPDR S&P 500
SPY
5,100.0 263.16
-0.03
PwrShrs QQQ Tr Series 1 QQQ
4,730.3 152.95
Industrial Select Sector XLI
4,565.5
73.30
-0.28
-0.38
73.64
73.30
F
0.14
-0.01 264.20 254.62
0.09 153.88 152.78
Percentage gainers…
94.9
51.75
8.50
19.65
53.00
43.25
750.3
57.62
4.73
8.94
58.54
51.72
10.4
45.00
2.30
5.39
45.00
42.70
136.9
4.95
0.23
4.76
5.00
4.70
GDDY
50.6
47.76
1.67
3.62
47.76
46.09
AeroVironment
AVAV
Dave Buster's Ent
PLAY
II-VI
IIVI
TerraForm Global Cl A GLBL
GoDaddy Cl A
560.52
463.83
14.2
11.3
-1.1
...And losers
106.84
88.02
17.1
15.3
12.4
Viking Therapeutics
VKTX
57.5
2.40
-0.34
-12.41
2.70
2.33
96.72
73.03
-5.7
-1.7
3.4
Tronox Cl A
TROX
39.1
23.00
-2.53
-9.91
25.61
22.90
192.66
117.79
-25.9
-26.1 -13.6
Blucora
BCOR
8.7
17.90
-1.90
-9.60
19.80
17.90
1341.69
16.04
870.00
9.14
41.2
-3.9
35.5
-19.3
Macerich
MAC
151.0
60.00
-5.24
-8.03
65.24
60.00
Bill Barrett
BBG
66.0
5.30
-0.42
-7.34
5.77
5.00
20.4
-1.4
18.8
19.2
21.4
0.64
0.24
0.28
0.03
0.03
16.7
20.5
4.1
4.0
15.8
7.0
11.3
10.9
10.6
13.7
–0.7
16.5
12.4
–1.6
9.2
8.0
13.0
2.6
no
n-
–0.14
–0.43
–0.16
YTD
% chg
0.34
–0.79
5.4
6.4
31.1
23.2
18.4
19.3
23.9
14.2
Company
Symbol
Revance Therapeutics
Barnes Noble Education
ClearSign Combustion
Adamis Pharmaceuticals
Zion Oil Gas
RVNC
Grana y Montero ADR
Ameri Holdings
VirnetX Holding
Avenue Therapeutics
G-III Apparel Group
GRAM
Comstock Resources
Lands' End
Delphi Technologies
Mustang Bio
Snap
CRK
Latest Session
Close Net chg % chg
BNED
CLIR
ADMP
ZN
AMRH
VHC
ATXI
GIII
LE
DLPH
MBIO
SNAP
High
52-Week
Low
% chg
BAC
33.65
22.89
20.48
18.75
16.52
37.20 15.85
13.15 4.99
4.60 1.75
6.45 2.55
6.90 1.07
92.5
-22.2
-35.1
61.0
94.8
Galectin Therapeutics
Pyxis Tankers
NextDecade
Helios Matheson Analy
Ascena Retail Group
GALT
2.99
2.88
4.10
4.45
34.30
0.41
0.38
0.50
0.54
4.16
15.89
15.20
13.89
13.81
13.80
7.97 2.16
9.00 2.15
8.75 1.70
8.58 3.50
35.03 18.00
-54.7
-55.8
20.6
...
15.5
Astrotech
Bellerophon Therapeutics
Emcore
Xunlei ADR
Contango Oil Gas
ASTC
6.98
13.20
56.50
10.67
14.94
0.84
1.40
5.68
1.03
1.37
13.68
11.86
11.18
10.68
10.10
13.42 4.01
24.80 10.55
57.25 38.00
13.35 8.06
29.44 11.28
-36.4
-17.2
...
...
...
MER Telemanagement
Edison Intl
Revolution Lighting Techs
Flex Pharma
U.S. Global Investors A
MTSL
General Electric
VelocityShares 3x Lg Nat
Micron Technology
Neuralstem
Snap
GE
RGC
SPY
AMD
64,438
58,187
56,261
54,791
50,927
UGAZ
MU
CUR
SNAP
29.4
34.1
1363.1
11.9
14.1
28.93
27.85
22.68
263.19
9.91
52-Week
High
Low
-0.45
-0.54
9.41
-0.36
-1.20
29.31 21.72
28.20 22.00
23.56 13.90
266.80 220.66
15.65
8.82
-12.9 17.76 -1.06
169.7 7.54 -6.45
51.9 41.21 3.28
11207.3 3.09 175.89
104.7 14.94 10.10
32.38
52.49
49.89
6.60
29.44
17.46
7.24
18.58
0.88
11.28
Selected rates
A consumer rate against its
benchmark over the past year
Money market accounts
Benchmark
Yields
Treasury
yield
curve
andtoRates
Yield
maturity of current bills,
t
Federal-funds
target rate
0.75
0.50
t
0.25
0.00
D J FMAM J J A S ON D
2017
Capital One 360
Glen Allen, VA
1.30%
877-464-0333
Tuesday
t
Goldman Sachs Bank USA
1.30%
New York, NY
855-730-7283
DollarSavingsDirect
New York, NY
1.50%
866-395-8693
Salem Five Direct
Salem, MA
1.50%
800-850-5000
5
2.25
0
1.50
–5
One year ago 0.75
–10
0.00
1
3 6
month(s)
10%
3.00
t
Money market
account yields
American Express Bank, FSB
1.25%
New York, NY
866-215-8754
1 2 3 5 710
years
maturity
Euro
Yen
s
2017
2
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Yield/Rate (%)
Last (l)Week ago
Federal-funds rate target
1.00-1.25 1.00-1.25
Prime rate*
4.25
4.25
Libor, 3-month
1.48
1.52
Money market, annual yield
0.33
0.34
Five-year CD, annual yield
1.48
1.49
30-year mortgage, fixed†
3.88
3.92
15-year mortgage, fixed†
3.28
3.36
Jumbo mortgages, $424,100-plus† 4.30
4.27
Five-year adj mortgage (ARM)† 3.72
3.62
New-car loan, 48-month
3.02
3.20
3-yr chg
52-Week Range (%)
Low 0 2 4 6 8 High (pct pts)
0.25 l
l
3.50
0.95 l
0.26 l
1.19 l
l
3.73
l
2.99
l
4.21
l
3.20
l
2.85
1.25
4.25
1.52
0.36
1.49
4.33
3.50
4.88
4.03
3.36
1.00
1.00
1.28
-0.09
-0.07
-0.04
0.17
0.03
0.16
0.03
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
Corporate Borrowing Rates and Yields
Bond total return index
Close
Yield (%)
Last Week ago
52-Week
High
Low
Total Return (%)
52-wk
3-yr
1463.583
2.215
2.171
2.237
1.818
2.860 1.965
10-yr Treasury, Ryan ALM 1734.894
DJ Corporate
381.282
Aggregate, Barclays Capital 1944.170
High Yield 100, Merrill Lynch 2860.043
Fixed-Rate MBS, Barclays 1987.350
Muni Master, Merrill
521.783
2.356
3.135
2.700
5.510
2.910
2.145
2.338
3.118
2.650
5.535
2.880
2.214
2.609
3.390
2.790
5.890
3.120
2.419
2.058
2.879
2.380
4.948
2.660
1.736
2.622
6.260
3.640
7.805
2.441
5.379
804.779
5.545
5.521
6.221
5.279
Treasury, Ryan ALM
EMBI Global, J.P. Morgan
1.728
4.067
2.415
4.450
1.999
2.611
10.127 6.101
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
XNET
MCF
0.85
0.90
6.55
2.20
1.65
97.6
102.5
-27.7
126.2
-71.5
3.83
1.85
6.25
13.71
2.62
-0.81
-0.36
-1.15
-2.51
-0.44
-17.46
-16.29
-15.54
-15.47
-14.38
9.00
2.44
12.20
27.00
10.39
2.24
0.48
5.80
3.11
2.22
-51.5
255.8
-3.1
211.6
-73.1
3.54 1.31
83.38 68.76
9.17 3.62
6.46 2.68
6.90 1.25
-44.3
1.7
-30.0
-39.8
134.2
1.82 -0.27 -12.92
70.00 -10.26 -12.78
RVLT
3.75 -0.53 -12.38
FLKS
3.79 -0.52 -12.06
GROW
3.42 -0.46 -11.86
EIX
Ranked by change from 65-day average*
Symbol
Delphi Technologies
Vanguard MC 400 Gr ETF
VanEck Vectors Poland ETF
Revance Therapeutics
iShares MSCI Israel Cap
DLPH
Global X MSCI Nigeria ETF
SPDR Portfolio Mid Cap
iShares Core 10+Y USD Bd
Teucrium Soybean Fund
SPDR Portfolio Large Cap
NGE
IVOG
PLND
RVNC
EIS
SPMD
ILTB
SOYB
SPLG
Volume % chg from Latest Session
(000) 65-day avg Close % chg
13347 56.50
6979 132.84
5295 19.74
4105 34.75
3276 49.84
16,283
831
465
8,076
353
2725
1956
1795
1438
1423
363
2,067
361
500
2,109
US$vs,
YTDchg
Tues
in US$ per US$ (%)
21.66
33.32
64.61
18.87
30.89
52-Week
High
Low
11.18
-0.72
-2.18
33.65
0.44
57.25
135.61
21.17
37.20
55.29
38.00
111.28
12.90
15.85
46.01
2.56
-0.86
0.48
0.86
-0.39
22.25
34.05
65.00
20.26
31.33
14.65
29.25
59.30
17.27
25.91
Track the Markets
Compare the performance of selected global stock
indexes, bond ETFs, currencies and commodities at
WSJ.com/TrackTheMarkets
US$vs,
YTDchg
Tues
in US$ per US$ (%)
Country/currency
Americas
Europe
Argentina peso
.0578 17.2890 8.9
Brazil real
.3085 3.2414 –0.4
Canada dollar
.7882 1.2687 –5.6
Chile peso
.001530 653.60 –2.4
Ecuador US dollar
1
1 unch
Mexico peso
.0533 18.7645 –9.5
Uruguay peso
.03457 28.9300 –1.4
Venezuela b. fuerte .100150 9.9851 –0.1
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
Australian dollar
.7606 1.3148 –5.3
China yuan
.1511 6.6189 –4.7
Hong Kong dollar
.1279 7.8169 0.8
India rupee
.01554 64.368 –5.3
Indonesia rupiah .0000739 13525 unch
Japan yen
.008881 112.60 –3.8
Kazakhstan tenge .003001 333.21 –0.1
Macau pataca
.1243 8.0467 1.6
Malaysia ringgit
.2461 4.0633 –9.4
New Zealand dollar
.6875 1.4545 0.7
Pakistan rupee
.00950 105.250 0.8
Philippines peso
.0197 50.648 2.1
Singapore dollar
.7424 1.3469 –6.9
South Korea won .0009194 1087.62 –10.0
Sri Lanka rupee
.0065206 153.36 3.3
Taiwan dollar
.03334 29.990 –7.6
Thailand baht
.03066 32.620 –8.9
Vietnam dong
.00004402 22718 –0.2
Commodities
.04611 21.687 –15.6
.1589 6.2924 –11.0
1.1826 .8456 –11.0
.003765 265.60 –9.7
.009646 103.67 –8.2
.1210 8.2621 –4.4
.2810 3.5592 –15.0
.01704 58.685 –4.2
.1196 8.3641 –8.2
1.0129 .9873 –3.1
.2601 3.8444 9.1
.0368 27.1961 0.4
1.3442 .7439 –8.2
Middle East/Africa
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6515 .3771 –0.01
.0563 17.7620 –2.0
.2854 3.5043 –8.9
3.3134 .3018 –1.2
2.5976 .3850 unch
.2750 3.636 –0.1
.2667 3.7502 –0.01
.0743 13.4514 –1.8
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 86.77
TR/CC CRB Index
Crude oil, $ per barrel
Natural gas, $/MMBtu
Gold, $ per troy oz.
0.13 0.15 –6.64
Sources: Tullett Prebon, WSJ Market Data Group
COMMODITIES
Tuesday
52-Week
Pricing trends on someClose
raw materials,
or commodities
Net chg % Chg
High
Low
DJ Commodity
Get real-time U.S. stock quotes and track most-active
stocks, new highs/lows and mutual funds. Plus,
deeper money-flows data and email delivery of key
stock-market data. Available free at WSJMarkets.com
3.68
12.22
10.99
38.86
8.19
Asia-Pacific
WSJ Dollar index
–15
30
-30.65
-26.65
-23.32
-21.03
-19.54
ASNA
Company
Country/currency
s
1.00%
Yen, euro vs. dollar; dollar vs.
major U.S. trading partners
3.75%
-0.76
-1.78
-2.22
-2.53
-0.51
HMNY
EMKR
52-Week
Low
% chg
1.72
4.90
7.30
9.50
2.10
NEXT
BLPH
High
U.S.-dollar foreign-exchange rates in late New York trading
Forex Race
notes and bonds
0.34%
Bankrate.com avg†:
* Primary market NYSE, NYSE American NYSE Arca only.
†(TRIN) A comparison of the number of advancing and declining
issues with the volume of shares rising and falling. An
Arms of less than 1 indicates buying demand; above 1
indicates selling pressure.
Currencies
s
U.S. consumer rates
NYSE Arca
* Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least
5,000 shares =Has traded fewer than 65 days
* Volumes of 100,000 shares or more are rounded to the nearest thousand
CREDIT MARKETS & CURRENCIES
Consumer Rates and Returns to Investor
Nasdaq
Total volume*2,053,605,432 260,025,646
Adv. volume* 884,159,797 42,614,785
Decl. volume*1,133,033,792 213,514,123
Issues traded
3,085
1,329
Advances
1,033
376
Declines
1,896
927
Unchanged
156
26
New highs
74
23
New lows
65
19
Closing tick
307
120
Closing Arms†
0.70
1.96
Block trades*
6,966
1,421
Latest Session
Close Net chg % chg
PXS
Volume Movers
89,506
76,596
73,895
72,851
65,730
XLF
Symbol
8.75
1.44
0.43
0.75
0.37
Volume % chg from Latest Session
Symbol (000) 65-day avg Close % chg
Bank of America
Finl Select Sector SPDR
Regal Entertainment Grp
SPDR S&P 500
Advanced Micro Devices
Company
34.75
7.73
2.50
4.75
2.61
Most Active Stocks
Company
Total volume* 884,997,895 18,959,535
Adv. volume* 233,615,811 6,998,255
Decl. volume* 645,391,749 11,731,929
Issues traded
3,077
330
Advances
1,082
144
Declines
1,902
171
Unchanged
93
15
New highs
80
4
New lows
40
7
Closing tick
81
62
Closing Arms†
1.42
1.13
Block trades*
6,648
153
Percentage Losers
Sources: SIX Financial Information; WSJ Market Data Group
WSJ
.COM
Low
...
Ford Motor
Percentage Gainers...
Latest
% chg
Americas
Brazil
Canada
Mexico
Chile
Interest rate
NYSE NYSE Amer.
Sources: SIX Financial Information; WSJ Market Data Group
International Stock Indexes
World
2212.23
-0.72
NYSE Arca Pharma
PHLX§ Oil Service
12.3
13.3
-4.03
553.53
4137.97
PHLX§ Semiconductor
Cboe Volatility
25.6
28.8
4143.89 -27.51
557.56
4230.76
PHLX§ Gold/Silver
26.8
30.8
2647.58
1544.14
-0.54
NYSE Arca Biotech
Value Line
5333.00
4788.67
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.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
NYSE Composite
-0.37
-9.87
6912.36
6422.56
Late Trading
ly
.
Major U.S. Stock-Market Indexes
602.59
-4.77
187.47
57.62
2.914
1261.60
-1.22
0.15
-0.071
-12.70
-0.79
616.58
532.01
-0.65 195.14
58.95
0.26
3.93
-2.38
-1.00 1346.00
166.50
42.53
2.56
1127.80
% Chg
5.79
YTD
% chg
6.23
-2.63 -2.62
7.26
13.14
-19.83 -21.75
9.70
8.05
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B13
COMMODITIES
WSJ.com/commodities
Contract
High hilo
Low
Open
Open
interest
Chg
Contract
Open
High hi lo
Low
Settle
Chg
Copper-High (CMX)-25,000 lbs.; $ per lb.
3.0640
3.0650
2.9205
2.9205 –0.1425
Dec
March'18 3.0875 3.1005
2.9430
2.9460 –0.1440
Gold (CMX)-100 troy oz.; $ per troy oz.
1275.40 1275.80
1260.00 1261.60 –12.70
Dec
Feb'18
1279.10 1279.80
1263.20 1264.90 –12.80
April
1283.60 1284.00
1267.80 1269.30 –12.80
June
1287.50 1288.30
1272.20 1273.70 –12.80
Aug
1290.50 1290.50
1277.80 1278.10 –12.90
Dec
1301.10 1301.60
1286.00 1287.20 –12.90
Palladium (NYM) - 50 troy oz.; $ per troy oz.
1003.45 1007.25
990.00
991.75 –7.00
Dec
March'18 987.75 995.00
973.60
977.15 –14.60
June
977.00
977.60
968.30
970.30 –14.95
Platinum (NYM)-50 troy oz.; $ per troy oz.
917.60
917.60
915.90
916.30 –8.50
Dec
Jan'18
927.60
931.10
914.70
917.50 –8.50
Silver (CMX)-5,000 troy oz.; $ per troy oz.
16.250
16.280
15.980
15.973 –0.311
Dec
March'18 16.340 16.380
16.040
16.068 –0.305
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl.
57.48
57.92
57.08
57.62
0.15
Jan
Feb
57.51
57.97
57.11
57.67
0.18
March
57.42
57.92
57.08
57.65
0.23
April
57.32
57.79
57.00
57.58
0.27
June
56.87
57.42
56.62
57.21
0.34
Dec
55.10
55.63
54.92
55.46
0.37
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal.
1.8950
1.9273
1.8861
1.9139 .0194
Jan
Feb
1.8930
1.9279
1.8877
1.9148 .0186
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal.
1.6935
1.7323
1.6894
1.7184 .0262
Jan
Feb
1.7075
1.7463
1.7060
1.7337 .0245
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
2.976
2.998
t
2.875
2.914 –.071
Jan
Feb
2.983
3.000
t
2.881
2.920 –.068
March
2.950
2.968
t
2.855
2.894 –.061
April
2.836
2.846
2.766
2.797 –.037
May
2.832
2.842
2.768
2.798 –.031
Oct
2.908
2.914
2.848
2.878 –.025
Open
interest
146.050
144.125
147.825 –2.125
145.750 –2.000
Dec
Feb'18
116.725
121.500
117.675
122.625
115.625
119.575
116.425
120.525
Dec
Feb'18
65.075
71.700
65.075
71.700
63.950
70.150
24,560
17,637
.050 19,048
–.650 151,070
64.275 –.675 20,502
70.500 –1.175 101,739
426.20
427.00
422.50
422.50 –10.00
Jan
March
417.00
417.00
412.40
412.50 –9.90
Milk (CME)-200,000 lbs., cents per lb.
15.35
15.45
15.33
15.42
.05
Dec
Jan'18
14.28
14.43
t
14.22
14.29
.01
Cocoa (ICE-US)-10 metric tons; $ per ton.
1,960
1,960
1,920
1,929
–73
Dec
March'18
1,997
2,001
1,912
1,932
–71
Coffee (ICE-US)-37,500 lbs.; cents per lb.
126.75
126.75
125.85
125.95
–.80
Dec
March'18 128.20 128.75
127.00
127.40 –1.10
Sugar-World (ICE-US)-112,000 lbs.; cents per lb.
15.04
15.15
14.87
14.90
–.16
March
May
14.98
15.07
14.84
14.87
–.13
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb.
27.35
27.35
27.35
26.89
–.16
March
May
27.01
27.19
27.00
27.19
–.03
Cotton (ICE-US)-50,000 lbs.; cents per lb.
75.00
75.42
74.80
74.96
–.07
Dec
March'18
72.50
73.15
72.14
72.51
–.07
Orange Juice (ICE-US)-15,000 lbs.; cents per lb.
161.40
162.50
160.10
162.05
.25
Jan
March
161.50
162.20
160.00
162.05
.20
26
63,385
1,343
151,156
523,445
239,665
297,287
143,283
242,719
264,576
136,526
63,730
4,681
1,258
4,331
3,824
157,640
60,220
.25
5,598
.25 848,343
1
5,938
10.00 283,554
10.25 187,565
5.90
2,856
5.80 141,942
.05
1,688
.06 160,674
382,302
141,200
2,826
2,216
35
170,254
7,260
2,774
.7597
.7598
.7596
.7595
.7598
Dec
.05361
.05371
March'18 .05279 .05288
Euro (CME)-€125,000; $ per €
Dec
1.1876
1.1886
March'18 1.1948 1.1956
Open
interest
Chg
.7605
.7604
.7603
.7602
.7601
.0012 128,138
.0011
1,241
.0012
378
.0013
4,418
.0013
260
.05312
.05233
.05314 –.00048 176,573
.05234 –.00045
1,859
1.1808
1.1880
1.1823 –.0043 462,217
1.1895 –.0042 19,439
Index Futures
Mini DJ Industrial Average (CBT)-$5 x index
24388 s
24396 s
24294
24307
2637.00 2648.50
Dec
March'18 2642.00 2650.00
Currency Futures
24154
24165
24175
24186
2627.70
2630.40
2628.30
2630.60
S&P 500 Index (CME)-$250 x index
–130 148,718
–128
4,981
–9.90
–9.80
70,175
6,233
Contract
High hilo
Low
Open
.8895
.8942
.8903
.8950
.8864
.8912
.8885
.8932
.0001 217,068
.0001 16,057
Dec
March'18
.7886
.7896
.7923
.7931
.7873
.7883
.7876
.7886
… 137,196
…
6,618
Dec
March'18
1.3484
1.3524
1.3484
1.3527
1.3375
1.3422
1.3446 –.0029 184,718
1.3491 –.0028 16,293
Dec
March'18
1.0164
1.0238
1.0174
1.0246
1.0121
1.0196
1.0126 –.0027
1.0200 –.0027
Canadian Dollar (CME)-CAD 100,000; $ per CAD
–4.25
1,218
–2.50 290,839
British Pound (CME)-£62,500; $ per £
–5.75
194
–2.50 203,414
Swiss Franc (CME)-CHF 125,000; $ per CHF
122
43,470
78,187
1,757
Chg
Open
interest
Mini S&P 500 (CME)-$50 x index
Dec
2636.00 2648.75
2627.25 2628.25
March'18 2638.50 2650.75
2630.00 2630.50
Mini S&P Midcap 400 (CME)-$100 x index
Dec
1891.90 1900.60
1877.10 1879.00
March'18 1900.40 1901.80
1881.50 1883.10
Mini Nasdaq 100 (CME)-$20 x index
Dec
6255.5
6339.8
6231.8
6271.8
March'18 6275.0 6358.0
6250.0
6290.3
Mini Russell 2000 (ICE-US)-$100 x index
Dec
1534.00 1539.50
1515.40 1516.70
March'18 1539.50 1540.50
1518.00 1519.40
Mini Russell 1000 (ICE-US)-$100 x index
Dec
1465.20 1467.70
1456.20 1456.70
U.S. Dollar Index (ICE-US)-$1,000 x index
93.02
93.45
93.00
93.33
Dec
March'18
92.72
93.10
92.70
93.00
–10.00 3,230,754
–10.00 258,414
–15.50
–13.70
93,389
37
6.5 309,979
6.8
5,076
–14.40
–14.30
67,764
377
–5.50
365
.19
.15
35,307
9,617
Source: SIX Financial Information
Tracking Bond Benchmarks
Return on investment and spreads over Treasurys and/or yields paid to investors compared with 52-week
highs and lows for different types of bonds
Total
return
close
YTD total
return (%)
Index
Yield (%)
Latest Low High
Total
return
close
2.700 2.380 2.790
1987.35
2.4
Mortgage-Backed
1954.47
1.8
Ginnie Mae (GNMA) 2.860 2.630 3.090
Broad Market Bloomberg Barclays
3.4
1944.17
6.1
3.240 3.030 3.520
1165.50
2.5
Fannie mae (FNMA) 2.930 2.670 3.120
Intermediate
2.860 2.530 3.010
1794.99
2.6
Freddie Mac (FHLMC) 2.950 2.680 3.130
11.3 Long term
4.040 4.040 4.710
521.78
4.6 Muni Master
2.145 1.736 2.419
4.4 Double-A-rated
2.690 2.470 2.870
365.00
5.1 7-12 year
2.173 1.744 2.516
3.8
3914.96
568.76
6.7
3.540 3.340 3.870
Triple-B-rated
High Yield Bonds Merrill Lynch
7.3
417.08
9.0
419.12
2.910 2.660 3.120
U.S. Corporate
2617.94
721.36
Yield (%)
Latest Low High
Index
Mortgage-Backed Bloomberg Barclays
U.S. Aggregate
U.S. Corporate Indexes Bloomberg Barclays
2792.73
YTD total
return (%)
High Yield Constrained 5.734 5.373 6.413
411.47
6.7
12-22 year
2.443 2.213 2.923
398.87
7.5
22-plus year
2.820 2.770 3.508
Global Government J.P. Morgan†
Triple-C-rated
10.602 9.584 12.003
545.61
1.6
Global Government 1.400 1.300 1.560
2860.04
6.6
High Yield 100
5.510 4.948 5.890
758.85
0.7
Canada
1.980 1.570 2.190
378.59
7.5
Global High Yield Constrained 5.190 4.934 6.078
374.93
1.6
EMU§
0.979 0.933 1.363
306.73
6.9
Europe High Yield Constrained 2.342 1.897 3.723
718.99
1.8
France
0.720 0.690 1.210
-0.5
Germany
0.390 0.210 0.620
-0.1
Japan
0.420 0.310 0.460
-0.1
Netherlands
0.500 0.360 0.760
U.K.
1.580 1.340 1.790
511.85
1638.62
2.1
U.S Agency
2.150 1.690 2.150
287.93
1462.58
1.1
10-20 years
2.020 1.490 2.020
565.96
20-plus years
2.900 2.730 3.460
922.31
2.930 2.610 3.090
804.78
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Dec
March'18
Settle
Bonds | WSJ.com/bonds
U.S Agency Bloomberg Barclays
Japanese Yen (CME)-¥12,500,000; $ per 100¥
6,613
3,373
Settle
Mexican Peso (CME)-MXN 500,000; $ per MXN
1,266
114,463
154-060 154-280
153-250 154-260
22.0 36,385
Dec
March'18 153-030 153-260
152-210 153-230
22.0 749,330
Treasury Notes (CBT)-$100,000; pts 32nds of 100%
Dec
124-170 124-205
124-115 124-190
3.0 123,810
March'18 124-090 124-125
124-025 124-110
3.0 3,167,093
5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
116-175 116-185
116-132 116-160
–1.0 135,588
Dec
March'18 116-097 116-112
116-052 116-085
–1.0 2,980,049
2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
Dec
107-105 107-107
107-090 107-097
–1.0 55,573
March'18 107-050 107-052
107-030 107-037
–1.2 1,702,764
30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg.
98.710
98.710
98.708
98.708 –.002 120,396
Dec
Jan'18
98.600
98.605
t 98.600
98.605
… 352,250
10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
Dec
100.625 100.859
100.438 100.828
.188 27,060
March'18 97.906 98.328
t 97.891
98.281
.188
164
1 Month Libor (CME)-$3,000,000; pts of 100%
Dec
98.5225 98.5350
98.5200 98.5175 –.0125
2,462
Jan'18
98.5000 98.5000
t 98.5000 98.5025
…
2,033
Eurodollar (CME)-$1,000,000; pts of 100%
Dec
98.4375 98.4400
98.4250 98.4275 –.0125 1,632,493
March'18 98.2500 98.2500
98.2300 98.2400 –.0100 1,566,543
June
98.1000 98.1000
98.0750 98.0850 –.0150 1,338,745
Dec
97.9150 97.9200
97.8950 97.9050 –.0050 1,573,388
Corn (CBT)-5,000 bu.; cents per bu.
.7653
.7652
.7649
.7650
.7644
Dec
March'18
Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
380,964
154,419
213,615
137,155
117,807
86,026
.7600
.7600
.7600
.7598
.7635
Dec
Jan'18
Feb
March
June
107
132,489
Interest Rate Futures
Agriculture Futures
–5.00
–2.75
151.100
148.775
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft.
98
33,415
684
15.00
14.50
150.525
148.200
Hogs-Lean (CME)-40,000 lbs.; cents per lb.
6,735
365,093
26,512
37,821
10,381
13,664
–2.25
–2.50
Jan
March
Cattle-Live (CME)-40,000 lbs.; cents per lb.
4,650
163,131
Contract
High hilo
Low
Open
Australian Dollar (CME)-AUD 100,000; $ per AUD
Cattle-Feeder (CME)-50,000 lbs.; cents per lb.
Metal & Petroleum Futures
Dec
339.75
343.00
338.50
339.75
March'18 353.50 357.00
352.75
353.75
Oats (CBT)-5,000 bu.; cents per bu.
Dec
240.00
240.00
238.75
239.00
March'18 257.50 258.00
251.25
254.50
Soybeans (CBT)-5,000 bu.; cents per bu.
Jan
998.50 1015.00
997.50 1008.50
March
1010.00 1027.00
1009.25 1020.50
Soybean Meal (CBT)-100 tons; $ per ton.
Dec
335.00
342.70
334.10
341.30
Jan'18
337.50
345.40
336.10
343.30
Soybean Oil (CBT)-60,000 lbs.; cents per lb.
Dec
33.34
33.44
33.25
33.41
Jan'18
33.54
33.59
33.24
33.50
Rough Rice (CBT)-2,000 cwt.; $ per cwt.
Jan
1220.00 1236.00
1217.50 1233.00
March
1252.50 1264.50
1248.00 1262.00
Wheat (CBT)-5,000 bu.; cents per bu.
Dec
410.25
411.00
405.75
406.00
March'18 434.25 436.25
431.00
432.75
Wheat (KC)-5,000 bu.; cents per bu.
Dec
418.50
418.50
413.75
414.25
March'18 433.50 435.50
430.00
431.50
Wheat (MPLS)-5,000 bu.; cents per bu.
Dec
609.50
612.00
609.00
609.00
March'18 629.00 631.00
625.25
626.25
Settle
ly
.
Futures Contracts
8.5
3393.69
5.0 Yankee
2463.02
1.0
8.9
Emerging Markets ** 5.545 5.279 6.221
*Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds
** EMBI Global Index
† In local currency § Euro-zone bonds
Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan
Global Government Bonds: Mapping Yields
Cash Prices | WSJ.com/commodities
Tuesday, December 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
Energy
0.9854
1.0383
2.860
2.850
2.970
2.500
2.720
2.330
2.780
59.850
12.100
Propane,tet,Mont Belvieu-g
Butane,normal,Mont Belvieu-g
NaturalGas,HenryHub-i
NaturalGas,TranscoZone3-i
NaturalGas,TranscoZone6NY-i
NaturalGas,PanhandleEast-i
NaturalGas,Opal-i
NaturalGas,MarcellusNE PA-i
NaturalGas,HaynesvilleN.LA-i
Coal,C.Aplc.,12500Btu,1.2SO2-r,w
Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w
Metals
Tuesday
16.2850
12090
(U.S.$ equivalent)
Coins,wholesale $1,000 face-a
Other metals
LBMA Platinum Price PM
*928.0
Platinum,Engelhard industrial
921.0
Platinum,Engelhard fabricated
1021.0
Palladium,Engelhard industrial
997.0
Palladium,Engelhard fabricated
1097.0
Aluminum, LME, $ per metric ton
*2052.5
Copper,Comex spot
2.9205
Iron Ore, 62% Fe CFR China-s
70.8
Shredded Scrap, US Midwest-s,w
276
Steel, HRC USA, FOB Midwest Mill-s
630
Fibers and Textiles
1272.31
1367.73
1266.30
1405.93
*1279.10
*1273.45
1313.00
1325.63
1325.63
1530.20
1240.50
1325.63
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA Gold Price AM
LBMA Gold Price PM
Krugerrand,wholesale-e
Maple Leaf-e
American Eagle-e
Mexican peso-e
Austria crown-e
Austria phil-e
Silver, troy oz.
16.2000
19.4400
16.0650
20.0810
£12.1400
0.6125
0.7176
*83.65
72.500
n.a.
Grains and Feeds
Barley,top-quality Mnpls-u
Bran,wheat middlings, KC-u
Corn,No. 2 yellow,Cent IL-bp,u
Corn gluten feed,Midwest-u,w
Corn gluten meal,Midwest-u,w
Cottonseed meal-u,w
Hominy feed,Cent IL-u,w
Meat-bonemeal,50% pro Mnpls-u,w
Oats,No.2 milling,Mnpls-u
Rice, 5% Broken White, Thailand-l,w
Rice, Long Grain Milled, No. 2 AR-u,w
Sorghum,(Milo) No.2 Gulf-u
no
Engelhard industrial
Engelhard fabricated
Handy & Harman base
Handy & Harman fabricated
LBMA spot price
Burlap,10-oz,40-inch NY yd-n,w
Cotton,1 1/16 std lw-mdMphs-u
Cotlook 'A' Index-t
Hides,hvy native steers piece fob-u
Wool,64s,staple,Terr del-u,w
4.85
103
3.2150
96.3
476.4
233
88
213
2.7200
392.00
25.00
7.5400
n-
Gold, per troy oz
Tuesday
338.30
9.7300
7.4875
4.3600
3.9450
5.2138
SoybeanMeal,Cent IL,rail,ton48%-u
Soybeans,No.1 yllw IL-bp,u
Wheat,Spring14%-pro Mnpls-u
Wheat,No.2 soft red,St.Louis-bp,u
Wheat - Hard - KC (USDA) $ per bu-u
Wheat,No.1soft white,Portld,OR-u
Food
189.52
168.12
0.8590
2.2000
156.25
151.25
71.25
n.a.
1.2589
1.4657
1.7650
15.85
0.72
64.30
1.5218
0.8546
n.a.
165.75
Fats and Oils
34.7500
n.a.
0.3800
0.3250
0.2650
0.3300
KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; H=Hurley Brokerage; I=Natural Gas Intelligence;
L=livericeindex.com; M=midday; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=Platts-TSI; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. *Data
as of 12/4
Source: WSJ Market Data Group
Borrowing Benchmarks | WSJ.com/bonds
Money Rates
December 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.
Week
Latest ago
Inflation
Oct. index
level
Chg From (%)
Sept. '17 Oct. '16
U.S. consumer price index
246.663
253.638
All items
Core
–0.06
0.28
2.0
1.8
Week
ago
1.180 1.170 1.300 0.340
1.290 1.285 1.290 0.490
1.450 1.435 1.450 0.590
4 weeks
13 weeks
26 weeks
Fannie Mae
52-Week
High
Low
Prime rates
U.S.
Canada
Japan
Treasury bill auction
Secondary market
International rates
Latest
30 days
60 days
4.25 4.25 4.25 3.50
3.20 3.20 3.20 2.70
1.475 1.475 1.475 1.475
0.00
0.50
0.50
1.50
0.00
0.50
0.50
1.50
0.00
0.50
0.50
1.50
0.00
0.50
0.25
1.50
Other short-term rates
1.20
1.05
1.38
0.24
Six month
One year
—52-WEEK—
High Low
1.71125 1.65738 1.71125 1.29322
1.98950 1.93798 1.98950 1.64456
Euro Libor
One month
Three month
Six month
One year
-0.403
-0.380
-0.315
-0.258
-0.402
-0.382
-0.317
-0.249
-0.376
-0.329
-0.220
-0.083
-0.405
-0.383
-0.322
-0.258
One month
Three month
Six month
One year
52-Week
high
low
-0.367
-0.326
-0.271
-0.191
Latest
-0.371
-0.329
-0.274
-0.186
Value
Traded
-0.366
-0.313
-0.216
-0.078
-0.375
-0.332
-0.276
-0.192
52-Week
High
Low
DTCC GCF Repo Index
3.00
3.00
3.00
2.25
Treasury
MBS
1.43
1.35
1.43
0.69
Libor
1.40319 1.34978 1.40319 0.64889
1.51532 1.47882 1.51532 0.95083
1.170 31.580 1.366 0.264
1.148 106.150 1.506 0.284
Open Implied
Settle Change Interest Rate
Commercial paper (AA financial)
One month
Three month
U.S. government rates
Week
ago
Call money
90 days
Overnight repurchase
U.S.
3.485 3.448 3.865 3.253
3.506 3.468 3.899 3.281
Latest
Week
Latest ago
Euro interbank offered rate (Euribor)
30-year mortgage yields
Policy Rates
Euro zone
Switzerland
Britain
Australia
—52-WEEK—
High Low
DTCC GCF Repo Index Futures
Treasury Dec
Treasury Jan
Treasury Feb
98.665 unch. 2488 1.335
98.565 0.005 1284 1.435
98.560 0.005 577 1.440
1.75
1.75
1.00
Federal funds
Effective rate
High
Low
Bid
Offer
1.1700
1.3125
1.0500
1.1600
1.1700
1.1700
1.3125
1.0500
1.1600
1.1700
1.2000
1.3125
1.1600
1.1700
1.1900
0.4200
0.5625
0.2500
0.4000
0.4200
1.750
U.S. 2
Yield (%)
Latest(l) 0 20 40 60 80 100 120 Previous
1.827 s
10 2.354 t
2.250
Month ago
Year ago
1.613
1.124
l
1.810
l
2.372
2.334
2.399
2.750
Australia 2
1.845 s
l
1.787
1.779
1.787
2.750
10
2.608 s
l
2.554
2.581
2.806
0.000
France 2 -0.588
l
-0.588
-0.591
0.750
10
0.627 t
l
0.652
0.617
Germany 2 -0.719 t
l
-0.703
-0.754
0.320 t
l
0.347
0.365
0.334
Italy 2 -0.325 t
l
-0.311
-0.211
0.065
1.710 t
l
1.716
1.794
Japan 2 -0.135 s
l
-0.148
-0.161
0.045 s
l
0.039
0.053
Spain 2 -0.370 t
l
-0.364
-0.363
-0.128
10
0.500
0.050
10
2.050
0.100
10
0.100
2.750
Spread Under/Over U.S. Treasurys, in basis points
Latest
Prev
Year ago
1.9
25.4
-0.644 -241.4
0.789
-172.7
-0.703 -254.6
-2.3
66.3
18.2
40.7
-239.8
-176.8
-172.0
-161.0
-251.4
-182.7
-203.3
-202.6
-206.4
-215.1
-212.1
-105.9
2.001
-64.4
-65.6
-39.8
-0.185
-196.1
-195.8
-130.9
-233.4
-236.8
-219.7
-217.4
-125.2
-94.2
-96.0
-82.2
-130.5
-102.0
-108.5
-112.6
0.030 -230.8
1.450
10
1.412 s
l
1.412
1.470
1.576
1.750
U.K. 2
0.491 t
l
0.506
0.448
0.104
4.250
10
1.258 t
l
1.288
1.267
1.273
-133.6
-109.6
Source: Tullett Prebon
Corporate Debt
in that same company’s share price.
Investment-grade spreads that tightened the most…
Issuer
Symbol Coupon (%)
21St Century Fox America
FOXA
4.750
Nov. 15, ’46
119
Macy's Retail Holdings
M
4.375
Sept. 1, ’23
235
Assured Guaranty US Holdings AGO
7.000
June 1, ’34
196
Aetna
AET
3.875
Aug. 15, ’47
CVS Health
CVS
3.875
Toyota Motor Credit
TOYOTA
1.950
Omega Healthcare Investors OHI
4.750
Jan. 15, ’28
237
Archer Daniels Midland
2.500
Aug. 11, ’26
70
ADM
Maturity
Current
Spread*, in basis points
One-day change
Last week
Stock Performance
Close ($)
% chg
156
32.99
283
…
…
–15
n.a.
…
…
133
–14
134
178.69
...
July 20, ’25
111
–14
112
71.01
...
April 17, ’20
11
–14
28
...
...
–10
245
26.78
...
–8
n.a.
40.84
–0.87
–42
–29
–0.30
…And spreads that widened the most
Allergan Funding SCS
AGN
4.850
June 15, ’44
174
13
n.a.
…
General Electric
GE
5.000
Jan. 21, ’49
127
13
87
17.76
–1.06
American Tower
AMT
5.000
Feb. 15, ’24
91
11
n.a.
140.76
0.09
Anadarko Finance
APC
7.500
May 1, ’31
222
10
n.a.
…
Bank of New York Mellon
BK
2.600
Aug. 17, ’20
30
8
33
54.43
–0.98
Boeing
BA
1.650
Oct. 30, ’20
16
7
20
275.54
–0.87
Equifax
EFX
6.900
July 1, ’28
210
7
217
114.39
0.87
Williams
WMB
3.700
Jan. 15, ’23
154
7
n.a.
29.07
0.07
…
…
High-yield issues with the biggest price increases…
Issuer
Symbol
Windstream Services
EP Energy
Bond Price as % of face value
Current
One-day change
Coupon (%)
Maturity
WIN
7.500
April 1, ’23
70.250
EPENEG
9.375
May 1, ’20
78.000
Altice Luxembourg S.A.
ATCNA
7.750
May 15, ’22
97.250
SFR S.A.
SFRFP
6.250
May 15, ’24
100.125
Wynn Las Vegas
WYNNLV
5.500 March 1, ’25
5.375
May 1, ’47
Genesys Telecommunications Laboratories GENLAB 10.000
Nov. 30, ’24
111.780
7.500
May 15, ’26
104.505
Charter Communications Operating CHTR
Altice Financing S.A.
ALTICE
1.50
Last week
Stock Performance
Close ($)
% chg
68.500
2.05
74.250
...
...
1.00
98.233
...
...
1.00
99.500
...
...
104.375
0.94
103.563
...
...
103.420
0.91
n.a.
…
…
0.78
112.613
...
...
0.76
105.500
...
...
1.25
–9.29
…And with the biggest price decreases
Frontier North
FTR
6.730
Feb. 15, ’28
Diamond Offshore Drilling
DO
4.875
Nov. 1, ’43
85.500 –2.25
73.000
86.000
–2.00
n.a.
…
16.70
…
0.36
12.500
April 1, ’22
87.000
–1.50
89.500
...
Plains All American Pipeline
PAA
3.600
Nov. 1, ’24
95.832
–1.42
97.582
19.75
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.
Telecom Italia Capital
TITIM
7.721
June 4, ’38
128.750
Cleveland–Cliffs
CLF
5.750 March 1, ’25
96.500
–1.00
First Quantum Minerals
FMCN
7.250
April 1, ’23
105.063
–1.00
IHS Markit
INFO
4.750
Feb. 15, ’25
105.730
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information;
Tullett Prebon Information, Ltd.
*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
Discount
1.75
Country/
Coupon (%) Maturity, in years
0.000
Beef,carcass equiv. index
choice 1-3,600-900 lbs.-u
select 1-3,600-900 lbs.-u
Broilers, National comp wghtd-u,w
Butter,AA Chicago
Cheddar cheese,bbl,Chicago
Cheddar cheese,blk,Chicago
Milk,Nonfat dry,Chicago lb.
Cocoa,Ivory Coast-w
Coffee,Brazilian,Comp
Coffee,Colombian, NY
Eggs,large white,Chicago-u
Flour,hard winter KC
Hams,17-20 lbs,Mid-US fob-u
Hogs,Iowa-So. Minnesota-u
Pork bellies,12-14 lb MidUS-u
Pork loins,13-19 lb MidUS-u
Steers,Tex.-Okla. Choice-u
Steers,feeder,Okla. City-u,w
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
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
Notes on data:
Intelsat Connect Finance S.A. INTEL
–1.25
–0.77
129.290
...
97.500
6.05
n.a.
106.000
...
44.67
...
–2.23
...
–10.37
...
0.52
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B14 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
* ***
BANKING & FINANCE
Senate Panel Backs Easing Bank Rule
Bill would raise
threshold for greater
Fed oversight to
$250 billion in assets
BY ANDREW ACKERMAN
WASHINGTON—A Senate
panel Tuesday approved a
plan to ease the rule book for
regional banks, advancing the
most significant bipartisan
rollback of financial regulations since postcrisis rules
were put in place.
The Senate Banking Committee voted 16-7 to sign off
on the bill, after a group of
Republicans and Democrats
reached an agreement on its
provisions in November.
If enacted, the bill could
drastically cut the number of
banks subject to heightened
Federal Reserve oversight by
raising a regulatory threshold
to $250 billion in assets from
$50 billion. It also would ease
red tape affecting credit
unions and community banks,
changes that supporters said
would boost lending.
The measure will “help tailor the current regulatory
landscape” by “relieving the
burden on American busi-
nesses that are unfairly being
treated like the largest companies in our economy,” Senate
Banking Committee Chairman
Mike Crapo (R., Idaho) said
ahead of the vote.
The bill is expected to advance through the full Senate
in early 2018.
The House also needs to act
on the plan for it to have a
chance at becoming law. Congressional staff said the House
would likely make some
changes to the bill and send it
back to the Senate. Lawmakers
are unlikely to reconcile the
Senate bill with a broader plan
to undo the 2010 Dodd-Frank
financial law that passed the
House earlier this year, called
the Financial Choice Act.
Though members of the
banking panel submitted more
than 100 different amendments to the legislation, all of
the changes the committee
agreed to appeared modest
and intended to stick to the
spirit of the bipartisan deal
hammered out between Mr.
Crapo and a group of moderate Democrats.
Liberal Democrats who opposed the measure said it
doesn’t do enough to aid consumers and could put the
broader economy at risk. “If
we learned anything from the
financial crisis, it is that deregulation of the banks
doesn’t create economic
growth, instead it puts millions of Americans at risk,”
said Sen. Sherrod Brown (D.,
Ohio), the panel’s senior Democrat.
One set of changes, included as an amendment from
Mr. Crapo, would fix drafting
errors in the initial bill, such
as clarifying that an exemption to the Volcker rule—
which bars banks from making
wagers with their own
money—applies only to financial institutions with less than
$10 billion in total assets. An
earlier version of the legislation could have exempted
much larger institutions from
the rule.
Other changes targeted
credit-monitoring bureaus.
One, written by Sen. David
Perdue (R., Ga.), would require
such companies to offer consumers an unlimited number
of free credit freezes and unfreezes, up from a requirement
that they only offer one free
freeze or unfreeze a year in an
earlier draft. The measure is a
response to the data breach
reported earlier this year by
Equifax Inc.
UBS Loses
Team of
Brokers to
Advisory
AmEx, JPMorgan to Keep Marriott Cards
BY ANNAMARIA ANDRIOTIS
JPMorgan Chase & Co. and
American Express Co. will remain credit-card issuers for
the Marriott International
Inc. rewards program, the hotel chain said Tuesday.
The longstanding U.S. partnership, in which JPMorgan issues Marriott credit cards and
American Express issues Starwood Hotels & Resorts credit
cards, was in question after
Marriott purchased Starwood
last year and began negotiations with the issuers.
One possibility in the process was merging the rewards
programs down to a single is-
suer, which would have pushed
all of the roughly $60 billion
spent on the hotel chain’s
credit cards in 2016 to one
lender.
Maintaining the status quo
is a win for AmEx in particular; the Starwood program is
the card issuer’s second-largest co-brand program, following Delta Air Lines Inc.
Some AmEx investors were
nervous about the prospect of
AmEx losing this relationship
just as the company is showing
signs of rebounding from the
loss of the Costco Wholesale
Corp. partnership that was
taken over by Citigroup Inc.
and Visa Inc. in 2016.
Starwood accounted for 5%
of AmEx’s world-wide loans
and 2% of its billings in the
second half of 2016, according
to AmEx data. The Starwood
program also is estimated to
account for about 4% to 5% of
AmEx’s earnings, said Mark
DeVries, a Barclays PLC analyst.
“The uncertainty had been
an overhang on [AmEx]
shares,” Mr. DeVries wrote in a
note Tuesday. “But the announcement today resolves
that uncertainty and effectively takes the worst case scenario off the table for” AmEx.
Holding onto the account
also helps departing AmEx
FINANCE WATCH
ICE Chief Says NYSE
Is Wary on Currency
BY EMILY GLAZER
AND RACHEL LOUISE ENSIGN
EDDIE SEAL/BLOOMBERG NEWS
The owner of the New York
Stock Exchange is taking a waitand-see approach to bitcoin,
even as two of his main competitors prepare for the launch
of futures markets based on the
fast-rising cryptocurrency.
“We may be stupid for not
being first on that,” Intercontinental Exchange Inc. Chairman
and Chief Executive Jeffrey
Sprecher told a financial conference in New York Tuesday.
But Mr. Sprecher voiced
doubts about the wisdom of being the first U.S. exchange to offer bitcoin futures. Chicagobased Cboe Global Markets Inc.
is set to start trading bitcoin futures on Sunday, while CME
Group Inc. is following a week
later.
Futures contracts could shake
up the bitcoin market by providing an easy way to “short” the
digital currency, to bet that its
price will fall.
Mr. Sprecher said the bitcoin
market is dominated by buyers,
not sellers, and it was unclear
who would short bitcoin when
given the chance. Bitcoin sellers,
including “algorithmic guys,”
could seize upon the launch of
futures to exit big bitcoin positions, the ICE CEO said.
That could lead to blowback
against futures exchanges, he
added. “I look at that and just
say, is that going to work out
well for me as a venue?” Mr.
Sprecher said.
Investors are looking ahead to weekly crude production data due out Wednesday.
Mr. Sprecher also suggested
that the underlying exchanges
where bitcoin is traded are “not
particularly transparent” and
that it was premature to use
them as the basis for a new futures contract.
—Alexander Osipovich
ENERGY
Crude Prices Rise
Before Supply Data
Oil prices settled higher Tuesday as traders and investors
took a break from selling and
turned their focus from OPEC’s
output deal to supply and demand.
U.S. crude futures gained 15
Chief Executive Kenneth
Chenault to leave on a relatively strong note and removes
a large potential problem for
Stephen Squeri, who takes
over as AmEx chief in February.
Travel co-brand programs
have lost some of their cachet
with consumers in recent
years as banks have rolled out
more generous rewards on
general-purpose credit cards.
Consumers can use those
cards to redeem points for a
variety of rewards and travel
expenses as opposed to limiting them to certain hotel
chains or airlines.
The programs have also be-
cents, or 0.3%, to $57.62 a barrel
on the New York Mercantile Exchange. Brent, the global benchmark, rose 41 cents, or 0.7%, at
$62.86 a barrel on ICE Futures
Europe.
Investors and analysts are
looking ahead to weekly U.S.
production data from the Energy
Information Administration, due
Wednesday. Analysts and traders surveyed by The Wall Street
Journal forecast that crude inventories fell 2.4 million barrels
last week—a sign that the oil
glut that has weighed on the
market is shrinking. The increase
came a day after both benchmarks tumbled as speculative investors liquidated bullish positions.
—Alison Sider
come costlier for lenders to
win. Hotels and airlines have
gained more leverage over
card issuers in negotiations in
recent years following consolidations in those sectors. In a
presentation earlier this year,
Stephanie Linnartz, Marriott’s
global chief commercial officer, said that there would be
“upside at contract renewals”
for the hotel chain.
Marriott said in its announcement Tuesday that it
expects to introduce new cobrand cards starting in 2018
with improved benefits aimed
at a mix of spenders, including
affluent and small-business
customers.
Banks Say Trading
Is Taking Another Hit
no
BITCOIN
BRENDAN MCDERMID/REUTERS
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
The hotelier’s longstanding U.S. credit-card partnership was in question after the chain purchased Starwood last year and began negotiations with the issuers.
n-
A team of brokers managing about $228 million in client assets has left UBS Group
AG for the independent ranks
just ahead of the firm’s exit
from a recruiting pact that
will make it more onerous for
defections.
Veteran financial advisers
Jason Bratt and David Nanson
and client service associate
Ashley Colvin left UBS to join
True Private Wealth Advisors,
a registered investment adviser in Salem, Ore., the parties said Tuesday.
The addition of the UBS
team brings True Private
Wealth Advisors’ client assets
to about $900 million, about
three times the total when the
firm was launched by a group
of former Merrill Lynch advisers in 2012.
The firm is part of Dynasty
Financial Partners network,
which helps advisers break
away from brokerage firms
and offers support services
such as payroll management
and technology.
Changes to a longstanding
recruitment pact have contributed to some brokers’ decisions to jump to independent
firms.
Shirl Penney, Dynasty’s
chief executive, said the moves
by Messrs. Bratt and Nanson
and Ms. Colvin were in the
works before UBS last week
said that it would leave the
Protocol for Broker Recruiting,
but the planned exit “cemented the decision on when
they would go.”
The recruitment pact, designed to reduce legal costs
tied to broker moves, has
made it easier for advisers to
change firms and take their
clients with them.
ly
.
BY LISA BEILFUSS
MASTERCARD
Another $4 Billion
In Buybacks Cleared
Mastercard Inc.’s board approved a $4 billion share-repurchase plan, the company said, to
take effect after its current $4
billion buyback is finished.
The global payments company said the current program
has $1.5 billion remaining. Mastercard’s board also declared a
quarterly cash dividend of 25
cents a share, a 14% increase
from the previous 22 cents a
share. It will be paid on Feb. 9 to
shareholders of record of its
class A common stock and class
B common stock as of Jan. 9.
Bank executives are flagging another tough quarter for
trading as quiet markets again
hurt a key Wall Street business.
Bank of America Corp.
Chief Executive Brian Moynihan said at a banking conference in New York on Tuesday
that trading revenue is likely
to fall about 15% in the fourth
quarter compared with the
year-earlier period.
At the conference, JPMorgan Chase & Co. finance chief
Marianne Lake also said trading revenue is expected to fall
15% in the quarter.
Ms. Lake said there are “not
many catalysts,” and volatility
remains “low across the spectrum.” Her remarks encapsulate what has been a tough
year for banks. Trading revenue has consistently declined
versus the prior-year period,
with the biggest falloff mostly
occurring in fixed income,
commodities and currencies.
Trading revenue has dipped
4.4% for the five large banks
with major investment banking operations as a group in
the first three quarters of the
year compared with the yearearlier period.
That is largely because volatility remains near lows, despite the constant drumbeat of
political and geopolitical developments that typically
would spur market activity.
One big drag on volatility:
Although the Federal Reserve
has been raising short-term
interest rates, longer-term
rates continue at superlow
levels in many countries, including the U.S., and inflation
continues to remain subdued.
Against that backdrop, and
without specific catalysts in
sight that might produce big
changes in rates, many investors are sitting on their hands.
Bank of America and
JPMorgan expect
quarterly trading
revenue to drop 15%.
To be sure, JPMorgan has
still had relatively good performance in fixed income, currencies and commodities. Ms.
Lake said she is “very, very
confident” the bank will maintain its market share.
She added that the bank is
making progress steadily on
the equities side of the trading
business, pointing to growth
in prime and cash equities,
among other areas.
Mr. Moynihan said that investment banking was strong
in the quarter and that fees in
the segment were on track to
rise “midsingle digits” in the
quarter from the year earlier.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | B15
* * * *
MARKETS
Tech Could Hold Clues for Market
BY BEN EISEN
Treasury prices strengthened after a broad gauge of
U.S. economic activity fell below expectations.
The yield on the 10-year
Treasury note settled at
2.356% Tuesday, compared
with 2.379% on Monday.
Yields, which fall when
bond prices rise, wavered and
eventually fell after the Institute for Supply Management
said its nonmanCREDIT
ufacturing index
MARKETS was 57.4 in November, down
from 60.1 in October and below the 59.0 reading anticipated by economists
surveyed by The Wall Street
Journal. A reading above 50
indicates activity is expanding
across service and other industries, while a number below 50 signals contraction.
Treasurys
tend
to
strengthen on disappointing
economic data as faster economic growth can spur inflation, which chips away at the
fixed returns of government
bonds. Analysts also attributed the decline in yields to
reports that House Republicans were delaying a vote on
a short-term spending bill
and a modest shift away from
riskier assets, with the Dow
Jones Industrial Average pulling back 109 points a day after it closed at another record.
Bond investors, meanwhile,
remained cautious about the
potential impact of the tax
cuts. Last week, the yield on
the 10-year note climbed
briefly once it looked like Senate Republicans had enough
votes to pass a bill.
For months, analysts have
generally expected that progress on tax cuts would lead to
higher bond yields, in part because legislation that expands
the federal budget deficit
would force the government to
issue more debt, which could
weigh on the prices of existing
bonds. Tax cuts could also
spur some economic growth
and inflation, delivering another blow to Treasurys.
So far, though, there have
been few signs that Treasurys
are poised for a big selloff. After topping 2.4% on Thursday,
the 10-year yield fell below
that threshold Friday and has
since remained fairly steady.
The yield, in fact, has
barely changed over the past
two months even as yields on
shorter-term bond yields have
moved steadily higher, a reflection, investors and analyst
say, of expectations that inflation will stay muted while the
Federal Reserve nudges up interest rates.
Investors are looking to
technology stocks as a sign of
where the market is headed
next.
The S&P 500 tech sector rebounded 0.2% Tuesday, making it the only grouping in the
index to rise on Tuesday as
the
broader
benchmark
dropped 0.4%.
The year’s best-performing
stock category had been the
worst in recent days.
The S&P 500 tech sector
dropped 1.9% in the previous
session.
Over the five days through
Monday, the tech-heavy Nasdaq Composite Index had
lagged behind the S&P 500 by
2.95 percentage points, which
is the most for any five-day
stretch since 2009, according
to Bespoke Investment Group.
Underperformance by techfocused indexes has in the
past been a leading indicator
for the market.
The Nasdaq 100, for example, “has tended to lead upside
and downside in the market
over the years,” said Michael
Oliver of Momentum Structural Analysis, in a research
note.
He pointed to underperformance at the end of 2015 and
beginning of 2016, when
stocks tumbled.
Underperformance in the technology sector in the past has been a leading indicator for the broader stock market.
Of course, the stock market
could continue to rise in the
absence of a boost from tech
stocks.
There is a lot of optimism
among investors about a taxcode overhaul that is making
its way through Congress,
which could reduce the corporate income-tax rate to as low
as 20%.
The companies poised for a
large profit boost from the
bill, such as those in the financial and telecommunications
sectors, have been rallying in
recent days, and may continue
to help the market.
Plus, analysts say that investors have been selling tech
stocks in part because they
are using the cash to invest in
cheaper cyclical stocks that
benefit from accelerating eco-
nomic growth.
But weakness in the tech
sector, which makes up more
than one-fifth of the S&P 500,
is already weighing on the
broader market.
The S&P had climbed as
much as 0.9% in Monday
morning trade as investors
bought stocks on optimism
over tax reform.
But the index pared all of
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY SAM GOLDFARB
BALINT PORNECZI/BLOOMBERG NEWS
Top sector of 2017
will remain key if
stocks are to continue
their climb into 2018
Stocks Retreat on Caution Over Tax Plan
BY MICHAEL WURSTHORN
AND DAVID HODARI
Stocks pulled back Tuesday, but they have had a remarkable run this year.
Percentage of stocks in the Dow Jones Industrial Average that
are trading above their 200-day moving average
100%
80
60
40
Tuesday
93.3%
20
0
2014
’15
’16
the political environment,”
said Mike Allison, a portfolio
manager with Eaton Vance.
Mr. Allison added that volatility has picked up among the
underlying sectors, giving investors some buying opportunities.
Most of the S&P 500’s sectors declined Tuesday, with
the exception of technology.
’17
THE WALL STREET JOURNAL.
Source: FactSet
no
n-
U.S. stocks pulled back
broadly, even as shares of
technology companies rose following losses in recent sessions.
Investors were cautious as
Republicans were set to try to
reconcile the
TUESDAY’S Senate’s verMARKETS
sion of the tax
bill with the
House’s, a task
lawmakers hope to complete
by Christmas. The end of the
third-quarter earnings season,
along with few new developments on the legislative front,
has left money managers with
little else to act on, some analysts and investors said.
The S&P 500 declined 9.87
points, or 0.4%, to 2629.57,
while the Dow Jones Industrial
Average shed 109.41 points, or
0.5%, to 24180.64. The techheavy Nasdaq Composite
slipped 13.15 points, or 0.2%, to
6762.21. The S&P 500 and Nasdaq Composite have fallen for
three consecutive sessions.
“The market feels directionless with the uncertainty in
Above Average
The declines were steepest
among telecommunications
companies, off 1.8%, and utilities, down 1.2%.
Shares of financial firms in
the S&P 500 fell alongside the
yield on the 10-year Treasury
note. Declines in long-term
rates tend to crimp lenders’
profits.
Consumer-discretionary
stocks in the S&P 500 fell after
12 consecutive sessions of
gains. Analysts partly attributed the recent rally to prospects of a lower corporate tax
rate for retailers that tend to
pay a relatively high tax bill.
Kohl’s declined $1.34, or
2.7%, to $48.26, paring its oneweek gain to 4.9%. Macy’s was
off 58 cents, or 2.2%, at 25.22,
and remained up 14% over the
past week.
Those declines offset gains
among technology firms.
Shares of tech companies in
the S&P 500 rose 0.2% Tuesday, recouping some of the
losses suffered Monday.
Investors had been selling
tech stocks—major contributors to this year’s rally—in recent sessions, while scooping
up shares of companies expected to benefit from a proposed cut in the corporate tax
rate, analysts said.
“Investors have a sense that
the fundamentals are still in
shape for tech,” said Mike Bailey, director of research at FBB
Capital Partners, a wealth
manager with $1 billion in assets.
He added that FBB plans to
The Won Wins Out
South Korea's currency is surging
this year....
How many won $1 buys
...as global investors snap up
South Korean assets.
Flows into South Korea,
monthly
1,075 won
$6 billion
1,100
SEONGJOON CHO/BLOOMBERG NEWS
Stocks
Debt
4
1,125
2
1,150
0
1,175
Scale inverted to
show rising won
1,200
–2
–4
1,225
J F M A M J J A S O
2017
The won has gained 11% against the dollar this year, as the Bank of Korea stays on the sidelines.
Sources: Tullett Prebon (currency); ANZ (investments)
THE WALL STREET JOURNAL.
South Korea’s Currency Dilemma Lures Investors
Investors are piling into
South Korea’s won, confident
that the country won’t weaken
its surging currency because it
By Saumya
Vaishampayan,
Kwanwoo Jun
and Ira Iosebashvili
fears being labeled a foreignexchange manipulator by the
U.S.
The won is up 11% against
the dollar this year, making it
one of the world’s best-performing currencies and putting it on track to deliver its
biggest annual gain since
2009. The won recently traded
its gains throughout the day
as losses in the tech sector accelerated. The index closed the
session down 0.1%.
That was the first session
since January 2000 that the
S&P 500 jumped more than
0.5% to a multiyear high and
then reversed to close with
losses, according to Jason
Goepfert of Sundial Capital
Research.
ly
.
Treasurys
Push Up
After Data
Turn Sour
at its highest level against the
dollar in more than two years.
On Tuesday, the dollar bought
1,087.62 won, from 1,086.30
won on Monday.
Money has poured into Korean markets this year despite
concerns about the unstable
geopolitical conditions on the
peninsula. Foreign investors
bought a net $3.3 billion of
Korean stocks and bonds in
October after two months of
outflows, according to the latest data from Australia & New
Zealand Banking Group Ltd.
Improving
economic
growth, expectations for
higher interest rates and a
weaker dollar have helped fuel
the won’s gains. But just as
important to investors has
been the central bank’s hesitance to rein in the currency.
South Korea’s central bank
“has not been anywhere near
as interventionist as it has in
the past,” said Prashant Singh,
a senior portfolio manager at
Neuberger Berman who has
held won throughout the year.
“This has been one of the primary drivers of the won’s
strength.”
Some investors and analysts say one reason is that
the government is concerned
about antagonizing the Trump
administration, even though a
strong won can have a damp-
ing effect on the South Korean
economy.
Since 2016, South Korea has
been on a U.S. Treasury Department watch list of countries that Washington says put
the U.S. at an unfair disadvantage by weakening their currencies. U.S. goods become
less competitive abroad when
foreign currencies fall against
the dollar.
Countries on the list, which
includes China, Japan, Germany and Switzerland, could
face U.S. sanctions if they take
actions like persistently intervening in currency markets
and running a significant
trade surplus with the U.S.
Bank of Korea officials have
suggested that the U.S. watch
list has influenced their policy
toward foreign-exchange interventions.
“It would not be true if we
say we are not conscious of
remaining on the list when we
conduct smoothing operations,” a senior Bank of Korea
official who supervises currency markets said in an interview.
The central bank’s comments are reassuring to market participants betting on
more won strength, said Jorge
Mariscal, emerging-markets
chief investment officer at
UBS Wealth Management.
use the recent weakness
among tech stocks to increase
the firm’s exposure to the sector. “This tech correction has
helped us put a couple of
things at the top of our list,”
Mr. Bailey said.
At midday in Tokyo, Japan’s
Nikkei was down 0.9% amid
commodity-stock weakness
and a stronger yen. Markets
were also down in Hong Kong,
South Korea and Australia.
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.
FOUR-WEEK BILLS
$108,549,240,200
Applications
$35,000,190,200
Accepted bids
$537,964,400
" noncompetitively
$100,000,000
" foreign noncompetitively
99.908222
Auction price (rate)
(1.180%)
1.197%
Coupon equivalent
93.91%
Bids at clearing yield accepted
912796LC1
Cusip number
The bills, dated Dec. 7, 2017, mature on Jan. 4, 2018.
52-WEEK BILLS
Applications
Accepted bids
" noncompetitively
" foreign noncompetitively
Auction price (rate)
Coupon equivalent
Bids at clearing yield accepted
Cusip number
$68,738,189,900
$20,000,209,900
$263,129,900
$0
98.331667
(1.650%)
1.694%
83.66%
912796PE3
The bills, dated Dec. 7, 2017, mature on Dec. 6, 2018.
Supply Gain
Dents Copper
BY AMRITH RAMKUMAR
AND CHRISTOPHER ALESSI
Copper prices suffered their
worst one-day percentage decline since January 2015, after
data showed an inflow into
London Metal Exchange warehouses.
“We’ve had a stock increase
in LME warehouses this morning after a long series of stock
falls and that may have
spooked the
COMMODITIES m a r k e t , ”
said Robin
Bhar, head
of metals research at Société
Générale.
Copper for March delivery
fell 3.5% to $2.9805 a pound
on the Comex division of the
New York Mercantile Exchange
on Tuesday, its lowest close
since late September.
The industrial metal fell
back below $3 for the first
time since early October and
was more than 7% off its
three-year high from that
same month.
As copper prices surged on
the back of strong Chinese
economic data this year, analysts cautioned that the market was too well supplied to
justify a 20% price increase.
Now, some investors are
worrying that a slowdown in
China, which accounts for half
of the world’s copper consumption, could put a damper
on prices.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B16 | Wednesday, December 6, 2017
THE WALL STREET JOURNAL.
MARKETS
Record Earnings Mark Global Recovery
Profit growth adds
fuel to a stock rally
and bolsters investor
confidence for 2018
Earnings growth at companies across the globe has been lackluster in the years since the financial crisis,
with investors hoping that this year marks a turning point.
$10
Recession
BY MIKE BIRD
8
6
FactSet World index* earnings per share,
12-month rolling average
4
2
0
2006
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
Around the world, economic data
has topped estimates...
...and international trade growth also is expected to
exceed global gross domestic product.
Citigroup Economic Surprise Index, year-to-date average
World-trade volume growth and projections
Emerging markets
Developed markets
30
12
20
10
10
8
0
6
–10
4
–20
2
Beatingg
Beating
Beatin
analys
y t
analyst
xpectatio
expectations
Missing
expectations
14%
Projections
ly
.
40%
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Listed companies are at
their most profitable on record after a bumper year of
earnings growth across global
stock markets.
The earnings per share of a
FactSet index of more than
20,000 listed companies from
around
the
world
has
reached an average of $9.69,
increasing nearly 19% in the
past year.
That is the fastest yearover-year rise since 2011, surpassing the late-2014 high of
$9.55. While the FactSet data
stretch back only to 2001, increased earnings in emerging
markets like China, among
other factors, mean that the
per share level has likely never
been higher.
Such high earnings per
share should boost investor
confidence that the recent
surge in stock markets is
backed by a broad global economic recovery and the ability
of companies to generate returns, not just ever-higher valuations.
“This feels like the first
proper postcrisis year,” said
Sunil Krishnan, head of multiasset funds at Aviva Investors. “It doesn’t end the problems
with
wages
or
productivity, but it does raise
hopes that the coming couple
of years are going to be more
economically normal.”
Earnings growth this year
picked up sharply around the
world after falling short of optimistic forecasts for several
years.
The Citigroup Global Economic Surprise Index, which
measures whether economic
data are beating or missing
analyst expectations, has seen
its best run since 2010 this
0
–30
2010
’11
’12
’13
’14
’15
’16
’17
2010
’11
’12
’13
*Index of over 20,000 listed companies from around the world
Sources: FactSet (FactSet World, Citigroup Economic Surprise indexes); International Monetary Fund (trade volume)
year in both emerging and developing markets.
International trade growth
is also expected to outstrip
gains in global gross domestic
product this year, with the International Monetary Fund expecting a 4% increase, up from
2.4% in 2016.
This has all helped boost
shares. Since the lows of a
market selloff in February
2016, the market capitalization
of FactSet’s index of 20,000
global companies has risen by
$24.7 trillion. That is more
than the entire index was valued at on some days in 2009,
during the aftermath of the financial crisis.
Financial stocks, which are
the FactSet index’s largest sector, have recorded earningsper-share growth of 8% this
year. The second-largest sector, electronic technology, has
recorded a 30% increase year
to date.
Some large Asian technology companies have seen par-
’14
’15
’16
’17
’18
THE WALL STREET JOURNAL.
ticularly big rises. Earnings
per share for China’s Tencent
Holdings Ltd. have risen by
about 55% in 2017, while South
Korea’s Samsung Electronics
Co. rose 95%, according to
FactSet data.
The energy and minerals
section of the index has seen
stellar growth, as higher com-
HEARD ON THE STREET
Email: heard@wsj.com
FINANCIAL ANALYSIS & COMMENTARY
The Great Tax-Windfall Surprise
10%
How Low Can It Go?
U.S. unemployment rate
8
n-
6
no
The biggest winners of
the Republican tax plan are
corporations. How they actually spend their windfall
could jolt the economy and
surprise markets.
Companies can do four
things with their cash: Invest
it; give it to shareholders;
hold it; or pay workers more.
In practice they do all of
these things in varying
amounts, depending on the
economy.
Stock investors are betting the plan will boost profits. The Dow Jones Industrial
Average added more than
700 points in the past week
as the proposal moved closer
to reality. Small wonder,
considering that the plan
would boost profits by lowering the corporate tax rate
to 20% from 35%.
Most economists agree,
saying companies will allow
most of the savings to flow
through to the bottom line,
with something around 20%
to 25% going to employees.
The tax plan’s proponents,
such as Treasury Secretary
Steven Mnuchin, argue otherwise, saying the bulk of
1997
4
2
0
2000
’05
’10
’15
THE WALL STREET JOURNAL.
Source: Labor Department
the corporate tax cut will
end up in workers’ pockets.
Bond investors also don’t
appear to agree with Mr.
Mnuchin’s view. Over the
past weeks, the 10-year Treasury yield has risen all of
0.05 percentage point to
2.38%. If investors thought
more money was about to
slosh into the labor market,
pushing up wages and potentially inflation, it ought to
have gone up by more.
But here it is worthwhile
to pause and consider what
the economy looks like at
the moment. The unemployment rate, at 4.1%, is already
extremely low, and even a
moderately growing economy could drop it well below
4% next year. Wage growth,
while low, has begun showing signs of life, not least on
company conference calls,
where mentions of “wage
pressures” are on the rise.
To the extent that the tax
plan boosts growth over the
next year—and odds are that
it will create some sort of
boost—demand for labor will
only pick up faster.
Companies might also respond to rising demand by
investing their tax gains in
capital equipment and the
like. Over time, that ought to
boost productivity, allowing
them to produce more with
fewer workers. But only over
time; it takes awhile to get
equipment built and put in
place. Before that, it is workers who build and set up
new equipment: The first-order effect of increased capital spending isn’t more productivity, but more employment.
One result of the tax bill
is that wages may finally get
a boost. In response, companies could accept lower
profit margins, which could
send down stocks. Or they
could try to raise prices,
which, if successful, would
spur inflation, sending interest rates higher and hurting
stocks.
Investors may regret their
enthusiasm for the tax bill.
—Justin Lahart
OVERHEARD
Life comes at you fast.
One day you think you’re on
the cutting edge of the hottest innovation in finance.
The next, one of the oldest
eats your lunch.
People eager to get in on
the cryptocurrency trade but
who didn’t want to own
some themselves could get
exposure through a fund
called Bitcoin Investment
Trust.
Each share represents
about 0.092 bitcoins and they
were up 1,742% in the year
through Monday, hitting a record.
The fund was so popular
that its shares traded at a
roughly 69% premium to the
value of the bitcoin it owned.
But there were warnings that
the premium would evaporate
once trading in bitcoin futures
starts next week.
Sure enough, its price collapsed Tuesday. In finance,
there really is nothing new
under the sun aside from
fresh crops of speculators
who think that the laws of
mathematics don’t apply to
them.
Why Sexual-Harassment Scandals Matter to Investors
There was a time when
what happened inside a company stayed inside a company. Today, corporate culture and the behavior of top
employees matter to profits,
stock prices and to a company’s competitive position.
U.S. investors overseeing
around $10 trillion in assets
now incorporate nonfinancial
factors such as environmental, social and governance
metrics in their decision
making. For both corporate
boards and investors, thinking about issues like child labor or climate change has
become mainstream.
Yet thinking about sexual
harassment has lagged behind. An October study by
Get Smart
Assets under management,
socially responsible investing
$8 trillion
6
4
2
0
1995
2000
’05
’10
’15
Source: U.S. SIF
THE WALL STREET JOURNAL.
theBoardlist and Qualtrics
found that 77% of boards
hadn’t talked about sexual
harassment, 88% hadn’t implemented a plan of action
as a result of recent revelations, and 83% hadn’t evalu-
ated the company’s risks
when it came to sexual harassment.
Their most commonly
cited reason for inaction: A
perception that sexual harassment wasn’t a problem
at the company. That is foolish: A recent Wall Street
Journal/NBC poll found that
nearly 50% of employed
women have been sexually
harassed at work.
Take 21st Century Fox,
where the cost is racking up.
The company’s settlements
involving accusations against
Bill O’Reilly and Roger Ailes
now top $100 million. And it
isn’t over. One woman who
reached a settlement with
Mr. O’Reilly is suing him and
modity prices help push a
262% rebound in earnings per
share, after five straight years
of declines.
Still, there are risks to the
rally. The global economy
could take a hit from
any slowdown in Chinese
growth or renewed political
crises in developed markets.
Also, the index’s price/earnings ratio—a measure of how
expensive stocks are relative
to their potential to make
money—isn’t far from records,
a source of investor concern.
But most of the increase in
global stock prices this year
can be accounted for by a rise
in earnings per share, according to analysts at Credit Suisse
Group AG.
Using MSCI Inc. indexes,
the bank calculated that
roughly 50% of this year’s U.S.
stock gains is attributable to
rising earnings, with the rest
accounted for by rising multiples, an increase in P/E ratios.
Analysts can calculate this
by looking at the movement of
the share price against that of
its P/E ratio. If the P/E ratio is
rising at a slower speed than
the share price, for instance,
then the rest of a stock’s gain
is down to earnings growth.
In the eurozone and Japan,
practically all of the increase
in stock prices is accounted
for by climbing earnings, as is
70% of the increase in emerging-market share prices.
“At a time of real improvement in the global economy,
we’re particularly interested in
those regions where we think
valuations aren’t extended,”
said Aviva’s Mr. Krishnan.
With 2017 coming to a
close, big investment banks
are in the process of updating
their forecasts for the year
ahead. Many expect the nascent pickup in earnings to
continue. “The question is
whether earnings will remain
a support for equities into
2018,” J.P. Morgan said in a
recent research note. “We
think that they will.”
Fox News for defamation and
breach of contract. 21st Century Fox and Wall Street
Journal parent News Corp
share common ownership.
Then there is the loss of
valuable assets. Mr. O’Reilly
at Fox, Kevin Spacey at Netflix and Matt Lauer at Comcast’s NBC were central to
their companies’ success.
Advertisers, attuned to
the new landscape, are paying close attention. “That
helps explain why NBC
pulled the plug so quickly”
on Mr. Lauer, says Jon Hale
of Morningstar. “They don’t
want to take the reputational
hit of a long, drawn-out process that could cost them
viewers and ad revenue.”
And even if a company
isn’t hit with publicity-generating accusations, sexual
harassment can be a slow,
costly drain. A 2007 study
found that it has a negative
effect on employee recruitment and retention, increases sick-leave costs and
lowers productivity.
Smart investors will ask
boards what actions they are
taking to mitigate these
risks. They should also look
at telling indicators, like
whether the company has a
culture that supports
women. An obvious step is
pushing companies to put
more women on their
boards.
—Elizabeth Winkler
WSJ.com/Heard
Uranium
Miners’ Glow
Won’t Last
No. 1 uranium exporter
Kazakhstan is cutting back.
Will it benefit the rest of the
battered industry?
Shares of Canadian miner
Cameco bounced as much as
18% Monday after stateowned Kazatomprom announced that it would slash
output by 20% from 2016
levels and extend those reductions for the next three
years. Cameco itself had
taken the painful step in
early November of announcing a suspension of production at two mines.
Uranium prices, which had
been under pressure for
years, particularly since the
2011 Fukushima nuclear disaster in Japan, bounced
from $20 to around $26.50 a
pound on the spot market,
according to Ux Consulting.
Even after the recent runup—the stock is up by almost one-third since October—Cameco’s share price is
less than one-third its preFukushima level.
Jonathan Hinze, executive
vice president international
at Ux, says the cuts by Kazatomprom, Cameco and
others amount to a little
over 20 million pounds a
year compared with 196 million pounds a year supplied
recently. Demand should be
flat at around 190 million
pounds. Even so, between
supply from nonmining
sources such as old warheads, tailings at enrichment
companies and inventory
from post-Fukushima overproduction, the market
should be well supplied for
years.
The upshot is that the
painful cuts announced recently were necessary to
keep the market from sinking further. The uranium
bear market isn’t over, but
perhaps it has reached its
half-life.
—Spencer Jakab
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
JOURNAL REPORT
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | R1
STEPHANIE DALTON COWAN
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© 2017 Dow Jones & Company. All Rights Reserved.
The Most Effectively Managed U.S.
Companies—and How They Got That Way
A landmark ranking puts Amazon on top, followed by Apple and Alphabet
Tech success
Why do so many of the biggest
names in tech—some of which didn’t
even exist three decades ago—make
the Management Top 250 list?
For the most part, the tech companies at the top get high grades
across all five categories, landing in
all but a few instances in the upper
15% to 20% of the more than 600
companies analyzed by the Drucker
Institute.
Amazon, Apple and Alphabet are
innovation and customer-satisfaction
standouts because so many of their
products—from cloud-computing
platforms to smartphones to the
burgeoning field of drones and driverless vehicles—are reshaping entire
industries as well as social behavior.
Tech firms such as Alphabet and
Microsoft also contract out much of
their front-line work. The official
staff that remain tend to be highly
paid and enjoy generous perks, a
likely factor in those companies’
high employee scores, says Rick
Wartzman, director of the Drucker
Institute’s KH Moon Center for a
Functioning Society. “Their workforces are the winners of the knowledge economy,” he says.
An innovation powerhouse
No. 1 Amazon is actually one of
the Management Top 250’s most uneven performers. Within the larger
universe of analyzed companies, it
scored in the bottom 20% on social
responsibility. The lackluster grade
comes after years of critical news reports about the working conditions
of its warehouse workers and poor
marks from activists for not being
more transparent about its environmental record. Yet, its mighty innovation score—so high that it lies off
the charts compared with other
companies’ scores—catapulted it to
first place.
Amazon, which has assembled a
high-profile corporate-responsibility
team over the past few years, declined to comment for this article.
The company’s $20.85 billion research-and-development spending in
the 12 months through September
outstripped all other U.S. companies,
according to S&P Global Market Intelligence data. It has kept ahead despite its swelling size by moving
quickly and sticking to its founding
principle of starting with the customer, says Reid Greenberg, executive vice president of digital and ecommerce
at
research
and
consulting firm Kantar Retail.
Its agility, he says, comes from
grouping workers in small teams.
Chief Executive Jeff Bezos instituted
the “two-pizza team” concept, where
the ideal team size is one that can
be fed on two pizzas. When it was
instituted in the early 2000s, it was
“really jarring,” says Eric Heller,
CEO of Marketplace Ignition, a consulting firm for brands and retailers,
and a former senior manager at Amazon. But by getting rid of bureaucratic layers, it fueled innovation.
Each team owned projects as small
as a single button on the website
and was responsible for improvements.
Please turn to the next page
TOP OF THE LIST
These companies rank
highest overall among the
Management Top 250
1. Amazon.com Inc.
2. Apple Inc.
3. Alphabet Inc.
4. Johnson & Johnson
5. International Business
Machines Corp.
6. Microsoft Corp.
Procter & Gamble Co.
8. 3M Co.
9. Cisco Systems Inc.
10. Nvidia Corp.
Sources: Drucker Institute, using data from
American Customer Satisfaction Index, Bloomberg Finance L.P., Clarivate Analytics, CSRHub,
Glassdoor, HIP Investor, PayScale, Satmetrix
Systems, Supply Chain Resource Cooperative,
Sustainalytics, Temkin Group and wRatings
THE WALL STREET JOURNAL.
INSIDE
Consumer-Goods Firms Shine
In Financial Category
Are Highly Ranked Companies a
Good Investment?
P&G, Clorox and Colgate-Palmolive
put their cash to good use. But
their markets are challenging.
R2
The Drucker Institute will launch an
exchange-traded fund that aims to
find out
R3
The Thinking Behind
The Rankings
Adobe’s Efforts to Understand
Workers Pay Off
It starts with the principles of
management guru Peter Drucker,
focusing on the long run and a
broad assessment of effectiveness
R2
The software maker constantly
probes employees’ attitudes to
figure out what will keep them
engaged
R3
Nvidia’s Broad Strength
The chip maker has high scores in
all five components of the rankings
R3
Innovation Is for Everyone
Companies of all kinds have
learned from the tech sector
R6
The Rankings
How the Management Top 250
score overall and in five categories
R4-6
LIST ICONS BY GREG MABLY
no
A NEARLY CENTURY-OLD timber
company is an unsung management
gem. Investor-favorite blue chips haven’t lost their luster in terms of
how well they are run. And the tech
giants shaping much of today’s society are the most effectively managed
U.S. companies.
Those are among the many insights revealed in the inaugural
Management Top 250, a landmark
ranking marking the first time the
ideals and teachings of the late business guru Peter Drucker have been
used to analyze and compare the
performance of major U.S. companies. Hailed as the father of modern
management, Mr. Drucker influenced
generations of business leaders with
his writings. His principles of what
makes a well-managed organization
have never before been translated
into a quantitative model to measure
how effectively a company is run.
The Management Top 250 does
just that. The ranking—compiled by
the Drucker Institute, founded in
2007 to advance the ideals of the
management sage—differs from
other “best of” lists in that it
doesn’t measure any single aspect of
a company’s prowess, such as profits
or productivity. Rather it takes a holistic approach, examining how well
a business does in five areas that reflect Mr. Drucker’s core principles:
customer satisfaction, employee en-
gagement and development, innovation, social responsibility and financial strength.
Amazon.com Inc. tops the list of
the nation’s most effectively managed businesses. On the online retail
juggernaut’s heels are Apple Inc. and
Google parent Alphabet Inc., in second and third place, respectively.
Tech behemoths International
Business Machines Corp., Microsoft
Corp. and Cisco Systems Inc. and
Silicon Valley up-and-comer Nvidia
Corp. take four of the other top 10
spots. Rounding out the Top 10 are
old-line stalwarts Johnson & Johnson (No. 4), consumer-products giant Procter & Gamble Co. (tied with
Microsoft at No. 6) and 3M Co. (No.
8), the company behind Post-it Notes
and Ace bandages.
To measure a business’s success
in each dimension, the Drucker Institute scored how companies stacked
up in 37 specific metrics, from market-share data to patent applications
to employee ratings on the careerreview site Glassdoor. The companies listed in the Management Top
250 are the highest scorers among
608 U.S. corporations studied that in
the fall of 2016 belonged either to
the S&P 500 stock index or Fortune
500 list or had a market value of
more than $10 billion. The ranking
methodology hasn’t been formally
peer reviewed.
n-
BY VANESSA FUHRMANS
AND YOREE KOH
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R2 | Wednesday, December 6, 2017
JOURNAL REPORT | MANAGEMENT TOP 250
Consumer-Goods Firms Shine in Financial Category
P&G, Clorox and Colgate-Palmolive put their cash to good use. But their markets are challenging.
CONSUMER-GOODS companies may
be under siege from slumping sales
and aggressive activist investors, but
three of the industry’s stalwarts—
Procter & Gamble Co., Clorox Co.
and Colgate-Palmolive Co.—placed
among the top 20 in the financialstrength category of the Drucker Institute’s Management Top 250.
These companies excel at churning out profit and putting their cash
to good use. By squeezing reliable
profits from toothpaste, laundry detergent and housecleaning-product
brands that date as far back as a
century, this trio of consumer-products giants is also part of a select
group of S&P 500 companies that
have raised dividends annually for
25 consecutive years or more.
The metrics the Drucker Institute
used to assess financial performance
include return on assets, return on
Challenging times
The consumer-products companies have been hard pressed to boost
sales growth while facing increased
competition and shifting consumer
tastes. There are concerns over
whether they can continue their
strong financial momentum, says
Lawrence Crosby, chief research scientist for the development of the
The Management Guru
Behind the Rankings
It all starts with the principles set
forth by Peter Drucker
The big picture
All of which gets to another fundamental tenet of Mr. Drucker’s: He
believed that while the value of a
corporation’s shares was a good barometer of how well the business
was being run, at least over an extended period of time, too many executives were “subordinating everything…to immediate earnings and
next week’s stock price.”
Mr. Drucker’s holistic approach
was born of necessity. When he
started out as a management consultant in the 1940s, there was little to
guide him.
Much to his frustration, he could
find books on individual aspects of
operating a business—finance, for
example, or human resources—but
there was nothing that connected all
of the pieces.
What was out there “reminded me
of a book on human anatomy that
would discuss one joint in the body—
the elbow, for instance—without
even mentioning the arm, let alone
the skeleton and musculature,” Mr.
Drucker later recalled. He would
remedy this by writing “The Practice
of Management” in 1954.
When it comes to measuring corporate performance with hard data,
the situation today is much like the
one Mr. Drucker faced more than 60
years ago.
Most metrics assess a single aspect—or at most, a few aspects—of
how a company is doing, with relatively little regard to how different
dimensions of performance fit together. By definition, ESG (environmental, social and governance) metrics take into account a variety of
factors, from a company’s carbon
footprint to its safety record to the
diversity of its board. Yet even then,
ESG is a rather narrow gauge—an examination of only the heart, if you
will.
In a world of specialists, our aim
is to offer the insights of the general
practitioner by seeing the whole corporate anatomy.
no
IN SEPTEMBER 2013, the Drucker Institute convened a group of scholars
and business leaders to consider how
to combat what we all agreed was a
serious and growing problem for the
economy and for society: the inordinate attention that most major companies devote to short-term financial
results.
The gathering was thought-provoking. And we at the Drucker Institute left the meeting committed to
creating a new measure of corporate
performance—one that would give
executives and investors a more
complete, longer-term view of how a
company was being managed. Four
years later, with this report, that
measure is being introduced.
opment help to pump up a company’s
financial strength within two years.
And if those intangibles continue to
improve, the gains in financial
strength accelerate over time.
n-
BY RICK WARTZMAN
AND LAWRENCE CROSBY
Principles and measures
Our metric is based on the writings of the late Peter Drucker, the
professor, consultant, author and
longtime Wall Street Journal columnist.
It judges overall corporate effectiveness through the lens of 37 indicators that fall under five dimensions
of performance: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength.
We define effectiveness as Mr.
Drucker did: “doing the right things
well.”
The indicators come from a dozen
data providers: the American Customer Satisfaction Index, Bloomberg
Finance LP, Clarivate Analytics, CSRHub, Glassdoor, HIP Investor, PayScale, Satmetrix Systems, the Supply
Chain Resource Cooperative, Sustainalytics, Temkin Group and wRatings.
Alice Korngold, author of “A Better
World, Inc.,” helped to develop the
methodology for evaluating social responsibility.
Underlying our five categories are
principles drawn from Mr. Drucker’s
39 books.
For example, there’s this: “To satisfy the customer is the mission and
purpose of every business.” And this:
“Developing talent is business’s most
important task.” And so on and so
forth—to the tune of 15 different
principles in all, spread across the
five dimensions.
It is clear from our research that
statistically significant increases in
the areas of innovation, social responsibility, customer satisfaction,
and employee engagement and devel-
Drucker rankings.
Among the common threads at
the three companies: Each has a
chief financial officer who has been
with the company at least a quartercentury, with Colgate CFO Dennis
Hickey serving the longest tenure, at
40 years.
Those long terms of employment
make the finance leaders at these
companies good at cost-cutting, says
Peter Crist, chairman of executivesearch firm Crist|Kolder Associates.
“They know how to pull the levers,”
he says.
P&G in recent years has narrowed
its focus, cutting back from more
than 100 brands to 65, in hopes of
speeding revenue growth and reversing market-share erosion, says
finance chief Jon Moeller.
The 180-year-old company, ranked
No. 4 for financial strength by
Drucker, has cut some 20,000 jobs
between 2012 and 2016, while trimming $10 billion in costs. Company
Oakland, Calif.-based Clorox, 16th
in Drucker’s measure of financial
strength, has been able to adapt to
changing market dynamics with new
or acquired products, such as its disinfecting wipes and its Burt’s Bees
brand, helping it match up with
smaller, agile competitors, says Jason Gere, a consumer-products analyst at KeyBanc Capital Markets.
The company’s financial strength
is reflected in its dividend policy.
Over the past four years, Clorox has
returned $2 billion through share
buybacks and dividends, says CFO
Stephen Robb. “We’ve increased our
dividend for 40 straight years,” he
says.
New York-based Colgate is 18th in
financial strength (tied with Boeing
Co.), thanks in part to strong return
on invested capital. Slightly more
than half of the company’s cash is
generated from capital investments.
But Colgate’s international reach
has posed some challenges. Most of
the company’s sales come from outside North America, and it has seen
its top line dented by currency woes.
TOP COMPANIES FOR
FINANCIAL
STRENGTH
Is the company a market
and financial success? Does it
manage its resources effectively
to create value?
Accenture PLC
Altria Group Inc.
Apple Inc.
Berkshire Hathaway Inc.
Gilead Sciences Inc.
Home Depot Inc.
Intuit Inc.
Lockheed Martin Corp.
Mastercard Inc.
Nvidia Corp.
Procter & Gamble Co.
Starbucks Corp.
United Parcel Service Inc.
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equity and return on invested capital, common measures of how efficiently a company makes money.
Drucker also considered companies’
market share and profits, and the total return for investors in their
shares.
P&G, Clorox and Colgate-Palmolive were among seven companies
that made the top 20 both in financial strength and overall. The others
were Apple Inc., the leader in financial strength and second overall,
chip maker Nvidia Corp., Alphabet
Inc. and Accenture PLC.
Adapting to change
MANAGEMENT TOP 250
ly
.
STEPHANIE DALTON COWAN
leaders have vowed to cut an additional $10 billion by 2021, mostly by
streamlining their supply chain and
bureaucracy, and focusing efforts on
top brands.
“The strategy was put in place
two or three years now,” Mr. Moeller
says. “We want to be in categories
that are used daily.”
Meanwhile, the company has
grappled with a bruising proxy fight
with activist investor Nelson Peltz.
Mr. Peltz argues that P&G, the maker
of Tide detergents, Pampers diapers
and Gillette razors, is burdened by
excessive costs and bureaucracy and
isn’t moving fast enough to boost
sales and profit.
Mr. Wartzman is the director and
Mr. Crosby is the chief data scientist at the KH Moon Center for a
Functioning Society, a part of the
Drucker Institute.
They can be reached at
reports@wsj.com.
Mr. Minaya is a reporter for CFO
Journal at The Wall Street Journal
in New York. He can be reached at
ezequiel.minaya@wsj.com.
Verizon Communications Inc.
Wal-Mart Stores Inc.
Sources: Drucker Institute, using data from
Bloomberg Finance LP
THE WALL STREET JOURNAL.
Most Effectively Managed Companies
Continued from the prior page
At Amazon, potential product
ideas get written up into dummy
news releases that get marked up.
Creators must answer questions
such as the cost of the project, how
much the product or service would
sell for and the launch date.
It’s always day one for Amazon—
”today we’re starting day one of
the next five years or the next 10
years and we’re not dwelling in the
past”—says Mr. Greenberg. “That’s
really how the company thinks and
breathes, and…that helps them
maintain a competitive advantage.”
The company’s early emphasis
on frugality led to creative ideas,
the most impressive of which were
rewarded with a highly coveted trophy that looked like a typical
worker’s desk. Ideas ranged from
how to better affix shipping labels
to packages to how to save money
on conference-room equipment.
Hidden strengths
In contrast to Amazon, six companies were particularly consistent
in their strengths, scoring in the
top 15% to 20% in all five categories: Apple, Alphabet, P&G, 3M,
Nike Inc. and Colgate-Palmolive.
The ranking and its approach
can highlight strengths and weaknesses that might be otherwise
harder to spot. While this is the
first year the list has been published, the Drucker Institute calculated the performance for most
companies back to 2012 to be able
to identify potential trends. For instance, the score of Intel, ranked
No. 14 overall, has steadily slipped
over the past five years, weighed
down by its customer-satisfaction
grade as the chip maker has struggled to catch up to the mobile revolution. Intel has made big bets in
artificial intelligence and autonomous driving as it moves into datacentric growth markets, but they
have yet to bear fruit.
The ranking reveals a handful of
hidden management champions
that typically fly under the radar,
such as Jack Daniel’s maker BrownForman Corp., electrical-equipment
maker Eaton Corp. and commercial
real-estate firm Jones Lang LaSalle. And who knew that 17thplace Weyerhaeuser Co., a forestproducts company with relatively
little public name recognition,
would score in the top 1% of companies in terms of innovation?
Weyerhaeuser, which owns or
controls about 13 million acres of
timberland in the U.S. and manages
additional timberland under licenses in Canada, stands out for
the resources it continues to dedicate to research and development,
says Mark Wilde, managing director
at BMO Capital Markets. Unlike
many other forestry companies,
many of which rely on universities
and other outside institutions for
research, Weyerhaeuser spent $17
million on R&D last year, much of
which goes toward forestry management and determining which
trees and methods yield the most
valuable timber growth where.
In the timber industry, “they are
the last man standing in terms of
their own independent forestry research,” Mr. Wilde says.
Insight into critiques
The Management Top 250 also
provides both a counterpoint and
insight into the critiques of activist
investors who have targeted corporate stalwarts such as P&G and
General Electric Co. Both companies score high—P&G at No. 6 overall and GE in 20th place—despite
coming under pressure from Nelson
Peltz’s Trian Fund Management LP
to revitalize profits.
P&G in particular scores in the
top 2.5% of the more than 600 analyzed companies in terms of innovation and financial strength, the
latter because brands such as Tide,
Gillette and Tampax dominate so
many consumer-product markets.
Yet two of Mr. Peltz’s chief criticisms are that the company isn’t innovating enough and has let upstarts such as Dollar Shave Club cut
into its market share. Indeed, a
closer look at the metrics behind
P&G’s overall score affirm a slip in
the company’s overall market dominance in recent years, but from a
very large position to begin with.
“Yes, there are some red flags,” Mr.
Wartzman says of the data. But
what you also see built into the
ranking, he says, “is the excellence
of their management over incredibly long periods of time.”
P&G CEO David Taylor argues
the company has taken steps to accelerate innovation in the two years
since he became CEO and has won
customers with new products or
enhancements to existing brands.
“The point of contention is the
rate of progress—an activist investor often has a shorter time frame
than a company that looks over
many stakeholders,” Mr. Taylor
says, echoing the holistic philosophy behind the Drucker model.
Over time, he adds, “it is a combination of a few key capabilities that
determine whether you win: superior products that delight consumers, technology that sustains
that…and what underpins it all is
acquiring the best people.”
Ms. Fuhrmans is a Wall Street
Journal reporter in New York. She
can be reached at vanessa.fuhrmans@wsj.com. Ms. Koh
is a Wall Street Journal reporter in
San Francisco. She can be reached
at yoree.koh@wsj.com.
MANAGEMENT TOP 250
TOP COMPANIES FOR
SOCIAL
RESPONSIBILITY
Is the company socially
responsible? Does it try to tackle
social challenges as part of
its core strategy?
3M Co.
Accenture PLC
Autodesk Inc.
Biogen Inc.
Bristol-Myers Squibb Co.
Campbell Soup Co.
Cisco Systems Inc.
Clorox Co.
HP Inc.
Intel Corp.
Johnson & Johnson
Merck & Co.
Microsoft Corp.
Motorola Solutions Inc.
Praxair Inc.
Sources: Drucker Institute, using data from
CSRHub, HIP Investor, Supply Chain Resource
Cooperative and Sustainalytics,
THE WALL STREET JOURNAL.
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Wednesday, December 6, 2017 | R3
JOURNAL REPORT | MANAGEMENT TOP 250
Are Top-Ranked Firms Good Investments?
The Drucker Institute will launch an exchange-traded fund that aims to find out
Whether identifying
well-run companies
can give an investor
an edge is uncertain.
stitute believes that collectively
these add up to Mr. Drucker’s philosophy. Laying out this kind of data on
what are normally considered qualitative factors should be valuable to
all investors.
More important, the institute has
connected this nonfinancial data to
the companies’ financial performance. “What we know now is the
intangibles do drive financial performance higher,” says Rick Wartzman,
director of the KH Moon Center for
a Functioning Society, which is part
of the Drucker Institute. Specifically,
the institute says that when these
intangibles improve, they generate a
more modest boost in financial performance within two years.
More positives, and questions
The Drucker data is a gold mine
for investors looking to judge a company on its environmental, social
and governance performance, criteria that drive an increasing amount
of institutional money. There is
something of a land rush among
companies such as MSCI and Standard & Poor’s to supply this kind of
data, but Drucker goes deeper, especially on how well a company is run,
which falls under governance.
This makes sense. Mr. Drucker
was always concerned with the role
of business in society, believing a
company is responsible for everything and everyone it touches. This
requires companies to be well-managed, and it penalizes companies
that cut corners in pursuit of shortterm profits.
Another positive in the data is
that the five main groups of data—
financial strength, social responsibility, innovation, customer satisfaction, and employee engagement and
development—are correlated with
one another. The institute is doing
more work on causality—is innovation the thing that drives financial
performance, for instance, or, does
employee pay matter to customer
satisfaction?
The institute’s success or failure
will depend in part on the quality of
its analysis, but also whether it is
telling investors anything new. The
top of the list is filled with the usual
suspects of most admired companies—Procter & Gamble, Nike, Intel, Exxon Mobil, Southwest Airlines and Starbucks among them.
Yet the performance of those companies’ shares has been mixed, largely
because of downturns in their industries, something that the Drucker
data doesn’t capture. The theory is
these companies will perform better
when the industries turn around,
though that is hard to judge.
For example, Procter & Gamble
shares are flat for the past three
years, in part because of new competitors that have bruised its cashcow Gillette brand. P&G, ranked No.
6 overall, scores high on innovation,
though it was blindsided by upstarts
like Dollar Shave Club and Harry’s
Razors. And the consumer-goods
maker is scored extra high on governance, yet its management is embroiled in an embarrassing and expensive fight to keep an activist
investor off its board.
CUSTOMER
SATISFACTION
Are customer needs well served
by the company? Is the company
viewed positively by consumers
of its products and services?
Mixed results
The potentially more interesting
list is of companies that have improved their share performance under the Drucker criteria, including
chip maker Nvidia, up sixfold in the
past two years, and steelmaker Steel
Dynamics, which has more than
doubled.
The question is whether the data
would have gotten investors into a
stock quick enough to capture the
gains. And, of course, nothing is certain. Other companies that have
shown big improvement in the
Drucker data, including Discover Financial Services and Southwest
Airlines, have lagged behind the
market, with shares of some names
down the list positively bombing.
The institute hopes to launch the
ETF based on Drucker’s top performers next year. Owning a basket of its
top-rated companies may be better
than using the data to pick individual stocks. But the market moves
fast, and the risk is that the Drucker
ETF could be left behind.
Mr. Brown is The Wall Street
Journal’s Heard on the Street editor, based in New York. He can be
reached at ken.brown@wsj.com.
Accenture PLC
Autoliv Inc.
Cisco Systems Inc.
Coty Inc.
Hewlett Packard Enterprise Co.
International Business
Machines Corp.
JetBlue Airways Corp.
Johnson Controls International
PLC
Molson Coors Brewing Co.
Oracle Corp.
Salesforce.com Inc.
TE Connectivity Ltd.
Tenneco Inc.
Teradata Corp.
ly
.
PETER DRUCKER IS a legend among
management consultants. But can he
pick stocks?
The late Mr. Drucker built his legacy telling executives to focus on
“doing the right things well.” That
advice has been distilled into the
rankings in this report. Next they
will be turned into an investment
product to see whether Mr.
Drucker’s philosophy can make
money for investors.
The Drucker Institute, a research
and consulting firm that aims to
spread Mr. Drucker’s views, is planning to launch an exchange-traded
fund that will buy shares of companies that score best on factors like
customer satisfaction and innovation. These squishy subjects tend to
be hard to grasp for spreadsheet-focused analysts, and the institute
aims to show that companies that
score high on these factors can beat
the market.
The logic is simple: Well-run companies should perform well financially, and that should drive their
stocks higher. The first part of that
idea—that good management leads
to higher profits—is generally true,
especially relative to competitors in
a company’s industry.
Whether identifying well-run
companies can give an investor an
edge in the market is iffier. The top
scorers in the Drucker data are Amazon.com Inc., Apple Inc. and
Google parent Alphabet Inc., which
collectively are up an average of 46%
in the past 12 months and are worth
$2.1 trillion. It feels like investors,
without Mr. Drucker’s help, have al-
ready figured out these are great
companies.
But first the positives. The data is
an impressive collection of five years
of numbers on 37 topics from a wide
range of sources, from employee surveys on their pay and job satisfaction to tallies of patents and trademarks, which help determine a
company’s innovation score. The in-
TOP COMPANIES FOR
United Natural Foods Inc.
Sources: Drucker Institute, using data from
American Customer Satisfaction Index, CSRHub,
Satmetrix Systems, Temkin Group and wRatings
THE WALL STREET JOURNAL.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY KEN BROWN
MANAGEMENT TOP 250
At Adobe, a Satisfied Workforce
TOP COMPANIES FOR
EMPLOYEE
ENGAGEMENT &
DEVELOPMENT
Are employees engaged and
satisfied? Does the company
adequately develop and reward
its employees?
Adobe Systems Inc.
Alphabet Inc.
Brown-Forman Corp.
Cisco Systems Inc.
Clorox Co.
Delta Air Lines Inc.
no
ADOBE SYSTEMS INC. is trying to
figure out what makes its 18,000 employees happy.
Apparently it’s on the right track.
Adobe scored the fourth-highest rating in the employee engagement and
development category of the Drucker
Institute’s Management Top 250 list
of the most effectively managed U.S.
companies.
The measure includes employee
ratings of job satisfaction, opportunities for advancement, and compensation, from a variety of sources including websites run by PayScale
Inc. and Glassdoor Inc.
Each quarter in 2017, managers at
Adobe emailed surveys to a section
of their workforce to learn if employees felt they could be themselves at work, whether they were
encouraged to think creatively, and if
they had recently had a meaningful
conversation about their career development.
The anonymous surveys also
sought to learn if staffers thought
their work contributed to the
broader goals of the company, and if
they would recommend a job with
the software maker to others.
One thing Adobe learned: Four
employee engagement surveys a year
is too many, says Donna Morris, executive vice president of customer
and employee experience. “Even the
communication and announcements
to employees about the importance
of the survey became repetitive,”
says Ms. Morris, who made the decision to do two surveys in 2018.
But the company is no less interested in probing employees’ hearts
and minds, reflecting a growing urgency among employers to attract
and hold talent in the face of low unemployment and shortages of
trained workers, especially those
with technology skills.
It is also an effort to produce
more immediate benefits. Companies
perform better financially when employees are engaged in their work
and feel recognized and rewarded
for their efforts, management research suggests.
“Organizations that promote a
strong sense of belonging among
employees have more success cultivating engagement and, in turn, are
more effective,” says Marcy Fetzer,
founder of Excellence in Leadership
Group, a workplace-culture consultancy.
MANAGEMENT TOP 250
n-
BY KELSEY GEE
AND SARAH NASSAUER
Benefits and pay
In addition to surveying its employees, Adobe is intimately aware
of what they are posting on sites like
Glassdoor. Adobe’s 1,300-person customer and employee experience
team monitors career websites for
reviews by current and former workers, and regularly checks apps such
as Blind that people use to discuss
jobs anonymously.
“Each employee has a different
Eli Lilly & Co.
Facebook Inc.
Intuit Inc.
Johnson & Johnson
Microsoft Corp.
Nvidia Corp.
Salesforce.com Inc.
Sempra Energy
Workday Inc.
Sources: Drucker Institute, using data from
CSRHub, Glassdoor, HIP Investor and PayScale
THE WALL STREET JOURNAL.
barometer for what constitutes an
engaging environment,” Ms. Morris
says. But she adds that a suite of
benefits like six months of paid parental leave, the flexibility to work
part time, and a six-week sabbatical
for employees to take time off to recharge all contribute to a culture
that keeps workers engaged
throughout their career with Adobe.
Keeping employee engagement
high—and quit rates low—remains a
challenge for businesses that primarily employ workers paid by the
hour. Retailers like Target Corp.,
Costco Wholesale Corp. and Dollar
General Corp. have announced plans
to raise starting wages for workers
or add manager training in recent
years, aiming to boost morale and
reduce turnover.
Wal-Mart Stores Inc., the largest
U.S. employer with 1.5 million workers, scored near the bottom for employee engagement on the Drucker
list, falling below retailers including
Target, Costco, Gap Inc. and Home
Depot. Wal-Mart’s score has followed
a V-pattern since 2012, the first year
for which Drucker obtained data,
falling until 2015 when it started to
rise again, says Zach First, executive
director of the Drucker Institute.
The Bentonville, Ark.-based retailer spent $2.7 billion over 2015
and 2016 raising starting wages and
adding training. Since last year the
retailer has built 185 training academies for front-line managers. The
rising employee-engagement score is
“consistent with what we’ve seen,”
says a Wal-Mart spokesman. “Both
customers and associates tell us they
are seeing a positive difference in
the shopping and working experience.”
Retention levels for front-line
managers who complete the additional academy training and their
employees are improving, he says.
The move to increase pay wasn’t
well-received by all. When Wal-Mart
increased starting wages for store
workers to $9 per hour in 2015,
some longtime employees balked as
new hires earned closer to their salaries, said Judith McKenna, chief operating officer for Wal-Mart U.S., in
a 2016 interview. Employees want to
know “they will still be ahead of
those who come from an entry-level
position,” she said at the time.
Health watch
Health and consumer-products giant Johnson & Johnson received one
of the highest marks in employee engagement and development, according to the Drucker Institute’s measures. That stemmed from the firm’s
efforts to demystify the wellness of
its staff, says Chief Human Resources Officer Peter Fasolo.
Mr. Fasolo says nearly all of the
company’s 128,000 employees have
voluntarily participated in a health
risk assessment that evaluates his or
her cholesterol, body mass and other
health factors.
The screenings are part of a program launched in 2015, aimed at improving physical fitness. A recent internal study of Johnson & Johnson’s
employee health programs found
that workers who took a course that
helped them manage their time and
energy in ways that optimize workplace performance were more likely
to get promotions and to stay with
the company for the following six
months.
Promoting stronger engagement
in a workforce also relies on engaged
managers and leaders, says Adobe’s
Ms. Morris. About 95% of Adobe’s eligible employees take advantage of
the six-week sabbatical perk, including high-level bosses, says a spokeswoman.
“We need to make sure we’re
modeling the ways to uphold our
values,” Ms. Morris says.
Ms. Gee and Ms. Nassauer are
Wall Street Journal reporters in
New York. They can be reached at
kelsey.gee@wsj.com and
sarah.nassauer@wsj.com.
Nvidia Corp. Chief Executive Jensen Huang
Nvidia’s Stellar Score
The chip maker does a lot well
BY TED GREENWALD
NVIDIA CORP. HAS been a force
among videogame fans for more
than a decade. Now the rest of the
world is catching on, as the premier maker of chips that paint
scenes of on-screen adventure and
mayhem emerges as the kingpin in
hardware for artificial intelligence.
Sales of Nvidia chips to internet
giants like Microsoft Corp. and
Facebook Inc.—which rely on AI to
do things like automatic image labeling and language translation—
have grown by triple digits, year
over year, for six quarters straight.
Investors have responded by driving up Nvidia’s stock roughly sevenfold in the past two years, lately
trading at about 45 times earnings,
compared with an industry average
around 17.
The market is rewarding not
only the company’s dominance in
graphics and AI but also its extraordinarily well-balanced operations. In the Drucker Institute’s
Management Top 250 ranking of
the most effectively managed U.S.
companies, Nvidia’s overall score of
76.8, which puts it in the top 10, is
based on strong scores in all five
categories that contribute to the
overall ranking—customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength.
The financial metric, in particular,
sets the chip maker apart. Nvidia
ranks 13th in that category, tied
with Accenture, thanks in part to
its per-share earnings nearly tripling over the past couple of years.
Nvidia’s secret is an unconventional chip design. General-purpose
processors from Intel and others
are built to handle a wide range of
unpredictable tasks, from web surfing to financial modeling, while
performing up to dozens of complex calculations at once. In contrast, Nvidia’s chips originally were
built solely to put splashy animations on a screen. In the late 1990s,
the company introduced a chip architecture designed to execute
thousands of relatively simple
tasks, such as computing the color
of each pixel on a computer’s
screen, simultaneously.
By the mid-2000s, Chief Executive Jensen Huang realized that the
same technology likely would be
useful for other tasks, and he invested in enabling the chips to respond to a wider variety of instructions. That makes the chips much
faster for any number of repetitive
jobs.
The newly programmable chips
turned out to be well suited to the
emerging field of deep learning, an
artificial-intelligence
technique
that gives computers the ability to
recognize, say, a photo of a cat by
examining, pixel by pixel, enormous
numbers of pictures of cats.
An Nvidia server packed with
eight of the company’s latest processors can do the same deeplearning work as roughly 160 conventional dual-chip servers, at
roughly 15% of the cost, according
to Linley Gwennap, principal analyst with the Linley Group, a technology research firm.
Nvidia is selling its chips to a
range of companies. Its deep-learning prowess has led to relationships with companies working on
autonomous vehicles, robots, industrial systems and other devices
that would benefit from the ability
to sense and respond to their surroundings.
Still, Nvidia’s business isn’t
without risk. The fast-growing AI
market is so new that forecasting
its growth is iffy. And while
Nvidia’s graphics chips have proved
faster than conventional processors
for deep learning, rising ranks of
competitors are betting that chips
built for AI from the ground up will
be even better. Such products are
expected to reach the market in
due course, led by Intel Corp.,
which aims to ship specialized AI
chips in the coming year.
Mr. Greenwald is a Wall Street
Journal reporter in San
Francisco. He can be reached
at ted.greenwald@wsj.com.
DAVID PAUL MORRIS/BLOOMBERG NEWS
The company constantly probes employees’ attitudes
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R4 | Wednesday, December 6, 2017
JOURNAL REPORT | MANAGEMENT TOP 250
Management Top 250
A ranking of U.S. companies by the Drucker Institute
Score
Amazon.com Inc.
Apple Inc.
Alphabet Inc.
Johnson & Johnson
International Business Machines Corp.
Microsoft Corp.
Procter & Gamble Co.
3M Co.
Cisco Systems Inc.
Nvidia Corp.
Nike Inc.
Accenture PLC
Dow Chemical Co.1
Intel Corp.
Clorox Co.
Colgate-Palmolive Co.
Weyerhaeuser Co.
Exxon Mobil Corp.
Marriott International Inc.
General Electric Co.
HP Inc.
Intuit Inc.
Southwest Airlines Co.
Kimberly-Clark Corp.
Starbucks Corp.
PepsiCo Inc.
Molson Coors Brewing Co.
89.0
88.4
86.7
83.4
80.7
79.5
79.5
78.8
77.8
76.8
76.4
74.9
74.9
74.0
73.8
72.7
72.1
71.1
70.6
70.4
70.2
70.1
70.1
70.0
69.8
69.7
69.6
HHHHH
HHHH
HHHH
HHH
HHHHH
HHHH
HHHH
HHHHH
HHHHH
HHHHH
HHHH
HHHHH
HHHHH
HH
HHHH
HHHH
HHHH
HH
HHHH
HHH
HHH
HHH
HHHH
HHHHH
HHH
HHHHH
HHHHH
68 Sempra Energy
no
Lockheed Martin Corp.
Adobe Systems Inc.
Ford Motor Co.
Altria Group Inc.
Coca-Cola Co.
United Parcel Service Inc.
Salesforce.com Inc.
AT&T Inc.
Jones Lang LaSalle Inc.
Brown-Forman Corp.
Texas Instruments Inc.
Wal-Mart Stores Inc.
Eli Lilly & Co.
General Motors Co.
Merck & Co.
Oracle Corp.
Facebook Inc.
Bristol-Myers Squibb Co.
L Brands Inc.
Campbell Soup Co.
Verizon Communications Inc.
Bank of America Corp.
Boeing Co.
JPMorgan Chase & Co.
Home Depot Inc.
Hershey Co.
Walt Disney Co.
Edwards Lifesciences Corp.
General Mills Inc.
Pfizer Inc.
Eaton Corp.
Hilton Worldwide Holdings Inc.
Amgen Inc.
Citigroup Inc.
Qualcomm Inc.
JetBlue Airways Corp.
Applied Materials Inc.
Moody's Corp.
Rockwell Automation Inc.
Hormel Foods Corp.
Sempra Energy
Avery Dennison Corp.
FedEx Corp.
Mastercard Inc.
Hasbro Inc.
Hewlett Packard Enterprise Co.
Lam Research Corp.
eBay Inc.
Biogen Inc.
Juniper Networks Inc.
Deere & Co.
Raytheon Co.
E.I. DuPont de Nemours & Co.2
Pitney Bowes Inc.
AbbVie Inc.
Alcoa Corp.
69.4
68.9
68.8
68.7
67.5
67.4
67.2
66.8
66.8
66.5
66.2
66.1
65.9
65.9
65.8
65.8
65.7
65.6
65.5
65.2
65.0
64.8
64.7
64.5
64.4
64.3
64.3
64.2
64.2
64.2
64.0
63.8
63.6
63.5
63.5
63.3
62.9
62.9
62.7
62.6
62.4
62.3
61.9
61.9
61.8
61.8
61.8
61.7
61.6
61.4
61.0
61.0
60.9
60.9
60.8
60.8
n-
Employee engagement
HHHHH
28
29
30
31
32
33
34
35
35
37
38
39
40
40
42
42
44
45
46
47
48
49
50
51
52
53
53
55
55
55
58
59
60
61
61
63
64
64
66
67
68
69
70
70
72
72
72
75
76
77
78
78
80
80
82
82
Employee
engagement &
development
Innovation
Social
responsibility
Financial
strength
Sector
HHHH
HHHH
HHHHH
HHHHH
HHH
HHHHH
HHHH
HHHH
HHHHH
HHHHH
HHHHH
HHHHH
HHHH
HHHH
HHHHH
HHHH
HHHH
HHHH
HHHH
HHHH
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HHHHH
HHHHH
HHHH
HHHH
HHH
HHHH
HHHHH+
HHHHH
HHHHH
HHHHH
HHHHH+
HHHHH
HHHHH
HHHHH
HHHHH
HHHH
HHHHH
HHH
HHHHH
HHHHH
HHH
HHHH
HHHHH
HHHHH+
HHHHH
HHHHH
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HHHHH
HHHHH
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HHHHH
HHHHH
HHHH
HHHHH
HHHHH
HHHH
HHH
Technology
Technology
Technology
Health Care/Life Sciences
Technology
Technology
Consumer Goods
Business/Consumer Services
Technology
Technology
Consumer Goods
Business/Consumer Services
Basic Materials/Resources
Technology
Consumer Goods
Consumer Goods
Real Estate/Construction
Energy
Leisure/Arts/Hospitality
Business/Consumer Services
Technology
Technology
Transportation/Logistics
Consumer Goods
Leisure/Arts/Hospitality
Consumer Goods
Consumer Goods
47 Campbell Soup
11 Nike Inc.
Social responsibility
HHHHH
Four of five categories
HHHHH
HHHH
HHH
HHHH
HHH
HHHH
HHH
HHHHH
HH
HHHH
HHHH
HHHH
HHH
HHHH
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HHHHH
HHHHH
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HHHH
HHHH
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HH
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HHHHH
HHHHH
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HHHHH
HHH
HHHHH
HHHHH
HHHH
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HHHHH
HHHH
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HHHHH
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HHHH
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HHHH
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HHHH
HHHHH
HHHHH
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HHHH
HH
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HHHHH
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HHHHH
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HHHH
HHHH
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HHHH
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HHHHH
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HHH
HHH
HHH
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HHHH
HHHH
HHH
HHHH
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HHH
HHH
HHHH
HHHH
HHHHH
HHHH
HHH
HHHHH
HHHHH
HHHHH
HHHH
HHHH
HHHH
HHHH
HHHH
HHHH
HHHH
HHHH
HHHHH
HHHH
HHHH
HHHH
HHHHH
HHHHH
HH
HHHHH
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HHHHH
HHHH
HHHHH
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HHHH
HHHH
HHHH
HHHH
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HHHHH
HHHH
HHHHH
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HH
Industrial Goods
Technology
Automotive/Vehicles
Consumer Goods
Consumer Goods
Transportation/Logistics
Technology
Telecommunication Services
Real Estate/Construction
Consumer Goods
Technology
Retail/Wholesale
Health Care/Life Sciences
Automotive/Vehicles
Health Care/Life Sciences
Technology
Technology
Health Care/Life Sciences
Retail/Wholesale
Consumer Goods
Telecommunication Services
Financial Services
Industrial Goods
Financial Services
Retail/Wholesale
Consumer Goods
Media/Entertainment
Health Care/Life Sciences
Consumer Goods
Health Care/Life Sciences
Business/Consumer Services
Leisure/Arts/Hospitality
Health Care/Life Sciences
Financial Services
Technology
Transportation/Logistics
Technology
Financial Services
Industrial Goods
Consumer Goods
Utilities
Basic Materials/Resources
Transportation/Logistics
Financial Services
Consumer Goods
Technology
Technology
Technology
Health Care/Life Sciences
Technology
Industrial Goods
Industrial Goods
Basic Materials/Resources
Business/Consumer Services
Health Care/Life Sciences
Basic Materials/Resources
+ Rating in this category was greater than five stars 1 Merged with E.I. DuPont de Nemours & Co. on Aug. 31, 2017, to form DowDuPont Inc. 2 Merged with Dow Chemical Co. on Aug. 31, 2017, to form DowDuPont Inc.
Sources: Drucker Institute, using data from American Customer Satisfaction Index, Bloomberg Finance L.P., Clarivate Analytics, CSRHub, Glassdoor, HIP Investor, PayScale, Satmetrix Systems, Supply Chain Resource Cooperative, Sustainalytics, Temkin Group and wRatings
PHOTOS FROM LEFT TO RIGHT: SAM HODGSON/BLOOMBERG NEWS; JEFF LEWIS/ASSOCIATED PRESS; JUSTIN SULLIVAN/GETTY IMAGES
1
2
3
4
5
6
6
8
9
10
11
12
12
14
15
16
17
18
19
20
21
22
22
24
25
26
27
Company
Customer
satisfaction
and October 2016. Financial data inputs were updated as of June
30, 2017; all other data inputs were updated during the first half
of 2017.
The Management Top 250 includes U.S. companies, as well
as companies that have principal executive offices outside the
U.S. but are listed in the Fortune 500 or have stock that is a
component of the S&P 500.
A detailed explanation of the methodology is at http://
on.wsj.com/top-250-methodology.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Rank
cluded from the ranking if fewer than two data inputs are available for any of the five areas.
The Management Top 250 includes the top U.S. companies
from a universe of 693 publicly traded companies that were included in a Drucker Institute study. To be included in the study
universe, companies met these criteria: they were listed in the
Fortune 500, had stock that was a component of the S&P 500
index, or had a stock-market capitalization of $10 billion or more
when snapshots were taken for the Drucker study in September
ly
.
The Management Top 250 ranking, developed by the Drucker
Institute, measures corporate effectiveness by examining performance in five areas: customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength. The ranking is based on an analysis of 37 data
inputs provided by 12 third-party sources.
The five areas are weighted nearly equally in calculating a
score that is the basis of the ranking. Not all data inputs are
available for all companies in the ranking; companies are ex-
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Wednesday, December 6, 2017 | R5
JOURNAL REPORT | MANAGEMENT TOP 250
Score
Owens Corning
Discover Financial Services
Equinix Inc.
Ingersoll-Rand PLC
Whirlpool Corp.
Best Buy Co.
Delta Air Lines Inc.
Wells Fargo & Co.
Analog Devices Inc.
Cognizant Technology Solutions Corp.
Cummins Inc.
TE Connectivity Ltd.
Visa Inc.
CA Inc.
United Technologies Corp.
Johnson Controls International PLC
Praxair Inc.
Berkshire Hathaway Inc.
Air Products & Chemicals Inc.
Kellogg Co.
CBRE Group Inc.
Mettler-Toledo International Inc.
Agilent Technologies Inc.
Sherwin-Williams Co.
T-Mobile US Inc.
Allstate Corp.
Eastman Chemical Co.
Nordstrom Inc.
Thomson Reuters Corp.
Alaska Air Group Inc.
Target Corp.
Becton Dickinson & Co.
Philip Morris International Inc
Goldman Sachs Group Inc.
Teradata Corp.
Rockwell Collins Inc.
Abbott Laboratories
McCormick & Co.
NextEra Energy Inc.
Cardinal Health Inc.
Darden Restaurants Inc.
Estee Lauder Cos.
LyondellBasell Industries N.V.
Autoliv Inc.
60.8
60.5
60.5
60.5
60.4
60.2
60.2
60.2
60.1
59.9
59.7
59.7
59.6
59.5
59.5
59.4
59.3
59.1
59.0
59.0
58.9
58.9
58.8
58.8
58.8
58.7
58.7
58.7
58.6
58.4
58.4
58.3
58.2
58.1
58.0
57.9
57.8
57.8
57.7
57.5
57.5
57.5
57.5
57.3
HHHH
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HHH
HHH
HH
HH
HHHHH
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H
HH
HHHHH
HHHHH
HH
HHHH
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HHHH
HHHH
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HHH
HHHHH
Innovation
Social
responsibility
Financial
strength
Sector
HHHH
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HHHHH
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HHHHH
H
HHHHH
HHHHH
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HHHHH
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HHHHH
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HHH
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HHH
HHH
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HHH
HHHH
HHHH
HHHH
HHH
HHHH
HHH
HHHH
HHHH
HHH
HHH
HH
HHH
HHHHH
HHHH
HHH
HHH
HHHHH
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HHHH
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HHH
HHHH
HHH
HHH
HHHHH
HHH
HH
HHH
HH
HHH
HHH
HHHH
HHHH
HHHH
HHHHH
HHH
Real Estate/Construction
Financial Services
Business/Consumer Services
Industrial Goods
Consumer Goods
Retail/Wholesale
Transportation/Logistics
Financial Services
Technology
Business/Consumer Services
Automotive/Vehicles
Industrial Goods
Financial Services
Technology
Industrial Goods
Business/Consumer Services
Basic Materials/Resources
Financial Services
Basic Materials/Resources
Consumer Goods
Real Estate/Construction
Industrial Goods
Industrial Goods
Retail/Wholesale
Telecommunication Services
Financial Services
Basic Materials/Resources
Retail/Wholesale
Media/Entertainment
Transportation/Logistics
Retail/Wholesale
Health Care/Life Sciences
Consumer Goods
Financial Services
Business/Consumer Services
Industrial Goods
Health Care/Life Sciences
Consumer Goods
Utilities
Health Care/Life Sciences
Leisure/Arts/Hospitality
Consumer Goods
Basic Materials/Resources
Automotive/Vehicles
ly
.
82
85
85
85
88
89
89
89
92
93
94
94
96
97
97
99
100
101
102
102
104
104
106
106
106
109
109
109
112
113
113
115
116
117
118
119
120
120
122
123
123
123
123
127
Company
Employee
engagement &
development
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Rank
Customer
satisfaction
132 Gilead Sciences
154 Baxter International
Financial strength
HHHHH
Social responsibility
HHHHH
101 Berkshire Hathaway
57.3
57.2
57.2
57.1
57.0
57.0
56.9
56.9
56.9
56.8
56.7
56.7
56.5
56.5
56.5
56.4
56.3
56.1
56.1
56.0
55.9
55.8
55.8
55.8
55.6
55.5
55.3
55.3
55.2
55.1
55.1
55.0
55.0
n-
W.W. Grainger Inc.
ManpowerGroup Inc.
PPG Industries Inc.
Northrop Grumman Corp.
Gilead Sciences Inc.
Motorola Solutions Inc.
Seagate Technology PLC
TJX Cos.
VF Corp.
Constellation Brands Inc.
American Express Co.
Autodesk Inc.
Gap Inc.
KLA-Tencor Corp.
Xylem Inc.
Southern Co.
PG&E Corp.
PVH Corp.
Tiffany & Co.
Symantec Corp.
Skyworks Solutions Inc.
Costco Wholesale Corp.
Nielsen Holdings PLC
Varian Medical Systems Inc.
Humana Inc.
Capital One Financial Corp.
Ball Corp.
Baxter International Inc.
Visteon Corp.
Delphi Automotive PLC
Reynolds American Inc.1
Honeywell International Inc.
Regeneron Pharmaceuticals Inc.
Sysco Corp.
Automatic Data Processing Inc.
Morgan Stanley
Schlumberger Ltd.
Celgene Corp.
International Flavors & Fragrances Inc.
Celanese Corp.
Dr Pepper Snapple Group Inc.
Citrix Systems Inc.
International Paper Co.
Tapestry Inc.2
Waste Management Inc.
Yum Brands Inc.
Oshkosh Corp.
Lear Corp.
Netflix Inc.
Red Hat Inc.
Xilinx Inc.
Baker Hughes Inc.3
Dana Inc.
J.M. Smucker Co.
NetApp Inc.
no
127
129
129
131
132
132
134
134
134
137
138
138
140
140
140
143
144
145
145
147
148
149
149
149
152
153
154
154
156
157
157
159
159
159
162
162
164
165
165
167
168
169
169
169
169
169
174
175
175
175
175
179
179
179
179
1 Merged with British American Tobacco PLC on July 25, 2017
55.0
54.9
54.9
54.8
54.7
54.7
54.6
54.5
54.4
54.4
54.4
54.4
54.4
54.3
54.2
54.2
54.2
54.2
54.1
54.1
54.1
54.1
HHHH
HHH
HHH
HH
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2 Changed name from Coach Inc. on Oct. 31, 2017
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HHHH
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HH
HHH
HHH
HHH
Retail/Wholesale
Business/Consumer Services
Basic Materials/Resources
Industrial Goods
Health Care/Life Sciences
Technology
Technology
Retail/Wholesale
Consumer Goods
Consumer Goods
Financial Services
Technology
Retail/Wholesale
Technology
Industrial Goods
Utilities
Utilities
Consumer Goods
Retail/Wholesale
Technology
Technology
Retail/Wholesale
Business/Consumer Services
Health Care/Life Sciences
Financial Services
Financial Services
Industrial Goods
Health Care/Life Sciences
Automotive/Vehicles
Automotive/Vehicles
Consumer Goods
Business/Consumer Services
Health Care/Life Sciences
Retail/Wholesale
Business/Consumer Services
Financial Services
Energy
Health Care/Life Sciences
Basic Materials/Resources
Basic Materials/Resources
Consumer Goods
Technology
Basic Materials/Resources
Consumer Goods
Business/Consumer Services
Leisure/Arts/Hospitality
Automotive/Vehicles
Automotive/Vehicles
Media/Entertainment
Technology
Technology
Energy
Automotive/Vehicles
Consumer Goods
Technology
3 Merged with General Electric Co. on July 3, 2017; new publicly traded company trades under name Baker Hughes a GE Company
Sources: Drucker Institute, using data from American Customer Satisfaction Index, Bloomberg Finance L.P., Clarivate Analytics, CSRHub, Glassdoor, HIP Investor, PayScale, Satmetrix Systems, Supply Chain Resource Cooperative, Sustainalytics, Temkin Group and wRatings
PHOTOS FROM LEFT TO RIGHT: DAVID PAUL MORRIS/BLOOMBERG NEWS; BAXTER INTERNATIONAL; CHRISTOPHER GOODNEY/BLOOMBERG NEWS
Innovation and financial strength
HHHHH
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R6 | Wednesday, December 6, 2017
JOURNAL REPORT | MANAGEMENT TOP 250
Tech Innovation Isn’t Just for Tech Firms
MANAGEMENT TOP 250
TOP COMPANIES FOR
Among the companies scoring well in the category: Wal-Mart and P&G
At Capital One, IT and business
groups work together instead of in
silos to develop, test, revise and deploy software in days and weeks instead of months and years. “We’re
taking software engineers who write
code and putting them in the room
with product owners who know the
things they want to build,” Mr. Alexander says.
Company
179
179
179
186
186
186
186
190
190
192
193
194
194
194
194
198
198
200
200
200
203
204
204
206
206
206
206
210
211
211
213
214
215
215
217
217
219
220
221
222
222
222
225
225
225
225
225
230
230
230
233
233
235
236
236
236
239
239
239
239
243
243
245
245
245
248
248
248
Under Armour Inc.
Waters Corp.
Workday Inc.
Electronic Arts Inc.
McKesson Corp.
Micron Technology Inc.
Xcel Energy Inc.
Steel Dynamics Inc.
VMware Inc.
Boston Scientific Corp.
Ecolab Inc.
American Airlines Group Inc.
Chevron Corp.
CVS Health Corp.
Thermo Fisher Scientific Inc.
Dominion Energy Inc.
Hanesbrands Inc.
Akamai Technologies Inc.
Booz Allen Hamilton Holding Corp.
CSX Corp.
IQVIA Holdings Inc.1
Lowe's Cos.
Paychex Inc.
Alliance Data Systems Corp.
Sirius XM Holdings Inc.
Tenneco Inc.
Tyson Foods Inc.
Exelon Corp.
Albemarle Corp.
Monsanto Co.
Allegion PLC
Hartford Financial Services Group Inc.
F5 Networks Inc.
Ryder System Inc.
DTE Energy Co.
PerkinElmer Inc.
Huntington Ingalls Industries Inc.
PNC Financial Services Group Inc.
Consolidated Edison Inc.
AES Corp.
Goodyear Tire & Rubber Co.
Mosaic Co.
Avon Products Inc.
Caterpillar Inc.
Las Vegas Sands Corp.
State Street Corp.
Textron Inc.
Comcast Corp.
Royal Caribbean Cruises Ltd.
Stryker Corp.
Corning Inc.
Mohawk Industries Inc.
Interpublic Group of Cos.
DaVita Inc.
Halliburton Co.
Prudential Financial Inc.
American Water Works Co.
Kraft Heinz Co.
United Natural Foods Inc.
UnitedHealth Group Inc.
Allergan PLC
Valero Energy Corp.
Jacobs Engineering Group Inc.
Newmont Mining Corp.
Wyndham Worldwide Corp.
Bank of New York Mellon Corp.
Church & Dwight Co.
Coty Inc.
no
Rank
Speed, agility and risk
Process automation has freed up
time for employees to work on
more-strategic initiatives at companies including Procter & Gamble and
Wal-Mart. For instance, P&G is working toward automating as much as
90% of claims investigations in the
accounts-receivable division next
year, and a bot named Lucy helps
quickly answer questions from employees about technical issues and
benefits, Mr. Polit says. Early tests
this year show the bots are increasing productivity in their areas by as
much as 30%, he says.
In November, Wal-Mart posted its
strongest sales growth in nearly a
decade, boosted by a 50% jump in ecommerce sales from a year earlier,
part of a broader effort to embrace
digital technology. About 500 software robots have been deployed
throughout the company, says Clay
Johnson, executive vice president
and enterprise chief information officer at Wal-Mart. Some AI-powered
chatbots are used to answer employee questions. Others help workers sift through 30,000 pages of audit documents, and supervisor
robots manage teams of bots to determine ways they can be more efficient, Mr. Johnson says.
Since he was appointed enterprise
CIO in January, Mr. Johnson says he
has tried to foster a culture of speed,
agility and risk-taking throughout
Wal-Mart’s 10,000-person technology
and services department, which includes employees and contractors.
He recently implemented a system in which IT employees are hyper-focused on specific technology
applications for departments such as
finance and human resources,
whereas before, they would oversee
multiple applications at once. That
will allow IT teams to “fail fast and
move quickly,” particularly when
employees want to tackle challenging projects such as integrating artificial-intelligence capabilities into
software, he says.
Corporate IT has changed immensely over Mr. Johnson’s two-decade career. But the pace of change
has accelerated over the past two
years, he says, as corporations have
looked to IT departments to play a
deeper role in the business.
“You’re starting to see IT become
a strategic, competitive advantage
for the company,” he says.
Ms. Castellanos is a Wall Street
Journal reporter in New York.
She can be reached at
sara.castellanos@wsj.com.
INNOVATION
Is the company investing in
innovation in its products,
services and work processes?
Is it seen as an innovation leader?
3M Co.
Alphabet Inc.
Amazon.com Inc.
Apple Inc.
AT&T Inc.
Berkshire Hathaway Inc.
Coca-Cola Co.
Dow Chemical Co.
Equinix Inc.
Exxon Mobil Corp.
General Electric Co.
International Business
Machines Corp.
Johnson & Johnson
Wal-Mart Stores Inc.
Weyerhaeuser Co.
ly
.
Working together
links over Bluetooth with a mobile
app to alert users to problems with
their brushing routines. Another mobile app the company launched last
year can assess a customer’s skin
through advanced facial recognition
and recommend particular products
or skin-care regimens.
Mr. Polit says his teams are conducting “global industry scans” to
find small and large business partners across the world—those that
have a clear grasp on technologies
such as artificial intelligence, data
analytics, and robotic process automation, the term for automation of
mundane processes with artificially
intelligent software robots.
Sources: Drucker Institute, using data from
Clarivate Analytics, Supply Chain Resource
Cooperative and wRatings
THE WALL STREET JOURNAL.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
INFORMATION-TECHNOLOGY executives at companies of all kinds
among the Management Top 250
have found ways to incorporate the
best strategies from the technology
sector to promote innovation, collaboration and new business models.
IT executives at companies such
as Wal-Mart Stores Inc., Procter &
Gamble Co.—both among the 20
companies with the highest scores
for innovation—and Capital One Financial Corp. are taking on a more
central role in the business, helping
their companies adapt to the digital
age. To that end, they’re using cloud
services and collaborative work
models to speed up the development
and delivery of technology, automating mundane work processes for employees and embracing cutting-edge
technologies that add business value.
“We’re modeling ourselves off the
best technology companies out
there,” says Rob Alexander, Capital
One’s chief information officer. “Not
legacy tech companies, but companies that have been built in the era
of the cloud and the internet.”
Some features in Capital One’s
voice-controlled customer assistant
and artificially intelligent chatbot
were released in a few weeks with
this process, he says. Such projects
would have taken up to 18 months in
the past, he says.
Capital One, which began migrating data and applications to Amazon.com Inc.’s Amazon Web Services
cloud in 2014, is on track to reduce
its data centers from eight to three
next year and expects to see cost
benefits in the process, Mr. Alexander says.
The cloud has also been a godsend for Procter & Gamble. “What
was previously cost-prohibitive is
now cost-effective with the use of
the cloud,” says Javier Polit, P&G’s
chief information officer.
Cloud services have helped
Procter & Gamble’s data scientists
deploy “game changing” data-analytics capabilities in recent years, Mr.
Polit says. For example, analytics
tools built in the cloud are helping
create a smarter supply chain by
helping managers better predict
shifts in inventory, he says. One such
tool drastically reduces out-of-stock
and overstock inventory and is saving the company hundreds of millions of dollars annually, he says.
“We’re able to forecast now in
ways that we couldn’t before,” Mr.
Polit says. “We’ve seen improvements in regards to the quantity of
raw materials we buy, and the costs
associated with ship and restock.”
New technologies also have
helped generate new lines of revenue
for Procter & Gamble. For example,
it offers an Oral B toothbrush that
Score
Customer
satisfaction
Employee
engagement &
development
Innovation
Social
responsibility
Financial
strength
Sector
54.1
54.1
54.1
54.0
54.0
54.0
54.0
53.9
53.9
53.8
53.7
53.6
53.6
53.6
53.6
53.5
53.5
53.4
53.4
53.4
53.3
53.1
53.1
53.0
53.0
53.0
53.0
52.9
52.8
52.8
52.7
52.6
52.5
52.5
52.4
52.4
52.3
52.2
52.1
52.0
52.0
52.0
51.9
51.9
51.9
51.9
51.9
51.8
51.8
51.8
51.7
51.7
51.6
51.5
51.5
51.5
51.4
51.4
51.4
51.4
51.3
51.3
51.2
51.2
51.2
51.1
51.1
51.1
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Consumer Goods
Industrial Goods
Technology
Consumer Goods
Health Care/Life Sciences
Technology
Utilities
Basic Materials/Resources
Technology
Health Care/Life Sciences
Business/Consumer Services
Transportation/Logistics
Energy
Health Care/Life Sciences
Health Care/Life Sciences
Utilities
Consumer Goods
Technology
Business/Consumer Services
Transportation/Logistics
Health Care/Life Sciences
Retail/Wholesale
Business/Consumer Services
Business/Consumer Services
Media/Entertainment
Automotive/Vehicles
Consumer Goods
Utilities
Basic Materials/Resources
Basic Materials/Resources
Business/Consumer Services
Financial Services
Technology
Transportation/Logistics
Utilities
Industrial Goods
Industrial Goods
Financial Services
Utilities
Utilities
Automotive/Vehicles
Basic Materials/Resources
Consumer Goods
Industrial Goods
Leisure/Arts/Hospitality
Financial Services
Industrial Goods
Media/Entertainment
Leisure/Arts/Hospitality
Health Care/Life Sciences
Industrial Goods
Real Estate/Construction
Business/Consumer Services
Health Care/Life Sciences
Energy
Financial Services
Utilities
Consumer Goods
Retail/Wholesale
Financial Services
Health Care/Life Sciences
Energy
Business/Consumer Services
Basic Materials/Resources
Leisure/Arts/Hospitality
Financial Services
Consumer Goods
Consumer Goods
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BY SARA CASTELLANOS
1 Changed name from Quintiles IMS Holdings Inc. on Nov. 6, 2017
Sources: Drucker Institute, using data from American Customer Satisfaction Index, Bloomberg Finance L.P., Clarivate Analytics, CSRHub, Glassdoor, HIP Investor, PayScale, Satmetrix Systems, Supply Chain Resource Cooperative, Sustainalytics, Temkin Group and wRatings
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