Paris suspect charged, #Hollande in the US, winter blues

Good morning, Quartz readers!

What to watch for today

The Philippines goes to court over the South China Sea. It will present arguments over the contested waters to a UN-appointed tribunal in the Hague. Beijing is not participating, but the tribunal said this will not deprive the court of jurisdiction. The hearing is expected to last a week.

François Hollande visits the US. The French president and his US counterpart will coordinate efforts to investigate the Paris attacks and fight Islamic militants. The visit is part of Hollande’s campaign to build a coalition against ISIL; he will visit Vladimir Putin next.

Canada shuts out Syrian men. The government, working toward a year-end goal of accepting 25,000 refugees, will unveil a plan to limit asylum towomen, children, and families. Unaccompanied men will be excluded due to security concerns.

Nigeria announces its rate decision. Analysts are worried that central bank governor Godwin Emefiele will weigh politics heavier than economicsand reduce the cost of borrowing. A lower rate would make borrowing cheaper for president Muhammadu Buhari’s administration.

Hewlett-Packard reports quarterly earnings. This is the last time HP will report its earnings as a single entity, after it split into HP Inc. and HP Enterprise earlier this month. Campbell Soup, Tiffany & Co., and Dollar Treealso report their numbers, as does Hormel Foods.

While you were sleeping

Belgian police charged a fourth Paris suspect. The unnamed man, arrested on Sunday, was accused of participating in activities of a terrorist group and of a terrorist attack. Separately, French police discovered what they believe to be the undetonated suicide vest (paywall) of Salah Abdeslam, one of the Paris attackers still at large.

Jaguar Land Rover warned of lower annual profits. The luxury British carmaker said its full-year pre-tax profit will not match last year’s £2.6 billion($3.9 billion), due to large investments in UK engine manufacturing and a blast in China that destroyed thousands of its vehicles. But CEO Ralf Speth said the Chinese market is rebounding, after a tough year.

Ethiopian Airlines is planning to expand its fleet. Africa’s largest carrier is considering purchasing 10 new planes from Canada’s Bombardier, but is also exploring offers from Brazilian, Russian, and Chinese plane makers. The airline plans to double its fleet from 77 to 150 by 2025—a large proportion of which might be piloted by women.

The US announced sanctions against Burundi officials. Two public security and police officials, as well as two former civil servants, will have their assets frozen and receive visa restrictions, after election-related violence increased in recent weeks. Nearly 250 people have been killed in clashes since April.

Argentina’s president-elect made some grand promises. Mauricio Macri, the center-right leader, promised to cast off capital controls and called on the country’s central bank leaders to step down. But he is refraining from making concrete plans until he sees the “real” state of the nation’s economy, he said.

Japanese manufacturing got a boost. The Nikkei/Markit preliminary purchasing manager’s index rose to 52.8 in November, from 52.4 last month, lifting further from the 50 level that separates expansion from contraction. The highest gauge in almost two years comes on the back of a growth in export orders.

Quartz obsession interlude

Gwynn Guilford and Nikhil Sonnad on why you always get sick on vacation. Lucky are the few who haven’t gone on a much-needed holiday only to spend their vacation hugging a box of tissues in a bed-bound Theraflu blur. So commonly do people seem to fall ill on vacation that some psychologists have christened it “leisure sickness.” Read more here.

Quartz markets haiku

Basically Ireland

is Switzerland with Guinness,

more tax inversions

Matters of debate

Nostalgia is ruining video games. Players’ love for franchises isdiscouraging the creation of new titles.

Bankers are still paid way too much. Even the co-head of Deutsche Bank thinks so.

Bombing Syria won’t make Europe safer. The terrorists who threaten the West are already there.

Surprising discoveries

Scientists discovered how agriculture transformed human genes. Itmight have contributed (paywall) to Europeans’ white skin color.

There’s a trick to avoiding the winter blues. Don’t distract yourself from the bad weather, get out and embrace it.

Mid-life crises are real. Life satisfaction is lower than ever in your 40s.

IBM wants to predict earthquakes and volcanoes. A new use for Watson, the smartypants supercomputer.

Parasitic infections could make some women more fertile.Roundworms can affect the number of children women have.

Our best wishes for a productive day. Please send any news, comments, winter happiness techniques, and mid-life crisis remedies to You can follow us on Twitter for updates throughout the day.

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Macri wins #Argentina, #Brussels on lockdown, gullible Brits

Good morning, Quartz readers!

What to watch for today

Brussels remains on lockdown. Schools, universities, and the metro are expected to remain shut, possibly all week, as Belgian police warn of an imminent attack (paywall). Troops launched 22 raids over the weekend in search for a man suspected of being involved in the Paris attacks.

China deflates some bubbles. New rules take effect on the biggest mainland stock exchanges, in Shanghai and Shenzhen, reducing how much investors can borrow against their existing holdings. The goal is to limit leveraged bets and cut the risk of dangerous speculation.

Pfizer and Allergan seal a mega-deal. The two are expected to announce a merger worth $150 billion, creating the world’s biggest drug firm by sales. The deal would be a “tax inversion” to allow Pfizer to benefit from Ireland’s low corporate taxes.

Britain sets out its defense priorities. Prime minister David Cameronpresents an $18 billion expansion to the country’s military equipment budget. The announcement will hint at both British concerns on global risks, and where the lucrative defense contracts are likely to be.

Françoise Hollande kicks off a week of security talks. The French president will host the British prime minister for a working breakfast, to discuss a military solution for ISIL. Throughout the week Hollande will also meet the leaders of Germany, Russia, and the US.

Over the weekend

Mauricio Macri became president of Argentina. The center-right mayor of Buenos Aires won 52% of votes with most of the ballots counted. Daniel Scioli, running to replace president Christina de Kirchner, conceded after receiving 48% of the vote.

Iran sentenced a US journalist to prison. Jason Rezaian, the Washington Post reporter accused of espionage, was given a sentence of unspecified duration, according to Iranian state media. The Post, which denies the US-born Rezaian is a spy, has a timeline of his arrest and captivity.

Mali launched a manhunt for the Bamako attackers. The countrydeclared a state of emergency as well as three days of mourning after Friday’s siege on a hotel in the capital that killed at least 19 people. Al-Mourabitoun, a group affiliated with Al-Qaeda, has claimed responsibility.

Crimea was plunged into darkness. Saboteurs blew up the power linesthat ran from Ukraine to the now Russian-held peninsula, causing Russia to declare a state of emergency there. Ukrainian activists had earlierblockaded commercial traffic to Crimea.

A Myanmar mine disaster killed at least 100 people. Around 100 more are still missing after a landslide struck jade mines in the country’s north. The jade industry accounts for half of Myanmar’s GDP but lacks transparency, Global Witness says.

Greece inched forward with its bailout. Euro area finance ministersapproved the transfer of up to €10 billion ($10.6 billion) to refinance the country’s banks, after prime minister Alexis Tsipras achieved requested reforms. But Tsipras is losing support in his own government, and may struggle to make further changes.

Violence broke out in Burundi’s presidential office. At least five peoplewere killed in heavy gunfire and apparent mortar shelling in the capital Bujumbura. Fighting connected to president Pierre Nkurunziza’s controversial third term has flared up since April; police say they arrested 28 suspects.

Four reasons to stay invested in housing. The market’s volatility over the last few months may have made investors nervous about some sectors of the global economy. But housing in the U.S. was not one of them: Home builder sentiment is at the highest level it’s been since November 2005. Here are four reasons why we remain positive on the sector.Advertisement

Quartz obsession interlude

Akshat Rathi on “gene drive,” the next potential weapon of mass destruction. “It allows scientists to, essentially, hijack the process of evolution, spreading a new gene through a population with incredible speed. And while it was developed with peaceful uses in mind, such as eradicating mosquitoes to end malaria, it could be used for ill too—it’s cheap and easy enough to master that bioterrorists could get their hands on it.” Read more here.

Matters of debate

Belgium is a failed state. That jihadism could take root in a Brussels suburb says a lot about the country’s institutional weaknesses.

Global deflation is still a problem. The Fed will want to be very carefulwhen it starts raising interest rates next month.

Seeking the best doctor is not the best way to get treatment. Quizzing an average doctor about their treatment plan is (paywall).

The finance industry has lost sight of its purpose. Which is to connect money with borrowers, not generate financial products for their own sake.

It’s immoral to have more than four children. After that point, the added benefits to parents don’t outweigh the child’s future risks.

Surprising discoveries

One in five British kids believe everything they see on search engines.The silver lining: Four years ago it was one in three.

Rome bought five Texan falcons to hunt starlings. The city is sick of the birds’ droppings.

Pigeons can spot breast cancer in X-rays. After two weeks of training,their success rate is similar to that of humans.

Zimbabwe’s “Mr. Ugly” was accused of cheating. The winner of the country’s annual male un-beauty contest is “too handsome,” said his rival’s supporters.

Our best wishes for a productive day. Please send any news, comments, starling droppings, and ugly pictures to You can follow us on Twitter for updates throughout the day.

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Weekend edition—American panic, Kenyan Sinophobia, professional cuddling

Good morning, Quartz readers!

Panic isn’t pretty, but American political leaders have produced it in quantity since the attacks in Paris a week ago.

Rushing through a bill to limit Syrian refugees fleeing ISIL and Assad won’t protect Americans, though. And irresponsible rhetoric about Muslim ID cardsand religious tests simply plays into the clash of civilizations that Islamist extremists would love to see happen.

So what can actually be done about the virulent ideological cocktail spilling out of a broken Middle East into the streets of Paris and Bamako alike?

Eliminating ISIL in its extremist sanctuary in Syria and Iraq will require untangling a lot of geopolitical and ethnic knots. Hillary Clinton, the leading Democratic contender for the US presidency, has a plan for doing that. It is neither simple, nor even likely to succeed, but unlike calls to get tough on refugees, it gets at the real problem—the fragile authoritarian states succumbing in slow motion to their people’s political aspirations and to American bombs, creating space for Islamist rebels.

In other, more familiar words: it means nation-building (paywall).

The trouble is, of course, the US has shown neither the capacity or the political will for such lofty goals (and bloody costs) in Iraq or Afghanistan. On the other hand, as Barack Obama recently said, the only alternative his critics have suggested is to “deploy US troops on a large scale to retake territory either in Iraq or now in Syria.” And who wants that again?

All of which is just a way of saying that there are no easy solutions, and the worst thing politicians can do is pretend there are. Only history will judge whether Obama’s steadfast refusal to scramble his priorities in response to the spasm of violence—more a sign of ISIL’s limits (paywall) than its powers—is wise or foolhardy, but either way, he won’t repeat his predecessor’s mistakes.—Tim Fernholz

Aviation is increasingly becoming a key driver for the Middle East’s economic growth. With over 130 airports, the Middle East is already one of the globe’s main transport hubs, supporting 2.3 million jobs in the region and contributing over $200 billion to the collective Middle Eastern GDP.

Five things on Quartz we especially liked

The backlash against the Chinese in Africa. China’s economic expansion on the continent has brought with it a wave of blue-collar migrants seeking a better life. And they seem to be the easiest target for an anti-Chinese backlash, as Lily Kuo explains in the strange case of the 77 people sitting in a Kenyan jail, accused, improbably of being cyber-hackers.

Take the global financial literacy test. Ashley Rodriguez and Keith Collins recreate the five-question test that was put to 150,000 people in more than 140 countries last year. Can you do better than the average? We certainly hope so, because the average is really rather worrying.

Ben Bernanke on bubbles, bitcoin, and Republicans. Matt Phillipsinterviews the former Federal Reserve chair and learns why he lost patience with the party he once belonged to, why he neither knows nor cares whether tech stocks are overvalued, and how best to lead a roomful of very smart people during the worst financial crisis in living memory.

Bad news for tech stocks is good news for the rest of us. There’s been a wave of disappointing tech IPOs, price markdowns, and other jitters. These, Dan Frommer says, show the system is working as it’s meant to: Instead of broad swathes of retail investors losing their shirts, as in the 2000 bust, professionals are now setting the prices—and paying the price.

Your holiday drone-buying guide. Can’t decide which quadcopter is for you? It all depends whether you want to shoot a movie, fly a drone race, evade impending regulation, or just not hurt anyone. Mike Murphy reviews and recommends seven of the best.

Aviation is increasingly becoming a key driver for the Middle East’s economic growth. With over 130 airports, the Middle East is already one of the globe’s main transport hubs, supporting 2.3 million jobs in the region and contributing over $200 billion to the collective Middle Eastern GDP.

Five things elsewhere that made us smarter

People will pay to snuggle. But Americans are really closed off to the idea of non-sexual touch, the founder of one cuddling business—there are 20 of them in all in the US—tells Priceonomics’ Zachary Crockett. His exploration of the pay-to-cuddle market reveals what it’s like to be a professional cuddler and offers a commentary on our basic human need for connection.

Citigroup’s Mexican money problems. At Banamex USA, signs of alleged money laundering on behalf of Mexican drug cartels were routinely missed. Alan Katz and Dakin Campbell of Bloomberg Markets tell the lurid backstory of the Citigroup subsidiary’s trouble getting to grips with illicit financial flows—a story, sadly, that is playing out at just about every big global bank these days.

Silicon Valley’s teen suicide surge. The rate of teenage suicides is four to five times higher in Palo Alto than the rest of the US, and two high schools there are having the second “suicide cluster” in ten years. For The Atlantic, Hanna Rosin looks at how teens in these schools deal with pressure from high-achieving parents, rigorous academic standards, and the far too common deaths of their peers.

Will AI save humanity or destroy it? The philosopher Nick Bostrom worries about trends that pose a fundamental threat to civilization. His biggest fear: super-smart artificial intelligence that decides it no longer needs humans. In the New Yorker, Raffi Khatchadourian profiles Bostrom and asks whether humanity can survive its own invention.

A bizarre passport plot. Across the Gulf states, passport problems plague all tiers of society: from nomads who never got citizenship to wealthy Arabs who struggle to open businesses abroad because of theirs. As Atossa Araxia Abrahamian recounts for the Guardian, one post-national entrepreneur found a fix: persuade the poor but paradisiacal Comoros Islands to sell its passports in bulk.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, drone recommendations, and blank Comoros passports to You can follow us on Twitter here for updates throughout the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. We’d also love it if you shared this email with your friends. They can sign up for free here.

CWS Market Review – November 20, 2015

November 20, 2015
“Stock market: a place where events with a <1% probability are discussed >90% of the time.”

“Wall Street hates uncertainty”: so goes the old saying. Until recently, investors feared an interest-rate hike. Now that a December rate hike seems quite probable, investors may fear that it won’t happen.

After the awful events in Paris, there was some concern that the Federal Reserve could delay an interest-rate hike. Now that some time has passed, that doesn’t appear to be the case. This week, the Fed released the minutes of its last meeting, and all the signs are in place for a rate hike. We also got an inflation report this week which suggests that deflation has run its course.

According to the latest futures prices, there’s a 71.7% chance that the Fed will raise interest rates at its December meeting. We’ve had false alarms before, but the Fed seems quite serious this time. This would be the Fed’s first interest-rate hike in nearly a decade. The financial world is finally getting back to normal.


In this week’s CWS Market Review, we’ll take a closer look at the recent economic data. Corporate earnings pulled back again during Q3, but there are signs of improvement for Q4. Initial jobless claims have been under 300,000 for the last 39 weeks in a row. That’s the longest streak in more than 40 years.

We just had a nice earnings report from Ross Stores (ROST). The deep discounter had given us tepid guidance, so it’s good to see it beat expectations. Later on, I’ll preview next week’s earnings report from Hormel Foods (HRL). The Spam company just hit a new high—it’s a 32.1% YTD winner for us. I’m also expecting Hormel to raise its dividend next week, which would be its 50th straight annual dividend increase. I’ll also update some of our Buy List stocks. But first, let’s take a closer look at the economy and stock market at the midway point of Q4.

The Global Economy Is out of Sync

We’re heading into the final stretch of the calendar, and in recent years, that’s been a good time for stocks. The S&P 500 has been positive over the final 30 trading days of the year for the last 12 years. Santa is clearly a bull.

What’s interesting is that over the last month, the stock market has developed an unusual pattern. Each day, the market either falls, or it rises by a lot. There haven’t been many modestly positive days.

Here are the numbers: In the last 23 trading sessions, the S&P 500 has fallen 15 times and rallied eight tines. But of those eight positive days, six have been greater than 1.1%. Just two of the last 23 days have seen either a loss less than 0.1% or a gain less than 1.1%. In other words, there’s no more middle ground. To borrow from Yeats, “Things fall apart; the center cannot hold; mean reversion is loosed upon the world.”

What does this mean? Hard to say, but I suspect that the market now assumes each day to be a negative until it’s proven bullish. Obviously, the Paris attack rattled nerves, especially in European markets, but that’s past us, and terrorism’s track record of disrupting financial markets has been a big fat zero. On Wednesday, the S&P 500 rallied over its 200-day moving average, and the French market is positive for the week.

So what’s the economic outlook for the U.S.? On Wednesday, the Federal Reserve released the minutes from its October meeting. I’m afraid these minutes always make for pretty dry reading, even for academics. Yet one part stood out. After the Fed laid out what would have to happen for rates to go higher, “most participants anticipated that…these conditions could well be met by the time of the next meeting.”

Whoa, that’s a big deal. I have to explains that the Fed’s minutes are a case study in the use of indefinite pronouns (“some” said this, “many” said that, “others” felt this). So when they say “most,” they mean it.

Pardon me for a brief nerdy digression, but the Fed is in the midst of a very wonky debate over the “natural interest rate.” This refers to the rate at which everything comes into balance. So when the Fed goes below the natural rate, it’s stepping on the gas. When it goes above it, it’s stepping on the brakes.

But here’s the tricky thing about the natural rate—no one knows what it is. In fact, there are some economists who think the whole idea is bogus. So the idea is that there’s this weird conceptual interest rate that’s floating around somewhere out in the ether, yet we can’t see it or hear it. But it drives everything. And here’s where it gets truly weird: the natural rate has likely gone down. Way down. The staff at the Fed thinks the natural rate went negative during the financial crisis, and it’s probably hanging just above 0% right now. (If you’re curious, here’s a post I did last year about the natural rate and gold.)

I think that’s right. It probably explains why gold and silver have taken such a beating, even though rates are still so low. If your currency’s interest rate is above the natural rate, then, all things being equal, commodities will fall. Silver just snapped its 15-day losing streak. U.S. crude inventories are the highest they’ve been at this time of year since 1930.

Fortunately for the Fed, the vagaries of the natural rate aren’t quite so vital at the moment, but it’s a very big deal to Mr. Draghi and his friends at the ECB. Bond yields in Europe are getting absurdly low. Germany just sold off some two-year bonds at -0.38%. In other words, investors are paying the government to borrow money from them. Stay tuned. I think the ECB will take further steps to get the European economy back on its feet. The euro may soon reach parity against the dollar.


Here’s what investors need to understand: the driving force in the world economics at the moment is that the U.S. and the rest of the world are out of sync. We’re heating up, while they’re still trying to get started. That’s what’s been driving the dollar higher.

On Tuesday, the U.S. government reported that inflation rose by 0.2% last month. That may not sound like much, but in seasonally adjusted terms, it was the most inflation since June. The “core rate,” which excludes food and energy, rose by 0.2%. In the last year, the core rate is up by 1.9%. Officially, the Fed’s inflation target is 2%. The sudden deflation that we saw late last year clearly made the Fed rethink any rate-hike plans. That’s no longer an issue. The next test for the Fed will be the November jobs report, which comes out on December 4. Now let’s take a look at our Buy List earnings report from this week.

Ross Stores Earns 53 Cents per Share

Last week, I told you that I was a bit puzzled by the weak guidance from Ross Stores (ROST). The numbers they gave us simply didn’t add up. Were they low-balling us (as they like to do), or are they seeing real problems ahead?

We’ve also seen a lot of weakness across the retail sector. Macy’s (M), for example, got clobbered after a lousy report. Last week, the Census Bureau said that retail sales were sluggish in October.

In August, Ross said they saw Q3 coming in between 48 and 50 cents per share. After the closing bell on Thursday, they reported Q3 results of 53 cents per share. So maybe they were being extra conservative.

Ross said that Q3 sales rose 7% to 2.783 billion. The key metric, comp-store sales, rose 3%. They had been expecting a gain of 1% to 2%.

Last week, I told you I expected Ross to raise their estimates for Q4. No such luck.

Looking ahead, Ms. Rentler said, “In the upcoming fourth quarter, we face challenging prior-year comparisons, ongoing uncertainty in the macro-economic environment, and a holiday season that will be highly promotional. Therefore, while we hope to do better, we believe it is prudent to maintain our prior guidance for this period. For the 13 weeks ending January 30, 2016, we continue to project same-store sales to be flat to up 1%, versus a strong 6% gain in the prior year, with earnings per share of $.60 to $.63 compared to $.60 in last year’s fourth quarter. For fiscal 2015, earnings per share are now forecast to be in the range of $2.45 to $2.48, up 11% to 12% from $2.21 in fiscal 2014.”

The shares rose about 6% in after-hours trading. Ross Stores remains a good buy whenever you see it below $54 per share.

Expect a 50th Straight Dividend Increase from Hormel

Hormel Foods (HRL) has been one of the best new additions to this year’s Buy List. On Thursday, the shares hit another 52-week high. We now have a 32.1% gain in Hormel, making it our second-best performer YTD.

The Spam company is due to report its fiscal Q4 earnings on Tuesday, November 24. For Q3, the company beat earnings and raised guidance for the full year. That was actually the second time it had raised their guidance. Hormel now sees full-year earnings coming in between $2.57 and $2.63 per share. That implies earnings growth of 15% to 18% over 2014, which itself was a record year.

But what I’m really looking forward to is the dividend announcement. Hormel usually raises its dividend with its Q4 earnings report. The company has increased its dividend for the last 49 years in a row, and the healthy profit increase tells us to expect #50 on Tuesday.

Hormel currently pays out 25 cents per share each quarter, or $1 per share for the whole year. I think it can easily be bumped up to 29 or 30 cents per share. Hormel Foods is a very solid company.

Buy List Updates

On Thursday, shares of AFLAC (AFL) touched a new 52-week high. The stock got as high as $65.42. You may recall how hard the stock was hit during August. But the worriers were wrong. Last month, the duck stock not only beat earnings, but it gave investors their 33rd dividend increase in a row. AFLAC remains a good buy up to $67 per share.

Shares of Bed Bath & Beyond (BBBY) got caught up in the retail storm. The stock finished Thursday below $54 per share, which seems quite cheap to me. Let’s look at the numbers. Last fiscal year (ending in February), the home-furnishings store made $5.03 per share. They said they expect to increase that by 0% to 5% this year. At the halfway mark, EPS is up 2.1%. Note that a lot of that is driven by share buybacks. I’m lowering our Buy Below on BBBY to $58 per share.

This week, Fiserv (FISV) announced a 15 million-share repurchase program. That’s about 7% of the company’s outstanding shares. All things being equal, I’d rather have the company pay shareholders in dividends, but this announcement is a reflection of how strong Fiserv is. Last month, the company beat earnings and raised guidance. Fiserv expects full-year earnings of $3.84 to $3.87 per share. This is another very good stock.

Every time I think the news can’t get worse for Qualcomm (QCOM), the news gets worse for Qualcomm. This week, the company said the South Korean government is investigating it for anti-trust violations. The stock dropped 9.4% and hit a four-year low. Qualcomm denies any charges, but I doubt that will get it far, especially in a country where Samsung, one of its top competitors, is based. I think we’ll soon hear more news about Qualcomm breaking itself up.

That’s all for now. Next week is Thanksgiving, so there will be no issue of CWS Market Review. The stock market will be closed next Thursday for Thanksgiving. The market will close at 1 pm on Friday. This is usually the slowest trading day of the year. There’s not much reason for the market to be open, but the NYSE hates to have the exchange closed four days in a row. The only interesting economic report will come on Tuesday, when we get the first revision to Q3 GDP. The initial report said that the economy grew by 1.5% for Q3. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 seven times in the last eight years. This email was sent by Eddy Elfenbein through Crossing Wall Street.
2223 Ontario Road NW, Washington, DC 20009, USA

Square floats, Lyft’s poor performance, Big Mac sushi

Good morning, Quartz readers!

What to watch for today

Square provides a litmus test for tech IPOs. The mobile payments company begins trading on the New York Stock Exchange with shares priced at an underwhelming $9. Square’s performance will be used to gauge the IPO value of other “unicorn” tech startups.

Barack Obama sits down with Justin Trudeau. The US and Canadian leaders will discuss energy, security, and Syria in their first meeting since Trudeau took office. Canada is also considering joining the US-led Trans-Pacific Partnership trade pact.

South Africa’s interest rate decision could go either way. Policymakers are uneasy about increasing rates in the face of a weak economy, but are also worried about the potential for inflation if rates are left unchanged.

Earnings: Best Buy, Gap, the JM Smucker Company, and Williams-Sonoma are among those scheduled to report quarterly results.

While you were sleeping

Leaked documents highlighted Lyft’s troubles. The ride-hailing service, and Uber’s largest competitor in the US, has repeatedly failed to meet its own performance indicators and is losing more money than it forecast,according to Bloomberg. In the first half of this year, Lyft made a loss of $127 million, on a revenue of $46.7 million.

China confirmed that ISIL executed one of its citizens. The foreign ministry condemned what is believed to be the terror group’s first killing of a Chinese national, and said the government would “hold the perpetrators accountable.” ISIL also claimed it executed a Norwegian hostage; the Norwegian government has not confirmed this.

The US Federal Reserve is on for a December rate hike. “While no decision had been made, it may well become appropriate” to raise interest rates next month, the Fed said in the minutes of its latest meeting.

Pfizer offered $150 billion for Allergan. The US pharmaceutical companybid up to $380 per share for its Irish peer, well above yesterday’s $310.8 closing price. The deal could be complicated by proposed US Treasury rules (paywall) to deter businesses from moving their headquarters to legally escape US taxes.

Keurig handily beat expectations. The US coffee pod and brewing machine maker’s shares shot up by as much as 20% in after-hours trading to $48.70, after reporting better-than-expected earnings in its fourth quarter.But Keurig estimated sales would be flat next year, due to currency swings.

Japan decided against ramping up its stimulus. The central bank kept the rate of its bond buying program steady, despite the economy officially entering a recession. Separately, imports plummeted beyond expectations in October; exports dipped in line with estimates (paywall).

Quartz markets haiku

Looks like December

So what! Rates will still be low

Just get on with it!

Innovation comes from people, not machines. Fujitsu and TechShop are using mobile maker spaces to inspire kids to develop their innate ingenuity. Advertisement

Quartz obsession interlude

Ian Kar on a VC investment in a bitcoin startup. “Moving money across borders is expensive, time consuming, and subject to regulatory costs. By incorporating blockchain and bitcoin, new entrants are betting they can make the process cheaper and faster, opening up a profitable niche of their own.” Read more here.

Matters of debate

ISIL is more European than Europe. It has created an international network of operators, while the EU can’t even unify its police forces.

Don’t leave any money to your kids, give it to charity. It’ll ensure a legacy and make you happier in life.

We can’t comprehend the extent to which we’re being surveilled.Because of public-private partnerships, pushing back is almost impossible, too.

Surprising discoveries

Lego invented slippers to prevent foot injuries. Stepping on a plastic block will no longer cause agonizing pain.

The Statue of Liberty was initially Muslim. Frederic Auguste Bartholdi first planned to make his statue a peasant woman guarding the Suez Canal.

Standing desks at work make you lazier at home. It is very difficult to change our sedentary lifestyle.

A master sushi chef turned a Big Mac into a roll. The burger makes afetching veggie-and-beef combo.

A new robot will do the unpleasant task of weeding for you. It couldeliminate the need for herbicides.

Our best wishes for a productive day. Please send any news, comments, robot weeders, and Big Mac sushi to You can follow us on Twitter for updates throughout the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. We’d also love it if you shared this email with your friends. They can sign up for free here.

Research & Investment | Cement and electricity – not there yet

By Colin Twiggs
November 19th, 2015 5:00 p.m. AEDT (1:00 a.m. EST)

Advice herein is provided for the general information of readers and does not have regard to any particular person’s investment objectives, financial situation or needs. Accordingly, no reader should act on the basis of any information contained herein without first having consulted a suitably qualified financial advisor.

Buying looks a lot more robust than last week and more US-led gains are likely.

Electricity & Cement Production

An examination of electricity and cement production shows the US recovery has plenty of scope for further improvement. Cement production recovered from its dramatic fall in 2008 but remains at the bottom end of the normal range of 120 to 160.

Cement Production

Construction activity is recovering but is a long way below the over-heated levels of 2006. Figures on the graph below are adjusted for CPI.

Construction Spending

Electricity production remains stalled at 2008 levels. Severity of the Great Recession should ensure that low growth endures for longer than the last period of stagnation in the early 1980s.

Electricity Production Index

GDP may have resumed its long-term up-trend but it would be reassuring to see this supported by growing electricity output. Only when growth is restored can we say the economy is fully mended.

Electricity Production compared to Real GDP

North America

The S&P 500 posted two strong blue candles suggesting that the correction is now over. Expect resistance at the previous high of 2130. A 21-day Twiggs Money Flow trough above zero would indicate healthy buying pressure. Breakout above 2130 would signal a fresh advance, with a target of 2400*. Reversal below 2000 is unlikely, but would warn of another test of primary support at 1870.

S&P 500 Index

* Target calculation: 2130 + ( 2130 – 1870 ) = 2390

A CBOE Volatility Index (VIX) peak at 20 indicates market risk is returning to normal.

S&P 500 VIX

NYSE short sales remain subdued.

The Nasdaq 100 is testing its March 2000 high at 4800. Bearish divergence on 13-week Twiggs Money Flow continues to indicate selling pressure but the pattern appears secondary in nature and recovery above the declining trendline would suggest a breakout, offering a target of 5800*.

Nasdaq 100

* Target calculation: 4800 + ( 4800 – 3800 ) = 5800

Canada’s TSX 60 respected support at 765, suggesting another attempt at 825. The 13-week Twiggs Momentum peak below zero (-5%) remains a strong bear signal. Failure of support at 765 would confirm the primary down-trend.

TSX 60 Index

* Target calculation: 775 – ( 825 – 775 ) = 725


Germany’s DAX continues to test resistance at 11000. Troughs on 21-day Twiggs Money Flow above zero indicate medium-term buying pressure. Breakout above 11000 and the descending trendline would suggest another test of the previous high at 12400. Respect is unlikely, but would warn of another test of primary support at 9400/9500.


The Footsie is a lot weaker, only finding support at 6100. 21-Day Twiggs Money Flow oscillating below zero indicates persistent selling pressure. Reversal below 6250 would warn of another test of primary support at 6000. Breakout above 6500 is unlikely, but would suggest another test of 7000.

FTSE 100


The Shanghai Composite Index is testing its new support level at 3500. Declining 13-week Twiggs Money Flow indicates moderate selling pressure. Breach of 3500 would signal another test of 3000.

Dow Jones Shanghai Index

Japan’s Nikkei 225 respected support at 19000, confirming another test of resistance at 21000. Rising 13-week Twiggs Money Flow indicates buying pressure.

Nikkei 225 Index

* Target calculation: 19000 + ( 19000 – 17000 ) = 21000

India’s Sensex broke the band of primary support at 26000/26500 but is edging lower in a trend channel, rather than a dramatic fall. Reversal of 13-week Twiggs Money Flow below zero would warn of rising selling pressure; a trough at zero would suggest buying pressure. Recovery above the upper channel at 27500 is unlikely at present, but would warn of a bear trap.


* Target calculation: 25000 – ( 27500 – 25000 ) = 22500


The ASX 200 respected primary support at 5000, suggesting another test of 5400. A 21-day Twiggs Money Flow trough above zero indicates medium-term buying pressure. Breach of 5000 is unlikely at present, but would warn of a (long-term) decline to 4000*.

ASX 200

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

#Pandora’s expansion, #Obama in Manila, marathon fail

Good morning, Quartz readers!

What to watch for today

Barack Obama meets with Asian leaders in Manila. The US president and nearly a dozen other leaders are flying straight from the G20 summit in Turkey to the Asia Pacific Economic Cooperation (APEC) Summit in the Philippines, to discuss security, the Trans-Pacific Partnership, climate change, and disputed waters in the South China Sea.

Catalonia charges ahead with secession plans. Days after a resolution for independence was blocked by Spain’s constitutional court, lawmakers are meeting in Barcelona to start the process anyway. The regional parliament has given itself 30 days to write a new constitution.

Canada gets Apple Pay. It will be only the third country, after the US and UK, to see activation of the service, which Apple has been slow to roll out internationally. The launch is taking place without cooperation from major Canadian banks or credit card companies.

Wal-Mart reports earnings. A month after warning of dismal results, the American retail giant is expected to post a 1% drop in quarterly revenue, to a mere $118 billion. Shares are near a three-year low.

While you were sleeping

US states closed their doors to Syrians. At least a dozen states, including Michigan, Alabama, and Texas, said they would not accept refugees from the war-torn country in the wake of the Paris attacks, although no Syrians have been definitively identified among the Paris attackers. President Obama rejected the idea that refugees should face religious testing.

Greece cleared a major hurdle with its creditors. Finance minister Euclid Tsakalotos smoothed over disagreements with the Euro Working Group regarding protections for homeowners and certain pension issues, allowing Greece to access €12 billion ($12.8 billion) in aid. Most of that will be spent recapitalizing banks.

Liberty Global agreed to buy Cable & Wireless. The London-based telecom company will pay £3.5 billion ($5.3 billion) for its Americas-focused counterpart, in an effort to expand into Latin America.

Pandora bought into Rdio. The music streaming service agreed to pay $75 million for technology that would allow it to create a range of paid plans for an on-demand library of music. Pandora will not buy into Rdio’s operating business, but hopes the technology will help it battle Apple Music and Spotify.

Shareholders panned a takeover move by Urban Outfitters. The US clothing company announced it had acquired a stake in a chain of pizza restaurants, as part of a plan to reshape its retail strategy and offset its declining store sales. Investors were skeptical; its share price dropped 12% in after-hours trading.

Quartz markets haiku

Calm after a storm

A surge against darkened tides

Normal trading hours

The key to your password is your heart. The next generation of securitytechnologies are human centric, using unique biometric signatures to protect your devices and identity.Advertisement

Quartz obsession interlude

Kevin Delaney on an app that pays its users for every message: CEO Nathan Eagle, speaking on the sidelines of Quartz’s The Next Billion event in New York, says that Jana is giving data credits for messaging in the expectation that it spurs other activities within mCent. “People like free stuff, particularly in these markets,” says Eagle. “These are very cost-sensitive consumers.” Read more here.

Matters of debate

Uber is not a disruptive innovator. It falls short of that specific definition, and that’s important for the taxi industry to remember.

Beirut and Paris are proof of an empathy gap. People take notice whenvictims of terrorism resemble themselves.

ISIL wants Christians and Muslims to fight a war. And US Republicans appear to be taking the bait.

Surprising discoveries

Bangkok set a new world record for the longest half-marathon. An erroneous U-turn made the race 27 kilometers (17 miles) long.

Scientists found a lost island in the Aegean Sea. The ancient city of Kane was the site of a famous battle in 406 BC.

2,000-year-old bread tastes surprisingly good. The British Museum had a chef recreate a loaf found in the ruins near Mount Vesuvius.

Colombia wants to become a legal marijuana exporter. What would Pablo Escobar have said about that?

“The Diary of Anne Frank” is now officially co-authored by Anne’s father. Adding his name will delay the book’s entry into the public domain.

Our best wishes for a productive day. Yes, we are trying out a new poetry-based markets feature. Please tell us whether you like it, and send along any news, comments, rediscovered islands, and ancient bread recipes You can follow us on Twitter for updates throughout the day.

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