#EU summit, Clooney’s tequila bonanza, orca gangs

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

EU leaders convene for a two-day quarterly summit. They’re expected to issue a joint statement on defense and global trade, and reiterate their support of the Paris climate accord. Ahead of the Brussels meeting, Italian prime minister Paolo Gentiloni called Brexita tough wake-up call.

Republicans in the US Senate finally unveil their health-care bill. President Donald Trump wants the Senate to pass a more “generous” bill than the one approved by the House, which he reportedly called “mean.” Majority leader Mitch McConnell has announced there will be just 10 hours of debate on the Obamacare repeal legislation.

The US Fed releases results from its big-bank stress tests.Investors hope it will let large US banks use some of their $150 billion in idle capital for dividends, stock buybacks, and other things. The Fed will release a second set of results on June 28. The tests measure the ability of banks to continue lending even in a serious economic recession.

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WHILE YOU WERE SLEEPING

George Clooney sold his tequila business. London-based Diageo will pay $700 million for Casamigos, with a potential for $300 million more depending on future performance. The interest from Diageo—owner of Smirnoff, Guinness, and Johnnie Walker—coincides with rising tequila consumption in the US.

ISIL reportedly destroyed one of Iraq’s most iconic monuments. The centuries-old Al-Nuri Mosque, which dates to the 12th century, was where the extremist group declared a caliphate in 2014. ISIL claimed an American airstrike destroyed the mosque and minaret, but the Iraqi military placed the blame on ISIL’s own explosives.

Nike will start selling some items on Amazon. Previously it refused to engage with the e-commerce giant, fearing it would “undermine its brand.” But with traffic at traditional outlets declining, Nike had little alternative. Shares of Foot Locker and other retailersfell on the news.

Top US and Chinese diplomats met to discuss North Korea.The US urged China to use more economic and diplomatic pressureto get Pyongyang to rein in its nuclear missile program. US secretary of state Rex Tillerson said Donald Trump would visit China later this year.

QUARTZ OBSESSION INTERLUDE

Lina Zeldovich on how waterless toilets will change the world.“The waste is sealed into a biodegradable bag underneath the toilet with not a drop of water being spilled. Once full, the bag is replaced by a service team, and the waste is brought (yes, hand-delivered) to Loowatt’s pilot waste-processing facility, where it’s converted to fertilizer and biogas.” Read more here.

MARKETS HAIKU

Perhaps it’s time for / an Uber for CEOs / the meter’s running

MATTERS OF DEBATE

Amazon is a monopoly in need of regulation. The Whole Foods acquisition puts it on a fast track to dominate yet another platform.

“Woke pop culture writing” isn’t enough. Let’s not confuse artistic critiques with political engagement.

Travis Kalanick could have learned a lot from Jean Liu. The president of China’s Didi Chuxing is known for her collaborative approach to competition.

SURPRISING DISCOVERIES

Orcas are the pirates of the Bering Strait. Gangs of up to 40 killer whales are shaking down Alaskan fishermen and stealing their catch.

NASA’s Mars rover is great at vaporizing rocks with a laser.Without any human involvement, it is analyzing hundreds of samples a day.

Brits born in the 1980s would be twice as wealthy if born just five years earlier. The generational wealth gap has trickled into politics.

Barbie’s friend Ken got a cornrow makeover. Bye-bye blue eyes: Mattel’s latest reboot features several ethnically and physically diverse looks.

North Korea has been Photoshopping Kim Jong-un’s ears.Forensic software reveals tweaks to make the dictator seem “a bit more handsome.”

Our best wishes for a productive day. Please send any news, comments, Ken doll alternatives, and photos of Kim Jong-un’s ears to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

#Queen’s Speech, #Uber takes tips, too hot to fly

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

Queen Elizabeth announces the British government’s legislative agenda. It looks to be the first Queen’s Speech delivered by a minority government since 1978, after prime minister Theresa May called a June 8 snap election that hurt rather than helped her Conservative party in Parliament.

The US and China meet to discuss North Korea. The inaugural session of the US-China Diplomatic and Security Dialogue, which presidents Donald Trump and Xi Jinping launched after their April summit, will focus on joint efforts to curb Pyongyang’s nuclear program.

The National Association of Realtors shares existing-homes sales data for the US. In April sales fell 2.3% from the previous month. For May, economists expect a 0.4% decline (paywall), with a shortage of properties keeping prices high and buyers sidelined.

WHILE YOU WERE SLEEPING

Republicans retained a fiercely contested seat in the US Congress. Karen Handel won the House seat vacated by US health secretary Tom Price. Democrats, sensing voter anger against Donald Trump, had hoped for an upset win in the GOP-leaning district in Atlanta’s suburbs. The two parties combined spent a record $57 million on the contest.

Toshiba picked a preferred bidder for its prized memory-chip unit. It chose a consortium of Japanese, US, and South Korean firms instead of Broadcom or other suitors. Offering $19 billion, the consortium is led by the Japanese government, which is keen to keep the unit under domestic control.

Uber is finally letting its drivers accept tips. To reduce driver turnover and dissatisfaction, the ride-hailing giant began offering an in-app tipping feature in several US cities. The rest of the country will have it by the end of July, and other parts of the world in the near future. CEO Travis Kalanick, who long opposed a tipping option, iscurrently on leave.

Chinese stocks got a big boost from MSCI. The US index giant agreed to add mainland “A” shares to its widely tracked emerging markets index. While the stocks will account for just 0.5% of the index, the decision could lead to hundreds of billions of dollars worth of share purchases.

Saudi Arabia named a new crown prince. Mohammed bin Salman, still in his early 30s, has played a key role in the country’s efforts to expand the economy beyond oil. Now he’s set to inherit the throne occupied by his father, King Salman.

QUARTZ OBSESSION INTERLUDE

Sarah Kessler on the selective rollout of Facebook’s “Pride” button: “The decision to make pride month reactions more visible in some places than others highlights a common problem for Facebook as it has scaled to nearly 2 billion global active users. In many of the countries where Facebook users said they could not access the pride button feature, such as Egypt and Algeria, homosexual acts are illegal.” Read more here.

MARKETS HAIKU

There’s a glut of crude / Bad news for cartels, good news / for your Suburban

MATTERS OF DEBATE

The “cool tech girl” is a dangerous myth. Casual sexism and toxic bro-culture have created a trope that needs to die.

Brazil may elect its own version of Donald Trump. Jair Bolsonaro is running on a racist, misogynist, and xenophobic platformthat is gaining steam with each new controversy.

Index funds aren’t as passive as you think. The proposedexclusion of dual-class companies (paywall) and recent inclusion of Chinese shares show that “passive” funds make active choices(paywall).

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SURPRISING DISCOVERIES

An ancient Islamic city was discovered under an Ethiopian town. Researchers have found evidence of a giant trading post, including jewelry and massive building stones.

No one knows Nigeria’s true population. Africa’s most populous country hasn’t had a census since 2006, and even that was probably exaggerated.

The neon flying squid is faster than Usain Bolt. It propels itself through the air by expelling water and using its fins as sails.

Old dads tend to have geeky sons. A survey of 8,000 boys found that older fatherhood was linked with higher IQs and social aloofness.

It’s so hot in Phoenix that planes can’t fly. American Airlines was forced to cancel 20 regional flights after the mercury hit 120°F (49℃), above the operational limits of some aircraft.

Our best wishes for a productive day. Please send any news, comments, cool tech-girl tropes, and Nigerian population estimates to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Weekend edition—#Amazon eats the world, the new markers of wealth, your circle style

Good morning, Quartz readers!

Amazon’s deal to buy Whole Foods may be remembered as the dawn of a new era in business, when an old industry stubbornly resistant to change suddenly gave way to something modern and innovative. But supermarkets were once themselves a cutting-edge concept.

It wasn’t that long ago that shoppers went to the butcher for meat, the baker for bread, and the green grocer for produce. Starting in 1930, the supermarket pulled it all together. The bounty of the American supermarket, with its towers of toilet paper and freezers full of meat, was so arresting to Soviet officials who visited one in 1989 that itshattered their faith in communism and helped end the Cold War.

Modern supermarkets were made possible by a host of changes, from industrial-scale farming to the interstate highway system. But after pioneering a logistics revolution that paved the way for shopping malls and big-box stores, progress pretty much stopped. While virtually every other domain of commerce has changed dramatically with the advent of the internet, online grocers were stymied by the challenge of delivering perishables while operating within the tight margins that make groceries a competitive business.

Why is this time different? Part of it is the track record of Amazon and Jeff Bezos; from books to television shows, there is little, if anything, they haven’t been able to sell online.

Bezos will soon be the richest person in the world. After today, Amazon is headed toward being the biggest company. And just as flip phones became obsolete the day after iPhones were introduced, Amazon-powered food buying could soon make us wonder how we ever managed before.—Oliver Staley

FIVE THINGS ON QUARTZ WE ESPECIALLY LIKED

How do you draw a circle? Direction, it turns out, is everything. Thu-Huong and Nikhil Sonnad analyzed 100,000 circle samples from around the world, finding intriguing clues about culture, geography, and upbringing. Draw yours here to learn which way you roll.

Why it’s so hard for women to figure out what to wear to work.Increased freedom of choice makes buying—and selling—more complicated than ever, Marc Bain explains. The big clothing brands are just as flummoxed as customers, but the answer may lie in “capsule wardrobes” customized to match specific office dress codes.

The nearly invisible new markers of the elite. The leisure class no longer trumpets its status with flashy purchases. Low-key is the new high-water mark of arrival, Dan Kopf finds, as Americans of means demonstrate their deepest aspirations with NPR tote bags, yoga classes, and other less conspicuous symbols of cultural capital.

The private-prison industry loves the US Marshals. The agency runs the nation’s largest jail system but owns no buildings to house its thousands of detainees, Hanna Kozlowska reports. Trump’s immigration crackdown means business will only increase foroperators with questionable records on safety and compliance.

Modern medicine makes wellness a women’s issue. At the inaugural summit of Gwyneth Paltrow’s lifestyle brand Goop, Jenni Avins meets seekers on a quest for fulfillment amid markers of the lucrative “transformation economy.” Annaliese Griffin links the boom to the medical establishment’s bias against women, who are now drawn to cozier types of care.

QUARTZ ANNOUNCEMENT

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FIVE THINGS ELSEWHERE THAT MADE US SMARTER

The miserable origin story of the iPhone. A decade after its release, Brian Merchant dives into the iPhone’s still-hotly-debated genesis for The Verge, detailing an intense Apple operation that birthed one of the world’s most influential devices—and ruined more than one marriage.

What was easy to miss about bitcoin. Bitcoin’s greatest advantages over legacy payment systems seemed to be low cost and fast speed. But with those gaps closing, American Banker’s Marc Hochstein argues for a more important bitcoin benefit: “censorship resistance,” to counter governments, political-correctness police, or anyone else who might seek to control our transactions and the data trail they leave.

Wealthy countries outsource toxicity to Asia. In the ‘80s, chemicals called EGEs were linked to miscarriages and other problems for women in semiconductor factories. In the US and Europe, the industry stopped using them. IBM, Motorola, HP, and others started relying on chips manufactured in South Korea, where, Bloomberg Businessweek finds, plants are still using EGEs, putting 120,000 women at risk.

Smoking shows inequality is a matter of life and death. The US smoking rate is just 15%. But it remains over 40% for the less educated. As cigarettes become a habit of only the poor in America, William Wan in the Washington Post spotlights how wealthier Americans are increasingly immune (paywall) from their devastating health and financial costs.

Meet the real father of economics. Ibn Khaldun, the 14th-century Islamic scholar, laid down basic economic precepts such as the division of labor four centuries before Adam Smith, and even hinted at the 20th-century ideas of John Maynard Keynes. Daniel Olah in Evonomics celebrates the pioneering—and thoroughly modern-sounding—writings of a thinker often ignored by the West.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, circle drawings, and miserable origin stories to hi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone and Android.

CWS Market Review – June 16, 2017

CWS Market Review

June 16, 2017

“If you’ve followed my forecasts, you’ve probably lost a lot of money.”
– St. Louis Fed President James Bullard

Well…it happened. As expected, the Federal Reserve raised interest rates again this week. I don’t like it, but we can’t always choose the ideal environment to invest in. If you wait for things to be perfect, then you’d never be in the market.

This was an important meeting for the Fed because they also explained what they intend to do with their enormous balance sheet. This has been a big concern on Wall Street. I’ll explain what it all means. Additionally, the central bankers updated their economic projections. I should explain that the Fed has a pretty dismal track record of predicting where things will go, but it’s still useful to look at their outlook for the economy.

Fortunately, the stock market continues to hold up well. The S&P 500 closed at another all-time high on Tuesday. However, there’s been a significant weak link in the market recently, and that’s big-cap tech stocks. Don’t feel too bad for these guys. They’ve been running up the score lately, so I can’t say it’s not wholly surprising to see them face a little pain. Outside of Microsoft, this recent trend hasn’t had a big impact on our Buy List. In fact, our Buy List has been doing quite well of late. Before I get to all that, let’s look at what the Fed did this week.

The Federal Reserve Raises Interest Rates

On Wednesday afternoon, the Federal Reserve released its latest policy statement. The central bank said they raised their range for the Fed funds rate to between 1% and 1.25%. That’s an increase of 0.25%. This was the second rate hike this year, and the fourth of this cycle.

As I’ve said before, I think this move is a mistake, and I won’t belabor the arguments against the increase. It happened, and we have to move on. I’ll note that there was one dissenting voice, Neel Kashkari of the Minneapolis Fed, who agrees with me.

On Wednesday morning, just hours before the Fed’s statement, the government released the inflation report for May. The report again showed that there’s absolutely no threat of inflation on the horizon. If anything, the rate of inflation has fallen off sharply over the last three months. It’s hard to justify rate increases to fight off an inflation threat that doesn’t exist.

During May, the headline rate of inflation fell by 0.1%. Economists had been expecting no change. Some of that was due to falling prices for gasoline. That’s why we also want to look at the “core rate,” which excludes volatile food and energy prices. But the core rate for May only rose by 0.1%. There’s simply not much inflation out there.

You may recall that March was the weakest month for core inflation in over 30 years. As with all stats, we don’t want to be fooled by one-point trends. There are always outliers, so we want to see more evidence. Indeed, that evidence came in the last two months. Core inflation for April and May were the second- and third-weakest of the last three years, trailing only March. So it’s not only that inflation is low: it’s actually going lower.

More troubling is that we’ve seen a swift reaction in the bond market. On Tuesday, the yield on the 10-year Treasury dropped to 2.1%. That’s the lowest point all year. After the election last year, Treasury yields soared on economic optimism, but that’s largely faded in recent weeks. The spread between the two-year and ten-year Treasuries is now less than 80 basis points.

In the Fed’s policy, they acknowledge the recent weakness in the economy, but they seem to feel that it will soon pass. I hope they’re right, but I just don’t see the evidence just yet. In fact, this week’s retail-sales report was another dud. Economists had been expecting a gain of 0.1%. Instead, retail sales fell 0.3% in May. This was the biggest drop in 16 months.

But the Fed thinks they’ve only started raising rates. According to the latest Fed projections, they expect to raise rates one more time this year. After that, the outlook becomes a lot less clear (the blue dots get much more dispersed). The Fed sees three more hikes in 2018, and possibly three more in 2019. That means it’s possible that the 2/10 spread could be negative as early as next year. Still, I don’t want to be too alarmist. By the Fed’s own projections, they see real interest rates staying negative for another 18 months. My point is that we’re not in the danger zone just yet, but we can see it on the horizon.

The Fed also unveiled its plans for what they intend to do with their $4.2 trillion balance sheet, or as the Fed calls it, their “normalization plans.” The Fed said they plan to stop reinvesting the proceeds of their bonds in gradually increasing increments. It will be a long, long time before the balance sheet gets back to normal. But the key point is that the Fed intends to raise rates at the same time they address their balance sheet. That point wasn’t always so clear.

The Great Tech Stock “Crash” of 2017

What’s happening with tech stocks? The tech sector has fallen four times in the last five sessions, and some of those drops have been pretty sharp. The stock market had been so placid for so long that a fairly minor bump in the road for large-cap tech stocks has rattled a lot of investors.

Let’s add some context here: tech stocks had been leading an already powerful rally. In fact, the rally hasn’t even affected the whole sector. A huge part of the gains have fallen on just five major stocks; Facebook, Apple, Amazon, Microsoft and Google. That’s right: the latest acronym hitting Wall Street is FAAMG.

At one point, Facebook, Amazon and Apple were all up over 30% for the year. That was more than three times the rest of the market. Not anymore! In the last week, the Tech Sector ETF (XLK) has dropped from $57.44 to $55.57.

I want to stress that the damage we’re seeing in tech is hardly unprecedented. What’s been unusual is the exceedingly low volatility visible until now. It’s the change from very, very low volatility to normal behavior that’s jarred Wall Street. Frankly, the current losses are very normal.

Our Buy List has largely side-stepped the FAAMG phenomenon, with the exception of Microsoft (MSFT). Shares of MSFT just pulled back below our $70 Buy Below price. Again, that’s following an impressive run-up. Of all the FAAMG stocks, Microsoft is the one I’m least worried about. The last few earnings reports have been quite good. Also, I’m expecting another dividend hike in September. For now, I’m not worried about Microsoft, but I think we’ll see more losses in the tech sector for a few more weeks. Now let’s look at some of our Buy List stocks.

Buy List Updates

There hasn’t been a lot of news impacting our Buy List stocks this week. The good news is that our performance versus the rest of the market continues to be strong.

This week, I want to make a few adjustments to some of our Buy Below prices. As always, please bear in mind that these are not price targets. Instead, they’re guidance for current entry into a stock.

First up is AFLAC (AFL). I’m lifting my Buy Below on the duck stock to $80 per share. AFL has gapped up recently. Paul Amos, the current president and CEO’s son, said he’ll be leaving the company. That probably takes him out of the running to be the next CEO.

I’m also raising our Buy Below on Fiserv (FISV) to $131 per share. This stock is as strong and steady as it’s ever been. I’m looking forward to another good earnings report next month.

I’m dropping my Buy Below on Ross Stores (ROST) to $66 per share. I still like Ross a lot, but the stock has been caught up in a poor environment for retail. I’m not worried about Ross. This will be a real bargain if you can get Ross below $60 per share.

Finally, I’m lowering my Buy Below on Snap-on (SNA) to $168 per share. This is another good stock caught in a downtrend.

That’s all for now. There’s not much in the way of economic news next week. On Wednesday, we’ll get the existing-home sales report for May. Then on Friday will be the new-home sales report. For now, the housing sector is a bright spot in the economy, while consumer spending looks tired. We’ll see how long this can last. Be sure to keep checkingthe blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

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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 eight times in the last ten years. This email was sent by Eddy Elfenbein through Crossing Wall Street.
2223 Ontario Road NW, Washington, DC 20009, USA

#Greece gets a bailout, Mike #Pence gets a lawyer, cosmic bruise

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY AND OVER THE WEEKEND

Donald Trump turns back the clock on US-Cuba relations. The US president is expected to at least partly reverse the Obama-erameasures that opened the country to US trade and travel in 2014.

The Dalai Lama gives a contentious speech in California.Chinese students, who account for 14% of the University of California San Diego’s student body, say the school was insensitive to invite the exiled Tibetan leader to give a commencement address.

Yahoo ceases to exist. Board member Thomas McInerney will become CEO of the newly renamed Altaba, a holding company with stakes in Alibaba Group and Yahoo Japan.

WHILE YOU WERE SLEEPING

Greece and the EU agreed on yet another bailout. Euro zone finance ministers agreed to extend another €8.5 billion ($9.5 billion) in funds, which will go toward servicing previous debt—essentially aloan to repay a previous loan.

Mike Pence lawyered up. The US vice president hired Richard Cullen as his outside counsel. Known for defending officials in high-profile investigations, Cullen will represent Pence during probes into whether there were ties between Russia and the election campaign of president Donald Trump.

The US student freed by North Korea has a severe neurological injury. Otto Warmbier returned to his home state of Ohio this week in a state of “unresponsive wakefulness,” his doctors said. That’s not a coma, but a persistent vegetative state. Warmbier spent more than a year in North Korean prison for stealing a propaganda poster.

A woman who was raped by an Uber driver in India is suing the company. The unnamed woman, who lives in Texas, filed a US lawsuit against CEO Travis Kalanick and two former executives who allegedly obtained her medical records.

The Bank of Japan kept its monetary policy steady. As expected the central bank left short-term interest rates at -0.1%. It also expressed confidence that the economic recovery, led by strong exports, was broadening and gaining momentum.

QUARTZ OBSESSION INTERLUDE

Thu-Huong Ha and Nikhil Sonnad on what we reveal when we draw a circle. “Americans tend to draw circles counterclockwise. Of nearly 50,000 circles drawn in the US, 86% were drawn this way. People in Japan, on the other hand, tend to draw circles in the opposite direction. Of 800 circles drawn in Japan, 80% went clockwise.” Read more here.

MATTERS OF DEBATE

Hedge funds need to stop naming themselves after Greek gods. Medea slaughtered her sons, Hermes was the patron of swindlers, and don’t even start with Icarus.

Instagram is rendering record labels obsolete. Through social media, musicians can finally be their own bosses.

Extremists aren’t always criminals. Engaging with people who are moving toward political violence is essential to preventing terrorism.

QUARTZ ANNOUNCEMENT

Sign up for the Cannes Daily Brief, Quartz’s pop-up newsletter on Cannes Lions — the world’s premier celebration of creativity in advertising — and sponsored by Undertone. Our journalists will be on the ground in Cannes from June 19 to 23 to report on industry moments, trends, and surprises. Whether or not you’ll be on La Croisette, sign up to stay informed about what’s happening on the ground and what it means for the media business.

SURPRISING DISCOVERIES

You could be a tree someday. Two Barcelona brothers makebiodegradable urns that seed pines, redwoods, maples, and oaks from human ashes.

The secret to AI may be knowing how to say “good job.” New research suggests that humans may be the best at helping machines learn.

Sushi robots could serve up Japan’s economic recovery.Automation is compensating for the nation’s shrinking population, especially in the food and restaurant industry.

Baby sea turtles are baking on the beach. Rising temperatures on Florida’s coasts are killing hatchlings and skewing turtle populations.

The universe has a bruise. An anomalous region of the sky might be the mark left from an ancient collision with another universe.

Our best wishes for a productive day. Please send any news, biodegradable urns, and sushi robots to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

#Greek bailout talks, #US-#Qatar arms deal, Asian river pollution

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

Greece negotiates another bailout. Euro zone finance ministers and IMF chief Christine Lagarde will meet in Brussels (paywall) as they try to strike a deal that could unlock another large payout to Athens—this time to the tune of €86 billion ($96.5 billion).

The Bank of England decides on interest rates. Despite inflation reaching 2.9% last month the bank is expected to keep interest ratesat a record low of 0.25%. The Bank of Japan also meets and isexpected to keep its -0.1% short-term rate flat.

European mobile users get a nice bonus. Residents will be able to make wireless calls, use data, and send texts without any additional roaming charges within the EU, as new rules take effect.

WHILE YOU WERE SLEEPING

Robert Mueller is investigating Donald Trump for possible obstruction of justice. That marks a major turning point in the FBI investigation’s into alleged Russian interference in the US election,reports the Washington Post. Mueller took over the probe as a special counsel after Trump fired FBI director James Comey. Obstruction of justice could form the basis for impeachment, but that would still be a long shot.

The US Senate overwhelmingly approved expanded sanctions against Russia. Lawmakers made the move in response to Russia’s likely interference in the US presidential election, and for its actions in Syria’s civil war. Unlikely to be vetoed given the strong bipartisan support, the deal would also prevent Trump from loosening or rolling back restrictions on Russia without Congress’s approval.

The US and Qatar agreed to an arms deal worth $12 billion. The preliminary agreement involves Qatar buying dozens of F-15 fighter jets. Qatar, which hosts the largest US military facility in the Middle East, has been accused by its neighbors of financing terrorism. In a bit of awkward timing—the deal has been in the works for months—Trump last week agreed with those accusations.

Western Digital sought a court injunction to block the sale of a Toshiba chip unit. The California company jointly operates Toshiba’s main chip-plant and wants to buy the unit, which Toshiba aims to sell for $18 billion to cover cost overruns at its bankrupt Westinghouse nuclear unit. Western Digital fears Toshiba is leaning toward another buyer, which it contends would be a breach of contract.

QUARTZ OBSESSION INTERLUDE

Heather Timmons on a shooting that instantly became political propaganda. “Within minutes of news breaking that Republican congressman Steve Scalise had been shot during a baseball practice… supporters of US president Donald Trump and alt-right talking heads were pushing a line that the shooting was part of a left-wing plot.” Read more here.

MARKETS HAIKU

Potential Fed clash / Over the chair: Should she stay? / Or should she go now?

MATTERS OF DEBATE

Playing videogames instead of getting a job is fine—for now.“Innovations in leisure computer activities” have resulted in more happiness and less despair for many young men.

Europe has too many types of tanks. The EU dreams of a common military but needs to harness continent-wide economies of scale.

Trump is making the Middle East squabble worse. By siding with Saudi Arabia, he’s simply backing one terrorist-financing autocracy over another.

SURPRISING DISCOVERIES

A parking space in Hong Kong just sold for over $664,000. It’s less than 18.5 square meters (200 square feet) yet costs more thansome two-bedroom homes.

Almost all of the ocean’s plastic comes from Asian rivers. The continent’s waterways send more pollution into the ocean than all the others combined.

Google is building a gallery to document unusual sari styles.The online exhibition will feature dozens of rare regional variationsfrom across India.

There’s a fish that recognizes faces. The cichlid can recognize friends and becomes guarded when it meets strangers.

A popular French cheese is endangered. Of the 360 million wheels of Camembert produced each year, only about 1% meet rigorous production standards.

Our best wishes for a productive day. Please send any news, soft-ripened cheeses, and sari-draping tips to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

#Uber CEO exit, #Sessions talks #Russia, surging slime

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

The Fed raises interest rates. Analysts widely expect the US Federal Reserve to increase its benchmark rate as the labor market and broader US economy improve—the second hike so far this year. Not everything is sunny, however: Inflation has dropped off slightly and hopes for major infrastructure and tax-reform policies have dimmed.

Xi Jinping meets the head of FIFA. Gianni Infantino and China’s president are expected to talk about a Chinese bid to host the World Cup in 2030 or 2034. Another option that’s being discussed: a co-hosting arrangement with China, South Korea, Japan, and North Korea.

The world’s biggest fashion retailer shares its results. Spain-based Inditex, which controls Zara and Massimo Dutti, will likely post another strong quarter, defying the glum retail environment. Citibank expects the fast-fashion giant to notch a 16% jump in pre-tax profits from a year ago, and analysts predict a 6% or 7% rise in like-for-like sales.

WHILE YOU WERE SLEEPING

The US attorney general called Russian collusion claims “a detestable lie.” A combative Jeff Sessions denied reports that he had an undisclosed meeting with Russian ambassador Sergey Kislyak, saying “if any brief interaction occurred in passing… I do not remember it.” Sessions refused to discuss any conversations with president Donald Trump about the firing of FBI director James Comey.

Jim Mattis gained authority from Trump to decide troop levels in Afghanistan. The US defense secretary is believed to favor sending several thousand more soldiers (paywall) to the country, where, he has said, “the enemy is surging.” The US has about 9,800 troops there. Most are assigned to training the Afghan military, but a few thousand fight Al Qaeda and other militant groups.

Australia agreed to compensate Manus Island detainees. The government and its contractors offered A$70 million ($53 million) to settle a class-action lawsuit representing 1,900-plus asylum seekers and refugees. The detainees have complained of suffering serious physical and psychological injuries while in offshore detention centers on the Papua New Guinea island.

Uber’s CEO took an indefinite leave of absence. After a long string of scandals and the sudden death of his mother, Travis Kalanick told employees that he was taking a break to work on “Travis 2.0.” The company’s board will appoint an independent chairman and hire a new chief operating officer who will assume some of Kalanick’s responsibilities.

QUARTZ OBSESSION INTERLUDE

Hanna Kozlowska on the private-prison client no one talks about. “The largest jail system in the United States has no buildings of its own. Instead, it’s a shadowy complex of agreements that tucks detainees in wherever there’s available space. It has swelled substantially over the past two decades, and it is likely to grow further.” Read more here.

MARKETS HAIKU

Rare celestial / events and rate hikes. Long waits / And not much suspense

MATTERS OF DEBATE

Ride-hailing and electric cars will kill Big Oil. The cost to hail an autonomous, electric car will make gasoline obsolete.

Eric Holder is the disappointed dad that Uber needs. A report by the former US attorney general scolded the tech giant for its immature culture.

A coin flip can take the angst out of traveling. Once you do the preliminary research, it’s less stressful than making decisions.

SURPRISING DISCOVERIES

A German kindergarten is the youngest democracy in the world. Kids as young as three years old can vote on their daily needs.

The birth of a giant panda in Tokyo triggered a stock market boom. Restaurant operators with outlets near Ueno Zoo are expected to benefit from a surge in visitors.

Slime boosted sales of Elmer’s Glue. Made from glue and borax (which has also seen a sales spike), the gooey stuff stars in many a social media video, alongside delighted kids.

Qatar is airlifting 4,000 cows to beat a trade embargo. Hostile Gulf states have cut off almost all of the country’s milk imports.

Spain has spent 76 years in the wrong time zone. It’s been onCentral European Time since a World War II-era gesture of solidarity to Adolf Hitler.

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